Q4 2023 Globus Medical Inc Earnings Call

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Speaker Change: Good day, and thank you for setting by welcome to the Globus Medical's fourth quarter and full year 2023 earnings call.

Operator: Good day, and thank you for standing by. Welcome to Globus Medical's fourth quarter and four-year 2023 earnings call. At this time, all participants are in a listen-only mode.

Speaker Change: All participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session. Drastic question. During this session you will need to press star one on your telephone you went out here and I haven't read it message advising you're having this race to withdraw your question. Please press star one again.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised.

Operator: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like to hand the conference over to your first speaker today, Brian Kearns, Senior Vice President of Business Development and Investor Relations. Please go ahead.

Speaker Change: Today's conference is being recorded I would like to hand, the conference over to your first speaker today, Brian Kearns Senior Vice President of Investor of business development and Investor Relations. Please go ahead.

Brian Kearns: Thank you Victor 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 operating and Chief Financial Officer.

Brian Kearns: Thank you, Victor, and thank you, everyone, for being with us today. Joining today's call from Globus Medical will be Dan Scavilla, President and CEO, and Keith Pfeil, Chief Operating Officer and Chief Financial Officer. This review is being made available via webcast accessible through the Investor Relations section of the Globus Medical website at www.globusmedical.com. Before we begin, let me remind you that some of the statements made during this review are or may be considered forward-looking statements. Our Form 10-K for the 2023 fiscal year and our subsequent filings with the Securities and Exchange Commission identify certain factors that could cause our actual results to differ materially from those projected in any forward-looking statements made today. Our SEC filings, including the 10-K, are available on our website.

Speaker Change: This review is being made available via webcast accessible through the Investor Relations section of the Globus medical website at Www Dot Globus medical Dot com.

Speaker Change: Before we begin let me remind you that some of the statements made during this review are or may be considered forward looking statements. Our Form 10-K for the 2023 fiscal year and our subsequent filings with the Securities and Exchange Commission identify certain factors that could cause our actual results to differ materially from those projected.

Speaker Change: The forward looking statements made today.

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

Brian Kearns: 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. However, these non-GAAP financial measures should not be considered replacements for and should be read together with the most directly comparable GAAP financial measures.

Speaker Change: 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.

Speaker Change: We believe these non-GAAP financial measures provide additional information pertinent to our business performance. These non-GAAP financial measures should not be considered replacements for and should be read together with the most directly comparable GAAP financial measures.

Brian Kearns: 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 Scavilla, our President and CEO. Thanks, Brian. And good afternoon, everyone.

Speaker Change: Conciliations 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.

Dan: Thanks, Brian and good afternoon, everyone. Globus finished 2023 with strong performance in the fourth quarter.

Dan Scavilla: Globus finished 2023 with strong performance in the fourth quarter. Revenue for the full year was a record $1,569,000,000, delivering $546,000,000 of revenue growth for 53% versus the prior year, including four months of invasive sales. We achieve record sales while maintaining industry-leading profitability, generating a record $2.32 in non-GAAP EPS and an adjusted EBIT of 30%, even as we continue our strong investments in enabling technology, orthopedics, and competitive recruiting. We also achieved significant progress integrating the Innovasive Merger and continue to fuel our innovation with five new products launched in 2023, positioning us well to gain momentum in 2024. In Q4, we delivered record sales of $617 million, growing 125% or $342 million. Q4 non-gap EPS was 60 cents, and adjusted EBITDA was 28%.

Dan: Revenue for the full year was a record $1 billion and $569 million delivering $546 million of revenue growth or 53% versus prior year, including four months of invasive sales.

Dan: We achieved record sales, while maintaining industry, leading profitability generating a record $2 32, and non-GAAP EPS and adjusted EBITDA of 30%, even as we continue our strong investments in enabling technology orthopedics and competitive recruiting.

Dan: We also achieved significant progress integrating the invasive merger and continue to fuel our innovation with five new products launched in 2023 position positioning us well to gain momentum in 2024.

Dan: In Q4, we delivered record sales of $617 million growing 125% or $342 million.

Dan: Q4, non-GAAP EPS was <unk> 60, and adjusted EBITDA was 28%.

Dan Scavilla: We also had a record-free cash flow of $82 million, up 79%. This cash will be used to fuel growth, funding innovative launches, product set expansions, and in-house manufacturing. I'll briefly comment on stand-alone Globus and stand-alone Invasive Q4 revenues. However, as we become one company with one focus in 2024, we will not provide stand-alone company information going forward. Globus standalone sales for Q4 were $304 million, increasing $30 million for 11% growth versus the prior year, delivering an adjusted EBITDA of 33%.

Dan: We also had a record free cash flow of $82 million up 79%. This cash will be used to fuel growth.

Dan: Funding innovative launches products had expansions and in house manufacturing.

I'll briefly comment on Standalone, Globus and Standalone invasive Q4 revenues. However, as we become one company with one focus in 2024, we will not provide standalone company information going forward.

Dan: Global Standalone sales for Q4 were $304 million, increasing $30 million or 11% growth versus prior year.

Dan: Delivering an adjusted EBITDA of 33% sales.

Dan Scavilla: Sales were driven by the continued above-market growth in U.S. spine of 11%, increasing momentum internationally with 20% growth and strong performance in trauma with 41% gains. Enabling technology to deliver 2% growth in Q4, driven by higher unit placements offset by product mix, country mix, and financing programs. There are over 65,000 robotic procedures performed to date and growing.

Dan: Sales were driven by the continued above market growth in U S spine, a 11% increasingly.

Dan: Increasingly momentum internationally with 20% growth and strong performance in trauma with 41% gains.

Dan: Enabling technology delivered 2% growth in Q4, driven by higher unit placements offset by product mix country mix and financing programs.

Dan: There are over 65000 in robotic procedures performed to date and growing the foundation remains strong and I am proud of the Globus team delivering solid growth and profitability as we enter 2024.

Dan Scavilla: The foundation remains strong, and I'm proud of the Globus team delivering solid growth and profitability as we enter 2024. Nuvesa stand-alone sales for Q4 were $312 million, up 2% on a pro forma basis, primarily driven by continued market penetration in international spine with 14% growth, market re-entry of key technology in Nuvesa's specialty orthopedics delivering 26% gains, and strength in Nuves This is partially offset by slight declines in U.S. spine attributed to deal disenergies and lower pull sales impacted by customers' uncertainty with the merger. To date, we have seen some sales disenergizes in a few territories, but these fall well within our projected estimates provided in the S-IV. The former Nuvasiv team is key growth drivers in 2024 with cross-selling and enabling tech penetration. I look forward to partnering with them. In Q4, we launched Victory lumbar fixation plates and buttress plates for anterior lateral and anterior lateral approaches, adding to our broad spinal fixation platform.

<unk> Standalone sales for Q4 were $312 million up 2% on a pro forma basis, primarily driven by continued market penetration in international spine with 14% growth.

Market reentry of key technology of Nuvasive specialty orthopedics, delivering 26% gains and strengthen invasive clinical services, increasing 6% versus prior year.

Dan: This was partially offset by slight declines in U S spine attributed to deal the synergies and lower pulse sales impacted by customers' uncertainty with the merger to date, we have seen some sales dis synergies in a few territories, but this fall well within our projected estimates provided in the S. Four.

Dan: The former invasive team our key growth drivers in 2024 with cross selling and enabling tech penetration I look forward to partnering with them.

Dan: In Q4, we launched victory lumbar fixation plates and buttress plates for anterior lateral and anterior lateral approaches adding to our broad spinal fixation platform.

Dan Scavilla: Entering 2024, our combined product pipeline is full, setting the stage for a strong year of product introductions. Over the next few months, we will be adding to our best-in-class expandable portfolio, new INR offerings, including the eHUB navigation system for seamless navigation when combined with our e3D system, and expansion of the precise trauma nailing system, moving into integration status and starting with the deal rationale. The merger with Nuvasiv created a leading world-class organization with a global scale and expanded customer reach with minimal sales force overlap. The comprehensive and innovative portfolio in spine, enabling tech, and orthopedics positions us well for long-term pain growth.

Dan: Entering 2020 for our combined product pipeline is full setting the stage for a strong year of product introductions.

The next few months, we will be adding to our best in class expandable portfolio.

Dan: New INR offerings, including the <unk> hub navigation system for seamless navigation, when combined with our <unk> system and.

Dan: An expansion of the precise trauma nailing system.

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

Dan: The merger with Nuvasive created a leading world class organization with global scale and expanded customer reach with minimal sales force overlap.

Dan: The comprehensive and innovative portfolio in spine, enabling tech in orthopedics positions us well for long term sustained growth.

Dan Scavilla: Our combined product development team will focus on the rapid development of innovative solutions to address unmet clinical needs through the continuum of care as we bring procedural solutions into the marketplace. The surge in education and research programs will further define us as thought leaders shaping the marketplace. While expanding our complementary operational footprint improves in-house capabilities to support commercial growth and drive cost savings, our financial discipline provides the ability to redirect investments into focused growth areas while improving combined profitability and cash flow. On the commercial front, we've completed the realignment of the U.S. and international sales teams and, in January 2024, implemented the new team structures to support surgeons throughout the world. We've also held several education sessions for reps for product cross training and enabling tech education.

Dan: Our combined product development team will focus on rapid development of innovative solutions to address unmet clinical needs through the continuum of care as we bring procedural solutions into the marketplace.

The surgeon education and research programs will further define us as thought leaders shaping the marketplace.

Dan: While expanding our complimentary operational footprint improves in house capabilities to support commercial growth and drive cost savings.

Dan: Our financial discipline provides the ability to redirect investments into focused growth areas, while improving combined profitability and cash flow.

Dan: On the commercial front.

Dan: We've completed the realignment of the U S and international sales teams and in January 2024 implement at the new team structures to support surgeons throughout the world.

Dan: We've also held several education sessions for reps for product Cross training and enabling Tech education.

Dan Scavilla: We remain on track for implementing common operating systems in Q1 that will allow us to work as one company and one team. I'm pleased with our work here and look forward to driving meaningful growth through the new structure. We also continue to receive significant inbound interest from competitive sales professionals who are seeking the opportunity to carry a bag second to none.

Dan: We remain on track for implementing common operating systems in Q1 that will allow us to work as one company and one team.

Dan: I am pleased with our work here and look forward to driving meaningful growth through the new structure.

Dan: We also continue to receive significant inbound interest from competitive sales professionals, who are seeking 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.

Dan Scavilla: Combined Company will be a destination of choice for sales personnel who cherish an incredible product portfolio, financial security, and longevity. One immediate benefit of the merger is cross-selling our existing portfolios. We made significant investments in key product sets in 2023 and are ramping up cross-selling in 2024. As mentioned, Salesforce cross-training is continuing as planned and will accelerate cross-selling opportunities throughout 2024 as more sets become available.

Dan: One immediate benefit of the merger is cross selling our existing portfolios. We made significant investments in key product sets in 2023 on a ramping up cross selling in 2024.

Dan: As mentioned Salesforce Cross training is continuing as planned and will accelerate cross selling opportunities throughout 2024 as more sets become available.

Dan Scavilla: We have also made significant investments in long-lead time components and manufacturing resources to scale up our enabling tech capacity, allowing for increased production output in preparation for higher demand. We are reorganizing product development, carrying forward the rich history of rapid development to remain an industry thought leader as we work with our surgeon partners to address unmet clinical needs. From pioneering the XLIF procedure that is now the gold standard of lateral surgery, leading the market in expandable cage technology, and developing the best spinal robot with the most advanced intraoperative CT imaging, we're working to create surgical proceduralization of all key spine surgeries to create the standard of care across the spine industry.

Dan: We also made significant investments in long lead time components and manufacturing resources to scale up our enabling tech capacity, allowing for increased production output and preparation for higher demand.

Dan: We are reorganizing product development carrying forward the rich history of rapid development to remain an industry thought leader as we work with our surgeon partners to address unmet clinical needs from pioneering the excellent procedure that is now the gold standard of lateral surgery.

Dan: Leading the marketing an expandable cage technology and developing the best spinal robot with the most advanced intra operative imaging.

We are working to create surgical procedure organization of all key spine surgeries to create the standard of care across the spine industry.

Dan: Our intellectual property portfolio has been number one in the spinal industry for the last decade.

Dan Scavilla: Our intellectual property portfolio has been number one in the spinal 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. To accomplish this, we remain committed to continuing existing projects, and we'll have a strong PD presence on the West Coast focused on spine and enabling tech solutions. We're enhancing our surgeon engagement programs to increase our impact with surgeons and further strengthen how we interact with them in all aspects of our business.

Dan: And we are committed to further expanding this lead especially in the enabling tech arena as we continue to be at the forefront of imaging navigation and robotics to accomplish this we remain committed to continuing existing projects and we'll have a strong PD presence on the west coast focused on spine and enabling tech solutions.

Dan: We're enhancing our surgeon engagement programs to increase our impact with surgeons and further strengthen how we interact with them in all aspects of our business. Our professional affairs team has been expanded.

Dan Scavilla: Our professional affairs team has been expanded, and we've added scientific affairs, marketing, and communication teams, all with talented individuals. In addition, we're increasing our research and clinical investments, expanding the coordination of education programs, and enhancing our presence in teaching institutions. Operations remains the strength of the merger. We've begun expanding in-house capabilities at the West Carrollton Production Facility as part of our ongoing synergies. The Memphis Distribution Center is now capable of supporting expanded distribution for the combined entity.

Dan: We've added scientific affairs marketing communication teams all with talented individuals. In addition, we're increasing our research and clinical investments expanding the coordination of education programs and enhancing our presence in teaching institutions.

Dan: Operations remains a strength of the merger we have begun expanding in house capabilities of the West Carrollton production facility as part of our ongoing synergies the.

Dan: The Memphis distribution center is now capable of supporting expanded distribution for the combined entity.

Dan Scavilla: We will continue to invest in high-tech manufacturing equipment for implant instrumentation and enabling tech production capabilities. We're also working to consolidate volumes and orders with third-party vendors to accelerate delivery times and drive cost savings. All these activities are progressing as planned.

We will continue to invest in high tech manufacturing equipment for our implant and instrumentation and enabling tech production capabilities.

Dan: We're also working to consolidate volumes and orders with third party vendors to accelerate delivery times and drive cost savings all of these activities are progressing as planned.

Dan Scavilla: Synergy targets have been identified, focusing on out-of-pocket spending and prioritizing investments to match future growth plans. In-house organizational structures are being implemented and should reach steady state by mid-year 2024. While some employees have been impacted by the merger and reorganization, this is not a slash-and-burn exercise, and the merger payback is not driven by deep employee or spending cuts. We remain focused on building an organization to support long-term, sustained, profitable growth. I want to conclude by sharing a recent event that reminded me of who we are. We recently held our combined U.S. national sales meeting, coming together as one team for the first time since the merger and commercial restructuring. It was interesting to watch the hesitancy of the participants evaporate as they saw familiar faces of teammates they'd worked with, worked for, or competed against. The combined and well-balanced leadership team showed our sales force that we really are bringing the best of both organizations together to support them and create a once-in-a-career opportunity. By the first evening's product fair, you could no longer tell who came from Globus or who came from Nuvei.

Dan: Synergy targets have been identified focusing on out of pocket spending and prioritizing investments to match future growth plans.

Dan: In house organizational structures are being implemented and should reach steady state by mid year 2024.

Dan: While some employees have been impacted by the merger and reorganization. This is not a slash and burn exercise and the merger payback is not driven by deep employee or spending cuts.

Dan: We remain focused on building an organization to support long term sustained profitable growth.

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

Dan: We recently held our combined U S national sales meeting coming together as one team for the first time since the merger in commercial restructuring.

Dan: It was interesting to watch the hesitancy of the participants evaporate as they saw a familiar faces of teammates they've worked with worked for where competed against.

Dan: The combined and well balanced leadership team showed our salesforce that we really are bringing the best of both organizations together to support them and create a once in a career opportunity.

Dan: By the first evenings products fair you can no longer tail, who came from globus or who came from nuvasive.

Dan Scavilla: There was only one strong energy in the room, focus on our combined portfolio and innovation and a genuine excitement to get back out in the field and win. This team and that meeting reconfirm my belief that we really are more alike than different. And when combined, we're unstoppable.

Dan: There was only one strong energy in the room.

Dan: <unk> on our combined portfolio and innovation and a genuine excitement to get back out in the field and win.

Dan: This team and that meeting reconfirm my belief that we really are more alike than different and when combined.

Dan: We're on Stoppable.

Dan Scavilla: I cannot wait for the International Sales Meeting to make that feeling global. 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 markets. We have at our fingertips everything we need to do this. In closing, I want to congratulate Keith Pfeil on his recent, well-deserved promotion to Chief Operating Officer (CFO). Keith is a rock-solid leader, a great partner, and is well suited to this role.

Dan: I cannot wait for the international sales meeting to make that feeling global.

Dan: I believe the potential for Globus has never been greater.

Dan: It's up to us to harness our resources and shape the future of our markets. We have at our fingertips everything we need to realize this in.

Dan: In closing.

Dan: I want to congratulate Keith Pfeil on his recent well deserved promotion to Chief operating Officer CFO.

Dan: Keith is a rock solid leader a great partner and is well suited for this role.

Dan Scavilla: I will now turn the call over to Keith. Dan, thank you and good afternoon to everyone joining us on today's call. We are now more than a year past the initial February 9th merger announcement and are reporting today on our first full quarter as a merged entity. My comments today will focus on Q4 and full year 2023 results, provide insights into our views for 2024 performance, provide updates on integration and synergy tracking, as well as comment on longer-term capital allocation priorities. My comments on Q4 and full year 2023 will focus on our as-reported results, providing updates on the legacy Globus business performance, as well as summary comments on the contributions from Nuvasiv on an as-reported basis. As a reminder, 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 NuVasa.

Keith W. Pfeil: I will now turn the call over to Keith.

Keith W. Pfeil: Dan Thank you and good afternoon to everyone joining us on today's call.

Keith W. Pfeil: We are now more than a year past the initial February 9th merger announcement and our reporting today on our first full quarter as a merged entity.

Keith W. Pfeil: Comments today will focus on Q4 and full year 2023 results provide insights into our views for 2024 performance provide updates on integration and synergy tracking as well as commenting on longer term capital allocation priorities.

Keith W. Pfeil: My comments on Q4, and full year 2023 will focus on our as reported results providing update on the legacy global business performance as well as summary comments on the contributions from new basis on an as reported basis.

Keith W. Pfeil: As a reminder, all information presented is done so based on Globus accounting policies and is consistently applied and the as reported results for both legacy Globus and legacy new basis.

Dan Scavilla: Q4'23 revenue was $616.5 million, growing 124.6% on an as-reported basis and 123.8% on a constant currency basis over the prior year quarter. Net income was $15 million, resulting in 11 cents of fully diluted gap earnings per share and is reflective of merger-related costs and expenses. Q4'23 non-GAAP net income was $83.5 million, which resulted in 60 cents of fully diluted non-GAAP earnings per share.

Keith W. Pfeil: Q4, 'twenty three revenue was $616 5 million from 124, 6% on an as reported basis and 123, 8% on a constant currency basis over the prior year quarter.

Keith W. Pfeil: Net income was $15 million, resulting in 11, a fully diluted GAAP earnings per share and is reflective of merger related costs and expenses.

Keith W. Pfeil: Q4, 23, non-GAAP net income was $83 5 million, which resulted in <unk> 60, a fully diluted non-GAAP earnings per share.

Keith W. Pfeil: Q4 non-GAAP net income grew 38.9% while non-GAAP EPS grew 2.1% over the prior year quarter, driven by a higher share count as a result of the merger with Nuvasiv. To illustrate, Q4'23 fully diluted shares were 139.8 million versus 102.2 million shares in the prior year quarter. Q4'23 at Jessedie B'Dah was 27.6%, and free cash flow generated totaled $81.8 million. Full year 2023 revenue was $1.569 billion, growing 53.3% on an as-reported and constant currency basis. Their adjusted sales growth was 47.8% with one less selling day in 2023 as compared to 2022. Net income was $122.9 million, which resulted in $1.7 of fully diluted earnings per share as reflective of deal and integration costs associated with an evasive merger. Non-GAAP net income was $266.4 million, delivering $2.32 of fully diluted non-GAAP earnings per share.

Keith W. Pfeil: Q4, non-GAAP net income grew 38, 9%, while non-GAAP EPS grew two 1% over the prior year quarter, driven by a higher share count as a result of the merger with new basis to illustrate Q4 'twenty three fully diluted shares were $139 8 million versus $102 2 million shares in the prior.

Keith W. Pfeil: Year quarter Q.

Keith W. Pfeil: Q4, 23, adjusted EBITDA was 27, 6% and free cash flow generated totaled $81 8 million.

Full year 2023 revenue was $1 $5 69 billion.

Keith W. Pfeil: Growing 53, 3% on an as reported and constant currency basis.

Keith W. Pfeil: Day adjusted sales growth was 47, 8% with one less selling day in 2023 as compared to 2022.

Keith W. Pfeil: Net income was $122 9 million, which resulted in a $1 seven fully diluted earnings per share is reflective of deal and integration costs associated with the new basic merger.

Keith W. Pfeil: non-GAAP net income was $266 $4 million delivering $2.32 of fully diluted non-GAAP earnings per share for.

Keith W. Pfeil: Full-year non-GAAP net income grew 25.9% over the prior year, while non-GAAP earnings per share grew 12.6% over the prior year. The lower growth rate on a per-share basis is driven by an increased share count as a result of the stock-for-stock merger with Nuvesi. Full year 2023 adjusted EBITDA was 29.6%, and we generated $165.2 million of free cash. Moving further into revenue, musculoskeletal sales for the fourth quarter of 2023 were $583.8 million, growing 138.3% as reported compared to the prior year quarter. Legacy Globus musculoskeletal sales in Q4'23 were $274 million, or 11.8% higher than the prior quarter, with growth led by our U.S. and international spine business, as well as continued share growth within Trump. Our Q4 2023 enabling technologies revenue was $32.7 million, growing 10.9% compared to the prior year. Legacy Globus Enabling Technologies revenue was $30.1 million, growing 2.1% over the prior year on record units placed. Capital continued to see strong uptake in the quarter, however revenue growth was tempered based on country mix and financing arrangements.

Keith W. Pfeil: Full year non-GAAP net income grew 25, 9% over the prior year, while non-GAAP earnings per share grew 12, 6% over the prior year.

The lower growth rate on a per share basis is driven by an increased share count as a result of the stock for stock merger with new basis.

Keith W. Pfeil: Full year 2023, adjusted EBITDA was 29, 6% and we generated $165 $2 million of free cash flow.

Keith W. Pfeil: Moving further into revenue musculoskeletal sales for the fourth quarter of 2023 were $583 8 million growing 100.

Keith W. Pfeil: 38, 3% as reported compared to the prior year quarter.

Keith W. Pfeil: Legacy Globus muscular skeletal sales in Q4, 23 or $274 million or 11, 8% higher than the prior year quarter with growth led by our U S and international spine businesses as well as continued share growth within trauma.

Keith W. Pfeil: Our Q4 2023, enabling technologies revenue was $32 7 million growing 10, 9% compared to the prior year quarter.

Keith W. Pfeil: Legacy Globus, enabling technologies revenue was $30 1 million growing two 1% over the prior year on record units placed capital continued to see strong uptake in the quarter. However revenue growth was tempered based on country mix and financing arrangements.

Keith W. Pfeil: Turning our attention to geographic sales U S revenue in the fourth quarter of 2023 was $490 8 million growing 110, 5% over the prior year quarter.

Keith W. Pfeil: Legacy Globus U S revenue in the fourth quarter of 2023 was $256 million growing nine 7% as reported compared to the prior year quarter. The.

Keith W. Pfeil: The increase in sales was led primarily by continued U S spine growth.

Keith W. Pfeil: Turning our attention to geographic sales, U.S. revenue in the fourth quarter of 2023 was $490.8 million, growing 110.5% over the prior year quarter. Legacy Globus U.S. revenue in the fourth quarter of 2023 was $256 million, growing 9.7% as reported compared to the prior year quarter. The increase in sales was led primarily by continued U.S. spine growth. International revenue for the fourth quarter was $125.7 million, growing 204.6% as reported compared to the prior year.

Keith W. Pfeil: International revenue for the fourth quarter was $125 $7 million growing 204, 6% as reported compared to the prior year.

Keith W. Pfeil: The legacy Global International revenue in Q4, 23 was $48 1 million or.

Keith W. Pfeil: Or 16, 7% higher versus the prior year quarter, driven by strong implant growth within key focus countries, including Australia, Brazil, Italy, Japan, Spain, and United Kingdom.

GAAP gross profit in the fourth quarter of 2023 was 56, 9% versus 74, 3% in the prior year quarter the.

Keith W. Pfeil: The decrease in GAAP gross profit was driven by the impacts of the new face of merger, namely step up inventory amortization.

Keith W. Pfeil: Adjusted gross profit, which excludes the impacts of inventory step up amortization was 65, 5%.

Keith W. Pfeil: Legacy Globus International revenue in Q4'23 was $48.1 million, or 16.7% higher versus the prior year quarter, driven by strong implant growth within key focus countries, including Australia, Brazil, Italy, Japan, Spain, and the United Kingdom. Gap gross profit in the fourth quarter of 2023 was 56.9% versus 74.3% in the prior year quarter. The decrease in GAAP gross profit was driven by the impacts of an invasive merger, namely step-up inventory amortization. Adjusted gross profit, which excludes the impacts of inventory step-up amortization, was 65.5%.

Keith W. Pfeil: We expect to continue to report on a consolidated adjusted gross profit metrics for the next several quarters as step up amortization will impact GAAP gross profit for most of fiscal 2024 legs.

Keith W. Pfeil: Legacy Globus GAAP gross profit in the fourth quarter of 2023 was 74, 7% compared to 74, 3% in the prior year quarter, driven by lower product costs as a result of a higher mix of spinal implant sales.

Keith W. Pfeil: Full year 2023, GAAP gross profit was 65, 1% compared to 74, 2% in the prior year driven again by the impact of step up amortization as a result of an invasive merger.

Keith W. Pfeil: Gross profit, which excludes the impact of inventory step up amortization was 69, 6%.

Keith W. Pfeil: We expect to continue to report on a consolidated adjusted gross profit metric for the next several quarters as step-up amortization will impact gap gross profit for most of fiscal 2024. Legacy Globus GAP gross profit in the fourth quarter of 2023 was 74.7% compared to 74.3% in the prior year quarter, driven by lower product costs as a result of higher mix spinal implant sales. Full year 2023 GAAP gross profit was 65.1% compared to 74.2% in the prior year, driven again by the impact of step-up amortization as a result of the newvasive merger. Adjusted gross profit, which excludes the impact of inventory step-up amortization, was 69.6 percent. Legacy Globus GAP gross profit for the full year 2023 was 74.2%, in line with the prior year, despite Legacy enabling technology sales growing over 20% compared to the prior year, which reflects the impacts of continued manufacturing and supply chain cost savings.

Keith W. Pfeil: Legacy Globus GAAP gross profit for the full year 2023 was 74, 2% in line to the prior year, despite legacy enabling technology sales growing over 20% to the prior year, which reflects the impacts of continued manufacturing and supply chain cost savings initiatives.

Keith W. Pfeil: Looking ahead to 2024, we expect our adjusted gross profit rate to be in the mid to upper $60 for the full year as we begin to realize supply chain savings, namely lower freight and warehousing expenses.

Keith W. Pfeil: Research and development expenses in Q4 were $52 3 million or eight 5% of sales compared to $19 5 million.

Keith W. Pfeil: Our seven 1% sale of sales in the prior year quarter.

Keith W. Pfeil: The increased spending both in dollars and as a percentage of sales is reflective primarily of the impacts of the new base of merger.

Keith W. Pfeil: <unk> legacy Globus Q4, 2023, R&D expense was $21 million or six 9% of sales compared to $19 5 million or seven 1% of sales in the prior year and is reflective of continued investments within our enabling technologies portfolio, partially offset by the leverage impact of higher sales.

