Q1 2025 Orthofix Medical Inc Earnings Call
, who are not the cancelled horrors.
Tina: Thank you for standing by. My name is Tina and I will be your conference operator today. At this time I would like to welcome everyone to the Orthofix First Quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise.
Tina: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.
Speaker Change: If you would like to withdraw your question, press star one again. Thank you, I will now turn the call over to Julie Dewey. Please go ahead.
Julie Dewey: Thank you operator and good morning everyone. Welcome to Orthofix's first quarter 2025 earnings call.
We appreciate you joining us.
Julie Dewey: I'm Julie Dewey, Orthofix's Chief IR and Communications Officer, joining me on the call today by our president and CEO Massimo Calafiore and Chief Financial Officer, Julie Andrews.
Julie Dewey: Before we get started, please note that our earnings release and the supplemental presentation accompanying this call are available on the events and presentations page of the investor section of our corporate website at orthofix.com.
Julie Dewey: Also, this call is being broadcast live over the internet to all interested parties and an archive copy of this webcast will be available in the investor section of our corporate website shortly after the conclusion of this call.
Julie Dewey: During this call, we will be making forward looking statements that involve risks and uncertainties. All statements other than those of historical facts are forward looking statements.
Julie Dewey: We do not undertake any obligation to revise or update such forward-looking statements. Factors that could cause actual results to differ materially are discussed in our most recent filings with the SEC and may be included in our future filings with the SEC.
Julie Dewey: In addition, on today's call, we will refer to various non-GAAP financial measures.
Julie Dewey: Please refer to today's news release announcing our first quarter 2025 results for information regarding our non-GAAP results, including our reconciliations of these non-GAAP financial measures to our U.S. GAP results.
Julie Dewey: Additionally and unless otherwise stated, all net sales percentage changes discussed will be on a pro forma, same sales day, constant currency, year-over-year basis, excluding the impact from the discontinuation of the M6 artificial disc product lines and all results of operations that we will refer to will be on a non-GAAP as adjusted basis.
Julie Dewey: Moving to today's agenda, Massimo will open with comments on our performance and business updates. Julie Andrews will then review the specifics of our first quarter results and our 2025 Financial Guidance. With that, I will now turn the call over to Massimo.
Massimo Calafiore: Thank you, Julie. Good morning, everyone, and thank you for joining us for our first quarter Ernie Skull.
Massimo Calafiore: I'll spend some time providing business updates and information about our key initiatives.
Speaker Change: Before I turn it over to Julie Andrews to cover the specifics of our Q1 results in 2025 guidance.
Speaker Change: During the first quarter, we continue to execute the priorities that we outline in our three-year plan to transform our business and deliver on our commitment to drive disciplined, profitable growth.
Speaker Change: On a same sales day basis, our first quarter perform a net sales of 189.2 million dollars represent year-over-year constant currency growth of 6%.
Speaker Change: I'm also pleased to report that we delivered another quarter of excellent progress in adjusted at EBDA Margin Expansion that exceeded expectations.
Speaker Change: As we move forward in 2025, I'm confident we are a well-positioned for profitable growth as our efforts to further optimize our spine-commercial channel begin to bear fruit.
Speaker Change: and we continue to build on our financial foundation and prudently deploy capital to create a long-term value for our shareholders.
Speaker Change: Our excitement continues to build in our orthopaedics business and the Greenfield opportunity we have to redefine the category of limb reconstruction which I'll discuss in more details shortly.
Speaker Change: as well as prospect we have in our bone growth therapies business to further capitalize on cross-selling opportunities and ripeneration in the fractured market with Axel stills.
Speaker Change: Now, I'd like to provide additional detail for each of our businesses.
Speaker Change: Our US Spinal Fixation Business grew 5.4% on a same sales day basis.
Speaker Change: We are successfully accelerating targetters, distributor transition in a few US territories in order to maximize our growth opportunity and more closely aligned with our strategic focus.
Speaker Change: As a result, we did experience some short-term incremental softness in biologics and spine fixation.
Speaker Change: This transition won't be completed until later this year, and we require some time to take full effect.
Speaker Change: but is expected to result in a stronger, more scalable commercial organization as we shift into our next phase of growth.
