GMED - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Globus Medical Fourth Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Brian Kearns, Senior Vice President of Business Development and Investor Relations. you. Thank sir. ahead, go Please

Brian Kearns

you. And today. being us everyone, thank you, for with Thank

Joining be Chief Medical and Globus President today's from call Officer. Financial will Keith Senior Scavilla, Vice and Chief and CEO; Executive Dave President Officer; and Commercial Pfeil, Vice Dan President Demski,

review made webcast available This accessible Relations Investor the is at the of www.globusmedical.com. being section Globus via through Medical website

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

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

website. as not forward-looking or SEC update any result to a developments. We do or the filings, on Our including future statements undertake new XX-K, of information are events our available

today Our should financial to be with performance. the include considered are accordance measures measures. financial in non-GAAP our We discussion GAAP comparable these calculated and for, together GAAP. replacements most Accounting be read will not measures with, information financial pertinent also or These provide financial additional believe Accepted that Generally not business certain should Principles directly measures non-GAAP

measures the the press the release Globus to Investor the are and Relations directly Reconciliations comparable schedules most website. GAAP Medical on on available accompanying the section of

the now turn President to Dave CEO. over will call I that, With our and Demski,

David Demski

million, our X% XXXX XX% the consecutive Medical was over of everyone. a of fourth good Globus And over a strong double-digit million, quarter. Brian. you, third growth. increase was and Full-year Thank $XXX.X revenue quarter fourth an a year a quarter off performance of for $XXX.X XXXX. great afternoon, representing capped the XXXX record Revenue increase with

ago, of in versus an EPS $X.XX The year non-GAAP EPS $X.XX $X.XX XXXX. per share XX%. $X.XX was full-year increase was a Non-GAAP versus

made posted XX.X%, XX.X% higher EBITDA in the than full INR improved at finished we as QX results for such half include year. growth of Trauma. XX.X% we the the investments year initiatives, significantly The Adjusted in we to and first the and planned

out approximately EBITDA Factoring improvement in added points $X.XX of non-GAAP of fourth XXX to and investments resulted have points would The EPS the and basis an in full-year quarter, impact respectively. adjusted $X.XX impact basis margin. the XXX was to these

margins the Musculoskeletal Globus competitive almost initiatives. somewhat Solutions continues business rep biologics market-leading pull-through significant X% and we portfolio. year. by to recruiting Spine US in the installations, take quarter strategic full achieve quarter, fourth as in weakness driven operating ExcelsiusGPS grew by invest our continued by key for to share and during in implant the The market offset XX% even from

We third and consecutive finished recruiting XXXX our rep year in onboarding. record with competitive

very sales recruiting XXXX continued a seasoned back XXXX showing Our half has with and pipeline into interest successful into joining in professionals of success of accelerated the strong our team.

quarter, quarter XXX basis and for our The to was due were is based biologics sales points full points decline fourth the XX% biologic and quarter our and cell The the with primarily off by in products. Solutions the overall our For issues the full basis Musculoskeletal the in decline the for of to XXXX year. of on rate X.X% growth impact compared fourth stem fourth amnion XXX year. supply

momentum to expect throughout and turn encouraged recover first to to We're this quarter see the in around begin XXXX. build and

HEDRON interbody Most including was fourth of of three first in in products launched IC, the quarter. introduction printed notable marks clinical products the the received plate spacers. a both the have cervical HEDRON our and and XD XX users. in high were early We from system, XXXX, integrated spacer spine in quarter. HEDRON QX IA, a lumbar integrated spacer system, and plate These of introduced

we and of XD portfolio the HEDRON industry, out the to line plan in most is HEDRON of comprehensive XXXX. interbody in roll the the remainder printed spacers

quarter X% included The expected supply by business QX in the chain largely deceleration first the have as Spine was caused pent-up been resolved. grew issues, significant The XXXX which alleviation revenue by of of QX. demand International associated with

nearly the you comps in in may These first result As quarter muted numbers growth as of recall, constant XXXX XXXX well. in XX% quarter first the growth for was likely will currency. challenging of

highly is was in Growth the slower leadership, reflected XXXX of as new the in management performance transition Japan there. to confident guidance. we couple quarter our overall the over our a of in but team maybe the market, fourth lower year growth which years that than We're new past in in

regulatory in selling in interest begin units we We're very half second received recently have XXXX. to the market ExcelsiusGPS strong surgeons system and from in to in expect the of approval to pleased Japan. There's Japan,