Keith W. Pfeil: The full year 2023 research and development expenses were $124 million or seven 9% of sales compared to $73 million or seven 1% of sales in the prior year with the increase being driven primarily by the impacts of an invasive merger.

Keith W. Pfeil: Looking ahead to 2024, we expect our adjusted gross profit rate to be in the mid to upper 60s for the full year as we begin to realize supply chain savings, namely lower freight and warehousing expenses. Research and development expenses in Q4 were $52.3 million, or 8.5 percent of sales, compared to $19.5 million, or 7.1 percent of sales in the prior year quarter. The increased spending, both in dollars and as a percentage of sales, is reflective primarily of the impacts of the invasive merger.

Keith W. Pfeil: Legacy Global 2023, R&D expense was $83 9 million or seven 3% of sales compared to $73 million or seven 1% of sales with the increased spending driven primarily by enabling technologies investments.

Keith W. Pfeil: Looking ahead to 2024, we expect R&D expenses to be in the range of seven 5% to 8%.

SG&A expenses in the fourth quarter were $242 4 million or <unk> 39, 3% of sales compared to $118 $1 million for 43% of sales in the prior year quarter, reflecting the impact of the new base of merger.

Keith W. Pfeil: Legacy Globus Q4 2023 R&D expense was $21 million, or 6.9% of sales, compared to $19.5 million, or 7.1% of sales in the prior year, and is reflective of continued investments within our enabling technologies portfolio, partially offset by the leverage impact of higher sales. The full year 2023 research and development expenses were $124 million, or 7.9% of sales, compared to $73 million, or 7.1% of sales, in the prior year, with the increase being driven primarily by the impacts of the invasive merger. Legacy Globus 2023 R&D expense was $83.9 million, or 7.3% of sales, compared to $73 million, or 7.1% of sales, with the increased spending driven primarily by enabling technologies investment. Looking ahead to 2024, we expect R&D expenses to be in the range of 7.5% to 8%. SG&A expenses in the fourth quarter were $242.4 million, or 39.3 percent of sales, compared to $118.1 million, or 43 percent of sales in the prior year quarter, reflecting the impacts of the new base of merger. Legacy Globus SGA expenses in the fourth quarter were $130.6 million, or 43% of sales, consistent with the prior year.

Keith W. Pfeil: Legacy Globus SG&A expenses in the fourth quarter were $136 million or <unk>, 43% of sales consistent with the prior year.

Keith W. Pfeil: Full year 2023, SG&A expenses were $641 1 million or 49% of sales compared to $432 1 million or.

Keith W. Pfeil: Or 42, 2% of sales in the prior year, which again reflects the impact of the new base of merger.

Keith W. Pfeil: <unk> Globus SG&A expenses for 2023 were $491 9 million or <unk> 42, 6% of sales and reflects slightly higher people costs, driven by benefits and travel as well as increased bad debt expense driven by a onetime benefit in the prior year that did not repeat in the current year.

Keith W. Pfeil: Looking ahead to 2024, we expect our full year SG&A to improve 1% to two percentage points over the full year 2023, SG&A expense of 49%.

Keith W. Pfeil: Further as we look ahead to fiscal 2024, we expect an interest expense headwind driven by two factors first our invested cash balance will be lower year over year, driven by the paydown of the former new base of line of credit at merger closed at merger close which decreased our cash balance by $428 million, thus decreasing interest income moves.

Keith W. Pfeil: Forward the second item relates to interest expense from the senior convertible notes.

Keith W. Pfeil: Interest expense on this note will occur in two parts first the cash portion based on the <unk>, 375% rate and secondly, a noncash interest portion driven by the amortization of the fair value adjustment of a note at the time of merger, we estimate interest expense to be in the range of $12 million to $15 million in fiscal 2024 versus net interest income of <unk>.

Keith W. Pfeil: Full year 2023 SG&A expenses were $641.1 million, or 40.9% of sales, compared to $432.1 million, or 42.2% of sales in the prior year, which again reflects the impact of the recent merger. Legacy Globus SG&A expenses for 2023 were $491.9 million, or 42.6% of sales, and reflect slightly higher people costs driven by benefits and travel as well as increased bad debt expense driven by a one-time benefit in the prior year that did not repeat in the current year. Looking ahead to 2024, we expect our full-year SG&A expenses to improve by 1 to 2 percentage points over the full-year 2023 SG&A expense of 40.9%. Furthermore, as we look ahead to fiscal 2024, we expect an interest expense headwind driven by two factors. First, our invested cash balance will be lower year over year, driven by the pay-down of the former newvasive line of credit at merger close, which decreased our cash balance by $420.8 million, thus decreasing interest income moving forward. The second item relates to interest expense on the senior convertible note.

Keith W. Pfeil: $1 1 million in fiscal 'twenty three.

Keith W. Pfeil: The GAAP tax rate for the quarter was 39, 8% compared to 19, 4% in Q4 of 2022, primarily driven by the impact of non deductible merger costs on lower GAAP pre tax income.

Keith W. Pfeil: On a normalized basis, our non-GAAP effective tax rate was 22% in the fourth quarter.

Keith W. Pfeil: Our full year 2023 effective tax rate was 25, 7% compared to 21, 7% in the prior year with the resulting increase driven by the impacts of merger related costs, which you do not expect to repeat in the future.

Keith W. Pfeil: Looking ahead to 2024, we expect our full year effective tax rate to be approximately 23%.

Keith W. Pfeil: Shifting to cash and liquidity, our cash cash equivalents in marketable securities were $593 2 million at December 31, there were no short term borrowings against our unsecured line of credit at year end and our long term borrowings consist of the <unk>, 375% senior convertible notes due in 2025, which were assumed as part of the merger with new basis.

Keith W. Pfeil: It remains our intent for these notes to be part of our capital structure until they are due to be settled in March 2025.

Keith W. Pfeil: Turning attention to cash flow Q4, net cash provided by operating activities was $104 7 million in Q4 free cash flow was $81 8 million.

Keith W. Pfeil: Interest expense on this note will occur in two parts. First, the cash portion based on the.375% rate, and secondly, a non-cash interest portion driven by the amortization of the fair value adjustment of the note at the time of merger. We estimate interest expense to be in the range of $12 to $15 million in fiscal 2024 versus net interest income of $20.1 million in fiscal 2023. The GAAP tax rate for the quarter was 39.8% compared to 19.4% in Q4 of 2022, primarily driven by the impact of non-deductible merger costs on lower GAAP pre-tax income. On a normalized basis, our non-gap effective tax rate was 22% in the fourth quarter.

Keith W. Pfeil: Free cash flow grew $36 $2 million over the prior year quarter with approximately $5 million of that growth being driven by legacy Globus and the remainder driven by the contributions from the <unk> merger.

Keith W. Pfeil: 2023, net cash provided by operating activities was $243 $5 million in 2023 free cash flow was $165 2 million.

Keith W. Pfeil: Looking ahead to 2024, we expect capex spending to be within a range of 5% to 6% of sales on a full year basis.

Keith W. Pfeil: Consistent with history, our capital allocation priorities will remain unchanged moving ahead, our primary use of capital will be to fund internal investments for product development inventory and capex, while facilitating complementary M&A, which meets the needs of our strategy moving forward and.

Keith W. Pfeil: Our full-year 2023 effective tax rate was 25.7% compared to 21.7% in the prior year, with the resulting increase driven by the impacts of merger-related costs, which you do not expect to repeat in the future. Looking ahead to 2024, we expect our full-year effective tax rate to be approximately 23%. Shifting to cash and liquidity, our cash, cash equivalents, and marketable securities were $593.2 million at December 31st. There were no short-term borrowings against our unsecured line of credit at year-end, and our long-term borrowings consist of the 0.375% senior convertible notes due in 2025, which were assumed as part of the merger with NuVasive. It remains our intent for these notes to be part of our capital structure until they are due to be settled in March 2025. Turning attention to cash flow, Q4 net cash provided by operating activities was $104.7 million, and Q4 free cash flow was $81.8 million.

Keith W. Pfeil: In the near term, we would expect any inorganic opportunities to be more of a tuck in type of deal as opposed to a transformative deal, especially while we continue to integrate and invasive merger.

Keith W. Pfeil: So organic and inorganic investment our primary uses of capital we continue to utilize share repurchases within our capital structure.

Keith W. Pfeil: Going into the fourth quarter, we had a total of $508 million authorized by our board of directors to fund share report purchases during the fourth quarter. We spent a total of $225 6 million to repurchase approximately $4 3 million shares at an average price of $52 11 per share.

Keith W. Pfeil: The company has approximately $275 $2 million remaining under its authorized share repurchase program.

Keith W. Pfeil: Shifting attention over to cost savings and synergies, we still expect to generate a total of $170 million of synergies over three years as a result of the merger with new basin, 40% being realized in year, 170% by the end of year, two and a 100% in year three.

Keith W. Pfeil: Since we've last year at an update we've taken steps to begin to realize those synergy savings. The focus of these savings have been across the business and have been centered on operations, namely warehousing contract negotiations SG&A cost redundancies, the elimination of Duplicative third party expenses as well as the startup systems integration activities.

As we move through 2024, we would expect synergy savings to increase sequentially each quarter as actions planned are realized as Dan noted we are not moving ahead with a slash and burn exercise of cost cuts rather the cuts will be focused in key areas to drive greater value creation.

Keith W. Pfeil: Free cash flow grew $36.2 million over the prior year quarter, with approximately $5 million of that growth being driven by legacy Globus and the remainder driven by the contributions from the newvasive merger. In 2023, net cash provided by operating activities was $243.5 million, and 2023 free cash flow was $165.2 million. Looking ahead to 2024, we expect CapEx spending to be within a range of 5-6% of sales on a full year basis. Consistent with history, our capital allocation priorities will remain unchanged moving forward.

Our primary focus in fiscal 2024 is a further drive recurring cost savings in the areas of manufacturing and sourcing we will do so through third party supplier contract renegotiations product in sourcing as well as investments in machinery and equipment, which will drive greater manufacturing efficiencies and also drive greater fixed cost leverage within our manufacturing and supply chain.

Keith W. Pfeil: The present time, we feel confident in achieving our synergy targets set forth for 2024 and beyond we will continue to provide updates as the year progresses.

Keith W. Pfeil: At the present time the company is reaffirming its previously provided financial guidance for 2024, which projects net sales to be in the range of 2.45 billion to 475 billion.

Keith W. Pfeil: Our primary use of capital will be to fund internal investments for product development, inventory, and CapEx while facilitating complementary M&A, which meets the needs of our strategy moving forward. In the near term, we would expect any inorganic opportunities to be more of a tuck-in type of deal as opposed to a transformative deal, especially while we continue to integrate the newvasive merger. Though organic and inorganic investment are our primary uses of capital, we continue to utilize share purchases within our capital structure. Coming into the fourth quarter, we had a total of $500.8 million authorized by our Board of Directors to fund share buybacks. During the fourth quarter, we spent a total of $225.6 million to purchase approximately 4.3 million shares at an average price of $52.11 per share.

Keith W. Pfeil: And fully diluted non-GAAP earnings per share to be in the range of $2 68 to $2 70.

Keith W. Pfeil: Our net sales guidance for 2024 includes projected sales dis synergies of roughly $150 million as a result of an invasive merger.

Keith W. Pfeil: Adjusting for those sales dis synergies are projected revenue growth would have been approximately eight 5% to nine 6% based on fiscal 2023 pro forma revenue of $2 $3 $96 billion or non-GAAP earnings per share guidance implies 15, five to 16, 4% growth and assumes approximately 140.

Keith W. Pfeil: Fully diluted shares for the full year versus actual 2023 shares of $114 8 million fully diluted shares.

Keith W. Pfeil: The company has approximately $275.2 million remaining under its authorized share repurchase program. Shifting attention over to cost savings and synergies, we still expect to generate a total of $170 million of synergies over three years as a result of the merger with NuVasive, 40% being realized in year one, 70% by the end of year two, and 100% in year three. Since we've last shared an update, we've taken steps to begin to realize those synergies savings. The focus of these savings has been across the business and has been centered on operations, namely warehouse and contract negotiations, SG&A cost-redundancy, the elimination of duplicative third-party expenses, as well as the start of systems integration activities. As we move through 2024, we would expect synergy savings to increase sequentially each quarter as actions planned are realized. As Dan noted, we are not moving ahead with a slash-and-burn exercise of cost cuts.

Keith W. Pfeil: As we look into 2024 are keys to success will focus on the ability to execute.

Keith W. Pfeil: In the near term, we will continue our merger integration with the goal of moving back towards more of a steady state by mid year.

Keith W. Pfeil: Tremendous effort has and will continue in bringing the organizations together will really push forward our go to market strategies in key geographies.

Keith W. Pfeil: Internally, we will continue to drive synergy capture with a key focus on continued operational improvements the focus on execution and value creation will drive shareholder value as we seek to achieve our goals set forth, creating enhanced profitability and cash flow generation.

Keith W. Pfeil: Our goal is to improve musculoskeletal care and we will achieve that through procedural innovations those innovations will be achieved by listening to our customers, which are the patients and the surgeons to be successful we need to listen to their needs. If we focus and execute with our customers through constant contact and active listening. We will continue to bring best in class innovation to market.

Keith W. Pfeil: And separate ourselves from the competition.

Keith W. Pfeil: Rather, the cuts will be focused in key areas to drive greater value creation. The primary focus in fiscal 2024 is to further drive recurring cost savings in the areas of manufacturing and sourcing. We will do so through third-party supplier contract renegotiations, product insourcing, as well as investments in machinery and equipment, which will drive greater manufacturing efficiencies and also drive greater fixed cost leverage within our manufacturing and supply chain. At the present time, we feel confident in achieving the synergy target set forth for 2024 and beyond. We'll continue to provide updates as the year progresses. At the present time, the company is reaffirming its previously provided financial guidance for 2024, which projects net sales to be in the range of $2.45 billion to $2.475 billion and fully diluted non-GAAP earnings per share to be in the range of $2.68 to $2.70.

Speaker Change: We remain excited for the future and want to thank the entire global team for their relentless effort and the pursuit of excellence operator, we will now open the call for questions.

Speaker Change: As a reminder to ask a question you need to press star one on your telephone.

Speaker Change: And wait for your name to be announced to withdraw your question. Please press star one again.

Speaker Change: Please standby, while we compile the Q&A roster one moment for our first question.

Speaker Change: Our first question comes from line of Vik Chopra from Wells Fargo. Your line is open.

Vik Chopra: Hey, good afternoon, and thanks, so much.

Vik Chopra: Two for me.

Vik Chopra: Appreciate.

Vik Chopra: I appreciate all the color on the integration efforts, but maybe you can talk about what surprised you to the upside and Walter the downside and then I have follow up questions.

Vik Chopra: Thanks, Nick This is Keith I'll take.

Keith W. Pfeil: I will take the upside and downside as it relates to cost.

Keith W. Pfeil: As I think about as we dig in and start to look at the business more and more.

Keith W. Pfeil: There continues to be great opportunities for operational improvements in manufacturing I think that bringing the facilities together with our manufacturing and legacy innovative really allows for fixed cost leverage improvements those cost savings wont be generated overnight because as I commented in my prepared remarks, and we're going to be looking at investing in new machinery and equipment that is.

Keith W. Pfeil: Our net sales guidance for 2024 includes projected sales dis-energies of roughly $150 million as a result of an evasive merger. Adjusting for those sales dis-energies, our projected revenue growth would have been approximately 8.5 to 9.6 percent based on fiscal 2023 pro forma revenue of $2.396 billion. Our non-GAAP earnings per share guidance implies 15.5 to 16.4% growth and assumes approximately 140 million fully diluted shares for the full year versus actual 2023 shares of 114.8 million fully diluted shares.

Keith W. Pfeil: Got to get online and then you've got to start to produce the inventory I think youll see some of those savings more so in 'twenty, five and going into 'twenty six.

Keith W. Pfeil: And then on the back side I would also say SG&A.

Speaker Change: Look as I look at where we're at today.

Speaker Change: I think that we're continuing to overlay the globus approach to spending I think theres opportunities there, but in saying that Dan commented that this isn't a slash and burn exercise and some of the things that he commented on are places that we're spending more money. He talked about scientific affairs talked about more surgeon outreach those are places, where we will invest.

Keith W. Pfeil: As we look into 2024, our keys to success will focus on the ability to execute. In the near term, we will continue our merger integration with the goal of moving back towards more of a steady state by mid-year. Tremendous effort has and will continue to be made in bringing the organizations together while we push forward our go-to-market strategies and key geographies. Internally, we will continue to drive synergy capture with a key focus on continued operational improvement. The focus on execution and value creation will drive shareholder value as we seek to achieve our goals set for creating enhanced profitability and cash flow generation. Our goal is to improve musculoskeletal care, and we will achieve that through procedural innervation. Those innovations will be achieved by listening to our customers, who are the patients and the surgeons. To be successful, we need to listen to their needs.

Speaker Change: The business moving forward yes.

Speaker Change: Yes, and I'll add to that one on.

Speaker Change: My thoughts I think with the upside.

Speaker Change: It was really the willingness of other teams to come together and embraced what they had in common not what was different and so the readiness of the field and also the in house. The support really came together in a way that I thought was great. The downside would just be some of the unsexy things to heavy lifting you need to do of common processes and common reports and common systems.

Speaker Change: Just needed to go run and drive an infrastructure now that they are big surprises just quite not as fun to go after when you have so much innovation and so much room to go grow.

Speaker Change: Great. Thanks for the color I guess, Paul I think you said that you have.

Paul: Some inbounds from competitive reps, maybe just talk about how meaningful those conversations have been and then just maybe broad trended higher in Q4, and how you see your recruiting and retention efforts shaking out in 2024. Thank you.

Operator: If we focus and execute with our customers through constant contact and active listening, we will continue to bring best-in-class innovation to market and separate ourselves from the competition. We remain excited for the future and want to thank the entire Globus team for their relentless effort in the pursuit of excellence. Operator, we will now open the call for questions. Thank you. As a reminder, to ask a question, you need to press star 11 on your telephone and wait for your name to be announced.

Paul: Yeah, you got it.

Paul: Dana I'll start with your first part.

Speaker Change: We really do have a lot of foot traffic right now with competitive people coming in expressing interest proactively with us and they're meaningful they're large in size. They are well established and so it certainly can be significant and we are taking time to make sure that we're going after that I would tell you that recruiting in general was strong in 2023.

Speaker Change: It was lighter.

Speaker Change: And then it had been in the past two years, just by itself, but I guess I could cheat and technically say, we've hired over 350 competitive reps in the fourth quarter.

Operator: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. One moment for our first question. The first question comes from Vick Chopra from Wells Fargo. Your line is open.

Speaker Change: Meaning that our focus is obviously with our counterparts in getting that done and so as a result, not quite as heavy as recruiting but it is a main focus to get back to and I'm pleased with what I see so far this quarter with traffic.

Keith W. Pfeil: Hey, good afternoon, and thanks so much for taking the questions, too, for me. I appreciate all the color of the integration efforts, but maybe you can talk about what surprised you on the upside and as well as the downside, and I have a follow-up question. Thanks. Rick. This is Keith.

Speaker Change: Alright. Thank you one moment our next question.

Speaker Change: Our next question comes from the line of Steve Lichtman from Oppenheimer. Your line is open.

Steven Lichtman: Thank you hi, guys.

Steven Lichtman: You mentioned in your prepared remarks relative to enabling technologies about financing arrangements.

Keith W. Pfeil: I'll take the upside and downsides as it relates to cost. You know, as I think about, as we dig in and start to look at the business more and more, to me, there continues to be great opportunities for operational improvements in manufacturing. I think that bringing the facilities together with our manufacturing and legacy invasive really allows for fixed-cost leverage improvements. You know, those cost savings won't be generated overnight because, as I commented in my prepared remarks, if you're going to be looking at investing in new machinery and equipment, that's got to get online, and then you've got to start to produce the inventory. I think you'll see some of those savings, more so in 2025 and going into 2026. And then, on the backside, I would also say SG&A.

Steven Lichtman: Are you seeing more of a mix of placements.

Steven Lichtman: Versus outright sales and is that something we should look for more from you guys, particularly as some new competitors hit the market.

Steven Lichtman: So great question and thanks for it I would say that in Q4, we saw more volume based sales. So whats the difference year over year interest rates are higher so when you think about the Rev rec or the revenue recognition that occurred a greater portion went to interest income that will be recognized ratably over the life of the deal so when I talk about.

Steven Lichtman: The 2% growth on base business, that's really driven primarily because of because of the interest impact.

Steven Lichtman: And that's really as I think about moving forward will we see more volume based arrangements I think it's going to ebb and flow quarter to quarter I wouldn't say that this is the start of an inflection point, where we're going to be driving more volume based is really going to be driven by what each customer is really looking for.

Keith W. Pfeil: As I look at where we are today, I think that we're continuing to overlay kind of the Globus approach to spending. I think there are opportunities there. But in saying that, Dan commented that, you know, this isn't a slash-and-burn exercise. And some of the things that he commented on are places that we're spending more money. He talked about scientific affairs.

Speaker Change: Got it great.

Speaker Change: Great.

And then just secondly in terms of.

Speaker Change: The ortho business I know I think as you guys talked about potentially showing in your knee system. This this year.

Dan Scavilla: He talked about more surges in outreach. Those are places where we will invest to drive the business moving forward. Yeah, and I'll add to it too, Vic. One of my thoughts, I think, with the upside was really the willingness of the teams to come together and embrace what they had in common, not what was different. And so the readiness of the field and also the in-house, the support, really came together in a way that I thought was great. You know, the downside would just be some of the unsexy things, the heavy lifting you need to do with common processes and common reports and common systems.

Speaker Change: What level of investment is going to be required to get that.

Speaker Change: That business off the ground in any of that embedded in your FY 'twenty four earnings commentary.

Speaker Change: Steve are you talking about the robot or the implants or both.

Speaker Change: Both.

Speaker Change: Okay that would make it tougher.

Speaker Change: The robot itself.

Speaker Change: <unk> built but it is not yet approved so it isn't something we would've built in with any significance in our 2024.

Speaker Change: While we do have some great updated products for some atlas or a press fit knee coming and revision updates we've been light and building them into the forecast just because they have yet to get through and get approval. So I look at all of those as upsides I would signal to you that all of them are anticipated in the second half of the year and we've not seen anything there.

Dan Scavilla: You know, just needed to go run and drive an infrastructure. Not that they're big surprises, just quite not as fun to go after when you have so much innovation and so much room to grow. Great, thanks for the color.

Dan Scavilla: Just to follow up, I think you said that you had some inbound calls from competitive reps; maybe just talk about how meaningful those conversations have been and then just the broad trends in hiring in Q4 and how you see your recruiting and retention efforts shaking out in 2024. Thank you.

Speaker Change: It would take US off course, we we're just conservative having not had FDA approval not building an Amazon needed plan to achieve.

Speaker Change: And relative to the level of investment.

Prior to kind of get that ortho business off the ground is that meaningful at all.

Dan Scavilla: Well, so a couple things. Let's start with the first part. We really do have a lot of foot traffic right now with competitive people coming in and expressing interest proactively with us. And they're meaningful.

Speaker Change: If any of that built in this year.

Speaker Change: I would say that the level of investment would not be meaningful to the year and as we think about development costs, we treat our we expense our development costs as they are incurred so theres not some hanging expense waiting to run through the P&L I think that we will it will come through the P&L in stride in 2024, one other thing I'd add DSD was all of the stuff you need to get to market has been <unk>.

Dan Scavilla: They're large in size, they're well established, and so certainly can be significant. And we're taking time to make sure that we go after that. I would tell you that recruiting in general was strong in 2023, although it was lighter than it had been in the past two years just by itself.

Dan Scavilla: But I guess I could cheat and technically say we've hired over 350 competitive reps in the fourth quarter, meaning that our focus is obviously on our counterparts and getting that done. And so, as a result, not quite as heavy as recruiting, but it is a main focus to get back to. And I'm pleased with what I see so far this quarter with traffic. All right, thank you.

Speaker Change: <unk> over the past couple of years anyway, and so you already have a large level of ortho investment built into 'twenty, two 'twenty three as well as even earlier with that so you shouldnt see a blip in your model or anything that would take you off significantly from where we are.

Speaker Change: Got it thanks guys.

Speaker Change: One moment our next question.

Speaker Change: And our next question comes from the line of Matt Blackman from Stifel. Your line is open.

Operator: One moment for our next question. Our next question comes from Steve Lichtman from Oppenheimer. Your line is open. Thank you. Hi guys.

Mathew Justin Blackman: Good afternoon, everybody. Thanks for taking my questions I've got a couple for Keith maybe just started just a bigger picture guidance question I'm curious what lens, we should be looking through to gauge. The 24 guidance. Historically I think you've guided to a range, where you have high conviction, but where there is also opportunity for upside. So first question has anything changed in your.

Keith W. Pfeil: Keith, you mentioned in your prepared remarks related to enabling technologies financing arrangements. Are we seeing more of a mix of placements versus outright sales? And is that something we should look for more from you guys, you know, particularly as some new competitors hit the market? So, great question. Thanks for it.

Keith W. Pfeil: Guidance philosophy for the now combined company and I have one follow up.

Keith W. Pfeil: I would say that our topline guidance to four five to four five <unk> to $2 75 is something that we feel confident in I would say that we called out some of the sales dis synergies because I wanted to get across the point that we remain extremely excited about our business and the growth prospects, but we're acknowledging that sales dis synergies could exist as it relates to the bottom.

Keith W. Pfeil: I would say that in Q4, we saw more volume-based sales. So, you know, what's the difference year-over-year? Interest rates are higher. So, when you think about the REV-REQ or the revenue recognition that occurred, a greater portion went to interest income, but that'll be recognized relatively over the life of the deal. So, when I talk about the 2% growth in base business, it's really driven primarily because of the interest impact. And that's really it.

Keith W. Pfeil: <unk> the range of 260 to 270, I think it's really a down the middle number I mean in my prepared remarks today I really thought to provide a lot of color as it relates to gross profitability R&D and SG&A expenses and I think that when you kind of pull that together.

Keith W. Pfeil: As I think about moving forward, will we see more volume-based arrangements? I think it's going to ebb and flow quarter to quarter. I wouldn't say that this is the start of an inflection point where we're going to be driving more volume. It's really going to be driven by what each customer is really looking for. All right.

Keith W. Pfeil: 260 to 270 seems reasonable obviously youre always going to try to beat but that's where we're standing as of now.

Speaker Change: Okay I appreciate that and then on that point is while you did give us a ton of P&L.

Speaker Change: You have to work through I'm curious, we didn't really touch on EBIT.

Speaker Change: Which is something that you've you certainly highlighted in the proxy if I recall your commentary has been that the proxy is still the best framework for numbers.

Keith W. Pfeil: Great. And then, just secondly, in terms of. The ortho business, I know, I think at AOS, you guys talked about potentially showing a knee or a knee system this, this year. What level of investment is going to be required to get that business off the ground? And is any of that embedded in your FY 24 earnings comment? Steve, are you talking about the robot or the implants, or both? Yes, both. Okay, that would make it tougher. No, the robot itself is actually built, but it's not yet approved.

Speaker Change: And this is a complicated question so I apologize in advance, but if we actually look back to your EBITDA outlook in the proxy for 2024, I think it was something like $788 million and.

Speaker Change: Appreciate that the synergies have shifted out and so there. There's obviously some changes there, but when we make some adjustments for that the timing of the synergies, we're still coming up with an EBITDA number roughly for 2024 and call. It the $737 50 range is that the right way to think about it.

Dan Scavilla: So it isn't something we would have built in with any significance in our 2024 forecast. While we do have some great updated products for cementless or press fitne coming, and revision updates, we've been light in building them into the forecast just because they have yet to get through and get approval. So I look at all of those as upsides, and I would signal to you that all of them are anticipated in the second half of the year, and we've not seen anything that would take us off course. We were just conservative having not had FDA approval, not building it in as a needed plan to achieve. And relative to the level of investment required to kind of get that ortho business off the ground, is that meaningful at all?