Speaker Change: Once our optimizational efforts are completed, we expect cross to return to historical levels.
All of which, significantly, I'll perform the market.
Speaker Change: Beginning in Q2, we have several product lunches planned, including the full lunch of RIFL, Lateral Lumber, Interbody, and additional solution in our Meridian-Elif portfolio.
Speaker Change: This new interbody design features our proprietary advances surface technologies and expand our portfolio of lumbar interbody fusion products to address varying surgeon preference and patient anatomies.
Speaker Change: In parallel, we will integrate our hardware products with access and navigation, create a comprehensive procedure solution to enhance efficiencies and predictability in the OR.
Speaker Change: At the same time, we continue to leverage our differentiated 70-flash navigation platform to create long-standing relationships with our surgeon partners.
Speaker Change: We continue the investment. We expect that our next generation advancements in enabling technology.
Speaker Change: and our hardware portfolio will build to Pandys Unique Foundation and establish us as the partner of choice for surgeon seeking real-time data-driven interpretive solutions in the OR.
Speaker Change: We believe that our comprehensive portfolio of spinal hardware, biologics and enabling technologies and steady cadence of innovation will enable us to attract top self-talented, increased exclusivity, distribution of relationships,
Speaker Change: and drive sticker relationships with surgeons and hospital accounts, which we expect to results in incremental product pull-through as well as ASP lift from mixed benefits.
Speaker Change: Thank you for your time. Have a great day. Bye bye.
Now, turning to Bongros Therapies.
Speaker Change: On a same sales day basis, BGT net sales grew 7% overall in Q1.
Speaker Change: and investments in the Fracture Market Sales Channel draw 8% growth in BGT Fracture, with Axel's team, bond growth therapy device to continue into a perform the market.
Speaker Change: Our BGT business is focused on maximizing our market leading position with the most comprehensive portfolio and the most indications on bone growth stimulation devices in the market.
Speaker Change: We will continue to focus on cross-selling with orthopedics and spine, adding new market channels with established sales representative and driving preparation in the fractured market with Axel Stim.
Speaker Change: Speaking of Access Team, we received an earlier then anticipated FDA approval for our Access Team 2.0 in the first quarter.
Speaker Change: This approval reinforces orthofix position as the market leader in bond growth simulation and represents a significant advancement in low-intensity pulse ultrasound technology.
Speaker Change: as the first and only such device to incorporate remote therapeutic visibility through integration with the Steve Mantrak mobile app in Physician Portal.
Speaker Change: Access Team 2.0 is expected to be available later this year. I continue to be impressed by the commercial execution of the BGT team.
Speaker Change: Our global orthopedic business had a strong start to the year, delivering a constant currency growth of 13% on a same sales day basis in Q1 compared to prior year.
Speaker Change: US orthopedics benefited from strong execution and grew 12%, also on a same sales day basis.
Speaker Change: Growth was led by the combination of our true lock and fit bond products, as well as growth in the caroxy fixation products family and Oscar Bonsement removal products.
Speaker Change: As we covered in our last earning call, Orthofix is redefining the categorical limbera construction.
Speaker Change: with the unique portfolio solutions that empower surgeons to excel in limb preservation, deformity correction, limb lengthening and complex fracture management.
Speaker Change: Together, these segments represent a market opportunity in excess of 1.7 billion, one of the fastest growing categories in orthopedics.
Speaker Change: We are particularly excited about the upcoming full market release of the True Lock Elevate TBT system, which is indicated to correct non-union and bonny or soft tissue deformities or defects.
Speaker Change: According to the American Diabetes Association, over 160,000 amputations occur each year
Speaker Change: As a result, a diabetic-related complication, representing a sizable market opportunities of approximately $1.2 billion.
Speaker Change: The True Lock Elevate TBT system is currently a limited market release at Selected Centers in the US and Europe .
Speaker Change: Surgeon participating in the limited release are witnessing firsthand that the formative potential of this product in treating condition that previously would have almost certainly resulted in limb amputation.
Speaker Change: and drastically reduce patients' quality of life and their life expectancy.
Speaker Change: Truloc Elevate is already making a real difference. We are continuing to prepare for a full market launch of Truloc Elevate in Q3.