For organic the grew international our by million, or $XX XXXX, our the full dollars level of growth constant year Spine in highest almost company's history. XX% of currency, business in

Fundamentally, stronger. been our international has organization never

in important several upgraded Our management been markets. teams have

increased have of technologies in we ExcelsiusGPS are innovative pull-through strong investments And result as a education. traction gained seeing Our from implant surgeon installations.

We growth internationally. are continued strong positioned well for

XXXX. new the quarter made and and by XXX% on Our systems we saw sales over full bringing are We innovation progress have for built fourth the received six quality good in We XXX% the the to hundreds year. Trauma and grow launched sets feedback and of in business market. great

increase to our XXXX Building expanding plan level building by footprint, products. we and our sales initial our in exciting several launching success, more new investment upon sets

million but a was XXXX, slightly very past Technologies quarters. QX trend Revenue seen strong from QX, we Enabling in down the the from positive have over continuing in $XX.X several

are the move a from We division into our we as about are bullish XXXX. very fully and of potential INR recovered QX soft

robust surgeons it of they benefits into trends technology see practice by experiencing continue ExcelsiusGPS the who as incorporate medicine. adoption to are We of their

we XXX(k) rolling begin late FDA. cranial have interbody the will We and cleared submitted out the the module module in to QX FDA

an submitting anticipate QX. in also XXX(k) system We imaging

beyond. strong XXXX team well we have sales for We heavily our well into clinical and are training in invested and expanding positioned as as XXXX in and team our support growth

exceptional XXXX. summary, in our excited performance In by we're

organic far Spine rate the was implant top the exceeded highest in the market and among Our competitors. six spinal growth

to our effectively larger in ability We Technologies, sustained much a compete strong finish demonstrating against Enabling players.

showed significant and half year and EBITDA the mid-XXs to heavy commitment EBITDA second in our INR. level despite improvement of adjusted Trauma We got in investments in the back

Spine portfolio, an We new We across work completed exciting products and and cranial significant enhancements the a development launched imaging several Trauma. of INR of XX are application stages robotic to in our final system. and including

parts short, great tremendous business all of look and a forward momentum we XXXX. In the to have across

company. to over I thank of Wheeler to Directors call Before Board Kurt and his service to Keith, turn want the Douglas Rob our to our welcome I for

comes ResMed, respiratory of chief in diagnose, the and treat applications experience technology operating improve software device over a and and device and years of disorders care settings. with in in the that connected currently out-of-hospital serves Rob XX in medical the to company as specializing medical for Inc., officer Globus office manage devices CEO Douglas president and cloud

support knowledge technology. expansion aboard, the medical health Rob's Welcome industry Rob. and device suited of our digital well continued global is in to markets

we success over Kurt an on well our Board in of him His you, of since invaluable advice for And have his to many the endeavors. knowledge Kurt. served leadership, director contributed our industry trusted our Wheeler Directors Thank board and wish Globus for the years. and of was years. XXXX. member XX He lead

to I Keith. the over will now turn call

Keith Pfeil

demonstrate underlying the everyone. good And strength fourth afternoon, business. Globus results quarter for Dave. our The of Thanks,

delivering market, outpace of generation. metrics to flow continues growth and the sales key cash Our while on profit

Japan on Full-year XXXX selling with XX.X% as fewer reported was currency full-year XX.X% seven as revenue during growing revenue XX.X% basis. in days million, $XXX.X or to a Day-adjusted, compared XXXX. constant grew

Net million and income income was million. was $XXX.X non-GAAP $XXX.X net

share per diluted $X.XX, earnings diluted were per share our fully were non-GAAP earnings fully Our while $X.XX.

was XX.X% million $XXX.X delivered EBITDA free for we cash and Adjusted flow. the year of

on day selling $XXX.X adjusted days the basis, reported and X% Japan prior-year X.X% was quarter. revenue in with fewer a growing QX versus as million, few