Speaker Change: Or something else, perhaps change that impacts the EBITDA in 'twenty, four and beyond that you've laid out in the proxy.

Speaker Change: Great question, I would say youre not youre not too far off I think that that makes sense. When you think about the S. Four one of the things that I would say it was different is we did a little bit more investment in enabling tech during the year, so that really impacted a little bit of base business profitability, but when you look going forward I think your range you provided it makes it makes a lot of sense.

Dan Scavilla: And if built in, I would say that the level of investment would not be meaningful for the year, and as we think about development costs, we expense our development costs as they're incurred, so there's not some hanging expense waiting to run through the P&L. I think that it'll come through the P&L in stride in 2024. One other thing I'd add to you, Steve, is that all of the stuff you need to get to market has already been spent over the past couple of years anyway, and so you already have a large level of orthopaedic investment built into 2022-23, as well as even earlier with that. So you shouldn't see a blip in your model or anything that would take you off significantly from where we are. Thanks, guys.

Speaker Change: Alright, thanks, so much.

Speaker Change: Thank you one moment our next question.

Shagun Singh: Our next question is from the line of <unk> Singh from RBC. Your line is open.

Shagun Singh: Great. Thank you so much taking the question.

Shagun Singh: Just to follow up on 2020 full guidance can you provide us.

Shagun Singh: Any help on the cadence look like you did call out $150 million in potential dis synergies how should we think about that and then is there any cross selling opportunity included in that and then I have a follow up.

Speaker Change: I would say the $150 million, we're really looking at that throughout throughout the entire year in the continuum across all our businesses.

Speaker Change: As it relates to cross selling we would've assumed cross selling in our in our guidance number this year of the two for $5 to $2 75.

Operator: One moment for our next question. And our next question will come from the line of Matt Blackman from Stiefel. Your line is open. Good afternoon, everybody. Thanks for taking my questions. I've got a couple for Keith.

Speaker Change: Dan anything you'd add to that yes, <unk>, what I would just tell you is the 150 that Keith referenced is the gross number we would look to offset that through cross selling and other growth and things like that it's just a natural one that we built in but it has not been netted down for the cross selling we're going to do that as a way to soften it from that point.

Keith W. Pfeil: Maybe just to start, just a bigger picture guidance question. Curious what lens we should be looking through to gauge the 24 guidance. Historically, I think you've got it to a range where you have high conviction but where there's also opportunity for upside. So first question, has anything changed in your guidance philosophy for the now combined company? And I have one follow-up. I would say that, you know, our top-line guidance, the 2450 to 2475, is something that we feel confident in. I would say that we called out some of the sales synergies because I wanted to get across the point that, you know, we remain extremely excited about our business and the growth prospects, but we're acknowledging that sales synergies could exist. As it relates to the bottom line, the range of 268 to 270, I think it's really a down-the-middle number.

Speaker Change: Understood and then.

Speaker Change: We have two new competitive spine robot coming to market from leather market players, including one that has been our media schedule now for the last several years. So I guess a two part question. How do you expect the new robotic systems to compete in the market.

Speaker Change: Dr offering and how do you think of the implant share dynamics as these companies may have better ability to kind of defend their own position in the market. Thank you for taking the questions.

Speaker Change: Yes, it's a great question as one really to be defined further we've got to see the actions that are taken there at the end of the day you have a large unmet clinical need we've got a robot that is superior and we think that even with competition, which we've called would be coming for years may arrive over the next 24 months that's okay.

Speaker Change: We're set to poised.

Speaker Change: And compete this way part of doing this merger was to create the size and the reach in order to also not only penetrate faster but compete in this fashion and so I think we're well poised to go head to head with antibody in this sense and while I would think about it.

Keith W. Pfeil: I mean, in my prepared remarks today, I really wanted to provide a lot of color as it relates to gross profitability, R&D, and SG&A expenses. And I think that when you kind of pull that all together, you know, 268 to 270 seems reasonable. Obviously, you're always going to try to beat it, but that's where we're standing as of now.

Speaker Change: There may be more choices over the long term for.

Speaker Change: Our customers and that's why you have to focus on driving innovation and putting products out that make meaningful differences.

Keith W. Pfeil: Okay, I appreciate that. And then on that point as well, you gave us a ton of P&L stuff to work through. I'm curious, we didn't really touch on EBITDA, which is something that you certainly highlighted in the proxy. And if I recall, your commentary has been that the proxy is still the best framework for numbers. This is a complicated question, so I apologize in advance.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: And our next question comes from the line of David Saxon from Needham Your line is open.

David M. Demski: Great. Thanks for taking my questions.

David M. Demski: Congrats on the quarter.

David M. Demski: Maybe to start on the integration I would love to hear the feedback youre getting from from our sales reps, calling the territory integration.

David M. Demski: That you guys completed in November.

Keith W. Pfeil: But if we actually look back to your EBITDA outlook in the proxy for 2024, I think it was something like $788 million. And I appreciate that synergies have shifted out, and so there's obviously some changes there. But when we make some adjustments for that, the timing of the synergies, we're still coming up with an EBITDA number roughly for 2024, and we call it the $730 to $750 range. Is that the right way to think about it? Or is there perhaps something else that impacts EBITDA in 2024 and beyond that you've laid out in the proxy? That's a great question.

David M. Demski: I know youre, saying attrition is kind of in line with expectations, but the attrition that you are seeing is it in territories that were kind of most disrupted.

David M. Demski: And then how are you thinking about kind of following those.

David M. Demski: You can see with some of these competitive reps we've called out.

Speaker Change: Thanks, David.

Obviously, it becomes a personal matter for reps and youre going in and making changes and most people assume in nature.

Speaker Change: Adapt well or appreciate change in the state of uncertainty so going through that quickly or as quick as we can.

Speaker Change: Is meaningful.

Speaker Change: Honest with you the teams that I've worked with throughout the world have been fantastic.

Keith W. Pfeil: And I would say you're not too far off. I think that makes sense. When you think about the S4, one of the things that I would say was different is that we did a little bit more investment in enabling tech during the year. So that really impacted a little bit of base business profitability. But when you look going forward, I think your range you provided makes a lot of sense. All right, thanks so much.

Speaker Change: And the vast majority have been willing to roll to sleeves and figure out where to work and how to cut up the spaces remember the thing we've called out clearly as we had very low overlap in fact by the time, we were unblinded. It was in the neighborhood of 3% in the U S. So it wasn't a major amount of untangling. So much as just reorganizing for the most efficient thing.

Keith W. Pfeil: Thank you. Please take a moment for our next question. Our next question will come from Shagun Singh from RBC. Great, thank you so much for taking the question. Just to follow up on 2024 guidance, can you give us, give us any help on the cadence of it? You did call out $150 million in potential dis-synergies. How should we think about that? And then is there any cross-selling opportunity included in that? And then I have a follow-up question.

Areas that have deposit that we may attribute to this change I think theres sporadic I don't think it was a density in certain areas that I would call out here again, and probably just more of a personal comfort or are they comfortable with this change where they like to go somewhere else and we're working through that filling it.

Speaker Change: We have a lot of reps and we need all of our reps. So we're looking where we spread out and we will keep our eye focused on competitive recruiting as we have in past years and use that as a growth mechanism.

Keith W. Pfeil: I would say $150 million. We're really looking at that throughout the entire year and the continuum across all our businesses. As it relates to cross-selling, we would have assumed cross-selling in our guidance number this year, the 245 to 2475. Dan, anything you'd add to that? Yeah.

Speaker Change: Okay, great. Thanks, so much for that and then I wanted to ask on the knee robot launch I'd love to hear you.

Speaker Change: The strategy around the launch like what type of accounts are you going to target initially what's your confidence in supply and manufacturing capacity and then how should we think about this delcath implant rep ramp.

Keith W. Pfeil: Shagun, what I would just tell you is the 150 that Keith referenced is the gross number. We would look to offset that through cross-selling and other growth and things like that. It's just a natural one that we've built in, but it hasn't been netted down for cross-selling. We're going to do that as a way to soften it from that point.

Speaker Change: Kind of build the robotics installed base. Thanks, so much.

Speaker Change: Youre welcome I would tell you we certainly have ordered the long lead time components and we've expanded our capacity not only to handle.

Speaker Change: The merger, but also for this so I feel like we're set to do that way, we've been scaling up implant sets as well slowly right now because we need to get through and get the approvals before we go bigger with it the truth.

Keith W. Pfeil: And then, you know, you potentially have two new competitive spine robots coming to market from larger market players, including one that has been a major share donor for the last several years. So I guess a two part question: how do you expect the new robotic systems to compete in the market relative to your offering? And how do you think of the implant share dynamics as these companies may have a better ability to kind of defend their own position in the market? Thank you for taking the question. Yeah, it's a great question. It's one that really should be defined further.

Speaker Change: Truth is the strategy will come together, a little bit more into the second quarter and early third quarter as we get through and understand when we can launch this and where we'll go.

Speaker Change: <unk> tell you. It's an open strategy right now of course, the need to be in afcs is prominent given where those procedures take place, but by all means we'll take advantage of hospitals as well. So you are going to be what we do is globus covering all of these areas versus being hyper focused and what will deals will start with concentric circles establish ourselves invest more and continue.

Dan Scavilla: We've got to see the actions that are taken there. At the end of the day, you have a large unmet clinical need. We've got a robot that is superior, and we think that even competition, which we've called would be coming for years, may arrive over the next 24 months. That's okay.

Speaker Change: Until we build up the momentum like we've done in spine over the years.

Speaker Change: Great. Thanks, so much.

Dan Scavilla: You know, we're set to poise and compete this way. Part of doing this merger was to create the size and the reach in order to not only penetrate faster but compete in this fashion. And so I think we're well poised to go head to head with anybody in this sense, and while I would think about it, there may be more choices over the long term for our customers. And that's why you have to focus on driving innovation and putting products out that make meaningful differences. Thank you. One moment for our next question, and this comes from the line of David Saxon from Needham. Your line is open.

Speaker Change: Thank you one moment our next question.

Speaker Change: Our next question comes from the line of Matt <unk> from Barclays. Your line is open.

Mathew Justin Blackman: Okay, great. Thanks, so much for taking the question and.

Mathew Justin Blackman: Congrats.

Mathew Justin Blackman: Progress on all the great color.

Mathew Justin Blackman: And maybe Dan just diving into.

Mathew Justin Blackman: One of the things that you just mentioned about the ASC.

Mathew Justin Blackman: No.

Curious if you could maybe talk a little bit about.

Mathew Justin Blackman: How that is shaking out as an opportunity.

Mathew Justin Blackman: Or for the combined business, how big that was or is for.

Mathew Justin Blackman: Globus legacy or debates over both in terms of the percentage of your business kind of do the AMC what you do.

Dan Scavilla: Great. Thanks for taking my questions. And congratulations on the quarter. Maybe to start on the integration, I'd love to hear the feedback you're getting from the sales reps following the territory integration that you guys completed in November. I know you're saying attrition is kind of in line with expectations, but the attrition that you are seeing, is it in territories that were kind of most disrupted? And then how are you thinking about filling those vacancies with some of these competitive reps you've called out? Thanks, David. You know, obviously, it becomes a personal matter for reps, and you're going in and making changes, and most people, by human nature, don't adapt well or appreciate change in this state of uncertainty, so going through that quickly, or as quick as we can, is meaningful. I'll be honest with you.

Mathew Justin Blackman: Doing to participate in that growth opportunity on the spine side, then I have one follow up with you.

Speaker Change: Yeah, you got it Matt So we won't disclose a certain business segment obviously.

Mathew Justin Blackman: So I'll leave that one out what we are looking at what we recognize is of course, there is a migration at a certain cadence of procedures that go out into the IC and so as appropriate we're looking to understand the best way to place, enabling tech versus freehand navigation versus just freehand period, and we're working through that as well.

Speaker Change: <unk>.

Speaker Change: To date, we're still putting together, what we want to do as an ASC strategy in that particular area is the new combined organization, but again it won't be any significant deviation I can't imagine calling it out to any size in 2024, I think it's one that as we fine tune and get better feel for the stabilized sales force, we'll bring this together and probably be stronger at that.

Speaker Change: Push later in the year into 2025.

Speaker Change: Okay.

Speaker Change: And then just on.

Speaker Change: Maybe a follow up on some of the integration.

Speaker Change: The dynamics are there.

Dan Scavilla: The teams that I've worked with throughout the world have been fantastic, and the vast majority have been willing to roll up their sleeves and figure out where to work and how to cut up the spaces. Remember, the thing we've called out clearly is that we have very low overlap. In fact, by the time we were unblinded, it was in the neighborhood of 3% in the U.S., so it wasn't a major amount of untangling so much as just reorganizing for the most efficient thing. Areas that have departed that we may attribute to this change, I think they're sporadic. I don't think it was the density in certain areas that I would call out here. Again, and probably just more of a personal comfort level, are they comfortable with this change? Would they like to go somewhere else?

Speaker Change: Yeah.

Speaker Change: Working through the combination of the field force and everything that you've talked about.

Speaker Change: We were pretty happy with the way that the new base in numbers came in in Q4.

Speaker Change: But I think if I can speak for investors that we talk to about the opportunity here is there still some.

Speaker Change: Apprehension about.

Speaker Change: When when do we start to feel like things are we're on the we're on the tail end or.

Speaker Change: Downward slope of the risk of maybe the synergies getting bigger than we were expecting.

Speaker Change: Is Q1 that transitional period do you think do we have to wait until Q2 or maybe.

Speaker Change: Another way what are some of the signals.

Data points.

Speaker Change: We can look for or think about that will help us to finally put all that sort of concern from last year.

Dan Scavilla: We're working through that, filling it. We have a lot of reps, and we need all of our reps, so we're looking where we can spread out, and we will keep our eye focused on competitive recruiting as we have in the past years and use that as a growth mechanism. Okay, great. Thanks so much for that.

Speaker Change: Tibet.

Speaker Change: Got it.

Speaker Change: Yes, it's a great question.

Speaker Change: I'm guessing here, but I would think that we would see activity in the first quarter and be able to understand where that is and what it is my thought would be exiting first quarter in the second quarter I would think it should be a touch more stable.

But this is just me guessing based on really only having one month's actual data for the year that way, but when we call out steady state by June we're doing unintentionally, saying that we think that Salesforce has settled in getting through the learning curve should get the bumps out of your system implementations and you work into a cadence really what I think is through the first quarter into the second but you exit the second quarter.

Dan Scavilla: And then I wanted to ask about the Neve robot launch. I'd love to hear your strategy around the launch, like what type of accounts are you going to target initially? What's your confidence in supply and manufacturing capacity? And then how should we think about the Stelcast implant ramp, as you know, you kind of build the robotics installed base. Thanks so much.

Speaker Change: <unk>.

Speaker Change: Going back to doing what you do best which is innovate take share and grow.

Dan Scavilla: No, you're welcome. I would tell you that we certainly have ordered the long-lead-time components, and we've expanded our capacity not only to handle the merger but also for this. So, I feel like we're set to do that way. We've been scaling up implant sets as well, slowly right now, because we need to get through and get the approvals before we go bigger with it. You know, the truth is, the strategy will come together a little bit more in the second quarter and early third quarter as we get through and understand when we can launch this and where we'll go. I would tell you it's an open strategy right now.

Speaker Change: Thanks, so much.

Speaker Change: Yes.

One moment for our next question.

Speaker Change: And our next question comes from the line of Matthew O'brien from Piper Sandler Your line is open.

Matthew Miksic: Great. Thanks for taking my questions I guess.

Matthew Miksic: Just for starters.

Matthew Miksic: When.

Matthew Miksic: You put the Standalone <unk> Standalone, Jim as the other and I know, there's moving parts here, but.

Matthew Miksic: You do that you take the dis synergy out I'm getting like.

Matthew Miksic: $50 million of.

Matthew Miksic: Cross selling benefit here. This year is that number about right and then the $150 million of dis synergies.

Speaker Change: That seems like a lot in one year I'm, just wondering what exactly that baking in and now we've learned about Texas, maybe turning over their interest and give a lot in one year, so what what's being baked in there and then I do have a follow up.

Dan Scavilla: Of course, the need to be in ASCs is prominent, given where those procedures take place, but by all means, we'll take advantage of hospitals as well. So, you're going to be, like we did with Globus, covering all these areas versus being hyper-focused, and what we'll do is we'll start with concentric circles, establish ourselves, invest more, and continue until we build up the momentum like we've done in spine Great, thanks so much.

Speaker Change: Thanks, Matt again remember we're globally. So we're conservative in what we look at it what we estimate we're putting numbers out that we would look to control our beat where possible, let's say and it's a slam dunk. We're just being realistic that we have created a market disruption as we become number one in the market and so we expect folks to react to that and I think it would be.

Dan Scavilla: Thank you. One moment for our next question. Our next question will come from the line of Matt Miksic from Barclays. Your line is open.

Dan Scavilla: Hey, great. Thanks so much for taking the question. And congrats on the progress and all the great color.

Speaker Change: Unrealistic not to think you would lose stuff. So it's an estimate but not really based on any factors you are calling out certain geographies that I wouldnt comment on.

Dan Scavilla: Maybe, Dan, I'll just dive into one of the things that you just mentioned about the ASM. I'm curious if you could maybe talk a little bit about how that's shaking out as an opportunity for the combined business, you know, how big that was or is for Globus Legacy or Devasiv, or both, in terms of the percentage of your business going through the ASC and what you're doing to participate in that growth opportunity on the spine side, and then add one follow-up. Yeah, you got it, Matt.

Speaker Change: Just because like I said, we did it more from a top side at number as an area to build from and look to go to from that way.

Speaker Change: Okay, but even with the low overlap I mean that 150, it seemed like a big number.

Speaker Change: I mean, I would say that it is a large number but when I step back and look at sales. When you look at the combined sales from 2022, that's about to about 7%, but to Dan's point earlier to gross.

Dan Scavilla: So we won't disclose a certain business segment, obviously. So I'll leave that one out. What we are looking at, what we recognize is, of course, there is a migration at a certain cadence of procedures that go out into the ASC. And so, as appropriate, we're looking to understand the best way to place enabling tech versus freehand navigation versus just freehand, period. And we're working through that as well. To date, we're still putting together what we want to do as an ASC strategy. And that particular area is the new combined organization. But again, there won't be any significant deviation. I can't imagine calling it out to any size in 2024.

Speaker Change: Or you consider cross selling opportunities to offset that.

Speaker Change: Bringing the portfolios together again youre going to be looking at the legacy <unk> team is going to be looking at Globus expandable cages, they're going to be looking at globus, enabling technologies. When you look at the invasive products. The legacy global Strep is going to be looking at an invasive lateral procedures. So there's cross selling in there there is cross selling that's not in that $1 50.

Speaker Change: At the end of the day, it's an imprecise science, but where base basing this on what we see yes, if you're still getting things you say between 5% to 10% of sales could be disrupted we're right in the middle and we came up with that number and then we say okay. That's again the gross number and then how do you beat that through cross selling through growth through natural account through competitive hiring.

Dan Scavilla: I think it's one that as we fine-tune and get a better feel for the stabilized sales force, we'll bring this together and probably be stronger at that push later in the year into 2025. Okay, and then maybe a follow-up on some of the integration and dynamics of, you know, working through the combination of the field forces and everything that you've talked about. We were pretty happy with the way that the new basis numbers came in Q4. But I think if I could speak for investors that we talked to about the opportunity here, there's still some apprehension about when do we start to feel like things are, we're on the tail end, or they're on the downward slope of the risk of maybe the synergies getting bigger than we were expecting.

That's where we're saying, but we are just putting out saying based on our formula is if you've picked a historical norm that would be the number we've put out and then go to beat by outgrowing it.

Speaker Change: Got it Okay. Appreciate that and then Keith as far as no back to Matt <unk> question on EBITDA I think you guys said when you did the deal.

Keith W. Pfeil: We post the closing you'd be back in kind of the mid thirty's as far as EBITDA grows I mean this guidance is more like kind of low 30, that's a lot of leverage and we're expecting over the next three years, you're going to get to 33%. So just talk about the confidence in getting back to that mid thirty's and kind of where that comes from.

Dan Scavilla: Is Q1 that transitional period, do you think? Do we have to wait until Q2 or maybe another way? What are some of the signals? data points and, you know, that we can look for or think about that will help to finally address all that sort of concern from last year? I appreciate it. Yeah, it's a great question. And you know, I'm guessing here, but I would think that we would see activity in the first quarter and be able to understand where that is and what it is. My thought would be exiting the first quarter; in the second quarter, I would think it should be a touch more stable.

Keith W. Pfeil: Up and down the P&L. Thanks.

Keith W. Pfeil: So we're confident we're confident in that when you think about the 170 that we called out.

Keith W. Pfeil: <unk>, 40% this year is about $68 million youre going to get 70% and 100%.

Keith W. Pfeil: As you think about the cadence it's important to think about some of my prepared comments talked about manufacturing and operations. Those are longer lead time items things in SG&A and R&D those will happen more quickly. So when you think about the $68 million I would say give or take 20% of that is going to be in cogs. The other 80% is going to come through R&D and SG&A in 2000.

Dan Scavilla: But this is just me guessing based on really only having one month's actual data for the year that way. But, you know, when we call out steady state by June, we're doing that intentionally, saying that we think that Salesforce has settled in getting through the learning curves, and you get the bumps out of your system implementations. And you're working into a cadence, really, what I think is through the first quarter and into the second, but you exit the second quarter, going back to doing what you do best, which is innovate, take share, and grow. Thanks so much.

Keith W. Pfeil: 24, but we have to plant the seeds for the future manufacturing improvements to drive improved P&L profitability. So what does that mean, what does that mean as that thing im going to pay attention to this year, such as getting into back half of the year cash flow because if I'm renegotiating contracts as you see improvements in working capital because of inventory on <unk>.

Dan Scavilla: Thank you. One moment for our next question, and our next question comes from Matthew O'Brien on Piper Sandler. Your line is open.

Raw materials cheaper than buying things and bringing them in house 2025 does the equipment out of investing is coming online and I'm producing inventory and building of inventory for them, which I will sell later in 'twenty five and 26, that's where you're going to see a lot of that benefit and thats going to be really in 2005 and 26%. So from my perspective, our view of getting back to mid <unk>.

Dan Scavilla: Great, thanks for taking the questions. I guess just for starters, when you put the standalone NUVA and standalone GMEDS together, and I know there's moving parts here, but you do that, you take the Dyssynergy out, I'm getting like, you know, $50 million of cross selling benefit here this year. Is that number about right? And then the $150 million in Dyssynergies. You know, that seems like a lot in one year. I'm just wondering what exactly that's going on.

Speaker Change: Right now I feel good about that.

Speaker Change: Okay. Thank you one moment our next question.

Speaker Change: And our next question comes from the line of Matt Taylor from Jefferies. Your line is open.

Matt Taylor: Hi, guys. Thanks for taking the question.

So I just wanted to ask you about.

Dan Scavilla: I know we've heard about Texas maybe turning over, but that just seems like a lot in one year. So what's being baked in there? And then I do have a follow-up. Thanks, Matt. Well, again, remember that we're Globus, so we're conservative in what we look at and what we estimate. We're putting numbers out that we would look to, you know, control or beat where possible. I'm not saying it's a slam dunk.

Matt Taylor: Two kind of side items, one was I thought it was interesting that you bought back stock in Q4. So maybe you could talk about your decision to do that whether that was opportunistic because I know you said.

Matt Taylor: M&A was the priority.

Matt Taylor: We're just a double AOS and you were talking about the ortho robot I know, we could see some of that more later this year and I guess my question would be do you expect the contributions from that to be material not this year, but maybe next year.

Dan Scavilla: We're just being realistic that we have created a market disruption as we become number one in the market, and so we expect folks to react to that. And I think it would be unrealistic not to think you would lose stuff. So it's an estimate, but not really based on any factors. You're calling out certain geographies that I wouldn't comment on, just because, like I said, we did it more from a top-sided number as an area to build from and look to go from there. Okay, Dan, but even with the low overlap, I mean, that 150 seems like a big number.

Matt Taylor: Hey, Matt This is Dan I'll actually answer and then hand, it off to Keith So.

Dan: Look we think that the market has overreacted in the stock price is actually at a deal and.

Dan: We're going to take the opportunity to use our strong cash and buy that back to reduce dilution actually set it up for other reasons. So it's opportunistic but it's also the plan of we will keep doing that because we believe strongly in where this is going to go we play for the long term, but we will use it to our advantage now.

Keith W. Pfeil: I'd say that it is a large number, but when I step back and look at sales, when you look at the combined sales from 2022, that's about 7%, but to Dan's point earlier, it's a gross number before you consider cross-selling opportunities to offset that. Bringing the portfolios together, again, you're going to be looking at the legacy Nuvasive team is going to be looking at Globus expandable cages, and they're going to be looking at Globus enabling technologies. When you look at Nuvasiv products, the legacy Globustrep is going to be looking at Nuvasiv lateral procedures.

Dan: That'd be the first one for double AOS and the robot, we're really happy with it as I said, we haven't filed yet it hasn't been approved we think it's going to be in the second half of the year I would tell you I would not expect material moves of that in 2024, I think thats going to be more of a 2025 story.

And Keith I don't really I don't really have a lot to add to Dan's comment I think you hit it head on there. Thanks.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next.

Speaker Change: Comes from the line of Ryan Zimmerman from <unk>. Your line is open.

Keith W. Pfeil: There's cross-selling that's not in that 150, and at the end of the day, it's an imprecise size, but we're basing this on what we've done. Yeah, if you just look at things, you know, you say between 5 to 10% of sales could be disrupted. We're right in the middle when we came up with that number. And then we say, okay, that's, again, the gross number; then how do you beat that through cost selling, through growth, through natural accounts, through competitive hiring? We do that, but we're just putting out, saying based on our formulas, if you picked a historical norm, that would be the number we'd put out and then go to beat by outgrowing it. Got it.

Ryan Zimmerman: Hey, guys. Thanks for taking the question.

Ryan Zimmerman: Want to follow up maybe on Matt's question in a different way.

Ryan Zimmerman: If you take kind of the the prior numbers Keith I think you called out.

$2 $3 96 billion.

Ryan Zimmerman: I look at where the guidance plans and again backing out the synergies.

Ryan Zimmerman: Come out to about 3% or so for FY 'twenty four.

Speaker Change: So I guess I'm curious kind of what your view of the market is relative to that number.

Speaker Change: Is the market growing at that rate is the market growing faster than the rate it feels like coming out of iOS in the early part of the year market has been pretty healthy and so are you.

Keith W. Pfeil: Okay, appreciate that. And then, Keith, as far as, you know, back to Matt Blackman's question on EBITDA, I think you guys said when you did the deal, you know, year three, post the closing, you'd be back in kind of the mid-30s as far as EBITDA goes. But this guidance is more like kind of the low-30s.

Speaker Change: Are you, suggesting that you guys are growing that market, Brian maybe slightly below market.

Speaker Change: And then the <unk>.

Speaker Change: Second point to that question is when you think about the guidance of the two for $5 2.4 dollars 75 now we all have these old models from all of the different segments and I know that's now one company but.

Keith W. Pfeil: It's a lot of leverage that we're expecting over the next, I guess, three years, even to get to 33%. So just talk about the confidence in getting back to that mid-30s and kind of where that comes from up and down the P&L. So we're confident; we're confident in that. When you think about the 170 that we called out, 40% this year is about $68 million. You're going to get to 70% and then 100%.

Speaker Change: Maybe help us piece together kind of where you see that growth coming from is it within cervical is that within.

Speaker Change: So.

Speaker Change: Support and neuro monitoring in international just because some of those components beyond maybe Moscow skeletal enabling tech if.

Speaker Change: If you're willing to comment on those would be helpful.

Yes. So thanks, Ryan for the question so as I think about the $2 45 to $2 75 from a growth perspective.

Speaker Change: Commented earlier on a previous question about what each legacy sales team will be looking for.

The legacy <unk> side, there'll be excited to sell globally expandable cages Clovis, enabling technologies.