Speaker Change: This includes confirming reimbursement, coding, and actively gathering feedback from surgeons involved in the initial rollout. This feedback will be crucial for successful full lunch in the coming months.
Speaker Change: with over 90 true-loc-elevated case, completed so far, surge of response has been overwhelming
and interest from the orthopaedic community continues to grow rapidly.
Speaker Change: Challenging conditions in a patient's extremity by allowing for an efficient, reproducible method to create a bond segment in the tibia that can be gradually destructed over a period of several days.
Speaker Change: Potentially, reducing the mint for an amputation, lowering associated mortality risk, and alleviating the long-term welfare cost linked to limb loss.
Speaker Change: Thus, Trulok elevates, offers the potential to not only be a limb and cost-saving device, but most importantly, a life-saving solution to a challenging patient population.
Speaker Change: In addition to true rock elevate, Orthofix growth in 2025 will be fueled by a number of new product introductions that we expect to capture additional market share with existing and new customers.
Speaker Change: This includes the Fitbon bond transport and Lentening Nail, the only bond transport nail available in the United States.
and the football trochanterre-nail.
Speaker Change: We respect all of this product to be in full market release in the second half of 2025.
Speaker Change: Our focus on limb reconstruction is yielding significant results, particularly in the USA market, and we anticipate this will be a key growth driver for orthofix for many years to come.
Speaker Change: Overall, we are in great positions to capitalize on our recent product launch successes and deliver meaningful innovation to improve outcomes and efficiencies for our surgeon, customers and their patients.
Speaker Change: We have a healthy commercial pipeline that we believe is poised to deliver substantial revenue growth in the coming months.
Speaker Change: Importantly, the breast and death of orthofix pine and orthopedic offerings provide multiple paths to grow the business-assustained above market rates.
Speaker Change: We remain the market leaders in bone growth therapies, have a comprehensive market leading biologic portfolio, and differentiate the products in several specialized or synthetic markets.
such as complex trauma reconstruction and limb the formative correction.
Speaker Change: Additionally, our broad and spine portfolio is work-class and is fully supported by a highly differentiated and compelling and ever-in technology.
Speaker Change: Looking ahead, we are focused on three strategic priorities. First, for the sharpening our commercial execution to drive deeper market penetration through our comprehensive portfolio offering including the adoption of our 7D flash navigation system.
Speaker Change: 2. Implementing projects to improve our gross margin and finally, focus on a disciplined capital allocation, adjust the TBD expansion and positive free cash for generation.
Speaker Change: Ensurance were well positioned to create long-term value for our shareholders in 2025 and beyond.
Speaker Change: At the same time, we are confident that our emphasis on responsible capital deployment within our businesses and the emphasizing areas where we have less scale or share, we also drive our transformation.
Speaker Change: Support profitable growth and increase penetration of our technology and product platforms in areas where we can win.
Speaker Change: In summary, after one year with this new management team, Orthofix is operating with greater discipline, executing our priorities and strengthening our balance sheet.
Speaker Change: I believe we are very well positioned to deliver on our commitment to drive profitable growth.
Julie Dewey: and Innovation while increasing long-term shareholder value. With that, I now turn the call over to Julie to review our first quarter financial results and our 2025 guidance.
Thank you Massimo, and good morning everyone.
As we get started, all that sales growth rates.
Julie Dewey: that I refer to in my prepared comments will be on a pro forma, constant currency, same sales day basis over the prior year quarter, and exclude the impact of net sales related to the discontinuation of the M6 artificial cervical and lumbar discs that we previously announced.
Julie Dewey: These pro forma comparisons are non-GAAP financial measures as described by Julie during the introduction of our call. As a reminder, this quarter had 63 selling days, which was one less selling day than Q1 2024.
Julie Dewey: Please refer to the non-GAAP reconciliation in our press release and I strongly encourage you to review the information posted on our website. We have provided you with information to assist you with your modeling and to provide you with proforma information through the first quarter of 2025.
Julie Dewey: During the first quarter, we continue to prioritize investment in innovation, rigorously allocating resources, to high return opportunities, to further sustain our shear capture in U.S. spying and U.S. orthopedics.
Julie Dewey: and Focus on improving margins and cash, positioning the company for near and long-term profitable growth.