Currency impacts the to immaterial quarter. are

million, million per the non-GAAP Net income we non-GAAP share. was income generated during of Adjusted $XX.X flow million $XX.X was $X.XX free fully driving net cash diluted and quarter. and earnings XX.X% of EBITDA $XX.X was

continued sales, utilizing business, the US accounts of strength was reps growth to as on quarter X.X% by our was QX the from than Musculoskeletal systems. benefit the our record of implant as of well ExcelsiusGPS for which XXXX. led continues Spine, our recruiting $XXX.X revenue driven The from pull-through million, US Focusing by competitive higher

the million, impacts growing currency $XX.X immaterial, Constant as International was are revenue reported. X.X% quarter as for previously noted.

business Our Musculoskeletal growth driven our ExcelsiusGPS as Enabling is as Technologies, placements. penetration driven by well of continued by

did expectations not second Our our repeat second half placed that the line growth the related rate slowed orders and and in previous in is large half first distributor half. to in with comments

the was Moving QX point to partially XX.X% offset compared gross into the basis The mix rest P&L, profit driven sales. of quarter. was reserves, XX by lower inventory by in of XX% improvement prior-year the our

gross one-time in prior of depreciation million $X.X Trauma Adjusting gross finished by profit and investments profit our been and includes inventory these compared driven is has mix in sets approximately sales the Spine XX.X% The at full-year across expenses lower profit would for XX.X% to resulted reserves. higher and XX.X% driven gross have by decreasing benefits, Full-year in one-time year. benefits, portfolios.

profit project XXXX. in ahead, we Looking gross a rate mid-XXs

$XX.X of fourth development our the and quarter sales quarter spending Technologies attributed for were in to or Research Enabling sales the compared expenses or for million $XX.X quarter. business the increased prior-year X% The million is to of level X.X% primarily of

investments investment of international support sales of million were a sales or clinical and $XX.X as the of SG&A of teams, education. expansion XX.X% continued and primarily sales well quarter as XX.X% as in expansion increased in upgrade Spine our team, the business, our in expenses result fourth $XX.X surgeon million compared or to INR in our

full-year compared points. to includes of rate The of stock related the rate rate XX.X% quarter related QX worth option exercises stock approximately The exercises The basis tax tax to XX.X% XXX tax income QX is and to points. for approximately tax XX.X% option basis was XXX benefits was inclusive in XXXX. worth income benefits

effective of For XXXX, tax an project approximately we XX%. rate

increase net of a income $X.XX quarter $X.XX. million earnings reflecting share were $XX.X net were was was and Diluted and million. $XX.X non-GAAP diluted over $X.XX, income XXXX QX share per earnings XX.X% non-GAAP per Fourth

The which was higher the compensation compared to resulting non-GAAP a headwind a include earnings was a higher drag, in non-operational EPS due non-GAAP per improvement share stock Full-year tax $X.XX $X.XX, despite expense. $X.XX $X.XX prior impacts, achieved headwinds and $X.XX in rate, of to in currency year.

to the our INR addition, year. $X.XX Trauma and In prior as incremental XXXX compared resulted impact in an to in investments

for rate been of year-over-year Adjusting in rate slightly earnings and higher headwinds growth have XX%, XX.X%. investment reflected sales and our $X.XX INR, non-GAAP our rate EPS an resulting XXXX overall our is higher of in non-operational growth in that those growth a would than

our of believe the growth, that realize growth will even long-term profitable for support to continue outstanding that INR business. company to it required Trauma though and growth other opportunities continue and masks to levels we the profitability in We and parts represent investment somewhat

reflecting prior-year for XX.X%, EBITDA point quarter. improvement the Adjusted over quarter was the XX a basis

full-year in XX.X% the Our EBITDA businesses. primarily XX.X% decrease to in increased and is adjusted was Enabling our compared by investments XXXX. Trauma adjusted EBITDA Technologies driven The in

ahead to we Looking a planning XXXX, adjusted EBITDA margin are percentage. mid-XXs for

the provided by We cash flow quarter million. million ended Fourth securities. operating activities $XX.X free million cash of marketable net was and with cash cash, equivalents $XX.X quarter $XXX and was