Keith W. Pfeil: As you think about the cadence, it's important to think about some of my prepared comments. I talked about manufacturing and operations. Those are longer lead time items. Things in SG&A and R&D, those will happen more quickly. So when you think about the 68 million, I would say give or take 20% of that's going to be in COGS. The other 80% is going to come through R&D and SG&A in 2024, but we have to plant the seeds for future manufacturing improvements to drive improved P&L profitability. So what does that mean?

Speaker Change: C Clovis will be focused on.

Speaker Change: On lateral lateral procedures things of that nature.

Speaker Change: When I think about the where internationally I think if you go back and look at historical basis, and Globus numbers I think we've both been on a pretty good clip of growing share internationally I would expect to see spinal implants, continuing to see that growth moving forward.

Speaker Change: Number.

Speaker Change: Trauma legacy trauma business continues to perform well.

Speaker Change: <unk> has had some products in that portfolio as well that we think together, we're going to be better together and drive share growth.

Keith W. Pfeil: What that means is that the thing I'm going to pay attention to this year, especially as we get into the back half of the year, is cash flow. Because if I'm renegotiating contracts, I just see improvements in working capital because of inventory. I'm buying raw materials cheaper. I'm buying things, and I'm bringing them in-house. In 2025, the equipment that I'm investing in is coming online, and I'm producing inventory. I'm building that inventory, which I will sell later in 25 and 26. That's where you're going to see a lot of that benefit, and that's going to be really noticeable in 25 and 26. So from my perspective, our view of getting back to the mid-30s, right now, I feel good about that. Thank you. Please take a moment for our next question. And our next question will come from the line of Matt Taylor from Jeffries. Your line is open.

Speaker Change: As I think about enabling tech again that gets back to the cross selling opportunity.

Speaker Change: That brings you back to U S spine and really your initial question you talked a little bit about the growth that you've seen being two years or 3% or where are we growing so.

Speaker Change: Early on we're going to have these dis synergies, we called out the $150 million gross to synergy.

Speaker Change: Our growth rate clearly is slowing down here for the for the first portion of the year, but to Dan's point youre getting into the first second quarter, you're really working to move towards a steady state getting into the second half of year in moving this forward, we still fully believe that we can provide.

Speaker Change: Mid to high single digit growth, but we're acknowledging that this first year, there is going to be dis synergies.

Speaker Change: I think to run the fun thing with this back to your point the growth.

Dan Scavilla: Hi guys, thanks for taking the question. So I just wanted to ask about two kinds of side items. One was I thought it was interesting that you bought back stock in Q4. So maybe you could talk about your decision to do that, whether that was opportunistic, because I know you said tucking M&A was the priority. And then we were just at AAOS, and you were talking about the ortho robot. I know we could see more of that later this year. And I guess my question would be, do you expect the contributions from that to be material? Not this year, but maybe next year? Hey Matt, this is Dan.

Speaker Change: I'm going to say it's everywhere.

Speaker Change: Because you're right you have got a great cervical disc that we can leverage you've got a GPS and <unk> youre going to have the neuro.

Speaker Change: Monitoring systems that we can go apply to our business and the cross selling there is a lot out there that we could go on and on so I think what we're looking to do is healthy growth throughout all of the portfolio and really showing it that way versus focusing on one or two areas of concentration.

Speaker Change: Okay.

Speaker Change: I appreciate you answering that multipart question, then I'm going to squeeze in one more and I appreciate taking the questions here, but I was late to the party at AOS, but I did see I didn't have a chance to go by the booth.

Dan Scavilla: I'll actually answer and then hand it off to Keith. So, you know, look, we think that the market has overreacted and the stock price is actually at a deal. And we're going to take the opportunity to use our strong cash and buy that back to reduce dilution and actually set it up for other reasons. So, yeah, it's opportunistic, but it's also the plan that we'll keep doing that because we believe strongly in where this is going to go. We play for the long term, but we'll use it to our advantage now. That'd be the first one.

Speaker Change: Some of the new component that you have and it feels like you and your largest competitor within robotics are moving a little bit more in terms of cranial flexibility in terms of your ability to maybe move into things like bone cutting right.

I'm, just curious kind of how you think about.

Dan Scavilla: You know, for AAOS and the robot, we're really happy with it. As I said, we haven't filed yet. It hasn't been approved.

Speaker Change: <unk> robotics is going particularly within spine.

Dan Scavilla: We think it's going to be in the second half of the year. But I would tell you I would not expect material moves like that in 2024. I think that's going to be more of a 2025 story. And Keith, I don't really have a lot to add to Dan's comment. I think he hit the nail on the head there.

Do you feel like Youre, hitting a ceiling within Europe <unk> within maybe a core spinal robotics application and having the venture beyond into areas like cranial or joint reconstruction et cetera, and Thats what were seeing in kind of the.

Dan Scavilla: One moment for our next question. Our next question comes from the line from Ryan Zimmerman from BTIG. Hey guys, thanks for taking the questions. I want to follow up maybe on Matt's question in a different way. You know, if you take kind of the prior numbers, Keith, I think you'd call that.

Speaker Change: Pipeline, if you will of products that you're offering now.

Speaker Change: So it's a great question a couple of things we've been in cranial for a long time with a robot and have great capabilities. There, there's absolutely room to expand and I think as <unk> said in one of the things I've called out that I'm most excited about.

Dan Scavilla: 2.396 billion, you know, when I look at where the guidance lands and again, back out. It'd come out to about 3% or so for FY24. And so I guess I'm curious about what.

Speaker Change: The array of power solutions that we're bringing forward in the near term. We will also work well with all of that enabling technology and further enhance the surgeon experience by all means.

Dan Scavilla: The Bulletproof Executive 2013, You know, is the market growing at that rate? Is the market growing faster than that? It feels like, you know, coming out of AOS, the early part of the year, the market's been pretty healthy. And so, you know, are you suggesting that you guys are growing at the market, growing maybe slightly below the market? And then, you know, the second point to that question... When you think about the guidance of the 2.45... 475. Now, we all, you know, we all have these old models from all the different segments, and I know it's now one company, but maybe it could help us piece together kind of where you see that growth coming within cervical cancer is that within, you know, report. Neuromonitoring.

Speaker Change: But if you really talk about the spinal robot they are in their infancy, not only in penetration, but capabilities and so you can have a very long journey of increasing the entire procedural application from bone soft tissue removal interbody placement on our own planning all of that fair for years to come with a lot of space and like I said, even combined.

Speaker Change: All of US combined are just really touching the robotics and Theres a lot of room for growth to come for many years. So I don't think we're anywhere near hitting the top or flattening out I think this is the start of some amazing changing technology.

Speaker Change: Thank you Dan.

Speaker Change: One moment for our next question.

Dan Scavilla: International. Just some of those components beyond maybe musculoskeletal enablement are you willing to comment on? Yeah, so thanks, Ryan, for the question. So as I think about the 2.45 to 2.75 from a growth perspective, I commented earlier on a previous question about what each legacy sales team would be looking for. You know, on the legacy NuVasa side, they'll be excited to sell Globus expandable cages, Globus enabling technologies, legacy Globus will be focused on lateral procedures, things of that nature. When I think about where, internationally, I think if you go back and look at historical NuVasa and Globus numbers, I think we've both been on a pretty good glip of growing share internationally. I would expect to see spinal implants continue to see that growth moving forward.

Speaker Change: Our next question comes from the line of Jason Wittes from Ross Your line is open.

Hi, Thanks for taking questions if I could just revisit the synergy number.

Jason Wittes: Based on your earlier comments it sounds like you've kind of just took the midpoint of five to 10.

Jason Wittes: Percent dis synergies and I think that's partly due to the fact that based on what you're seeing now but also.

Speaker Change: You have to see what happens in the next two quarters is that the right way to think about it or is that how you came to that number and I'm just trying to understand your thoughts behind that yes. Okay. Okay. That's fair and then in terms of quarterly cadence can you help us out in terms of how we should think about.

Speaker Change: Revenues and also just.

Speaker Change: How expenditures kind of flow through the year.

Speaker Change: We're not we're not going to break out and provide quarterly guidance at this point.

Speaker Change: Okay, but then.

Just from a general standpoint, I think you've kind of implied that.

Dan Scavilla: The trauma business, you know, our trauma, legacy trauma business continues to perform well. NuVasa has some products in that portfolio as well that we think together we're going to be better together and drive share growth. As I think about enabling tech, again, that gets back to the cross-selling opportunity. That brings you back to U.S. Spine and really your initial question.

Speaker Change: The first half.

Based on your comments that you made I guess throughout the throughout this call. It does sound like it's somewhat back end loaded, meaning theres going to be a fair amount of still.

Speaker Change: Reorganization in the first half a lot of it I guess already occurred.

Speaker Change: And then in terms of your ability to start picking up are gaining market share. It sounds like you kind of anticipate that by the end of the year youre going to be positioned to start.

Dan Scavilla: You talked a little bit about the growth that you've seen being 2% or 3%. Where are we growing? So, early on, we're going to have these dis-energies. We called out the $150 million gross dis-energy. Our growth rate is clearly slowing down here for the first portion of the year.

Speaker Change: Growing sort of above market and as the market leader is that a fair way to think about it.

Speaker Change: That's a fair way to think about it.

Speaker Change: But as it relates to cost synergies, specifically, we would expect to see that improve sequentially as we get throughout the year.

Dan Scavilla: But to Dan's point, you're getting into the first and second quarter; you're really working to move towards a steady state, getting into the second half of the year and moving this forward. We still fully believe that we can provide mid to high single-digit growth, but we're acknowledging that this first year there's going to be dis-energy. Yeah, I think too, Ryan, the fun thing with this, back to your point, the growth. I'm going to say it's everywhere. Because you're right, you've got a great cervical disc that we can leverage, you've got eGPS and any 3D, you're going to have the neuro, you know, monitoring systems that we can apply to our business and cross selling. There's a lot out there that we could go on and on about.

Speaker Change: Okay. That's helpful. Thank you very much.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: And as a quick reminder, that just final one for a question star one one.

Speaker Change: One moment for our next question.

Okay.

Speaker Change: Our next question comes from the line Craig.

Craig: Greg Bayou from Banc of America Securities. Your line is open.

Craig: Great. Thanks for taking the questions guys.

Craig: Wanted to ask first on the $150 million revenue dis synergies and.

Speaker Change: I appreciate that.

Matthew Miksic: You gave us that number but I think in the S. Four you were expecting roughly 200, and maybe 50% of that in year. One. So just wanted to kind of reconcile that 150 for 24 and could there still be some incremental synergies in year two year three post deal.

Dan Scavilla: So I think what we're looking to do is healthy growth throughout all of the portfolio and really showing it that way versus focusing in on one or two areas of concentration. I appreciate you answering that multi-part question. Then I'm going to squeeze in one more question, and I appreciate taking the questions here, but I was late to the party at AOS, but I did see, I did have a chance to go by the... See some of the new, you know, components that you have, and it feels like you and your largest competitor within robotics are moving a little bit more in terms of cranial applicability, www.globusmedical.com Particular And that's what we're seeing in kind of the pipeline, if you will, of products that you're offering. So it's a great question.

So I would say, yes, there could be incremental synergies in year two year three post deal. The $1 50 was really just taken a more refresh look I mean, when we commented on the S. Four at that point in time, we thought it was a good number and we still think generally speaking overall the S. Four is a good document, but as we looked at building our plan for 2024.

Matthew Miksic: Or with more current information $1 50 felt like it was a more reasonable number based on what we're seeing from a growth perspective.

Speaker Change: Greg I would add to that one of the thoughts here is that type of activity occurs upfront in the early years and then as you cross sell and you gained traction you offset that more near to in probably by the time, we exit year three so put the bat out in the S. Four that way upfront and the cross selling and the growth in the offsets in the outer years coming out neutral by the time.

Dan Scavilla: A couple of things. We've been in cranial for a long time with the robot, and we have great capabilities there. There's absolutely room to expand, and I think, as you've said, and one of the things I've called out that I'm most excited about, the array of power solutions that we're bringing forward in the near term will also work well with all of that enabling technology and further enhance the surgeon experience by all means. But if you really talk about spinal robots, they are in their infancy, not only in penetration but in capabilities.

Speaker Change: Entering the fourth year and timing also of when the deal actually closed was a little bit later, yes, that's also having a little bit of an impact.

Speaker Change: Okay. That's helpful guys.

Dan Scavilla: And so you can have a very long journey of increasing the entire procedural application from bone, soft tissue removal, inner body placement, on and on, planning. All of that's there for years to come with a lot of space. And like I said, even combined, all of us combined are just really touching the robotics, and there's a lot of room for growth to come for many years. So I don't think we're anywhere near hitting the top or flattening out.

Speaker Change: Just a follow up specifically on what's embedded in the EPS guidance just yet.

Speaker Change: I heard your comments too we're on EBITDA before but wanted to see.

Speaker Change: I mean, my math it makes it look like it's 29%, 30% EBITDA margins were 24, and then I also wanted to see if there's any assumption of share buyback in your EPS guidance.

Dan Scavilla: I think this is the start of some amazing changing technology. One moment for our next question. Our next question will come from the line of Jason Wittes from Roth. Your line is open.

Speaker Change: The 20%, 30% I think makes it makes a lot of sense 140 million shares is what we projected for the year.

Dan Scavilla: Hi, thanks for sharing the questions. If I could just revisit the synergy number, Based on your earlier comments, it sounds like you kind of just took a midpoint 5 to 10% dis-synergies. And I think that's partly due to the fact that based on what you see now, but also, you know, you have to see what happens in the next two quarters. Is that the right way to think about it? Or is that how you came up with that number?

Speaker Change: I'll leave it at that.

Speaker Change: Okay. Thanks, guys.

Speaker Change: One moment for our next question.

Speaker Change: And our next question comes from the line of Caitlin Cronin from Canaccord. Your line is open.

Caitlin Cronin: Hi, Thanks for taking my questions just regarding the AAR headset any updates on the timing there and secondly, what do you think of the current competition and how does your product is going to be competitive with these offerings.

Dan Scavilla: And just trying to understand, you know, your thought process behind it. Yes. Okay. Okay, that's fair.

Speaker Change: Okay.

Speaker Change: Kayla, we expect our augmented reality headset, the XR to get out by mid year based on everything that we're tracking towards right now are pretty excited to do that as well.

Dan Scavilla: And then, in terms of quarterly cadence, can you help us out in terms of how we should think about revenues and also just how expenditures kind of flow through for the year? We're not going to break out and provide quarterly guidance at this point. Okay, but then just from a general standpoint, I think you kind of implied that, you know, the first half is, it sounds, based on your comments that you made, I guess, throughout this call, it does sound like it's somewhat back-end loaded, meaning there's going to be a fair amount of reorganization in the first half, although a lot of it, I guess, already occurred. And then, in terms of your ability to start picking up or gaining market share, it sounds like you kind of anticipate that by the end of the year, you're going to be positioned to start growing sort of above the market and, you know, as the market leader. Is that a fair way to think about it?

Speaker Change: Working to make sure that it really works seamlessly with some of our enabling tech activities as well to actually create a stronger stroke.

Speaker Change: Stronger offering out to the surgeons.

Speaker Change: Okay.

Speaker Change: Great Okay.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: Okay.

Speaker Change: And our next question will come from the line of Richard New Winter from <unk>. Your line is open.

Speaker Change: Hi, Thanks for taking the questions.

Speaker Change: Was hoping just to go back to the comment that you made it sounds like going a little bit more heavy on offense on rep hiring and attrition.

Speaker Change: You had said something about.

Speaker Change:

Speaker Change: Not not hiring as many reps as normal in 2023, but then in the fourth quarter, you hired 350 reps or net reps I guess just help me understand what that 350 means.

What is that relative to a good quarter of net hiring and how we're supposed to kind of interpret that relative to the dis synergies that are starting to unfold and then I have a follow up.

Dan Scavilla: That's a fair way to think about it. But as it relates to cost synergies specifically, we would expect to see that improve sequentially as we get throughout the year. Okay, that's helpful. Thank you very much.

Dan Scavilla: Thank you. And as a quick reminder, that's star 11 for questions, star 11. One moment for our next question. Our next question will come from Linda Craig. Craig Bijou from Bank of America Securities.

Speaker Change: You got it right. So let's start this way we've had great recruiting years and in 2023 I would tell you. It was an okay recruiting year. The reason why it was an okay is we had all of our focus shifted into making this merger happen. So naturally your level of recruiting and your focus on recruiting wasn't quite as heavy now it doesn't mean it was dismal.

Dan Scavilla: Your line is open. Great. Thanks for taking the questions, guys. I wanted to ask first about the $150 million in revenue dis-synergies, and I appreciate that you gave us that number. But I think in the S4, you were expecting roughly 200 and maybe 50% of that in year one. So I just wanted to kind of reconcile that 150 for 24, and could there still be some incremental synergies in year two, year three post-deal? So, I would say yes, there could be some incremental synergies in year two, year three post-deal. The 150 was really just taking a more refreshed look.

Speaker Change: It was really not that different from the last five years. It just wasn't the strongest to a record year like we normally call out.

Speaker Change: I was being me when I was replying to the fact that we closed the deal in September and so global it's actually then inherited or took over through the merger roughly 350 sales reps from the new base of business that was my comment.

Speaker Change: Thanks.

There is something tongue in cheek there okay.

Speaker Change: And then.

Dan Scavilla: I mean, when we commented on the S-4 at that point in time, we thought it was a good number, and we still think, generally speaking, overall, the S-4 is a good document. But as we looked at building our plan for 2024 with more current information, 150 felt like it was a more reasonable number based on what we were seeing from a gross perspective. Greg, I would add, too, that one of the thoughts here is that type of activity occurs up front in the early years, and then as you cross-sell and gain traction, you offset that more in year two and probably by the time you exit year three. So, put the bad out in the S-4 that way up front, and the cross-selling and the growth and the offsets in the outer years come out neutral by the time you enter the fourth year. And the timing, also, of when the deal actually closed was a little bit later. Yeah. That's also having a little bit of an impact. Okay, that's helpful, guys.

Speaker Change: Sorry, I just lost my train of thought for a second and then <unk>.

Speaker Change: Wanted to also.

Speaker Change: Get a sense for what kind of information you're going to provide on a go forward basis is that what we've seen in the press release from here. This is the divisional breakout we're going to see.

Speaker Change: Or is there <unk>.

Speaker Change: Going to be.

Speaker Change: Historical that you provide.

Speaker Change: Segment detail, how should we think about that and one last one just product rationalization has any of that effort begun.

Speaker Change: So thanks Rich this is Keith so the what we've what we've put out there from a reporting perspective is what we're going to continue to provide breakout of musculoskeletal and enabling as well as U S versus international.

Keith W. Pfeil: Can you continue to provide color each quarter about some of the businesses like we've always done historically as.

Keith W. Pfeil: As it relates to product rationalization that is not something we've really looked at at this point. Some of my earlier comments focused on the need for us to listen to our customer right. Now the thing that we're focused on is bringing the sales forces together listening to the surgeons listening to the patient.

Dan Scavilla: And just to follow up specifically on what's embedded in the EPS guidance, I just, you know, I heard your comments about or on EBITDA before, but I wanted to see, my math, it makes it look like it's 29, 30%, even a margin for 24. And then I also wanted to see if there's any assumption of a share buyback in your EPS guidance. The 29-30% I think makes a lot of sense. 140 million shares is what we projected for the year. I'll leave it that way.

Rich: And really selling the products of both companies and rich I would just add on that we don't have planned rationalization, we thought that over time, our surgeons and our customers will select what they want and we will migrate towards that but we don't have a product rationalization in as a way to reach or achieve our synergies or anything in our financials.

Dan Scavilla: Okay, thanks, yes. One moment for our next question, and our next question will come flying now. Kaitlin Cronin from Canaccord, your line is open.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: And our next question comes from the line of June Ranieri from Morgan Stanley. Your line is open.

Dan Scavilla: Hi, thanks for taking the question. Just regarding your AR headset, any updates on the timing there? And secondly, what do you think of the current competition in that space and how is your product going to be competitive with those? Kaitlin, we expect our augmented reality headset, the XR, to get out by mid-year based on everything that we're tracking towards right now. Pretty excited to do that as well.

Andrew Christopher Ranieri: Hi, guys. Thanks for taking the questions.

Andrew Christopher Ranieri: To piggyback off of something a bit been already asked but on Rich's last question about product rationalization can you maybe just had it upon what youre thinking about for free cash flow generation over the next two three years into 2026, and just how investors should think about that cash generation I think it was one of the hallmarks of <unk>.

Dan Scavilla: Working to make sure that it really works seamlessly with some of our enabling tech activities as well to actually create a stronger offering for the surgeons. Great, thank you. Thank you. One moment for our next question. And our next question will come from the line of Richard Newitter from Truist. Thanks for taking the questions.

Andrew Christopher Ranieri: The deal when you initially proposed it and then has anything changed about how youre thinking about tracking or driving instrument set.

Andrew Christopher Ranieri: Instrument set utilization.

Dan Scavilla: I was hoping just to go back to the comment that you made about, it sounds like going a little bit more heavy on offense in terms of rep hiring and attrition. I think you had said something about not hiring as many reps as normal in 2023, but then in the fourth quarter, you hired 350 reps or net reps. Just help me understand what that 350 means. What is that relative to a good quarter of net hiring, and how are we supposed to kind of interpret that relative to the dis-energies that are starting to unfold? And then I have a follow-up. You've got it, Rich.

Andrew Christopher Ranieri: Between kind of the two.

Andrew Christopher Ranieri: Following that the two companies anymore, but between legacy <unk>.

Speaker Change: Andrew based on looking ahead I had a follow up.

Speaker Change: Sure I'll go first this is Dan and I'll hand, it off to Keith was that so just for clarity in our cash flow or our estimates we don't have anything built in related to rationalization. So I just want to make sure. We're building off of Rich's you agree we're not pursuing a product rationalization is not built into our finances that way. So it won't have any effect financially or cash flow wise. However.

Dan Scavilla: So let's start this way. We've had great recruiting years. And in 2023, I would tell you it was an okay recruiting year. The reason why it was okay is we had all of our focus shifted into making this merger happen. So naturally, your level of recruiting and your focus on recruiting wasn't quite as heavy. Now, it doesn't mean it was dismal.

Speaker Change: We do have in place ways to utilize our field assets are set sufficiently we've been working on that and ever improving that through our globus legacy and we intend to do the same with our Nuvasive team as we get in and get up to speed, what thats going to allow us to do is get more surgeries more turns more output with those investments.

Dan Scavilla: I mean, it was really not that different from the last five years; it just wasn't the strongest or record year like we normally call out. I was just being myself when I was replying to the fact that we closed the deal in September. And so Globus actually then inherited or took over through the merger, roughly 350 sales reps from the new base. That was my comment. Okay. Thanks. I figured there was something tongue in cheek about it.

Speaker Change: Which to your point, we will generate a favorable cash flow by generating the sales not having the current level of investment needed to get those sales.

Speaker Change: Couple of comments I'd add to that is when you think about globus, yes, we're going to focus on driving the business and managing for cash and as I think about that $170 million.

Speaker Change: It's predominantly cash savings, which should translate into cash flow as we move forward.

Dan Scavilla: Okay. And then, sorry, I just lost my train of thought for a sec. And then wanted to also... Ask a friend, what kind of information you're going to provide on a go-forward basis?

That's part one part two is really the controls capex. So if you go back and look and compare legacy global basis, Youll see that legacy new the carrier.

Dan Scavilla: Is what we've seen in the press release here the divisional breakout we're going to see, or is there going to be, you know, more historical data that you provide on segment detail? How should we think about that? And one last one, just product rationalization.

Capex that was probably closer to eight or 9% of sales globus give or take six or seven I commented on where we're going to land. This year in my prepared remarks that is also going to help drive cash flow free cash flow generation and it's not going to impact our ability to invest in R&D really what it is going to come back to from our perspective or from my perspective is better control of the App.

Dan Scavilla: Has any of that effort begun? So, thanks, Richard. This is Keith.

Keith W. Pfeil: So, what we've put out there from a reporting perspective is what we're going to continue to provide, breakdown of musculoskeletal and enabling, as well as U.S. versus international. We will continue to provide color each quarter about some of the businesses like we've always done historically. As it relates to product rationalization, that is not something we've really looked at at this point. You know, some of my earlier comments focused on the need for us to listen to our customers. Right now, the thing that we're focused on is bringing the sales forces together, listening to the surgeons, listening to the patients, and really selling the products of both companies. Yeah, Rich, I would just add that we don't have a planned rationalization.

Speaker Change: And driving improved return on invested capital.

Speaker Change: Got it thanks, and just a quick follow up.

Speaker Change: Just anything on getting products registered and approved like Celsius looking ahead, thanks for taking them.

Speaker Change: Yes, definitely as one of the key things. So of course, we're going to be doing that and doing that in an ever growing away starting with the <unk> system and I will certainly look for in Nevada and different activities that way that's going to be one of the events, we think by mid year or within the third quarter, we should be capable of going and pushing forward on.

Keith W. Pfeil: We think that over time, our surgeons and our customers will select what they want, and we'll migrate toward that. But we don't have a product rationalization as a way to reach or achieve our synergies or anything in our financials. Thank you.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: And with no further questions that concludes the lowest medical earnings call. Thank you for participating you may now disconnect everyone have a great day.

Keith W. Pfeil: One moment for our next question, and our next question will come from the line of Drew Ranieri from Morgan Stanley. Your line is open.

Speaker Change: Okay.

Keith W. Pfeil: Hi guys, thanks for taking the questions. Just to piggyback off of some that have already been asked, but on Rich's last question about product rationalization, can you maybe just hit upon what you're thinking about for free cash flow generation over the next two or three years into 2026 and just how investors should think about that? Cash generation, I think, was one of the kind of hallmarks of the deal when you initially proposed it. And then has anything changed about how you're thinking about tracking or driving instrument set utilization between the two – well, not the two companies anymore, but between legacy, GMED, and new base of looking ahead at a follow-up? Drew, I'll go first.

Keith W. Pfeil: This is Dan, and I'll hand it off to Keith with that. So just for clarity, in our cash flow or our estimates, we don't have anything built in related to rationalization. So I just want to make sure we're building it off of Rich's. You agree, we're not pursuing a product rationalization.

Speaker Change: [music].

Keith W. Pfeil: It's not built into our finances that way, so it won't have any effect financially or cash flow-wise. However, we do have in place ways to utilize our field assets, our sets, efficiently. We've been working on that and continually improving it through our Globus legacy, and we intend to do the same with our newvasive team as we get in and get up to speed. What that's going to allow us to do is get more surgeries, more turns, more output with those investments, which, to your point, will generate a favorable cash flow by generating the sales, not having the current level of investment needed to get those sales. And a couple of comments I'd add to that are, when you think about Globus, yes, we're going to focus on driving the business and managing for cash. And as I think about that $170 million, that's predominantly cash savings, which should translate into cash flow as we move forward. That's part one.

Keith W. Pfeil: Part two is really the control of CapEx. So if you go back and look and compare legacy Globus to legacy Nuva, you'll see that legacy Nuva carried CapEx that was probably closer to 8% or 9% of sales, while Globus, give or take 6% or 7%.

Keith W. Pfeil: I commented on where we're going to land this year in my prepared remarks that it's also going to help drive free cash flow generation, and it's not going to impact our ability to invest in R&D. Really, what it's going to come back to from our perspective, or from my perspective, is better control of the assets and driving an improved return on invested capital.

Keith W. Pfeil: Thanks. And just as a quick follow-up, just anything on getting new vaccine products registered and approved on Excelsius. Looking ahead, thanks for taking the time. Yeah, definitely.

Keith W. Pfeil: That's one of the key things. So, of course, we're going to be doing that and doing it in an ever-growing way, starting with the Reliance system, and then we'll certainly look for inner bodies and different activities that way. That's going to be one of the events we think by mid-year or within the third quarter we should be capable of going and pushing forward on. Thank you.

Keith W. Pfeil: And with no further questions, that concludes the Globus Medical Earnings Call. Thank you for participating. You may now disconnect. Everyone have a great day.