Julie Dewey: Global Final Implants, Biologics, and Enabling Technologies, First Quarter Proforma Net Sales $104.3 million with year-over-year growth of 4% on a pro-forma same-sale day basis.
Julie Dewey: These results were slightly below our expectations, primarily due to some incremental softness in biologics and spine fixation.
in our U.S. Fine Fixation Business.
Procedure Volume Growth on a Same Sales Day Basis
with 7 percent.
Julie Dewey: of a price decrease due to a joint venture between one of our largest hospital accounts in the Midwest and a large regional group purchasing organization that already had an orthofix pricing agreement in place. We will be working through this for the remainder of the year.
Moving now to bone growth therapies.
Julie Dewey: BGT Revenue grew 7% on a same sales day basis to 55.1 million in Q1, driven by above market performance in both the spine and fracture channels.
Julie Dewey: BGT Fracture Growth with 8% on a same sales day basis, driven by investments in the Fracture Market Sales Channel.
Julie Dewey: We do expect our BGT growth to remain above market growth rates.
Julie Dewey: Currently estimated to be two to three percent and continue to moderate somewhat as we move forward in 2025 due to our number one market position in the BGT spine business and lapping the gains from surgeons acquired last year.
Julie Dewey: We will continue to focus on adding new surgeons and competitive surgeon conversions.
and BGT Spine, and continue our commercial focus.
Julie Dewey: in the BGT Fracture Market, where we currently have a lower market penetration and see a substantial opportunity to drive new business with orthopedic surgeons.
Julie Dewey: The global orthopedics business grew 13% to 29.8 million in the first quarter, led by 12% growth in the U.S. as a result of strong performance across our portfolio, as well as distributor expansion and sales channel investments.
Julie Dewey: The International Orthopedics Business grew 14% versus prior year. As we previously said, due to the nature of this business, particularly around the timing and volume of stocking distributor and tender orders, we expect to see variability from quarter to quarter in the growth rate.
Proforma non-GAAP Adjusted Evita
Exploding the impact of the discontinuation of the M6.
Julie Dewey: with 11.4 million with pro-forma adjusted EBITDA margin expanding approximately 200 basis points compared to reported non-GAAP adjusted EBITDA for the first quarter of 2024.
Julie Dewey: The discontinuation of M6 which has been a negative drag on our profitability in prior periods drove the majority of the improvement in the quarter.
Julie Dewey: In addition, we continued our efforts to optimize our shared service functions, executing actions to deliver annual savings of $3 million.
Julie Dewey: We remain encouraged by these results as we say our ability to drive leverage on sales growth materializing as we continue to focus on disciplined profitable growth.
Julie Dewey: From a cash standpoint, our total cash balance, including restricted cash at the end of Q1, total 60.5 million.
Julie Dewey: As a reminder, the first quarter of each year is always a high cash outflow quarter, primarily due to the payment of the prior years annual bonuses and Q4 commissions.
Julie Dewey: In addition, we had higher than normal cash severance payments related to the discontinuation of M6 and the right sizing of our shared service functions.
Julie Dewey: Excluding these items, uses of cash, worn line with normal business operations, and slightly better than the company's projections. [inaudible]
Julie Dewey: As we said on our last earnings call, Q1 was expected to be the lowest cash low quarter of the year.
Julie Dewey: While we continue to expect to generate positive free cash flow, excluding the impact of restructuring charges related to M6 discontinuation for the full year 2025, we do not expect to generate positive free cash flow in every quarter.
Julie Dewey: It is important to note that the M6 product lines were a headwind to the company's top line revenue growth rate, growth margin, adjusted EBITDA, and free cash flow. This product phase out is in line with our commitment to direct resources to more profitable
Julie Dewey: We have posted a Proforma P&L for M6 on our website to assist you with updating your models. We will update it on a quarterly basis for the remainder of 2025.
Julie Dewey: We expect to have one time cash restructuring charges of approximately $8 million, primarily due to the closure of the dedicated M6 manufacturing facility in Sunnyvale, California. We expect most of the charges to be incurred during 2025.
Julie Dewey: We will continue to support customer demand in the US market as we burn through remaining inventory.
Julie Dewey: In addition, we intend to fulfill all requirements related to post-market surveillance activities.
Julie Dewey: Overall, we continue to be confident in our ability to drive profitable revenue growth moving forward.