The sales offset company in EBITDA compensation growth full-year by EPS driven guidance related reaffirms depreciation. and and non-cash to margin, and The stock expected of EPS to non-GAAP expanding $XXX expenses is sales at an same rate, is XXXX and approximately million which the non-GAAP occur higher $X.XX by respectively.

for now the We'll questions. open call

Operator

[Operator Instructions].

your will Miksic question. come from with ahead question Suisse. with Please Matthew first Your Credit go

Matthew Miksic

Thanks questions. so much taking for the

I if two, just on margins. had I One could. EBITDA So,

could as that more look variability than to there the Just continue trends. a you investments understanding year, year margin the we to coming this maybe a in magnitude last if it wondered to usual line, bit of you – how and should seemed take you think margin we just the what in making, timing a trends make? about like last I year, about year, expect forward you're chat margin minute bit the the given was investments

Keith Pfeil

I in think two I'm going to that parts. answer

about talked XX%. QX when EBITDA from would XXXX, range perspective XX% Globus really the say is, an fell The first look you at of thing that outside or historically I

finished we as And get margin improvement. call-out year. important further As points is than saw QX, to XX sequential prior in an year, really EBITDA got higher along basis EBITDA, you our the our I the we think adjusted

of the when feel some on spite going, kind that the – we of as investments spite where even So, of good, where we're cited and of think you were we made. in some the we we've call, about of in

drive well some we business as those When you which helped expect Enabling, growth investing, some into margins. as about of still XXXX, see had leverage think going we ourselves of do but continue also expand to our to the Musculoskeletal help EBITDA

Matthew Miksic

the it been guess That's And implant putting great. some this growth just been a you've market has while on Dave, of above Thank up, biologic case it based fourth supply revenue for want comments, revenue, the significantly that more now. stable quarter. have your would on overall I that, then, sounded color. consumable call to you And revenue, you for potentially with like been the in if implantable the higher,

very impact growth? applications expect what to from the high digit these, factors those rates, low-double it, talk support maybe implant the system and single, about you given of high other So, your additional can maybe call Excelsius to need from and imaging what come together you sort

David Demski

actually We've reps year. out encouraged over. we're No, The Matt. coming last end strong by we're very really Thanks, was of terms this in strong. competitive of year what started really seeing

market both that the standpoint, the enabling well implant clear in as an is message technology the from think we're technology. leader, a as I

a lot reps our to of brought team. that's great So,

The XX. year, spine this we launched that products we launched

to future I growth. and well. some next in are growth Technologies Enabling continuing strong we're And the those building platform think as going traction for us give base that a as then, year

of into next think spinal terms success and year beyond. continued those things all I drive in will implants So, of

Matthew Miksic

folks That's ask leave there great. other it I'll from let and questions here.

David Demski

Matt. you, Thank

Operator

Your come question. your next with Matthew Piper with Sandler. from Please question O'Brien proceed will

Matthew O'Brien

for the taking Thanks so much questions.

Just we there last can bit a about has over quarters bit three a been little little stagnant Technologies, the if performance sequentially. the think Enabling

here as anticipate kind on things perspective, other out How service of call in dynamics to systems So, for you are going place front what the should from competitive any business the of kind on and a we that pricing XXXX? system? perspective

David Demski

Well, become Matt. it's Thanks, very competitive.

in holding sales. our I are think for terms own we sure we're demonstrating that of

us installations utilized think where think from to And that, to have evidence that just traction think we're that's going systems I effect. are that's better The basis, performing give we've I drive going right long-term going But had clinically. getting forward. additional I anecdotal growth. now, a I future to just and

current cranial we've We interbody offering, our particularly module as working, are talked enhance module. the to about, and then the

sales. I incremental can that think in help

the with is to I some later more imaging to efficiencies the think OR. system add going coupling in year an

a So, our all of us part to good things, those that this certainly runway for I of think, grow to business point expect and year.

given for we're sure what up make still And lot a they've standpoint, really well. been at weren't We point, From the it's ASPs willing But of a holding providing pricing it. are threat. to to really of a certainly, to our competitive environment, it. and pay this value hospital customers