Operator: Thank you, www.microsoft.com.ca ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? the, Good day, and thank you for standing by. Welcome to the Globus Medical's fourth quarter and four-year 2023 earnings call. At this time, all participants are in a listen-only mode.

Operator: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star-one-one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star-one-one again. Please be advised that today's conference is being recorded. I would like to hand the conference over to your first speaker today, Brian Kearns, Senior Vice President of Business Development and Investor Relations. Please go ahead.

Operator: Thank you, Victor, and thank you, everyone, for being with us today. Joining today's call from Globus Medical will be Dan Scavilla, President and CEO, and Keith Pfeil, Chief Operating Officer and Chief Financial Officer. This review is being made available via webcast accessible through the Investor Relations section of the Globus Medical website at www.globusmedical.com. Before we begin, let me remind you that some of the statements made during this review are or may be considered forward-looking statements. Our Form 10-K for the 2023 fiscal year and our subsequent filings with the Securities and Exchange Commission identify certain factors that could cause our actual results to differ materially from those projected in any forward-looking statements made today. Our SEC filings, including the 10-K, are available on our website.

Operator: 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. However, these non-GAAP financial measures should not be considered replacements for and should be read together with the most directly comparable GAAP financial measures.

Operator: 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 Scavilla, our President and CEO. Thanks, Brian. And good afternoon, everyone.

Operator: Globus finished 2023 with strong performance in the fourth quarter. Revenue for the full year was a record $1,569,000,000, delivering $546,000,000 of revenue growth or 53% versus the prior year, including four months of invasive sales. We achieve record sales while maintaining industry-leading profitability, generating a record $2.32 in non-GAAP EPS and an adjusted EBIT of 30%, even as we continue our strong investments in enabling technology, orthopedics, and competitive recruiting. We also achieved significant progress integrating the newvasive merger and continue to fuel our innovation with five new products launched in 2023, positioning us well to gain momentum in 2024. In Q4, we delivered record sales of $617 million, growing 125%, worth $342 million. Q4 non-gap EPS was 60 cents, and adjusted EBITDA was 28%.

Speaker Change: [music].

Speaker Change: Good day, and thank you for setting by welcome to the Globus Medical's fourth quarter and full year 2023 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.

Operator: We also had a record-free cash flow of $82 million, up 79%. This cash will be used to fuel growth, funding innovative launches, product set expansions, and in-house manufacturing. I'll briefly comment on stand-alone Globus and stand-alone Invasive Q4 revenues. However, as we become one company with one focus in 2024, we will not provide stand-alone company information going forward. Globus stand-alone sales for Q4 were $304 million, increasing $30 million or 11% growth versus the prior year, delivering an adjusted EBITDA of 33%.

Speaker Change: Here in automated message advising you're having this race to withdraw your question. Please press star one again.

Speaker Change: Please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today, Brian Kearns Senior Vice President of Investor of business development and Investor Relations. Please go ahead.

Brian Kearns: Thank you Victor 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 operating and Chief Financial Officer.

Operator: Sales were driven by the continued above-market growth in U.S. spine of 11%, increasing momentum internationally with 20% growth, and strong performance in trauma with 41% gains. Enabling technology to deliver 2% growth in Q4, driven by higher unit placements offset by product mix, country mix, and financing programs. There are over 65,000 robotic procedures performed to date and growing.

Brian Kearns: This review is being made available via webcast accessible through the Investor Relations section.

Brian Kearns: Robus medical website at Www Dot Globus medical Dot com.

Operator: The foundation remains strong, and I'm proud of the Globus team delivering solid growth and profitability as we enter 2024. Nuvesa's standalone sales for Q4 were $312 million, up 2% on a pro forma basis, primarily driven by continued market penetration in international spine with 14% growth, market reentry of key technology in Nuvesa's specialty orthopedics delivering 26% gains, and strength in Nuvesa' This is partially offset by slight declines in U.S. spine attributed to deal disenergies and lower pull sales impacted by customers' uncertainty with the merger. To date, we have seen some sales disenergizes in a few territories, but these fall well within our projected estimates provided in the S-IV. The former Invasive team is key growth drivers in 2024 with cross-selling and enabling tech penetration. I look forward to partnering with them. In Q4, we launched Victory lumbar fixation plates and buttress plates for anterior lateral and anterior lateral approaches, adding to our broad spinal fixation platform.

Brian Kearns: Before we begin let me remind you that some of the statements made during this review are or may be considered forward looking statements.

Brian Kearns: Form 10-K for the 2023 fiscal year and our subsequent filings with the Securities and Exchange Commission.

Brian Kearns: Identifies certain factors that could cause our actual results to differ materially from those projected in any forward looking statements made today.

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

Brian Kearns: 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.

Brian Kearns: We believe these non-GAAP financial measures provide additional information pertinent to our business performance. These non-GAAP financial measures should not be considered replacements for and should be read together with the most directly comparable GAAP financial measures.

Operator: Entering 2024, our combined product pipeline is full, setting the stage for a strong year of product introductions. Over the next few months, we will be adding to our best-in-class expandable portfolio, new INR offerings, including the eHub navigation system for seamless navigation when combined with our e3D system, and expansion of the Precise Trom and Nailing system, moving into integration status and starting with the deal rationale. The merger with Nuvasiv created a leading, world-class organization with a global scale and expanded customer reach with minimal sales force overlap.

Brian Kearns: 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.

Dan: Thanks, Brian and good afternoon, everyone. Globus finished 2023 with strong performance in the fourth quarter revenue.

Dan: Revenue for the full year was a record $1 billion and $569 million delivering $546 million of revenue growth or 53% versus prior year, including four months of a new base of sales.

Operator: The comprehensive and innovative portfolio in spine, enabling tech, and orthopedics positions us well for long-term sustained growth. Our combined product development team will focus on the rapid development of innovative solutions to address unmet clinical needs through the continuum of care as we bring procedural solutions into the marketplace. The surge in education and research programs will further define us as thought leaders shaping the marketplace.

Dan: We achieved record sales, while maintaining industry, leading profitability generating a record $2 32, and non-GAAP EPS and adjusted EBITDA of 30%, even as we continue our strong investments in enabling technology orthopedics and competitive recruiting.

Dan: We also achieved significant progress integrating the new base of merger and continue to fuel our innovation with five new products launched in 2023 position positioning us well to gain momentum in 2024.

Operator: While expanding our complementary operational footprint improves in-house capabilities to support commercial growth and drive cost savings, our financial discipline provides the ability to redirect investments into focused growth areas while improving combined profitability and cash flow. On the commercial front, we've completed the realignment of the U.S. and international sales teams and, in January 2024, implemented the new team structures to support surgeons throughout the world. We've also held several education sessions for reps for product cross training and enabling tech education. We remain on track for implementing common operating systems in Q1 that will allow us to work as one company and one team. I'm pleased with our work here and look forward to driving meaningful growth through the new structure. We also continue to receive significant inbound interest from competitive sales professionals who are seeking the opportunity to carry a bag second to none.

Dan: In Q4, we delivered record sales of $617 million growing 125% or $342 million.

Dan: Q4, non-GAAP EPS was <unk> 60, and adjusted EBITDA was 28%.

Dan: We also had a record free cash flow of $82 million up 79%. This cash will be used to fuel growth.

Dan: <unk> innovative launches products had expansions and in house manufacturing.

Dan: I'll briefly comment on Standalone, Globus and Standalone invasive Q4 revenues. However, as we become one company with one focus in 2024, we will not provide standalone company information going forward.

Dan: Global Standalone sales for Q4 were $304 million, increasing $30 million or 11% growth versus prior year.

Dan: Delivering an adjusted EBITDA of 33%.

Operator: Combined Company will be a destination of choice for sales personnel who cherish an incredible product portfolio, financial security, and longevity. One immediate benefit of the merger is cross-selling our existing portfolios. We made significant investments in key product sets in 2023 and are ramping up cross-selling in 2024. As mentioned, Salesforce cross-training is continuing as planned and will accelerate cross-selling opportunities throughout 2024 as more sets become available.

Dan: Sales were driven by the continued above market growth in U S spine a 11%.

Dan: Increasing momentum internationally with 20% growth and strong performance in trauma with 41% gains in.

Dan: Enabling technologies delivered 2% growth in Q4, driven by higher unit placements offset by product mix country mix and financing programs.

Dan: There are over 65000 in robotic procedures performed to date and growing the foundation remains strong and I'm proud of the Globus team delivering solid growth and profitability as we enter 2024.

Operator: We have also made significant investments in long-lead time components and manufacturing resources to scale up our enabling tech capacity, allowing for increased production output in preparation for higher demand. We are reorganizing product development, carrying forward the rich history of rapid development to remain an industry thought leader as we work with our surgeon partners to address unmet clinical needs. From pioneering the XLIF procedure that is now the gold standard of lateral surgery, leading the market in expandable cage technology, and developing the best spinal robot with the most advanced intraoperative CT imaging, we're working to create surgical proceduralization of all key spine surgeries to create the standard of care across the spine industry.

Dan: <unk> Standalone sales for Q4 were $312 million up 2% on a pro forma basis, primarily driven by continued market penetration in international spine with 14% growth market reentry of key technology of Nuvasive specialty orthopedics, delivering 26% gains and strengthen invasive clinical <unk>.

Dan: Services, increasing 6% versus prior year.

Dan: This was partially offset by slight declines in U S spine attributed to deal the synergies and lower pull sales impacted by customers' uncertainty with the merger to date, we have seen some sales dis synergies in a few territories, but this fall well within our projected estimates provided in the S. Four.

Operator: Our intellectual property portfolio has been number one in the spinal 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. To accomplish this, we remain committed to continuing existing projects, and we'll have a strong PD presence on the West Coast focused on spine and enabling tech solutions. We're enhancing our surgeon engagement programs to increase our impact with surgeons and further strengthen how we interact with them in all aspects of our business.

Dan: The former invasive team our key growth drivers in 2024 with cross selling and enabling tech penetration I look forward to partnering with them.

Dan: In Q4, we launched victory lumbar fixation plates and buttress plates for anterior lateral and anterior lateral approaches adding to our broad spinal fixation platform.

Dan: Entering 2020 for our combined product pipeline is full setting the stage for a strong year of product introductions over the next few months, we will be adding to our best in class expandable portfolio, new INR offerings, including the <unk> hub navigation system for seamless navigation when combined with our <unk> system and.

Operator: Our professional affairs team has been expanded, and we've added scientific affairs, marketing, and communication teams, all with talented individuals. In addition, we're increasing our research and clinical investments, expanding the coordination of education programs, and enhancing our presence in teaching institutions. Operations remains the strength of the merger. We've begun expanding in-house capabilities at the West Carrollton production facility as part of our ongoing synergies. The Memphis Distribution Center is now capable of supporting expanded distribution for the combined entity.

Dan: An expansion of the precise trauma nailing system.

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

Dan: The merger with new base have created a leading world class organization with global scale and expanded customer reach with minimal sales force overlap.

Dan: The comprehensive and innovative portfolio in spine, enabling tech in orthopedics positions us well for long term sustained growth.

Dan: Our combined product development team will focus on rapid development of innovative solutions to address unmet clinical needs through the continuum of care as we bring procedural solutions into the marketplace.

Operator: We will continue to invest in high-tech manufacturing equipment for implant instrumentation and enabling tech production capabilities. We're also working to consolidate volumes and orders with third-party vendors to accelerate delivery times and drive cost savings. All these activities are progressing as planned.

Dan: The surgeon education and research programs will further define us as thought leaders shaping the marketplace <unk>.

Dan: While expanding our complimentary operational footprint improves in house capabilities to support commercial growth and drive cost savings.

Dan: Our financial discipline provides the ability to redirect investments into focused growth areas, while improving combined profitability and cash flow.

Operator: Synergy targets have been identified, focusing on out-of-pocket spending and prioritizing investments to match future growth plans. In-house organizational structures are being implemented and should reach steady state by mid-year 2024. While some employees have been impacted by the merger and reorganization, this is not a slash-and-burn exercise, and the merger payback is not driven by deep employee or spending cuts. We remain focused on building an organization to support long-term, sustained, profitable growth. I want to conclude by sharing a recent event that reminded me of who we are. We recently held our combined U.S. national sales meeting, coming together as one team for the first time since the merger and commercial restructuring. It was interesting to watch the hesitancy of the participants evaporate as they saw familiar faces of teammates they'd worked with, worked for, or competed against. The combined and well-balanced leadership team showed our sales force that we really are bringing the best of both organizations together to support them and create a once-in-a-career opportunity. By the first evening's product fair, you could no longer tell who came from Globus or who came from Nuvei.

Dan: On the commercial front.

Dan: We've completed the realignment of the U S and international sales teams and in January 2024 implemented the new team structures to support surgeons throughout the World. We've also held several education sessions for reps for product Cross training and enabling Tech education.

Dan: We remain on track for implementing common operating systems in Q1 that will allow us to work as one company and one team I.

Speaker Change: I am pleased with our work here and look forward to driving meaningful growth through the new structure.

We also continue to receive significant inbound interest from competitive sales professionals, who are seeking 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.

Speaker Change: One immediate benefit of the merger is cross selling our existing portfolios. We made significant investments in key product sets in 2023 on a ramping up cross selling in 2020 for.

Speaker Change: As mentioned Salesforce Cross training is continuing as planned and will accelerate cross selling opportunities throughout 2024 as more sets become available.

Operator: There was only one strong energy in the room, focus on our combined portfolio and innovation and a genuine excitement to get back out in the field and win. This team and that meeting reconfirm my belief that we really are more alike than different. And when combined, we're unstoppable.

Speaker Change: We also made significant investments in long lead time components and manufacturing resources to scale up our enabling tech capacity, allowing for increased production output and preparation for higher demand.

Speaker Change: We are reorganizing product development carrying forward the rich history of rapid development to remain an industry thought leader as we work with our surgeon partners to address unmet clinical needs from pioneering the excellent procedure that is now the gold standard of lateral surgery.

Operator: I cannot wait for the International Sales Meeting to make that feeling global. 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 markets. We have at our fingertips everything we need to do this. In closing, I want to congratulate Keith Pfeil on his recent, well-deserved promotion to Chief Operating Officer (CFO). Keith is a rock-solid leader, a great partner, and is well-suited to this role.

Speaker Change: Leading the market in an expandable cage technology and developing the best spinal robot with the most advanced intra operative imaging.

Speaker Change: We are working to create surgical procedure realization of all key spine surgeries to create the standard of care across the spine industry.

Speaker Change: Our intellectual property portfolio has been number one in the spinal 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 to accomplish this we remain committed to continuing as existing projects and will have a store.

Operator: I will now turn the call over to Keith. Dan, thank you and good afternoon to everyone joining us on today's call. We are now more than a year past the initial February 9th merger announcement and are reporting today on our first full quarter as a merged entity. My comments today will focus on Q4 and full year 2023 results, provide insights into our views for 2024 performance, provide updates on integration and synergy tracking, as well as comment on longer-term capital allocation priorities. My comments on Q4 and full year 2023 will focus on our as-reported results, providing updates on the legacy Globus business performance, as well as summary comments on the contributions from Nuvasiv on an as-reported basis. As a reminder, 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 NuVasa.

Speaker Change: <unk> PD presence on the west coast focused on spine and enabling tech solutions.

Speaker Change: We're enhancing our surgeon engagement programs to increase our impact of surgeons and further strengthen how we interact with them in all aspects of our business. Our professional affairs team has been expanded and we've added scientific affairs marketing communication teams all with talented individuals'. In addition, we're increasing our research and clinical investments.

Speaker Change: Pending the coordination of education programs and enhancing our presence in teaching institutions.

Speaker Change: Operations remains a strength of the merger we have begun expanding in house capabilities of the West Carrollton production facility as part of our ongoing synergies.

Speaker Change: Memphis distribution center is now capable of supporting expanded distribution for the combined entity.

Operator: Q4'23 revenue was $616.5 million, growing 124.6% on an as-reported basis and 123.8% on a constant currency basis over the prior year quarter. Net income was $15 million, resulting in 11 cents of fully diluted gap earnings per share and is reflective of merger-related costs and expenses. Q4'23 non-gap net income was $83.5 million, which resulted in 60 cents of fully diluted non-GAAP earnings per share. Q4 non-GAAP net income grew 38.9% while non-GAAP EPS grew 2.1% over the prior year quarter, driven by a higher share count as a result of the merger with Nuvasiv. To illustrate, Q4'23 fully diluted shares were 139.8 million versus 102.2 million shares in the prior year quarter.

Speaker Change: We will continue to invest in high tech manufacturing equipment for our implant and instrumentation and enabling tech production capabilities.

Speaker Change: We're also working to consolidate volumes and orders with third party vendors to accelerate delivery times and drive cost savings all of these activities are progressing as planned.

Speaker Change: Synergy targets have been identified focusing on out of pocket spending and prioritizing investments to match future growth plans.

Speaker Change: In house organizational structures are being implemented and should reach steady state by mid year 2024.

Speaker Change: While some employees have been impacted by the merger and reorganization. This is not a slash and burn exercise and the merger payback is not driven by deep employee or spending cuts.

Speaker Change: We remain focused on building an organization to support long term sustained profitable growth.

Speaker Change: I want to conclude by sharing our recent events that reminded me of who we are.

Speaker Change: We recently held our combined U S national sales meeting coming together as one team for the first time since the merger in commercial restructuring.

Operator: Q4-23 adjusted EBITDA was 27.6%, and free cash flow generated totaled $81.8 million. Full year 2023 revenue was $1.569 billion, growing 53.3% on an as-reported and constant currency basis. Day adjusted sales growth was 47.8% with one less selling day in 2023 as compared to 2022. Net income was $122.9 million, which resulted in $1.07 of fully diluted earnings per share as reflective of deal and integration costs associated with an evasive merger. Non-GAAP net income was $266.4 million, delivering $2.32 of fully diluted non-GAAP earnings per share.

Speaker Change: It was interesting to watch the hesitancy of the participants evaporate as they saw a familiar faces of teammates they've worked with worked for where competed against the.

The combined and well balanced leadership team showed our sales force that we really are bringing the best of both organizations together to support them and create a once in a career opportunity.

Speaker Change: By the first evening product fair you can no longer tail, who came from globus or who came from nuvasive.

Speaker Change: There was only one strong energy in the room focus on our combined portfolio and innovation and a genuine excitement to get back out in the field and win.

This team and that meeting.

Speaker Change: I confirm my belief that we really are more alike than different and when combined.

Speaker Change: On Stoppable.

Speaker Change: I cannot wait for the international sales meeting to make that feeling global.

Speaker Change: I believe the potential for Globus has never been greater.

Speaker Change: It's up to us to harness our resources and shape the future of our markets. We have at our fingertips everything we need to realize this.

Operator: Full-year non-GAAP net income grew 25.9% over the prior year, while non-GAAP earnings per share grew 12.6% over the prior year. The lower growth rate on a per-share basis is driven by an increased share count as a result of the stock-for-stock merger with Nuvesc. Full year 2023 adjusted EBITDA was 29.6%, and we generated $165.2 million of free cash. Moving further into revenue, musculoskeletal sales for the fourth quarter of 2023 were $583.8 million, growing 138.3% as reported compared to the prior year quarter. Legacy Globus musculoskeletal sales in Q4'23 were $274 million, or 11.8% higher than the prior quarter, with growth led by our U.S. and international spine business, as well as continued share growth within Trump. Our Q4 2023 enabling technologies revenue was $32.7 million, growing 10.9% compared to the prior year.

Speaker Change #100: In closing.

Speaker Change #100: I want to congratulate Keith Pfeil on his recent well deserved promotion to Chief operating Officer CFO.

Speaker Change #100: Keith is a rock solid leader a great partner and is well suited for this role.

Keith W. Pfeil: I will now turn the call over to Keith.

Dan Thank you and good afternoon to everyone joining us on today's call.

Keith W. Pfeil: We are now more than a year past the initial February 9th merger announcement and our reporting today on our first full quarter as a merged entity.

Keith W. Pfeil: Comments today will focus on Q4 and full year 2023 results provide insights into our views for 2020 for performance.

Keith W. Pfeil: Provide updates on integration and synergy tracking as well as commenting on longer term capital allocation priorities.

Keith W. Pfeil: My comments on Q4, and full year 2023 will focus on our as reported results providing update on the legacy global business performance as well as summary comments on the contributions from new basis on an as reported basis.

Keith W. Pfeil: As a reminder, all information presented is done so based on Globus accounting policies and is consistently applied and the as reported results for both legacy Globus and legacy new basis.

Keith W. Pfeil: Q4, 'twenty three revenue was $616 $5 million from a 124, 6% on an as reported basis and 123, 8% on a constant currency basis over the prior year quarter net.

Operator: Legacy Globus Enabling Technologies revenue was $30.1 million, growing 2.1% over the prior year on record units placed. Capital continued to see strong uptake in the quarter, however revenue growth was tempered based on country mix and financing arrangements. Turning our attention to geographic sales, U.S. revenue in the fourth quarter of 2023 was $490.8 million, growing 110.5% over the prior year quarter. Legacy Globus US revenue in the fourth quarter of 2023 was $256 million, growing 9.7% as reported compared to the prior year quarter. The increase in sales was led primarily by continued U.S. spine growth. International revenue for the fourth quarter was $125.7 million, growing 204.6% as reported compared to the prior year.

Keith W. Pfeil: Net income was $15 million, resulting in 11, a fully diluted GAAP earnings per share and is reflective of merger related costs and expenses.

Keith W. Pfeil: Q4, 23, non-GAAP net income was $83 5 million, which resulted in <unk> 60, a fully diluted non-GAAP earnings per share.

Keith W. Pfeil: Q4, non-GAAP net income grew 38, 9%, while non-GAAP EPS grew two 1% over the prior year quarter, driven by a higher share count as a result of the merger with new basis to illustrate Q4 'twenty three fully diluted shares were $139 8 million versus $102 2 million shares in the.

Keith W. Pfeil: Our year quarter Q.

Keith W. Pfeil: Q4, 23, adjusted EBITDA was 27, 6% and free cash flow generated totaled $81 8 million.

Operator: Legacy Globus International revenue in Q4'23 was $48.1 million, or 16.7% higher versus the prior year quarter, driven by strong implant growth within key focus countries, including Australia, Brazil, Italy, Japan, Spain, and the United Kingdom. GAAP gross profit in the fourth quarter of 2023 was 56.9% versus 74.3% in the prior year quarter. The decrease in GAAP gross profit was driven by the impacts of an invasive merger, namely step-up inventory amortization. Adjusted gross profit, which excludes the impacts of inventory step-up amortization, was 65.5%.

Keith W. Pfeil: Full year 2023 revenue was $1 $5 69 billion.

Keith W. Pfeil: Growing 53, 3% on an as reported and constant currency basis.

Keith W. Pfeil: Day adjusted sales growth was 47, 8% was one less selling day in 2023 as compared to 2022.

Keith W. Pfeil: Net income was $122 9 million, which resulted in $1 7 million fully diluted earnings per share is reflective of deal and integration costs associated with the new basis merger.

Keith W. Pfeil: non-GAAP net income was $266 4 million delivering $2 32, <unk> a fully diluted non-GAAP earnings per share.

Keith W. Pfeil: Full year non-GAAP net income grew 25, 9% over the prior year, while non-GAAP earnings per share grew 12, 6% over the prior year.

Operator: We expect to continue to report on a consolidated adjusted gross profit metric for the next several quarters as step-up amortization will impact gap gross profit for most of fiscal 2024. Legacy Globus GAP gross profit in the fourth quarter of 2023 was 74.7% compared to 74.3% in the prior year quarter, driven by lower product costs as a result of higher mix spinal implant sales. Full year 2023 GAP gross profit was 65.1% compared to 74.2% in the prior year, driven again by the impact of step-up amortization as a result of the newvasive merger. Adjusted gross profit, which excludes the impact of inventory step-up amortization, was 69.6 percent. Legacy Globus GAP gross profit for the full year 2023 was 74.2%, in line with the prior year, despite Legacy enabling technology sales growing over 20% compared to the prior year, which reflects the impacts of continued manufacturing and supply chain cost savings.

Keith W. Pfeil: The lower growth rate on a per share basis is driven by an increased share count as a result of the stock for stock merger with new basis.

Keith W. Pfeil: Full year 2023, adjusted EBITDA was 29, 6% and we generated $165 $2 million of free cash flow.

Keith W. Pfeil: Moving further into revenue musculoskeletal sales for the fourth quarter of 2023 were $583 8 million growing 138, 3% as reported compared to the prior year quarter.

Keith W. Pfeil: Legacy Globus muscular skeletal sales in Q4, 23 or $274 million or 11, 8% higher than the prior year quarter with growth led by our U S and international spine businesses as well as continued share growth within trauma.

Keith W. Pfeil: Our Q4 2023, enabling technologies revenue was $32 7 million growing 10, 9% compared to the prior year quarter.

Keith W. Pfeil: Legacy Globus, enabling technologies revenue was $30 $1 million growing two 1% over the prior year on record units placed capital continued to see strong uptake in the quarter. However revenue growth was tempered based on country mix and financing arrangements.

Operator: Looking ahead to 2024, we expect our adjusted gross profit rate to be in the mid to upper 60s for the full year as we begin to realize supply chain savings, namely lower freight and warehousing expenses. Research and development expenses in Q4 were $52.3 million, or 8.5 percent of sales, compared to $19.5 million, or 7.1 percent of sales in the prior year quarter. The increased spending, both in dollars and as a percentage of sales, is reflective primarily of the impacts of the invasive merger.

Keith W. Pfeil: Turning our attention to geographic sales U S revenue in the fourth quarter of 2023 was $490 8 million growing 110, 5% over the prior year quarter.

Keith W. Pfeil: Legacy Globus U S revenue in the fourth quarter of 2023 was $256 million growing nine 7% as reported compared to the prior year quarter. The.

The increase in sales was led primarily by continued U S spine growth.

Operator: Legacy Globus Q4 2023 R&D expense was $21 million, or 6.9% of sales, compared to $19.5 million, or 7.1% of sales in the prior year, and is reflective of continued investments within our enabling technologies portfolio, partially offset by the leverage impact of higher sales. The full year 2023 research and development expenses were $124 million, or 7.9% of sales, compared to $73 million, or 7.1% of sales, in the prior year, with the increase being driven primarily by the impacts of the invasive merger. Legacy Globus 2023 R&D expense was $83.9 million, or 7.3% of sales, compared to $73 million, or 7.1% of sales, with the increased spending driven primarily by enabling technologies investment. Looking ahead to 2024, we expect R&D expenses to be in the range of 7.5% to 8%. SG&A expenses in the fourth quarter were $242.4 million, or 39.3 percent of sales, compared to $118.1 million, or 43 percent of sales in the prior year quarter, reflecting the impacts of the new base of merger. Legacy Globus SGA expenses in the fourth quarter were $130.6 million, or 43% of sales, consistent with the prior year.

Keith W. Pfeil: International revenue for the fourth quarter was $125 $7 million growing 204, 6% as reported compared to the prior year.

Keith W. Pfeil: The legacy Globus International revenue in Q4, 23 was $48 1 million or 16, 7% higher versus the prior year quarter, driven by strong implant growth within key focus countries, including Australia, Brazil, Italy, Japan, Spain, and United Kingdom.

Keith W. Pfeil: GAAP gross profit in the fourth quarter of 2023 was 56, 9% versus 74, 3% in the prior year quarter.

Keith W. Pfeil: The decrease in GAAP gross profit was driven by the impacts of invasive merger, namely step up inventory amortization.

Keith W. Pfeil: Adjusted gross profit, which excludes the impacts of inventory step up amortization was 65, 5%.

Keith W. Pfeil: We expect to continue to report on a consolidated adjusted gross profit metrics for the next several quarters as step up amortization will impact GAAP gross profit for most of fiscal 2024 legs.

The legacy Globus GAAP gross profit in the fourth quarter of 2023 was 74, 7% compared to 74, 3% in the prior year quarter, driven by lower product costs as a result of a higher mix of spinal implant sales.