Julie Dewey: We remain focused on pursuing the vital few initiatives in our long-range plan and prudently deploying capital and resources to areas where we have a differentiated advantage, all of which we believe will support the achievement of our three-year financial targets and propel our business
Moving on to 2025, Full Year Guidance [inaudible]
Julie Dewey: First, regarding tariffs. Recognizing that this is still a fluid situation, we have exposure to tariffs in the EU, Canada, China, and Taiwan.
Julie Dewey: We now estimate our annual exposure to be approximately three to four million dollars, which is better than our original estimate of five million dollars.
Julie Dewey: This estimate includes currently applicable tariffs, as well as the additional tariffs that were announced on April 2nd by the US that would take effect following the 90-day pause and assume such tariffs remain in place.
Julie Dewey: This exposure is very manageable, primarily reflected in cost of goods sold and already contemplated in our guidance.
Julie Dewey: We now expect full-year net sales of $808 million to $816 million, which excludes sales from the discontinued M6 product lines, representing implied constant currency growth of 5% year over year at the midpoint of the range.
Julie Dewey: While we no longer expect foreign exchange rates to have a negative impact, our updated guidance reflects the anticipated short-term impact
Massimo Calafiore: from the targeted distributor transitions that Massimo discussed earlier, which we believe will set us up for success and generate significant future returns.
Massimo Calafiore: Our guidance also assumes a $5 million negative impact from US-funded non-governmental organization NGO business as compared to the full year 2024.
Massimo Calafiore: This guidance range is based on the current foreign currency exchange rates and does not take into account any additional potential exchange rate changes that may occur this year.
We expect the majority of the impact
from a revised net-sailed guidance.
Massimo Calafiore: to be reflected in the second quarter due to the timing of international stocking orders, the anticipated short-term effect of the targeted distributor transitions.
Massimo Calafiore: and the quarterly impact from the reduction of US-funded NGO Revenue.
Massimo Calafiore: We continue to expect full-year 2025 non-GAAP adjusted EBITDA of 82 to 86 million. This range includes the anticipated impact from the discontinuation of the NSX product lines that was previously announced in February 2025.
Massimo Calafiore: and represents 190 basis points of EBITDA margin expansion at the midpoint of the range compared to 2024.
Massimo Calafiore: We also continue to expect to generate positive free cash flow for the full year 2025, excluding the impact of restructuring charges related to the discontinuation of the M6 product lines.
Massimo Calafiore: Now for some specifics on individual line items for the PNL for 2025.
Massimo Calafiore: We expect our gross margins to be approximately 71% consistent with previous estimates and in line with 2024.
Massimo Calafiore: We now expect our operating expenses to improve by 200 basis points this year versus 2024 compared to the 100 basis points of improvement we previously communicated.
Massimo Calafiore: This improvement is expected to come from our continued focus on discipline investments, as well as lower stock-based compensation and depreciation and amortization.
Massimo Calafiore: Stock-based compensation is now expected to be in the range of $29 million to $30 million while depreciation and amortization is expected to decrease to $37 million to $39 million for the full year 2025.
Massimo Calafiore: We still expect interest in other expenses to be approximately $5 million per quarter.
and Massimo Calafiore.
Speaker Change: Throughout 2025, we will maintain a heightened focus on disciplined, profitable growth, and free cash flow generation to build on our financial foundation, and prudently deploy capital to create long term value for our shareholders.
Speaker Change: Now, before we open the call for questions, let me turn it back to Massimo for concluding comments. Massimo?
Thanks, Julie.
Speaker Change: I want to thank our Orthofix team and our committed commercial partners for their F14Q1. We believe our focus on commercial strategy and broad differentiated technology combined with our robust innovation pipeline and our pace-setting and ebony technologies.
Speaker Change: Position as well to drive commercial execution and operational excellence, deliver on our financial commitments and create long-term, sustainable value for shareholders.
Speaker Change: I am excited and energized about the path we have set for ourselves and the opportunities for the basis to deliver exceptional value to our surgeons, their patients and our shareholders in 2025 and beyond.
Operator, let's now open the line for question.
Speaker Change: At this time I would like to remind everyone in order to ask the question, press star, then the number one on your telephone keypad. We ask that you please limit yourself to one question and one follow-up. We'll pause for just a moment to compile the Q&A roster.
and Massimo Calafiore.
Thank you.
Speaker Change: Your first question comes from the line of Ryan Zimmerman with BTIG, please go ahead
Speaker Change: Hi, good morning, everyone. This is Izzy on for Ryan. Thank you for taking the questions. So to start out, Massimo, I was wondering if you could talk about the rationale for the optimization within the spine channel, what prompted the decision to take this on right now. And if you could put a little bit of a finer point as to how long the process might take. Thank you.
Speaker Change: This is a bit of a multi-parter, so sorry about that, but are there any chance that these impacts could bleed into next year or any implications we should keep in mind for the long-range plan as a result of the optimization?
Speaker Change: No, definitely not. You know, to give you a more color, we entering when we enter...
Speaker Change: The Second Year of our tenure. We believe that we are much stronger footing than when we started. Our balance sheet is very strong. We are making a lot of progress on our EBITDA expansion. BGT keep performing. We are redefining the orthopedics and where we are, as you see, we are
Start to achieve sustainable growth.
Speaker Change: So for us was the moment to really think about our spine business and we want to start to be much more deliberate and intentional and how we see how we go to market
Speaker Change: So, given our strengths, we realized that our current distribution network was already a capacity from the growth standpoint.
Speaker Change: So, we are accelerating our transformation by investing in larger, much more capital-efficient commercial partner to drive the long-term growth that we are expecting to create shareholder value.
Speaker Change: and I can tell you that the commercial pipeline is already primed and ready to deliver substantial revenue growth.
Speaker Change: starting later this year. It's coming with some pain point short term, but again we believe that we can create higher growth of business now, investing in the ripartner.
Speaker Change: That's helpful. Thank you. And Julie, heard your comments on the 2025 guidance, but I was curious what is enabling you guys to maintain your adjusted even though while lowering the top line.
Speaker Change: Yeah, so, you know, as we mentioned, you know, we've been very focused on making sure that we're making investments that have a return. We did do some right sizing of
Speaker Change: Service Organization. At the beginning of the year as well, which was kind of delivering more on our synergies as you remember, we had about 10 million going into the year remaining on synergies and we've kind of now taken actions for about an additional 6 million of that.
Speaker Change: And so, you know, the combination of continuing to deliver on our synergies as well as, you know, looking at all of our costs and investing and what we're going to get the highest return on.
Understood. Thanks for taking the questions.
Thank you.
Speaker Change: Our next question comes from the line of Mathew Blackman, would you please go ahead?
Matthew Blackman: Good morning, everybody. Thanks for taking her questions. Maybe to start, Julie, you mentioned one less selling day. I just want to make sure I get the simple math.
Speaker Change: would that have amounted to something like a point and a half percent growth headwind or about you know call it two or three million dollars of the year over year drag and the first quarter is at the right ballpark and then I've got some follow ups.
Speaker Change: Yeah, it was a little bit over a point and a half of headwind on the quarter growth rate.
Speaker Change: Okay, I appreciate that any, and I guess are there any other quarters this year that we should be sensitive to in terms of days, selling days versus last year?
Speaker Change: No, but the remaining quarters all have the same days as prior years
Speaker Change: Okay. Thank you for that. And then I just want to make sure I wrap my head, arms, whatever.
Speaker Change: You want to use around the moving pieces on the updated guide as well as the first quarter, so...
Speaker Change: Revenue for the full year comes out about 10 million at the midpoint, 5 million, I think very clearly federal funding being cut.
Speaker Change: The remaining five, because you obviously mentioned the channel optimization initiatives but then you also mentioned the pricing headwind and spine.
Speaker Change: from one particular customer. Just maybe put a little bit more detail against each of those buckets. And I get the last pieces.
Speaker Change: You know, of all these disruptions, you mentioned some in the first quarter in the spine of the biologics business and then there's the
Speaker Change: and the channel optimization and the pricing. Did we see any of this impact in the first quarter? So, for instance, that $10 million. I know you said a lot of it's in the second quarter, but do we already absorb some of that $10 million headwind here in the first quarter? Those are my three questions. Sorry about all that.
That's fine. Yeah, so let me try to unpack that. Let's go.