Keith W. Pfeil: Full year 2023, GAAP gross profit was 65, 1% compared to 74, 2% in the prior year driven again by the impact of step up amortization as a result of the new base of merger.

Operator: Full year 2023 SG&A expenses were $641.1 million, or 40.9% of sales, compared to $432.1 million, or 42.2% of sales in the prior year, which again reflects the impact of the recent merger. Legacy Globus SG&A expenses for 2023 were $491.9 million, or 42.6% of sales, and reflect slightly higher people costs driven by benefits and travel as well as increased bad debt expense driven by a one-time benefit in the prior year that did not repeat in the current year. Looking ahead to 2024, we expect our full-year SG&A expenses to improve by 1 to 2 percentage points over the full-year 2023 SG&A expense of 40.9%. Furthermore, as we look ahead to fiscal 2024, we expect an interest expense headwind driven by two factors. First, our invested cash balance will be lower year over year, driven by the pay-down of the former newvasive line of credit at merger close, which decreased our cash balance by $420.8 million, thus decreasing interest income moving forward. The second item relates to interest expense on the senior convertible note.

Keith W. Pfeil: The gross profit, which excludes the impact of inventory step up amortization was 69, 6%.

Legacy Globus GAAP gross profit for the full year 2023 was 74, 2% in line to the prior year, despite legacy enabling technology sales growing over 20% to the prior year, which reflects the impacts of continued manufacturing and supply chain cost savings initiatives.

Keith W. Pfeil: Looking ahead to 2024, we expect our adjusted gross profit rate to be in the mid to upper <unk> for the full year as we begin to realize supply chain savings, namely lower freight and warehousing expenses.

Keith W. Pfeil: Research and development expenses in Q4 were $52 3 million or eight 5% of sales compared to $19 5 million or seven 1% sale of sales in the prior year quarter.

Keith W. Pfeil: The increased spending both in dollars and as a percentage of sales is reflective primarily of the impacts of the new base of merger.

Keith W. Pfeil: Legacy Globus Q4, 2023, R&D expense was $21 million or six 9% of sales compared to $19 5 million or seven 1% of sales in the prior year and is reflective of continued investments within our enabling technologies portfolio, partially offset by the leverage impact of higher sales.

Keith W. Pfeil: The full year 2023 research and development expenses were $124 million or seven 9% of sales compared to $73 million or seven 1% of sales in the prior year with the increase being driven primarily by the impacts of invasive merger.

Operator: Interest expense on this note will occur in two parts. First, the cash portion based on the.375% rate, and secondly, a non-cash interest portion driven by the amortization of the fair value adjustment of the note at the time of merger. We estimate interest expense to be in the range of $12 to $15 million in fiscal 2024 versus net interest income of $20.1 million in fiscal 2023. The GAAP tax rate for the quarter was 39.8% compared to 19.4% in Q4 of 2022, primarily driven by the impact of non-deductible merger costs on lower GAAP pre-tax income. On a normalized basis, our non-gap effective tax rate was 22% in the fourth quarter.

Keith W. Pfeil: Our legacy <unk> 2023, R&D expense was $83 9 million or seven 3% of sales compared to $73 million or seven 1% of sales with the increased spending driven primarily by enabling technologies investments looking ahead to 2024, we expect R&D expenses to be in the range of seven five to eight.

Keith W. Pfeil: <unk>.

Keith W. Pfeil: Yes.

Keith W. Pfeil: SG&A expenses in the fourth quarter were $242 4 million or 39, 3% of sales compared to $118 $1 million or 43% of sales in the prior year quarter, reflecting the impacts of the new basic merger.

Operator: Our full-year 2023 effective tax rate was 25.7% compared to 21.7% in the prior year, with the resulting increase driven by the impacts of merger-related costs, which you do not expect to repeat in the future. Looking ahead to 2024, we expect our full-year effective tax rate to be approximately 23%. Shifting to cash and liquidity, our cash, cash equivalents, and marketable securities were $593.2 million at December 31st. There were no short-term borrowings against our unsecured line of credit at year-end, and our long-term borrowings consist of the 0.375 percent senior convertible notes due in 2025, which were assumed as part of the merger with NuVasive. It remains our intent for these notes to be part of our capital structure until they are due to be settled in March 2025. Turning attention to cash flow, Q4 net cash provided by operating activities was $104.7 million, and Q4 free cash flow was $81.8 million.

Keith W. Pfeil: Legacy Global SG&A expenses in the fourth quarter were $130 6 million or 43% of sales consistent with the prior year.

Keith W. Pfeil: Full year 2023, SG&A expenses were $641 1 million or 49% of sales compared to $432 1 million or 42, 2% of sales in the prior year, which again reflects the impact of the new base of merger.

Keith W. Pfeil: Legacy Globus SG&A expenses for 2023 were $491 9 million or 42, 6% of sales and reflects slightly higher people costs, driven by benefits and travel as well as increased bad debt expense driven by a onetime benefit in the prior year that did not repeat in the current year.

Keith W. Pfeil: Looking ahead to 2024, we expect our full year SG&A to improve 1% to two percentage points over the full year 2023, SG&A expense of 49%.

Keith W. Pfeil: Further as we look ahead to fiscal 2024, we expect an interest expense headwind driven by two factors first our invested cash balance will be lower year over year, driven by the paydown of the former new <unk> line of credit at merger closed at merger close which decreased our cash balance by $428 million, thus decreasing interest income move.

Operator: Free cash flow grew $36.2 million over the prior year quarter, with approximately $5 million of that growth being driven by legacy Globus and the remainder driven by the contributions from the newvasive merger. In 2023, net cash provided by operating activities was $243.5 million, and 2023 free cash flow was $165.2 million. Looking ahead to 2024, we expect CapEx spending to be within a range of 5-6% of sales on a full year basis. Consistent with history, our capital allocation priorities will remain unchanged moving forward.

Keith W. Pfeil: Going forward the second item relates to interest expense from the senior convertible note interest.

Keith W. Pfeil: Interest expense on this note will occur in two parts first the cash portion based on the <unk>, 375% rate and secondly, a noncash interest portion driven by the amortization of the fair value adjustment of a note at the time of merger.

Keith W. Pfeil: We estimate interest expense to be in the range of $12 million to $15 million in fiscal 2024 versus net interest income of $20 1 million in fiscal 'twenty three.

Keith W. Pfeil: The GAAP tax rate for the quarter was 39, 8% compared to 19, 4% in Q4 of 2022, primarily driven by the impact of non deductible merger costs on lower GAAP pre tax income.

Operator: Our primary use of capital will be to fund internal investments for product development, inventory, and CapEx while facilitating complementary M&A, which meets the needs of our strategy moving forward. In the near term, we would expect any inorganic opportunities to be more of a tuck-in type of deal as opposed to a transformative deal, especially while we continue to integrate the newvasive merger. Though organic and inorganic investment are our primary uses of capital, we continue to utilize share purchases within our capital structure. Coming into the fourth quarter, we had a total of $500.8 million authorized by our Board of Directors to fund Share Report. During the fourth quarter, we spent a total of $225.6 million to purchase approximately 4.3 million shares at an average price of $52.11 per share.

Keith W. Pfeil: On a normalized basis, our non-GAAP effective tax rate was 22% in the fourth quarter.

Keith W. Pfeil: Our full year 2023 effective tax rate was 25, 7% compared to 21, 7% in the prior year with the resulting increase driven by the impacts of merger related costs, which you do not expect to repeat in the future.

Keith W. Pfeil: Looking ahead to 2024, we expect our full year effective tax rate to be approximately 23%.

Keith W. Pfeil: Shifting to cash and liquidity, our cash cash equivalents in marketable securities were $593 2 million at December 31, there were no short term borrowings against our unsecured line of credit at year end and our long term borrowings consist of the <unk>, 375% senior convertible notes due in 2025, which were assumed as part of the merger with new basis.

It remains our intent for these notes to be part of our capital structure until they are due to be settled in March 2025.

Keith W. Pfeil: Turning attention to cash flow Q4, net cash provided by operating activities was $104 7 million in Q4 free cash flow was $81 8 million.

Operator: The company has approximately $275.2 million remaining under its authorized share repurchase program. Shifting attention over to cost savings and synergies, we still expect to generate a total of $170 million of synergies over three years as a result of the merger with Newvasive. 40% being realized in year one, 70% by the end of year two, and 100% in year three. Since we've last shared an update, we've taken steps to begin to realize those synergies savings. The focus of these savings has been across the business and has been centered on operations, namely warehouse and contract negotiations, SG&A cost-redundancy, the elimination of duplicative third-party expenses, as well as the start of systems integration activity. As we move through 2024, we would expect synergy savings to increase sequentially each quarter as actions planned are realized. As Dan noted, we are not moving ahead with the slash-and-burn exercise of cost cuts.

Keith W. Pfeil: Free cash flow grew $36 $2 million over the prior year quarter with approximately $5 million of that growth being driven by legacy Globus and the remainder driven by the contributions from the new base of merger.

Keith W. Pfeil: <unk> 2023, net cash provided by operating activities was $243 $5 million in 2023 free cash flow was $165 $2 million.

Keith W. Pfeil: Looking ahead to 2024, we expect capex spending to be within a range of 5% to 6% of sales on a full year basis.

Keith W. Pfeil: Consistent with history, our capital allocation priorities will remain unchanged moving ahead, our primary use of capital will be to fund internal investments for product development inventory and capex, while facilitating complementary M&A, which meets the needs of our strategy moving forward.

Keith W. Pfeil: In the near term, we would expect any inorganic opportunities to be more of a tuck in type of deal as opposed to a transformative deal, especially while we continue to integrate and invasive merger.

Keith W. Pfeil: So organic and inorganic investment are our primary uses of capital we continue to utilize share repurchases within our capital structure.

Operator: Rather, the cuts will be focused in key areas to drive greater value creation. The primary focus in fiscal 2024 is to further drive recurring cost savings in the areas of manufacturing and sourcing. We will do so through third-party supplier contract renegotiations, product insourcing, as well as investments in machinery and equipment, which will drive greater manufacturing efficiencies and also drive greater fixed cost leverage within our manufacturing and supply chain. At the present time, we feel confident in achieving the synergy target set forth for 2024 and beyond. We'll continue to provide updates as the year progresses. At the present time, the company is reaffirming its previously provided financial guidance for 2024, which projects net sales to be in the range of $2.45 billion to $2.475 billion and fully diluted non-GAAP earnings per share to be in the range of $2.68 to $2.70.

Keith W. Pfeil: Going into the fourth quarter, we had a total of $508 million authorized by our board of directors to fund share report purchases during the fourth quarter. We spent a total of $225 6 million to repurchase approximately $4 3 million shares at an average price of $52 11 per share.

Keith W. Pfeil: The company has approximately $275 $2 million remaining under its authorized share repurchase program.

Shifting attention over to cost savings and synergies, we still expect to generate a total of $170 million of synergies over three years as a result of the merger with new basin, 40% being realized in year, 170% by the end of year, two and a 100% in year three.

Keith W. Pfeil: Since we've last year and an update we've taken steps to begin to realize those synergy savings.

Keith W. Pfeil: Focus of these savings have been across the business and have been centered on operations, namely warehousing contract negotiations SG&A cost redundancies, the elimination of Duplicative third party expenses as well as the startups systems integration activities.

Keith W. Pfeil: As we move through 2024, we would expect synergy savings to increase sequentially each quarter as actions planned are realized as Dan noted we are not moving ahead with the slash-and-burn exercise of cost cuts rather the cuts will be focused in key areas to drive greater value creation.

Operator: Our next sales guidance for 2024 includes projected sales dissynergies of roughly $150 million as a result of an evasive merger. Adjusting for those sales dis-energies, our projected revenue growth would have been approximately 8.5 to 9.6 percent based on fiscal 2023 pro forma revenue of 2.396 billion dollars. Our non-GAAP earnings per share guidance implies 15.5 to 16.4 percent growth and assumes approximately 140 million fully diluted shares for the full year versus actual 2023 shares of 114.8 million fully diluted shares.

Keith W. Pfeil: Our primary focus in fiscal 2024 is a further drive recurring cost savings in the areas of manufacturing and sourcing we will do so through third party supplier contract renegotiations product in sourcing as well as investments in machinery and equipment, which will drive greater manufacturing efficiencies and also drive greater fixed cost leverage within our manufacturing and supply chain.

Keith W. Pfeil: The present time, we feel confident in achieving the synergy targets set forth for 2024 and beyond we will continue to provide updates as the year progresses.

Keith W. Pfeil: At the present time the company is reaffirming its previously provided financial guidance for 2024, which projects net sales to be in the range of 245 billion to 475 billion.

Operator: As we look into 2024, our keys to success will focus on the ability to: In the near term, we will continue our merger integration with the goal of moving back towards more of a steady state by mid-year. Tremendous effort has and will continue to bring the organizations together while we push forward our go-to-market strategies and key geographies. Internally, we will continue to drive synergy capture with a key focus on continued operational improvement. The focus on execution and value creation will drive shareholder value as we seek to achieve our goals set for creating enhanced profitability and cash flow generation. Our goal is to improve musculoskeletal care, and we will achieve that through procedural innervation. Those innovations will be achieved by listening to our customers, who are the patients and the surgeons. To be successful, we need to listen to their needs.

Keith W. Pfeil: And fully diluted non-GAAP earnings per share to be in the range of $2 68 to $2 70.

Keith W. Pfeil: Our net sales guidance for 2024 includes projected sales dis synergies of roughly $150 million as a result of an invasive merger.

Keith W. Pfeil: Adjusting for those sales dis synergies are projected revenue growth would've been approximately eight 5% to nine 6% based on fiscal 2023 pro forma revenue of $2 $3 96 billion.

Keith W. Pfeil: Our non-GAAP earnings per share guidance implies 15, five to 16, 4% growth and assumes approximately $140 million fully diluted shares for the full year versus actual 2023 shares of $114 8 million fully diluted shares as.

As we look into 2024 are keys to success, we will focus on the ability to execute.

In the near term, we will continue our merger integration with the goal of moving back towards more of a steady state by mid year.

Keith W. Pfeil: Tremendous effort has and will continue bringing the organizations together will really push forward our go to market strategies in key geographies.

Operator: If we focus and execute with our customers through constant contact and active listening, we will continue to bring best-in-class innovation to market and separate ourselves from the competition. We remain excited for the future and want to thank the entire Globus team for their relentless effort in the pursuit of excellence. Operator, we will now open the call for questions. Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.

Keith W. Pfeil: Internally, we will continue to drive synergy capture with a key focus on continued operational improvements the focus on execution and value creation will drive shareholder value as we seek to achieve our goals set forth, creating enhanced profitability and cash flow generation.

Keith W. Pfeil: Our goal is to improve musculoskeletal care and we will achieve that through procedural innovations those innovations will be achieved by listening to our customers, which are the patients and the surgeons to be successful we need to listen to their needs. If we focus and execute with our customers through constant contact and active listening. We will continue to bring best in class innovation to market.

Operator: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. One moment for our first question. The first question comes from Vick Chopra from Wells Fargo. Your line is open.

Keith W. Pfeil: And separate ourselves from the competition.

Keith W. Pfeil: We remain excited for the future and want to thank the entire globus team for their relentless effort and the pursuit of excellence operator, we will now open the call for questions.

Operator: Hey, good afternoon, and thanks so much for taking the questions, too, for me. I appreciate all the color of the integration efforts, but maybe you can talk about what surprised you on the upside and as well as the downside, and I have a follow-up question. Thanks. Rick. This is Keith.

Keith W. Pfeil: As a reminder to ask a question you need to press star one on your telephone.

Keith W. Pfeil: And way from name to be announced to withdraw your question. Please press star one again.

Operator: I'll take the upside and downsize as it relates to the cost. You know, as I think about, as we dig in and start to look at the business more and more, to me, there continues to be great opportunities for operational improvements in manufacturing. I think that bringing the facilities together with our manufacturing and legacy invasive really allows for fixed cost leverage improvements. You know, those cost savings won't be generated overnight because, as I commented in my prepared remarks, we're going to be looking at investing in new machinery and equipment. That's got to get online, and then you've got to start to produce the inventory. I think you'll see some of those savings more so in 2025 and going into 2026. And then, on the backside, I would also say SG&A.

Keith W. Pfeil: Please standby, while we compile the Q&A roster one moment for our first question.

Keith W. Pfeil: Our first question comes from the line of Vik Chopra from Wells Fargo. Your line is open.

Vik Chopra: Hey, good afternoon, and thanks, so much.

Vik Chopra: Two for me.

Vik Chopra: Appreciate all the color of the integration efforts that maybe you can talk about what surprised you to the upside and Walter the downside and then I have follow up questions.

Vik Chopra: Thanks, Nick This is Keith I'll take.

Keith W. Pfeil: I'll take the upside and downside as it relates to cost.

Keith W. Pfeil: As I think about as we dig in and start to look at the business more and more.

Keith W. Pfeil: To me there continues to be great opportunities for operational improvements in manufacturing I think that bringing the facilities together with our manufacturing and legacy innovative really allows for fixed cost leverage improvements those cost savings wont be generated overnight because as I commented in my prepared remarks, and we're going to be looking at investing in new machinery and equipment.

Operator: As I look at where we are today, I think that we're continuing to overlay kind of the Globus approach to spending. I think there are opportunities there, but in saying that, Dan commented that, you know, this isn't a slash-and-burn exercise, and some of the things that he commented on are places that we're spending more money. He talked about scientific affairs.

Keith W. Pfeil: Got to get online and then you've got to start to produce the inventory I think youll see some of those savings more so in 'twenty, five and going into 'twenty six.

Keith W. Pfeil: And then on the back side I would also say SG&A.

Keith W. Pfeil: Look as I look at where we're at today.

Operator: He talked about more surges in outreach. Those are places where we will invest to drive the business moving forward. Yeah, and I'll add to it too, Vic. One of my thoughts, I think, with the upside was really the willingness of the teams to come together and embrace what they had in common, not what was different. And so the readiness of the field and also the in-house, the support, really came together in a way that I thought was great. You know, the downside would just be some of the unsexy things, the heavy lifting you need to do with common processes and common reports and common systems.

I think that we're continuing to overlay the globus approach to spending I think theres opportunities there, but in saying that Dan commented that this isn't a slash and burn exercise and some of the things that he commented on are places that we're spending more money. He talked about scientific affairs, you talked about more surgeon outreach those are places, where we will invest.

Keith W. Pfeil: The business moving forward yes.

Speaker Change #101: Yes, and I'll add to Vic one them.

Speaker Change #101: My thoughts I think with the upside.

Speaker Change #101: It was really the willingness of other teams to come together and embraced what they had in common not what was different and so the readiness of the field and also the in house. The support really came together in a way that I thought was great. The downside would just be some of the unsexy things. The heavy lifting you need to do of common processes and common reports and common systems.

Operator: You know, just need it to go run and drive an infrastructure. Not that they're big surprises, just quite not as fun to go after when you have so much innovation and so much room to grow. Great, thanks for the color.

Operator: Just to follow up, I think you said that you had some inbound calls from competitive reps; maybe just talk about how meaningful those conversations have been and then just the broad trends in hiring in Q4 and how you see your recruiting and retention efforts shaking out in 2024. Thank you.

Speaker Change #101: Just needed to go run and drive an infrastructure now that they are big surprises just quite not as fun to go after when you have so much innovation and so much room to go grow.

Speaker Change #102: Great. Thanks for the color I guess, Paul I think you said that you have.

Paul: Some inbound from competitive reps, maybe just talk about how meaningful those conversations have been and then just maybe broad trended higher in Q4, and how you see your recruiting and retention efforts shaking out in 2024. Thank you.

Operator: Well, so a couple things. Let's start with your first part. We really do have a lot of foot traffic right now with competitive people coming in and expressing interest proactively with us, and they're meaningful. They're large in size, they're well established, and so it certainly can be significant. And we're taking time to make sure that we're going after that. I would tell you that recruiting in general was strong in 2023, although it was lighter than it had been in the past two years just by itself.

Paul: Yeah, you got it.

Paul: Couple of things I'll start with your first part.

Speaker Change #103: Really do have a lot of foot traffic right now with competitive people coming in expressing interest proactively with us and they're meaningful they're large in size. They are well established and so certainly it can be significant and we are taking time to make sure that we're going after that I would tell you that recruiting in general was strong in 2023.

Speaker Change #103: It was lighter.

Speaker Change #104: And then it had been in the past two years, just by itself, but I guess I could cheat and technically say, we've hired over 350 competitive reps in the fourth quarter.

Operator: But I guess I could cheat and technically say we've hired over 350 competitive reps in the fourth quarter, meaning that our focus is obviously on our counterparts and getting that done. And so, as a result, not quite as heavy as recruiting, but it is a main focus to get back to. And I'm pleased with what I see so far this quarter with traffic. All right, thank you.

Speaker Change #104: Meaning that our focus is obviously with our counterparts in getting that done and so as a result.

Speaker Change #104: <unk> quite as heavy as recruiting but it is a main focus to get back to and I'm pleased with what I see so far this quarter with traffic.

Operator: One moment for our next question. Our next question comes from Steve Lichtman from Oppenheimer. Your line is open. Thank you. Hi guys.

Speaker Change #105: Alright. Thank you one moment our next question.

Operator: Keith, you mentioned in your prepared remarks relative to enabling technologies financing arrangements. Are we seeing more of a mix of placements versus outright sales? And is that something we should look for more from you guys, you know, particularly as some new competitors hit the market? So, great question. Thanks for it.

Our next question comes from the line of Steve Lichtman from Oppenheimer. Your line is open.

Steven Lichtman: Thank you hi, guys.

Steven Lichtman: Keith you mentioned in your prepared remarks relative to enabling technologies about financing arrangements.

Steven Lichtman: Are you seeing more of a mix of placements.

Steven Lichtman: Versus outright sales and is that something we should look for more from you guys, particularly as some new competitors hit the market.

Operator: I would say that in Q4, we saw more volume-based sales. So, you know, what's the difference year-over-year? Interest rates are higher. So, when you think about the REV-REC or the revenue recognition that occurred, a greater portion went to interest income that'll be recognized ratably over the life of the deal. So, when I talk about the 2% growth in base business, it's really driven primarily because of the interest impact. And that's really, as I think about moving forward, will we see more volume-based arrangements? I think it's going to ebb and flow from quarter to quarter. I wouldn't say that this is the start of an inflection point where we're going to be driving more volume. It's really going to be driven by what each customer is really looking for. I think that's about it.

Keith W. Pfeil: So great question and thanks for it I would say that in Q4, we saw more volume based sales. So whats the difference year over year interest rates are higher so when you think about the Rev rec or the revenue recognition that occurred a greater portion went to interest income that will be recognized ratably over the life of the deal so when I talk about.

Keith W. Pfeil: The 2% growth on base business, that's really driven primarily because of because of the interest impact.

Keith W. Pfeil: And that's really as I think about moving forward will we see more volume based arrangements I think it's going to ebb and flow quarter to quarter I wouldn't say that this is the start of an inflection point, where we're going to be driving more volume based is really going to be driven by what each customer is really looking for.

Operator: Great. And then, just secondly, in terms of... The ortho business, I know, I think at AOS, you guys talked about potentially showing a knee or a knee system this year. What level of investment is going to be required to get that business off the ground? And is any of that embedded in your FY 24? Earnings comment? Steve, are you talking about the robot or the implants, or both? Both. Okay, that would make it tougher. No, the robot itself is actually built, but it's not yet approved.

Speaker Change #106: Got it great.

Speaker Change #106: Great.

Speaker Change #107: And then just secondly in terms of.

Speaker Change #107: The ortho business I know I think as you guys talked about potentially showing knee in your knee system. This this year.

Speaker Change #107: What level of investment is going to be required to get that.

Speaker Change #107: That business off the ground and is any of that embedded in your FY 'twenty four earnings commentary.

Operator: So it isn't something we would have built in with any significance in our 2024 forecast. While we do have some great updated products for cementless or press fit knees coming, and revision updates, we've been light in building them into the forecast just because they have yet to get through and get approval. So I look at all of those as upsides. I would signal to you that all of them are anticipated in the second half of the year, and we've not seen anything that would take us off course. We were just conservative having not yet had FDA approval, not building it in as a needed plan to achieve.

Steve are you talking about the robot or the implants or both.

Speaker Change #107: Both.

Steven Lichtman: Okay that will make it tougher.

Speaker Change #107: The robot itself.

Speaker Change #107: <unk> built but it is not yet approved so it isn't something we would've built in with any significance in our 2024.

Speaker Change #107: While we do have some great updated products for some atlas or a press fit knee coming and revision updates we've been light and building them into the forecast just because they have yet to get through and get approval. So I look at all of those as upsides I would signal to you that all of them are anticipated in the second half of the year and we've not seen anything that.

Operator: And relative to the level of investment required to kind of get that ortho business off the ground, is that meaningful at all? And in any case, built into this, I would say that the level of investment would not be meaningful for the year, and as we think about development costs, we expense our development costs as they're incurred, so there's not some hanging expense waiting to run through the P&L. I think that it'll come through the P&L in stride in 2024. One other thing I'd add to you, Steve, is that all of the stuff you need to get to market has been spent over the past couple of years anyway, and so you already have a large level of ortho investment built into 2022-23, as well as even earlier with that. So you shouldn't see a blip in your model or anything that would take you off significantly from where we are. Thanks, guys.

Speaker Change #107: It would take US off course, we we're just conservative having not had FDA approval not building it in as a needed plan to achieve.

Speaker Change #107: And relative to the level of investment.

Speaker Change #107: Prior to kind of get that ortho business off the ground is that meaningful at all.

Speaker Change #107: If any of that built in this year.

Speaker Change #107: I would say that the level of investment would not be meaningful to the year and as we think about development costs, we treat our we expense our development costs as they're incurred so there is not some hanging expense waiting to run through the P&L I think that we will it will come through the P&L in stride in 2024, one other thing I'd add DSD was all of this stuff you need to get to market has been <unk>.

Speaker Change #107: Over the past couple of years anyway, and so you already have a large level of ortho investment built into 'twenty, two 'twenty three as well as even earlier with that so you shouldnt see a blip in your model or anything that would take you off significantly from where we are.

Operator: One moment for our next question. And our next question will come from the line of Matt Blackman from Stifel. Your line is open. Good afternoon, everybody. Thanks for taking my questions. I've got a couple for Keith.

Speaker Change #108: Got it thanks guys.

Speaker Change #109: One moment our next question.

Speaker Change #109: And our next question comes from the line of Matt Blackman from Stifel. Your line is open.

Operator: Let me just start with just a bigger picture guidance question. Curious what lens we should be looking through to gauge the 24 guidance. Historically, I think you've got it to a range where you have high conviction but where there's also opportunity for upside. So first question, has anything changed in your guidance philosophy for the now combined company? And I have one follow-up. I would say that, you know, our top-line guidance, the 2450 to 2475, is something that we feel confident in. I would say that we called out some of the sales synergies because I wanted to get across the point that, you know, we remain extremely excited about our business and the growth prospects, but we're acknowledging that sales synergies could exist.

Mathew Justin Blackman: Good afternoon, everybody. Thanks for taking my questions I've got a couple for Keith maybe just started just a bigger picture guidance question curious what lens, we should be looking through to gauge. The 24 guidance. Historically I think you've guided to a range, where you have high conviction, but where there is also opportunity for upside so.

Keith W. Pfeil: First question has anything changed in your guidance philosophy for the now combined company and I have one follow up.

Keith W. Pfeil: I'd say that our topline guidance to four five to four five year to 275 is something that we feel confident in I would say that we called out some of the sales dis synergies because I wanted to get across the point that we remain extremely excited about our business and the growth prospects, but we're acknowledging that sales dis synergies could exist.

Operator: As it relates to the bottom line, the range of 268 to 270, I think it's really a down-the-middle number. I mean, in my prepared remarks today, I really sought to provide a lot of color as it relates to gross profitability, R&D, and SG&A expenses, and I think that when you kind of pull all that together, you know, 268 to 270 seems reasonable. Obviously, you're always going to try to beat them, but that's where we stand as of now.