Speaker Change: You know, out of the takedown, yeah, 5 million is related to the US funded.
Speaker Change: NGO business. The remainder is really spine and biologics, I would say channel disruption.
Speaker Change: The price we primarily had included in our original guidance, it's a little steeper than we originally but I would say that was in our original guide. We did take some of that in Q1, both the price and the softness.
Speaker Change: in the distributor channel. We didn't see some of that in Q1, but we expect the majority of it to be in Q2. And then if you think about the 5 million from NGO, that was...
Speaker Change: They generally placed a quarterly order, so that's going to spread evenly throughout the year, so you know you had a million and a half or so of that and Q1 and you'll see that throughout the remainder of each year, each quarter of this year for that as well as far as we are aware at this point.
Speaker Change: Okay, if I could just add just to make sure I'm doing all that math, right? I mean, it sounds like the first quarter of you add back the selling day difference.
which I don't think we had contemplated.
Speaker Change: and then some of those moves and pieces, you're sort of excluding M6 still in the low 190s. Is that sort of the right way to think about it if I just add back some of that stuff?
Speaker Change: Yeah, that would be the right way to think about it, Mathew.
Speaker Change: Okay, thank you very much. I'll get back into you. Thank you Thank you very much.
Speaker Change: Our next question comes from the line of Caitlin Cronin with Canacor genuities, please go ahead.
Taking the questions.
Speaker Change: I guess just to start off, just a quick clarifying question for the NGO impact, where is that going to hit specifically within the different segments? And then just with the guidance change, really any thoughts on the longer term guidance and the risk to that stay the same?
Speaker Change: Yeah, so the NGO business is Ortho, so it will be in the International Ortho business, is where you would see that. And then we are not updating our long-term guidance at this point. We'll provide an update on our Q4 call.
Speaker Change: Yeah, I mean, we're still continuing to make progress with 70. We're focused, you know, our focus is really on urn outs as we believe that as the best return for us in the long term with the full three to our spine business, but no specific updates as it relates to the capital environment.
Great, thanks.
As a reminder, press star 1 to ask a question.
Speaker Change: And our next question comes from the line of Jeffrey Cohen with Landon Berg, please go ahead.
Jeffrey Cohen: Good morning, thank you for taking our questions. I guess it's true for me, and I guess firstly, if you talk about ourselves in 2.0 a little bit, we're pretty clear on timing, but could you talk about some of the functionality that's available on the unit, and could you talk about the contact, your, and I'm glad to give our questions to some of you. Thanks.
Speaker Change: Look, I just see 2.0 what it does, the pretty much it connects to our physician, our
Physician Porter-Steamont-Track
Speaker Change: So it's gonna do what all of the other systems that we sell do, so give the opportunity to do the surgeon to keep to follow the patient during the utilization of the device to make sure that the patient is compliant in the monitor progress.
Speaker Change: So, I think that this one is going to help us because
Speaker Change: is given, you know, I kiss something that also the physician can build, I can given that there is a DRG called for it. So I get the opportunity for us to keep pushing into the specific market segment.
Speaker Change: So there won't be any changes towards the functionality and the settings of the actual unit.
No, it's just the integration with Timon Track.
Speaker Change: Got a perfect agreement. As Paul and Massimo, if you talk about the true lock system a little bit as far as the cases that's been done, what's being measured as far as data and outcomes and how many SKUs with your ambition having when when launched or launching this year?
Massimo Calafiore: Yes, the SKU's of the true log TBT is pretty much similar to all our other systems, so it's pretty much one.
is one SKU with some accessories.
Massimo Calafiore: And right now, we are in the limited clicker release that is going very well. So we are having a lot of interest of surgeon that are going to help us to collect data to demonstrate the benefit of our of this new.
and Massimo Calafiore.
Massimo Calafiore: and, you know, like I said, already we did that in cases just in a very limited market release, so a great, a great opportunity for us.
Perfect. Thanks for taking our questions.
Thank you.
Speaker Change: He's very no further questions at this time. I will now turn the call back over to Julie Dewey for closing remarks.
Julie Dewey: Thanks everybody for joining us today. We appreciate your time and interest. If you have more questions please reach out and we'll look forward to talking to you next quarter. This concludes our call.
Julie Dewey: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.