As it relates to the bottom line the range of $2 60 to 270, I think it's a really a down the middle number I mean in my prepared remarks today really sought to provide a lot of color as it relates to gross profitability R&D and SG&A expenses and I think that when you kind of pull that together.

Keith W. Pfeil: 260 to 270 seems reasonable obviously youre always going to try to beat but that's where we're standing as of now.

Operator: Okay, I appreciate that. And then on that point as well, you gave us a ton of P&L stuff to work through. I'm curious, we didn't really touch on EBITDA, which is something that you certainly highlighted in the proxy. And if I recall, your commentary has been that the proxy is still the best framework for numbers. This is a complicated question, so I apologize in advance.

Speaker Change #110: Okay I appreciate that and then on that point is while you did give us a ton of P&L.

Speaker Change #111: You have to work through I'm curious, we didn't really touch on EBITDA, which is something that you've certainly highlighted in the proxy and if I recall your commentary has been that the proxy is still the best framework for numbers.

Speaker Change #111: And this is a complicated question so I apologize in advance, but if we actually look back to your EBITDA outlook in the proxy for 2024, I think it was something like $788 million and.

Operator: But if we actually look back to your EBITDA outlook in the proxy for 2024, I think it was something like $788 million. And I appreciate that synergies have shifted out, and so there's obviously some changes there. But when we make some adjustments for that, the timing of the synergies, we're still coming up with an EBITDA number roughly for 2024, and we call it the $730 to $750 range. Is that the right way to think about it? Or is there perhaps something else perhaps changed that impacts EBITDA in 2024 and beyond that you've laid out in the proxy? That's a great question.

Speaker Change #111: Appreciate that the synergies have shifted out and so there. There's obviously some changes there, but when we make some adjustments for that the timing of the synergies, we're still coming up with an EBITDA number roughly for 2024 and call. It the $737 50 range is that the right way to think about it.

Speaker Change #111: Or something else, perhaps change that impacts the EBITDA in 'twenty, four and beyond that you've laid out in the proxy.

Operator: And I would say you're not too far off. I think that makes sense. When you think about the S4, one of the things that I would say was different is that we did a little bit more investment in enabling tech during the year, so that really impacted a little bit of base business profitability. But when you look going forward, I think your range you provided makes a lot of sense. All right, thanks so much.

Speaker Change #112: Great question, I would say youre not youre not too far off I think that that makes sense. When you think about the S. Four one of the things that I would say was different is we did a little bit more investment in enabling tech during the year, so that really impacted a little bit of base business profitability, but when you look going forward I think your range you provided it makes it makes a lot of sense.

Speaker Change #113: Alright, thanks, so much.

Operator: Thank you. Please take a moment for our next question. Our next question will come from Shagun Singh from RBC. Your line is open. Great, thank you so much for taking the question. Just to follow up on 2024 guidance, can you give us, give us any help on the cadence of it? You did call out $150 million in potential dis-synergies. How should we think about that? And then is there any cross-selling opportunity included in that?

Speaker Change #114: Thank you one moment our next question.

Shagun Singh: Our next question from the line of <unk> Singh from RBC. Your line is open.

Shagun Singh: Oh, great. Thank you so much taking the question.

Shagun Singh: Just to follow up on 2024 guidance can you provide us.

Shagun Singh: Any help on the cadence of that you did call out $150 million in potential dis synergies how should we think about that and then is there any cross selling opportunity included in that and then I have a follow up.

Operator: And then I have a follow-up. I would say the $150 million. We're really looking at that throughout the entire year and the continuum across all our businesses. As it relates to cross-selling, we would have assumed cross-selling in our guidance number this year of 245 to 2475. Dan, anything you'd add to that?

Shagun Singh: I would say the $150 million, we're really looking at that throughout throughout the entire year in the continuum across all our businesses.

Speaker Change #115: As it relates to cross selling we would've assumed cross selling in our in our guidance number this year of the two for $5 to 275.

Speaker Change #115: Dan anything you'd add to that yes, and <unk>, what I would just tell you is the 150 that Keith referenced is the gross number we would look to offset that through cross selling and other growth and things like that it's just a natural one that we built in but it has not been netted down for the cross selling we're going to do that as a way to soften it from that point.

Operator: Yeah. Shagun, what I would just tell you is the 150 that Keith referenced is the gross number. We would look to offset that through cross-selling and other growth and things like that. It's just a natural one that we've built in, but it hasn't been netted down for cross-selling, and we're going to do that as a way to soften it from that point.

Operator: And then, you know, you potentially have two new competitive spine robots coming to market from larger market players, including one that has been a major share donor for the last several years. So I guess a two part question: how do you expect the new robotic systems to compete in the market relative to your offering? And how do you think of the implant share dynamics as these companies may have a better ability to kind of defend their own position in the market? Thank you for taking the question. Yeah, it's a great question. It's one that really should be defined further.

Speaker Change #116: Understood and then.

Speaker Change #116: Any update on your competitive spying robot coming to market from larger market players, including one that has been our media schedule now for the last several years. So I guess a two part question. How do you expect the new robotic systems to compete in the market relative to your offering and how do you think of the implant share dynamics as these companies may have better.

Speaker Change #116: Ability do.

And their own position in the market. Thank you for taking the questions.

Speaker Change #117: Yes, it's a great question as one really to be defined further we've got to see the actions that are taken there at the end of the day you have a large unmet clinical need we've got a robot that is superior and we think that even with competition, which we've called would be coming for years may arrive over the next 24 months that's okay.

Operator: We've got to see the actions that are taken there. At the end of the day, you have a large unmet clinical need. We've got a robot that is superior, and we think that even competition, which we've called would be coming for years, may arrive over the next 24 months. That's okay.

Operator: You know, we're set to poise and compete this way. Part of doing this merger was to create the size and the reach in order to not only penetrate faster but compete in this fashion. And so I think we're well poised to go head to head with anybody in this sense. And while I would think about it, there may be more choices over the long term for our customers, and that's why you have to focus on driving innovation and putting products out that make meaningful differences. Thank you. Please take a moment for our next question. And our next question comes from the line of David Saxon from Needham. Your line is open.

Speaker Change #117: We're set to poised.

Speaker Change #117: And compete this way part of doing this merger was to create the size and the reach in order to also not only penetrate faster but compete in this fashion and so I think we're well poised to go head to head with anybody in this sense and while I would think about it.

Speaker Change #117: There may be more choices over the long term for.

Speaker Change #117: Our customers and that's why you have to focus on driving innovation and putting products out that make meaningful differences.

Speaker Change #118: Thank you.

Speaker Change #119: One moment for our next question.

Speaker Change #119: And our next question comes from the line of David Saxon from Needham Your line is open.

Operator: Great, thanks for taking my questions and congrats on the quarter. Maybe to start on the integration, I'd love to hear the feedback you're getting from the sales reps following the territory integration that you guys completed in November. I know you're saying attrition is kind of in line with expectations, but the attrition that you are seeing, is it in territories that were kind of most disrupted?

David M. Demski: Great. Thanks for taking my questions.

David M. Demski: Congrats on the quarter maybe.

David M. Demski: Maybe to start on the integration I would love to hear the feedback youre getting from from the sales reps, calling the territory integration.

David M. Demski: That you guys completed in November.

You are saying attrition is kind of in line with expectations, but the attrition that you are seeing is it in territories that were kind of most disrupted.

Operator: And then how are you thinking about kind of filling those vacancies with some of these competitive reps you've called out? Thanks, David. You know, obviously, it becomes a personal matter for reps, and you're going in and making changes, and most people, by human nature, don't adapt well or appreciate change in a state of uncertainty, so going through that quickly, or as quick as we can, is meaningful. I'll be honest with you.

David M. Demski: And then how are you thinking about kind of filling those vacancies with with some of these competitive reps.

Called out.

Speaker Change #120: Thanks, David.

Speaker Change #120: Obviously, it becomes a personal matter for reps and youre going in and making changes in most people as human nature.

Speaker Change #120: Adapt well or appreciate change in the state of uncertainty so going through that quickly or as quick as we can.

Speaker Change #120: Is meaningful I'll be honest with you the teams that I've worked with throughout the world have been fantastic.

Operator: The teams that I've worked with throughout the world have been fantastic, and the vast majority have been willing to roll up their sleeves and figure out where to work and how to cut up the spaces. Remember, the thing we've called out clearly is that we have very low overlap. In fact, by the time we were unblinded, it was in the neighborhood of 3% in the U.S., so it wasn't a major amount of untangling so much as just reorganizing for the most efficient thing.

Speaker Change #120: And the vast majority have been willing to roll the sleeves and figure out where to work and how to cut up the spaces remember the thing we've called out clearly as we had very low overlap in fact by the time, we were unblinded. It was in the neighborhood of 3% in the U S. So it wasn't a major amount of untangling. So much as just reorganizing for the most efficient thing.

Operator: Areas that have departed that we may attribute to this change, I think they're sporadic. I don't think there was a density in certain areas that I would call out here. Again, and probably just more of a personal comfort level, are they comfortable with this change?

Speaker Change #120: Areas that have deposit that we may attribute to this change I think theres sporadic I don't think it was a density in certain areas that I would call out here.

Speaker Change #120: And probably just more of a personal comfort or are they comfortable with this change where they like to go somewhere else.

Operator: Would they like to go somewhere else? We're working through that, filling it. We have a lot of reps, and we need all of our reps, so we're looking where we can spread out, and we will keep our eye focused on competitive recruiting as we have in the past years and use that as a growth mechanism. Okay, great. Thanks so much for that.

Speaker Change #120: And we're working through that filling it.

Speaker Change #120: Have a lot of reps and we need all of our reps. So we're looking where we spread out and we will keep our eye focused on competitive recruiting as we havent passed years and use that as a growth mechanism.

Speaker Change #121: Okay, great. Thanks, so much for that and then I wanted to ask on the knee robot launch I'd love to hear your voice.

Operator: And then I wanted to ask about the Neve robot launch. I'd love to hear your strategy around the launch, like what type of accounts are you going to target initially? What's your confidence in supply and manufacturing capacity? And then how should we think about the Stelcast implant ramp, as you know, you kind of build the robotics installed base. Thanks so much.

The strategy around the launch like what type of accounts are you going to target initially what's your confidence in supply and manufacturing capacity and then how should we think about the delcath implant rep ramp.

Speaker Change #121: You kind of build the robotics installed base. Thanks, so much.

Operator: No, you're welcome. I would tell you that we certainly have ordered the long-lead-time components, and we've expanded our capacity, not only to handle the merger but also for this. So, I feel like we're set to do that way. We've been scaling up implant sets as well, slowly, right now, because we need to get through and get the approvals before we go bigger with it. You know, the truth is, the strategy will come together a little bit more in the second quarter and early third quarter as we get through and understand when we can launch this and where we'll go. I would tell you it's an open strategy right now. Of course, the need to be in ASCs is prominent, given where those procedures take place, but by all means, we'll take advantage of hospitals as well. So, you're going to be, what we do as Globus, covering all these areas versus being hyper-focused, and what we'll do is start with concentric circles, establish ourselves, invest more, and continue until we build up the momentum like we've done in spine over the years Great, thanks so much.

Speaker Change #122: Youre welcome, but I would tell you we certainly have ordered the long lead time components and we've expanded our capacity not only to handle.

Speaker Change #123: The merger, but also for this so I feel like we're set to do that way, we've been scaling up implant sets as well slowly right now because we need to get through and get the approvals before we go bigger with it.

Speaker Change #123: Truth is the strategy will come together, a little bit more into the second quarter and early third quarter as we get through and understand when we can launch This award will go.

Speaker Change #123: <unk> tell you. It's an open strategy right now of course, the need to be an ASC as prominent given where those procedures take place, but by all means we'll take advantage of hospitals as well. So you are going to be what we do is globus covering all of these areas versus being hyper focused and what we'll do is we'll start with concentric circles establish ourselves invest more and continue.

Speaker Change #123: Until we build up the momentum like we've done in spine over the years.

Speaker Change #124: Great. Thanks, so much.

Operator: Thank you. One moment for our next question. Our next question will come from the line of Matt Miksic from Barclays. Your line is open. Hey, great. Thanks so much for taking the question and congratulations on the progress and all the great color.

Speaker Change #125: Thank you one moment our next question.

Speaker Change #125: Okay.

Speaker Change #125: Our next question comes from the line of Matt <unk> from Barclays. Your line is open.

Speaker Change #125: Okay.

Matt: Great. Thanks, so much for taking the question and.

Speaker Change #125: Congrats.

Matt: Progress on all the great color.

Operator: Maybe, Dan, I'll just dive into one of the things that you just mentioned about the ASM. I'm curious if you could maybe talk a little bit about how that's shaking out as an opportunity for the combined business, you know, how big that was or is for Globus Legacy or Devasive or both, in terms of the percentage of your business going through the ASE and what you're doing to participate in that growth opportunity on the spine side. And then I have one follow-up question. Yeah, you got it, Matt.

Matt: And maybe Dan just diving into one of the things that you just mentioned about the ASC.

Matt: Ortho.

Dan: I'm curious if you could maybe talk a little bit about.

Dan: How that is shaking out as an opportunity.

Dan: For the combined business, how big that was or is for.

Dan: Globus legacy or debates over both in terms of the percentage of your business going through the agency, what youre doing to participate in that growth opportunity on the spine side and then I have one follow up with you.

Speaker Change #127: Yeah, you got it Matt So we won't disclose a certain business segment obviously.

Operator: So we won't disclose a certain business segment, obviously. So I'll leave that one out. What we are looking at and what we recognize is, of course, there is a migration at a certain cadence of procedures that go out into the ASC. And so, as appropriate, we're looking to understand the best way to place enabling tech versus freehand navigation versus just freehand, period. And we're working through that as well. To date, we're still putting together what we want to do as an ASC strategy in that particular area as the new combined organization. But again, it won't be any significant deviation. I can't imagine calling it out to any size in 2024.

Speaker Change #128: So I'll leave that one out what we are looking at what we recognize is of course, there is a migration at a certain cadence of procedures that go out into the IC and so as appropriate we're looking to understand the best way to place, enabling tech versus freehand navigation versus just freehand period, and we're working through that as well.

Speaker Change #127: <unk>.

Speaker Change #127: To date, we're still putting together, what we want to do as an ASC strategy in that particular area is the new combined organization, but again it won't be any significant deviation I can't imagine calling it out to any size in 2024, I think it's one that as we fine tune and get better feel for the stabilized sales force.

Operator: I think it's one that as we fine-tune and get a better feel for the stabilized sales force, we'll bring this together and probably be stronger at that push later in the year and into 2025. Okay, and then maybe a follow-up on some of the integration and dynamics of, you know, working through the combination of the field forces and everything that you talked about. We were pretty happy with the way that the new basis numbers came in in Q4, but I think if I could speak for the investors that we talked to about the opportunity here, there's still some apprehension about when do we start to feel like things are, we're on the tail end, or they're on the downward slope of the risk of maybe this energy is getting bigger than we were expecting. Is Q1 that transitional period, do you think?

Speaker Change #127: We will bring this together and probably be stronger at that push later in the year into 2025.

Speaker Change #127: Okay.

Speaker Change #127: And then just on.

Speaker Change #127: Maybe a follow up on some of the integration.

Speaker Change #127: Dynamics.

Speaker Change #127: Working through the combination of the field force everything that you've talked about we were we were pretty happy with the way that the new basic numbers came in in Q4.

Speaker Change #129: But I think if I can.

Speaker Change #130: Can speak for the investors that we talk to about the opportunity here is theres still some.

Speaker Change #130: Apprehension about.

Speaker Change #130: When when do we start to feel like things are we're on the we're on the tail end or on the downward slope of.

Speaker Change #130: The risk of maybe the synergies getting bigger than we were expecting.

Speaker Change #130: Is Q1 that that transitional period do you think do we have to wait until Q2 or maybe.

Operator: Do we have to wait until Q2 or maybe another way? What are some of the signals? data points and, you know, that we can look for or think about that will help to finally address all that sort of concern from last year? I appreciate it.

Speaker Change #130: The other way what are some of the signals.

Speaker Change #130: Data points.

That we can look for or think about that will help us to finally put all that sort of concern from last year to bed I appreciate it.

Operator: Yeah, it's a great question. And you know, I'm guessing here, but I would think that we would see activity in the first quarter and be able to understand where that is and what it is. My thought would be exiting the first quarter in the second quarter; I would think it should be a touch more stable. But this is just me guessing based on really only having one month's actual data for the year that way.

Yes, it's a great question.

Speaker Change #130: I'm guessing here, but I would think that we would see activity in the first quarter and be able to understand where that is and what it is my thought would be exiting first quarter in the second quarter I would think it should be a touch more stable.

But this is just me guessing based on really only having one month's actual data for the year that way, but when we call out steady state by June we're doing unintentionally, saying that we think that Salesforce has settled in getting through the learning curve should get the bumps out of your system implementations and you work into a cadence really what I think is through the first quarter into the second but you exit the second quarter.

Operator: But, you know, when we call out steady state by June, we're doing that intentionally, saying that we think that Salesforce is settled in getting through the learning curves; you get the bumps out of your system implementations. And you're working into a cadence, really, what I think is through the first quarter and into the second, but you exit the second quarter, going back to doing what you do best, which is innovate, take share, and grow. Thanks so much.

Speaker Change #130: <unk>.

Speaker Change #130: Going back to doing what you do best which is innovate take share and grow.

Speaker Change #131: Thanks, so much.

Operator: Yeah, one moment for our next question. And our next question comes from Matthew O'Brien on Piper Sandler. Your line is open.

Speaker Change #131: Yes.

Speaker Change #132: One moment for our next question.

Speaker Change #132: And our next question comes from the line of Matthew O'brien from Piper Sandler Your line is open.

Operator: Great, thanks for taking the questions. I guess just for starters, we think about when you put the standalone NUVA and standalone GMEDS together, and I know there's moving parts here, but you do that, you take the Dyssynergy out, I'm getting like, you know, $50 million of cross-selling benefit here this year. Is that number about right? And then the $150 million in Dyssynergies. You know, that seems like a lot in one year. I'm just wondering what exactly that's going on.

Matthew Miksic: Great. Thanks for taking the questions.

Matthew Miksic: Just for starters, when we think about when you put the Standalone <unk> Standalone <unk> together and I know, there's moving parts here, but.

Matthew Miksic: You do that you take the dis synergy out I'm getting like.

Matthew Miksic: $50 million of.

Matthew Miksic: Cross selling benefit here. This year is that number about right and then.

Matthew Miksic: $150 million of dis synergies.

That seems like a lot in one year I'm just wondering what exactly that is baking in and now we've learned about Texas, maybe turning over but it just seems like a lot in one year. So what's what's being baked in there and then I'll do a follow up.

Operator: I know we've heard about Texas maybe turning over, but that just seems like a lot in one year. So what's being baked in there? And then I do have a follow-up. Thanks, Matt. Well, again, remember that we're Globus, so we're conservative in what we look at and what we estimate. We're putting numbers out that we would look to, you know, control or beat where possible. I'm not saying it's a slam dunk.

Speaker Change #133: Thanks, Matt again remember we're globally. So we're conservative in what we look at and what we estimate we're putting numbers out that we would look to control our beat where possible, let's say and it's a slam dunk. We're just being realistic that we have created a market disruption as we become number one in the market and so we expect folks to react to that and I think it would be.

Operator: We're just being realistic that we have created a market disruption as we become number one in the market, and so we expect folks to react to that. And I think it would be unrealistic not to think you would lose stuff. So it's an estimate, but not really based on any factors. You're calling out certain geographies that I wouldn't comment on just because, like I said, we did it more from a top-sided number as an area to build from and look to go from there. Okay, Dan, but even with the low overlap, I mean, that 150 seems like a big number.

Speaker Change #133: Unrealistic to think you would lose stuff. So it's an estimate but not really based on any factors you are calling out certain geographies that I wouldnt comment on.

Speaker Change #133: Just because they can say we did it more from a top side at number as an area to build from and look to go to from that way.

Speaker Change #133: Okay, but even with the low overlap I mean that 150, it seems like a big number.

Operator: I mean, I'd say that it is a large number, but when I step back and look at sales, when you look at the combined sales from 2022, that's about 7 percent. But to Dan's point earlier, it's a gross number before you consider cross-selling opportunities to offset that. Bringing the portfolios together, again, you're going to be looking at the legacy Nuvasiv team is going to be looking at Globus expandable cages, and they're going to be looking at Globus enabling technologies. When you look at Nuvasiv products, the legacy Globustrep is going to be looking at Nuvasiv lateral procedures, so there's cross-selling in there, there's cross-selling that's not in that 150, and at the end of the day, it's an imprecise size, but we're basing this on what we have.

Speaker Change #133: I would say that it is a large number but when I step back and look at sales. When you look at the combined sales from 2022, that's about to about 7%, but to Dan's point earlier to gross.

Speaker Change #133: We consider cross selling opportunities to offset that.

Speaker Change #133: Bringing the portfolios together again youre going to be looking at the legacy <unk> team is going to be looking at Globus expandable cages theyre going to be looking at globus, enabling technologies. When you look at the invasive products. The legacy Globus Rep is going to be looking at an invasive lateral procedures. So there is cross selling and there there's cross selling that's not in that $1 50.

Speaker Change #133: And at the end of day, it's an imprecise science, but where base basing this on what we see yes, if you're still getting things you say between 5% to 10% of sales could be disrupted we're right in the middle when we came up with that number and then we say okay. That's again the gross number and then how do you beat that through cross selling through growth through natural account through competitive hiring.

Operator: Yeah, if you just look at things, you know, you say between 5 to 10% of sales could be disrupted. We're right in the middle when we came up with that number. And then we say, okay, that's, again, the gross number; then how do you beat that through cost selling, through growth, through natural accounts, through competitive hiring? We do that, but we're just putting out numbers based on our formulas. If you picked a historical norm, that would be the number we'd put out and then go to beat by outgrowing it. I got it.

Speaker Change #133: That's where we're saying, we're just putting out saying based on our formula is if you've picked a historical norm that would be the number we've put out and then go to beat by outgrowing it.

Operator: Okay, appreciate that. And then, Keith, as far as, you know, back to Matt Blackman's question on EBITDA, I think you guys said when you did the deal, you know, year three, post the closing, you'd be back in kind of the mid-30s as far as EBITDA goes. But this guidance is more like kind of the low-30s.

Speaker Change #134: Got it okay I appreciate that and then Keith as far as no back to Matt Blackman question on EBITDA I think you guys said when you did the deal.

Keith W. Pfeil: Three post the closing you'd be back in kind of the mid thirty's as far as EBITDA grows I mean this guidance is more like kind of low <unk> thats a lot of leverage and we're expecting over the next three years, you're going to get to 33%.

Operator: It's a lot of leverage that we're expecting over the next, I guess, three years, even to get to 33%. So just talk about confidence and getting back to that mid-30s and kind of where that comes from, up and down the P&L. So we're confident; we're confident in that. When you think about the 170 that we called out, 40% this year is about $68 million. You're gonna get to 70% and then 100%.

Keith W. Pfeil: Talk about the confidence in getting back to that mid thirties, and kind of where that comes from.

Keith W. Pfeil: Up and down the P&L. Thanks.

Speaker Change #135: So we're confident we're confident in that and when you think about the 170 that we called out.

Speaker Change #135: <unk>, 40%. This year is about $68 million, you kind of get to 70% and 100%.

Operator: As you think about the cadence, it's important to think about some of my prepared comments, which talked about manufacturing and operations. Those are longer lead time items. Things in SG&A and R&D will happen more quickly. So when you think about the 68 million, I would say give or take 20% of that's gonna be in COGS. The other 80% is gonna come through R&D and SG&A in 2024, but we have to plant the seeds for future manufacturing improvements to drive improved P&L profitability. So what does that mean? It means that thing I'm gonna pay attention to this year, especially as we get into the back half of the year, cashflow. Because if I'm renegotiating contracts, I just see improvements in working capital because of inventory. I'm buying raw materials cheaper, I'm buying things, and I'm bringing them in house.

Speaker Change #135: As you think about the cadence it's important to think about some of my prepared comments talked about manufacturing and operations. Those are longer lead time items things in SG&A and R&D those will happen more quickly. So when you think about the $68 million I would say give or take 20% of that is going to be in cogs. The other 80% is going to come through R&D and SG&A in 2000.

24, but we have to plant the seeds for the future manufacturing improvements to drive improved P&L profitability. So what does that mean, what does that mean as that thing I'm going to pay attention to this year, such as getting into back half of the year for cash flow.

Speaker Change #135: If I'm renegotiating contracts as you see improvements in working capital because of inventory and buying raw materials cheaper than buying things and bringing them in house 2025 does the equipment that are investing is coming online and I'm producing inventory and building of inventory for them, which I will sell later in 'twenty five 'twenty, six that's where you're going to see a lot of that benefit.

Operator: In 2025, the equipment that I'm investing in is coming online, and I'm producing inventory. I'm building an inventory which I will sell later in 25 and 26. That's where you're gonna see a lot of that benefit, and that's gonna be really noticeable in 25 and 26. So from my perspective, our view of getting back to the mid-30s, right now, I feel good about that. Thank you. Please take a moment for our next question. And our next question will come from the line of Matt Taylor from Jeffries. Your line is open.

Speaker Change #135: And that's going to be really in 2005 and 26%. So from my perspective, our view of getting back to mid <unk> right now I feel good about that.

Speaker Change #136: Okay. Thank you one moment our next question.

Speaker Change #136: And our next question comes from the line of Matt Taylor from Jefferies. Your line is open.

Operator: Hi guys, thanks for taking the question. So I just wanted to ask about two kinds of side items. One was, I thought it was interesting that you bought back stock in Q4. So maybe you could talk about your decision to do that, whether that was opportunistic, because I know you said that tucking M&A was the priority. And then we're just at AAOS, and you were talking about the ortho robot. I know we could see more of that later this year. And I guess my question would be, do you expect the contributions from that to be material? Not this year, but maybe next year? Hey Matt, this is Dan.

Matt Taylor: Hey, guys. Thanks for taking the question.

Matt Taylor: So I just wanted to ask you about.

Matt Taylor: Kind of side items, one was I thought it was interesting that you bought back stock in Q4. So maybe you could talk about your decision to do that whether that was opportunistic because I know you said.

Matt Taylor: And M&A was the priority.

Matt Taylor: Then.

Matt Taylor: Double AOS and you were talking about the ortho robot I know, we could see some of that more later this year.

Speaker Change #137: Yes. My question would be do you expect the contributions from that to be material not this year, but maybe next year.

Speaker Change #137: Hey, Matt This is Dan I'll actually answer and then hand, it off to Keith. So look we think that the market has overreacted in the stock price is actually added deal.

Operator: I'll actually answer and then hand it off to Keith. So, you know, look, we think that the market has overreacted and the stock price has actually fallen. And we're going to take the opportunity to use our strong cash and buy that back to reduce dilution and actually set it up for other reasons. So, yeah, it's opportunistic, but it's also the plan that we'll keep doing that because we believe strongly in where this is going to go. We play for the long term, but we'll use it to our advantage now. That'd be the first one.

Dan: And we're going to take the opportunity to use our strong cash and buy that back to reduce dilution actually set it up for other reasons. So yes, it's opportunistic but it's also the plan of we will keep doing that because we believe strongly in where this is going to go we play for the long term, but we will use it to our advantage now that'd be the first one.

Operator: You know, for AAOS and the robot, we're really happy with it. As I said, we haven't filed yet. It hasn't been approved.

Dan: For double AOS and the robot, we're really happy with it as I said, we haven't filed yet it hasn't been approved we think it's going to be in the second half of the year I would tell you I would not expect material moves of that in 2024, I think thats going to be more of a 2025 story.

Operator: We think it's going to be in the second half of the year. But I would tell you I would not expect material moves like that in 2024. I think that's going to be more of a 2025 story. And Keith, I don't really have a lot to add to Dan's comment. I think he hit the nail on the head there.

Speaker Change #138: And Keith I don't.

Keith W. Pfeil: I don't really I don't really have a lot to add to Dan's comment I think you hit it head on there. Thanks.

Operator: Thanks. Thank you. One moment for our next question. Our next question comes on the line from Ryan Zimmerman from BTIG. Your line is open.

Speaker Change #139: Alright. Thank you one moment for our next question.

Our next question comes from the line of Ryan Zimmerman from <unk>. Your line is open.

Operator: Hey, guys, thanks for taking the questions. Want to follow up maybe on Matt's question in a different way. You know, if you take kind of the prior numbers, Keith, I think you'd call that... 2.396 billion. When I look at where the guidance lands, and again, back out, it'd come out to about 3% or so for FY24.

Ryan Zimmerman: Hey, guys. Thanks for taking the question.

Ryan Zimmerman: Want to follow up.

Ryan Zimmerman: On Matt's question in a different way.

Ryan Zimmerman: If you take kind of the prior numbers Keith I think you called out $2 $3 96 billion when I look at where the guidance plans and again backing out the synergies come.

Ryan Zimmerman: Come out to about 3% or so for FY 'twenty four.

Operator: And so, I guess I'm curious kind of how the view of the market is relative to that. You know, is the market growing at that rate? Is the market growing faster than that?

Ryan Zimmerman: So I guess I'm curious kind of what your view of the market is relative to that number.

Ryan Zimmerman: Is the market growing at that rate is the market growing faster than the rate it feels like coming out of iOS in early.

Operator: It feels like, you know, coming out of AOS, the early part of the year, the market's been pretty healthy. And so, you know, are you suggesting that you guys are growing at the market, growing maybe slightly below the market? And then, you know, the second point to that question... When you think about the guidance of the 2.45... 475. Now, we all, you know, we all have these old models from all the different segments, and I know that's now one company, but maybe help us piece together kind of... where you see that growth coming within Cervical is that within, you know, the report. Neuromonitoring.

Ryan Zimmerman: Early part of the year market has been pretty healthy and so are you are.

Speaker Change #140: Are you, suggesting that you guys are growing that market, Brian maybe slightly below market.

Speaker Change #140: And then the <unk>.

Speaker Change #140: Second point to that question is when you think about the guidance of the two for $5 2.4 dollars 75 now we all we all have these old models from all of the different segments and I know that's now one company but.

Speaker Change #140: Maybe help us piece together kind of where you see that growth coming from is it within cervical is that within.

Speaker Change #140: So.

Speaker Change #140: Support and neuro monitoring in international just because some of those components beyond maybe Moscow skeletal enabling tech if.

Operator: International. Just some of those components beyond maybe musculoskeletal enabling you're willing to comment on? Yeah, so thanks, Ryan, for the question. So as I think about the 2.45 to 2.75 from a growth perspective, I commented earlier on a previous question about what each legacy sales team would be looking for. You know, on the legacy NuVasa side, they'll be excited to sell Globus expandable cages, Globus enabling technologies, and legacy Globus will be focused on lateral procedures, things of that nature. When I think about where we are internationally, I think if you go back and look at historical NuVasa and Globus numbers, I think we've both been on a pretty good clip of growing share internationally.

Speaker Change #141: If you're willing to comment on those would be helpful.

Speaker Change #142: Yes. So thanks, Ryan for the question so as I think about the $2 45 to $2 75 from a growth perspective.

Speaker Change #143: Commented earlier on a previous question about what each legacy sales team will be looking for.

Speaker Change #144: The legacy <unk> side, there'll be excited to sell Globus expandable cages globus, enabling technologies.

Speaker Change #144: <unk> will be focused on.

Speaker Change #144: On lateral lateral procedures things of that nature.

Speaker Change #144: When I think about the where internationally I think if you go back and look at historical basis, and Globus numbers I think we've both been on a pretty good clip of growing share internationally I would expect to see spinal implants, continuing to see that growth moving forward.

Operator: I would expect to see spinal implants continue to see that growth moving forward. Trauma, you know, our trauma, and legacy trauma business continues to perform well. NuVasa has some products in that portfolio as well that we think together we're going to be better together and drive share growth. As I think about enabling tech again, that gets back to the cross-selling opportunity. That brings you back to U.S. Spine and really your initial question.

Speaker Change #144: Number.

Speaker Change #144: Trauma legacy trauma business continues to perform well.

Speaker Change #144: <unk> has had some products in that portfolio as well that we think together, we're going to be better together and drive share growth.

Speaker Change #144: As I think about enabling tech again that gets back to the cross selling opportunity that brings you back to the U S spine and really your initial question you talked a little bit about the.

Operator: You talked a little bit about, you know, the growth that you've seen being, you know, two or three percent, or where are we growing? So, you know, early on, we're going to have these dis-energies. We called out the $150 million gross dis-energy.

The growth that you've seen being two years or 3% or where are we growing so.

Speaker Change #144: Early on we're going to have these dis synergies, we called out the $150 million gross to synergy.

Operator: Our growth rate clearly is slowing down here for the first portion of the year, but to Dan's point, you're getting into the first and second quarter; you're really working to move towards a steady state, getting into the second half of the year and moving this forward. We still fully believe that we can provide mid- to high-single-digit growth, but we're acknowledging that this first year there's going to be dis-energy Yeah, I think too, Ryan, the fun thing with this, back to your point, the growth. I'm going to say it's everywhere. Because you're right, you've got a great cervical disc that we can leverage, you've got eGPS and E3D, you're going to have the neuro, you know, monitoring systems that we can apply to our business and cross selling. There's a lot out there that we could go on and on about.

Speaker Change #144: Our growth rate clearly is slowing down here for the for the first portion of the year, but to Dan's point youre getting into the first second quarter, you're really working to move towards a steady state getting into the second half of year in moving this forward, we still fully believe that we can provide.

Speaker Change #144: Mid to high single digit growth, but we're acknowledging that this first year theres going to be dis synergies.

Speaker Change #144: I think to run the fun thing with this back to your point the growth.

Speaker Change #144: When I say it's everywhere.

Speaker Change #144: Because you're right you have got a great cervical disc that we can leverage you've got a GPS and <unk> youre going to have the neuro.

Speaker Change #144: Monitoring systems that we can go apply to our business and the cross selling there is a lot out there that we could go on and on so I think what we're looking to do is healthy growth throughout all of the portfolio and really showing it that way versus focusing on one or two areas of concentration.

Operator: So I think what we're looking to do is healthy growth throughout all of the portfolio and really showing it that way versus focusing in on one or two areas of concentration. I appreciate you answering that multi-part question. Then I'm going to squeeze in one more, and I appreciate you taking the questions here.

Speaker Change #144: Okay.

Speaker Change #145: I appreciate you answering that multi part question and then I'm going to squeeze in one more and I appreciate taking the questions here, but I was late to the party at AOS, but I did see I didn't have a chance to go by the booth.

Operator: But I was late to the party at AOS, but I did see, I did have a chance to go by the, see some of the new components that you have, and it feels like you and your largest competitor within robotics are moving a little bit more in terms of cranial clickability, www.globusmedical.com, particularly within spine. You feel like you're hitting a ceiling within your applicability within maybe a core spinal robotic And that's what we're seeing in kind of the pipeline, if you will, of products that you're So it's a great question, a couple things. We've been in cranial for a long time with the robot, and we have great capabilities there.

See some of the new component that you have and it feels like you and your largest competitor within robotics are moving a little bit more in terms of cranial flexibility in terms of your ability to maybe move into things like bone cutting right.

I'm, just curious kind of how you think about where robotics is going particularly within spine.

Speaker Change #145: Do you feel like Youre hitting the ceiling within your applicable 80 within maybe a core spinal robotics application and having the venture beyond into areas like cranial or.

Speaker Change #145: Reconstruction et cetera, and Thats, what were seeing in kind of the.

Speaker Change #145: Pipeline, if you will of products that you're offering now.

Speaker Change #146: So it's a great question a couple of things we've been in cranial for a long time with a robot and have great capabilities. There, there's absolutely room to expand and I think as <unk> said in one of the things I've called out that I'm most excited about.

Operator: There's absolutely room to expand, and I think, as you've said, and one of the things I've called out that I'm most excited about, the array of power solutions that we're bringing forward in the near term will also work well with all of that enabling technology and further enhance the surgeon experience by all means. But if you really talk about spinal robots, they are in their infancy, not only in penetration but in capabilities.

Speaker Change #146: The array of power solutions that we're bringing forward in the near term. We will also work well with all of that enabling technology and further enhance the surgeon experience by all means.

But if you really talk about the spinal robot they are in their infancy, not only in penetration, but capabilities and so you can have a very long journey of increasing the entire procedural application from bone soft tissue removal interbody placement on it at all and planning all of that fair for years to come with a lot of space and like I said, even combined.

Operator: And so you can have a very long journey of increasing the entire procedural application from bone, soft tissue removal, inner body placement, on and on, planning. All of that's there for years to come with a lot of space. And like I said, even combined, all of us combined are just really touching the robotics, and there's a lot of room for growth to come for many years. So I don't think we're anywhere near hitting the top or flattening out.

Speaker Change #146: All of US combined are just really touching the robotics and Theres a lot of room for growth to come for many years. So I don't think we're anywhere near hitting the top or flattening out I think this is the start of some amazing changing technology.

Operator: I think this is the start of some amazing changing technology. One moment for our next question. Our next question will come from the line of Jason Wittes from Roth. Your line is open.

Speaker Change #147: Thank you Dan.

Speaker Change #148: One moment for our next question.

Speaker Change #148: Our next question comes from the line of Jason Wittes from Ross Your line is open.

Operator: Hi, thanks for the questions. If I could just revisit the synergy number, Based on your earlier comments, it sounds like you kind of just took a midpoint of five to 10% dis-synergies. And I think that's partly due to the fact that based on what you see now, but also, you know, you have to see what happens in the next two quarters. Is that the right way to think about it? Or is that how you came up with that number?

Jason Wittes: Hi, Thanks for taking questions if I could just revisit the synergy number.

Jason Wittes: In your earlier comments it sounds like you kind of just took the midpoint of five to 10.

Jason Wittes: Percent dis synergies and I think that's partly due to the fact that based on what you're seeing now but also.

Speaker Change #149: We'll have to see what happens in the next two quarters is that the right way to think about it or is that how you came to that number I'm just trying to understand your thoughts behind that yes.

Operator: And I'm just trying to understand, you know, your thought process behind it. Yes. Okay. Okay, that's fair. And then, in terms of quarterly cadence, can you help us out in terms of how we should think about revenues and also just how expenditures kind of flow through for the year? We're not going to break out and provide quarterly guidance at this point.

Speaker Change #150: Yes, okay.

Speaker Change #150: That's fair and then in terms of quarterly cadence can you help us out in terms of how we should think about.

Speaker Change #150: <unk> revenues and also just.

Speaker Change #150: How expenditures kind of flow through for the year.

Speaker Change #151: We're not we're not going to break out and provide quarterly guidance at this point.

Operator: Okay, but then, just from a general standpoint, I think you kind of implied that, you know, the first half is, it sounds, based on your comments that you made, I guess, throughout this call, it does sound like it's somewhat back-end loaded, meaning there's going to be a fair amount of reorganization in the first half. A lot of it, I guess, already occurred. And then, in terms of your ability to start picking up or gaining market share, it sounds like you kind of anticipate that by the end of the year, you're going to be positioned to start growing sort of above the market and, you know, as the market leader. Is that a fair way to think about it?

Speaker Change #151: Okay, but then just from a general standpoint, I think you've kind of implied that.

Speaker Change #151: <unk>.

Speaker Change #151: The first half as it sounds based on your comments that you made I guess throughout the throughout this call. It does sound like it's somewhat back end loaded, meaning theres going to be a fair amount of still.

Speaker Change #151: Reorganization in the first half a lot of it I guess already occurred.

Speaker Change #151: And then in terms of your ability to start picking up are gaining market share. It sounds like you kind of anticipate that by the end of the year youre going to be positioned to start.

Speaker Change #151: Growing sort of above market and as the market leader or is that a fair way to think about it.

Operator: That's a fair way to think about it. But as it relates to cost synergies specifically, we would expect to see that improve sequentially as we get throughout the year. Okay, that's helpful. Thank you very much.

Speaker Change #152: That's a fair way to think about it.

Speaker Change #152: As it relates to cost synergies, specifically, we would expect to see that improve sequentially as we get throughout the year.

Speaker Change #153: Okay. That's helpful. Thank you very much.

Operator: Thank you. And as a quick reminder, that's star 11 for questions, star 11. One moment for our next question. Our next question will come from Linda Craig. Craig Bayou from Bank of America Securities.

Speaker Change #153: No.

Speaker Change #154: Thank you.

And as a quick reminder, that just final one for a question star one.

Speaker Change #155: One moment for our next question.

Speaker Change #155: Our next question comes from the line of Craig.

Craig: Greg Bayou from Banc of America Securities. Your line is open.

Operator: Your line is open. Great. Thanks for taking the questions, guys. I wanted to ask first about the $150 million in revenue dis-synergies, and I appreciate that. You gave us that number, but I think in the S4, you were expecting roughly 200 and maybe 50% of that in year one.

Craig: Great. Thanks for taking the questions guys.

Craig: Wanted to ask first on the $150 million revenue dis synergies and.

Craig: I appreciate that.

Craig: You gave us that number but I think in the S. Four you were expecting roughly 200, and maybe 50% of that in year. One. So just wanted to reconcile that 150 for 24 and could there still be some incremental synergies in year two year three post deal.

Operator: So I just wanted to kind of reconcile that 150 for 24, and could there still be some incremental synergies in year two, year three post-deal? So I would say, yes, there could be some incremental synergies in year two, year three post-deal. The 150 was really just taking a more refreshed look. I mean, when we commented on the S-4 at that point in time, we thought it was a good number. And we still think, generally speaking, that the S-4 is a good document.

Speaker Change #156: So I would say, yes, there could be incremental synergies in year two year three post deal. The 150 was really just taking a more refresh look I mean, when we commented on the S. Four at that point in time, we thought it was a good number and we still think generally speaking overall the S. Four is a good document, but as we looked at building our plan for 2024.

Operator: But as we looked at building our plan for 2024 with more current information, 150 felt like it was a more reasonable number based on what we were seeing from a gross perspective. Craig, I would add, too, that one of the thoughts here is that type of activity occurs up front in the early years. And then as you cross-sell and gain traction, you offset that more in year two and probably by the time you exit year three. So put the bad out in the S-4 that way up front, and the cross-selling and the growth, and the offsets in the outer years come out neutral by the time you enter the fourth year. And the timing also of when the deal actually closed was a little bit later. Yeah. That's also having a little bit of an impact.

Or with more current information $1 50 felt like it was a more reasonable number based on what we're seeing from a growth perspective.

Speaker Change #157: Greg I would add to that one of the thoughts here is that type of activity occurs upfront in the early years and then as you cross sell and you gained traction you offset that more near to in probably by the time, we exit year three so put the bad out in the S. Four that way upfront and the cross selling and the growth in the offsets in the outer years coming out neutral by the time you Yang.

Speaker Change #157: Enter a new to the fourth year and timing also of when the deal actually closed was a little bit later, yes. That's also have been a little bit of an impact.

Operator: Okay, that's helpful, guys. And just to follow up specifically on what's embedded in the EPS guidance, I just, you know, I heard your comments about or on EBITDA before, but I wanted to see, my math, it makes it look like it's 29, 30%, even a margin of 24. And then I also wanted to see if there's any assumption of share buyback in your EPS guidance. The 29-30%, I think, makes a lot of sense. 140 million shares is what we projected for the year.

Speaker Change #158: Okay. That's helpful guys.

Speaker Change #159: Just a follow up specifically on.

Speaker Change #160: What's embedded in the EPS guidance I just.

Speaker Change #160: I heard your comments too we're on EBITDA before but wanted to see.

Speaker Change #160: I mean, my math it makes it look like it's 29%, 30% EBITDA margins were 24, and then I also wanted to see if there's any assumption of share buyback in your EPS guidance.

Speaker Change #160: The 20%, 30% I think makes it makes a lot of sense 140 million shares is what we projected for the year.

Operator: I'll leave it. Okay, thanks guys. One moment for our next question. And our next question comes flying out. Caitlin Cronin from Canaccord, your line is open. Hi, thanks for taking the question. Just regarding your AR headset, any updates on the timing there?

Speaker Change #161: Ill leave it at that.

Speaker Change #162: Okay. Thanks, guys.

Speaker Change #162: <unk>.

Speaker Change #162: One moment for our next question.

Speaker Change #162: And our next question comes from the line of Caitlin Cronin from Canaccord. Your line is open.

Caitlin Cronin: Hi, Thanks for taking my questions just regarding the AR headset any updates on the timing there and secondly, what do you think of the current competition and how is your product going to be competitive with these offerings.

Operator: And secondly, what do you think of the current competition in that space and how is your product going to be competitive with eGolf? Kaitlin, we expect our augmented reality headset, the XR, to get out by mid-year based on everything that we're tracking towards right now. Pretty excited to do that as well.

Speaker Change #162: Okay.

Speaker Change #162: Kayla, we expect our augmented reality headset, the XR to get out by midyear based on everything that we're tracking towards right now are pretty excited to do that as well.

Operator: Working to make sure that it really works seamlessly with some of our enabling tech activities as well to actually create a stronger offering for the surgeons. Great, thank you. Thank you. One moment for our next question. And our next question will come from the line of Richard Newitter from Truist. Hi, thanks for taking the questions.

Speaker Change #162: Working to make sure that it really works seamlessly with some of our enabling tech activities as well to actually create a stronger stroke.

Speaker Change #162: Stronger offering out to the surgeons.

Kayla: Great Okay.

Speaker Change #164: Thank you.

Speaker Change #165: Our next question.

Speaker Change #164: Okay.

Speaker Change #164: And our next question will come from the line of Richard <unk> from <unk>. Your line is open.

Richard: Hi, Thanks for taking the questions.

Operator: I was hoping just to go back to the comment that you made about, it sounds like going a little bit more heavy on offense in terms of rep hiring and attrition. I think you had said something about not hiring as many reps as normal in 2023, but then in the fourth quarter, you hired 350 reps or net reps. Just help me understand what that 350 means. What is that relative to a good quarter of net hiring, and how are we supposed to kind of interpret that relative to the dis-energies that are starting to unfold? Then I have a follow-up. You've got it, Rich.

Richard: Was hoping just to go back to the comment that you made.

Richard: It sounds like going a little bit more heavy on offense on rep hiring and attrition.

Speaker Change #167: You had said something about.

Not hiring as many reps as normal in 2023, but then in the fourth quarter, you hired 350 reps or net reps I guess just help me understand what that 350 means.

Speaker Change #167: What is that relative to a good quarter of net hiring and how we're supposed to kind of interpret that relative to the dis synergies that are starting to unfold and then I have a follow up.

Operator: So let's start this way. We've had great recruiting years, and in 2023, I would tell you it was an okay recruiting year.

Speaker Change #168: You got it right. So let's start this way we've had great recruiting years and in 2023 I would tell you. It was an okay recruiting year. The reason why it was an okay is we had all of our focus shifted into making this merger happen. So naturally your level of recruiting and your focus on recruiting wasn't quite as heavy now it doesn't mean it was dismal.

Operator: The reason why it was okay was we had all of our focus shifted into making this merger happen. So naturally, your level of recruiting and your focus on recruiting wasn't quite as heavy. Now, that doesn't mean it was dismal. I mean, it was really not that different from the last five years.

Speaker Change #168: It was really not that different from the last five years. It just wasn't the strongest to a record year like we normally call out.

Operator: It just wasn't the strongest or record year like we normally call out. I was being myself when I was replying to the fact that we closed the deal in September, and so Globus actually then inherited or took over through the merger roughly 350 sales reps from the new base of business. That was my comment.

Speaker Change #168: I was being me when I was replying to the fact that we closed the deal in September and so global it's actually then inherited or took over through the merger roughly 350 sales reps from the new base of business that was my comment okay.

Operator: Okay. Thanks. I figured there was something tongue-in-cheek about it.

Speaker Change #168: Thanks.

Speaker Change #169: There is something tongue in cheek there okay.

Operator: Okay. And then, sorry, I just lost my train of thought for a sec. And then I wanted to also... Ask a friend, what kind of information you're going to provide on a go-forward basis?

Speaker Change #169: And then.

Speaker Change #170: So I just bought my train of thought for a second and then <unk>.

Speaker Change #171: Wanted to also.

Speaker Change #171: Get a sense for what kind of information you're going to provide on a go forward basis is that what we've seen in the press release from here. This is the divisional breakout we're going to see.

Operator: Is what we've seen in the press release here the divisional breakout we're going to see, or is there going to be more historical data that you provide on segment detail? How should we think about that? And one last one, just product rationalization. Has any of that effort begun? So, thanks, Richard. This is Keith.

Speaker Change #171: Or is there going to be.

Speaker Change #171: Historical that you provide.

Speaker Change #171: Segment detail, how should we think about that.

Speaker Change #171: One last one just product rationalization has any of that effort begun.

Speaker Change #171: So thanks Rich this is Keith so the what we've what we've put out there from a reporting perspective is what we're going to continue to provide breakout of musculoskeletal and enabling as well as U S versus international.

Operator: So, what we've put out there from a reporting perspective is what we're going to continue to provide, breakdown of musculoskeletal and enabling, as well as U.S. versus international. We will continue to provide color each quarter about some of the businesses like we've always done historically. As it relates to product rationalization, that is not something we've really looked at at this point. You know, some of my earlier comments focused on the need for us to listen to our customers. Right now, the thing that we're focused on is bringing the sales forces together, listening to the surgeons, listening to the patients, and really selling the products of both companies. Yeah, Rich, I would just add that we don't have a planned rationalization. We think that over time, our surgeons and our customers will select what they want, and we'll migrate toward that. But we don't have a product rationalization as a way to reach or achieve our synergies or anything in our financials. Thank you. Thank you.

Keith W. Pfeil: Can you continue to provide color each quarter about some of the businesses like we've always done historically as.

Keith W. Pfeil: As it relates to product rationalization that is not something we've really looked at at this point. Some of my earlier comments focused on the need for us to listen to our customer right. Now the thing that we're focused on is bringing the sales forces together listening to the surgeons listening to the patient.

Rich: And really selling the products of both companies and rich I would just add on that we don't have planned rationalization, we thought that over time, our surgeons and our customers will select what they want and we will migrate towards that but we don't have a product rationalization in as a way to reach or achieve our synergies or anything in our financials.

Speaker Change #172: Thank you.

Speaker Change #173: Thank you.

Operator: One moment for our next question, and our next question will come from Jude Ranieri from Morgan Stanley. Your line is open.

Speaker Change #174: Our next question.

Speaker Change #174: And our next question will come from the line of June Ranieri from Morgan Stanley. Your line is open.

Operator: Hi guys, thanks for taking the questions. Just to piggyback off of some that have already been asked, but on Rich's last question about product rationalization, can you maybe just hit upon what you're thinking about for free cash flow generation over the next two or three years into 2026 and just how investors should think about that? Cash generation, I think, was one of the kind of hallmarks of the deal when you initially proposed it. And then, has anything changed about how you're thinking about tracking or driving instrument set utilization between the two – well, not the two companies anymore, but between Legacy, GMED, and the new base of looking ahead, and I had a follow-up. Drew, I'll go first.

Andrew Christopher Ranieri: Hi, guys. Thanks for taking the questions just to piggyback off of something a bit been already asked but on Rich's last question about product rationalization can you maybe just had it upon what youre thinking about for free cash flow generation over the next two three years into 2026, and just how investors should think about that.

Andrew Christopher Ranieri: Cash generation I think was one of the hallmarks of.

Andrew Christopher Ranieri: The deal when you initially proposed it and then has anything changed about how you're thinking about tracking or driving instrument set.

Instrument set utilization.

Andrew Christopher Ranieri: Between kind of the two.

Andrew Christopher Ranieri: And that the two companies anymore, but between legacy <unk> and.

Andrew Christopher Ranieri: Based on looking ahead I had a follow up.

Andrew Christopher Ranieri: Sure I'll go first this is Dan and I'll hand, it off to Keith was that so just for clarity in our cash flow or our estimates we don't have anything built in related to rationalization. So I just want to make sure. We're building off of Rich's you agree we're not pursuing a product rationalization is not built into our finances that way. So it won't have any effect financially or cash flow wise.

Operator: This is Dan, and I'll hand it off to Keith with that. So just for clarity, in our cash flow or our estimates, we don't have anything built in related to rationalization. So I just want to make sure we're building it off of Rich's. You agree, we're not pursuing a product rationalization.

Operator: It's not built into our finances that way, so it won't have any effect financially or cash flow-wise. However, we do have in place ways to utilize our field assets, our sets, efficiently. We've been working on that and continually improving it through our Globus legacy, and we intend to do the same with our newvasive team as we get in and get up to speed. What that's going to allow us to do is get more surgeries, more turns, more output with those investments, which, to your point, will generate a favorable cash flow by generating the sales, not having the current level of investment needed to get those sales. And a couple of comments I'd add to that are, when you think about Globus, yes, we're going to focus on driving the business and managing for cash.

Keith W. Pfeil: We do have in place ways to utilize our field assets are set sufficiently we've been working on that and ever improving that through our globus legacy and we intend to do the same with our Nuvasive team as we get in and get up to speed, what thats going to allow us to do is get more surgeries more turns more output with those <unk>.

Keith W. Pfeil: Investments, which to your point, we will generate a favorable cash flow by generating the sales not having the current level of investment needed to get those sales.

Keith W. Pfeil: A couple of comments I'd add to that is when you think about globus, yes, we're going to focus on driving the business and managing for cash and as I think about that $170 million.

Operator: As I think about that $170 million, that's predominantly cash savings, which should translate into cash flow as we move forward. That's part one. Part two is really the control of CapEx. So if you go back and look at legacy Globus and legacy Nuva, you'll see that legacy Nuva carried CapEx that was probably closer to eight or nine percent of sales, while Globus, give or take six or seven.

Keith W. Pfeil: That's predominantly cash savings, which should translate into cash flow as we move forward.

Keith W. Pfeil: Part one part two is really the controls capex. So if you go back and look and compare legacy global basis, Youll see that legacy new the carrier Capex that was probably closer to eight or 9% of sales globus give or take six or seven I commented on where we're going to land. This year in my prepared remarks that is also going to help drive cash flow free cash flow generation.

Operator: I commented on where we're going to land this year in my prepared remarks. That is also going to help drive free cash flow generation, and it's not going to impact our ability to invest in R&D. Really, what it's going to come back to from our perspective, or from my perspective, is better control of the assets and driving an improved return on invested capital. Got it, thanks. And just as a quick follow-up, just anything on getting new vaccine products registered and approved on Excelsius, looking ahead, thanks for taking. Yeah, definitely. That's one of the key things. So of course, we're going to be doing that and doing it in an ever growing way, starting with the Reliance system. And we'll certainly look for inner bodies and different activities that way. That's going to be one of the events we think by mid year or within the third quarter, we should be capable of going and pushing forward.

Keith W. Pfeil: And it's not going to impact our ability to invest in R&D really what it's going to come back to from our perspective or from my perspective is better control of the assets and driving improved return on invested capital.

Speaker Change #175: Got it thanks, and just as a quick follow up.

Speaker Change #176: Anything on getting new base of products registered and approved like Celsius looking ahead, thanks for taking them.

Speaker Change #177: Yes, definitely as one of the key things. So of course, we're going to be doing that and doing that in an ever growing away starting with the <unk> system and I will certainly look for in Nevada and different activities that way that's going to be one of the events, we think by mid year or within the third quarter, we should be capable of going and pushing forward on.

Operator: Thank you. And with no further questions, that concludes the Globus Medical Earnings Call. Thank you for participating. You may now disconnect. Everyone, have a great day.

Speaker Change #177: Okay.

Speaker Change #177: Okay.

Speaker Change #178: Okay. Thank you.

Speaker Change #179: And with no further questions that concludes the lowest medical earnings call. Thank you for participating you may now disconnect everyone have a great day.