Matthew O'Brien

couple base. Dan, thanks. Okay, guys of then, area small years. an is you the that the on lot last great talked things, about And Trauma definitely a growth off year, side of last a it's for have of but XXX% over know just I

from So, or out is event? corporate that step is a growth meaningful, we this are more overall the Trauma with the those top the meaningful of line of sets see a XXXX year hundreds up big that tailwind on there and to where business

Daniel Scavilla

the for question. Thanks Matt. Hey,

always this journey saw quarter, Trauma. is quarter like longer is robots. with we've we on growth said year, about It's year what think with on an not a I explosion

market over that I year it's equal step in So, Spine we to we call size XXXX significant rather wouldn't big right? to of but with that journey Remember, along a grow the something that. of change, one such this time, be pivotal the play as

in right, place have do we to sets You're the it.

access. we market. We and see what in we've just and is penetrate focused force go you'll through the have on improvements as sales each a quarter been place market And

Matthew O'Brien

on Again, bit you this. push sorry to a little

Is humongous this meaningful a you trying kind along talked investment and your a confidence to been while. about think it's as to that's the And I of of market. that something less you've There's share encountered been market? a you you've surprised penetrate you're for some there years? here several ability next this do it's over in any journey lot have take something

Daniel Scavilla

that prioritize year thing only had The of company, entire the some of whatsoever. in to disclosed confidence because on growth differently. sets all were earlier delayed we the throughout less No the No. was we the of

through out, sets those rolled announced but They're we place. in So, that XXXX.

because this pulls So, other back we're than like driving fact really is little behind in a delays, set at and on bit of that that all. plan we We're forward we're there to. the all nothing

Matthew O'Brien

Okay, appreciate that. Thank you.

Operator

will Your with Kaila come proceed SunTrust. Krum next from your Please question question. with

Kaila Krum

Hi, guys. much so questions. Thanks for taking our

you So, quantify specific up on any to give issue? touch there? a Spine Is just, biologics the putting of there commentary congrats that up did Can want I shape supply quarter. any to US little on issue. growth But way that sort more bit to great core number a headwind? in just just And the detail

David Demski

a the we We There's be and product. quarter. things to in our in back spine Kaila. hope getting area. of still past before based and in couple stem up online, a of to able do couple Sure, the we're process to tests couple that cell more is of get the that. One We're back have first

amnion, engaged to Those we're so system, and of quarter. When in to pure now there. building, even some way of market in tissue just some are is first and it starting the the being that the processed sources that we've comes already that in working supply through their see additional with

and be up, through build back gradual year build restore the that we as thing So, customer a that'll that up. relationships those

basis Fourth points. reflected did think, year quarter try I the put was And we worse. all to that's about up. it's points, Musculoskeletal And was – that overall. XXX We then, for basis numbers Solutions about quantify the the XXX gotten headwind in

Kaila Krum

it. Got

for you'll like robot have press Okay. alerting innovating No, robotics a updates. I be consistently releases that know of us it you mover have first first then, time. But helpful. second, been guys your feels advantage a million mover And some without you'll and spine that's in

curious if updates So, have sort your are meaningful there robotic to are release system XXXX. press in spine that you that you I'm think of to planned any enough

David Demski

The already to is Nothing we've module sets it quarter. basically what for other interbody it this out getting building discussed. than roll ready – right now we're and

aspect a the FDA to planning we it's with deformity on with to is to hard the the We that clearance hope cranium The module near have now that's a and right system, in cases. although of module the enhance going future, overall get complex particularly predict. more

launch of OR, spins. And the – well in then, to half to in with just hope multiple to levels, second having workflow year providing able efficiency imaging, do as ability to help our quality the more address is the and to better combine cases we going it without as and more do complex which image more we'll the be

think things out year. of I are So, the coming next all those in

Kaila Krum

for Perfect. Great. Thank so questions. you, guys, all the much

Operator

come from with question. you’re Cantor. will your question next Your proceed Craig Please Bijou

Craig Bijou

Hey, questions. for the Thanks. Thanks guys. taking

in to color the with wanted your I But whether out Just you've – the number obviously, US Spine it's then given past, start that's guidance Trauma components, Technologies. know Enabling have International, or and you revenue there. some on and

to about see that the think could us that you I if XXX. So, where help – just guess of components wanted

Keith Pfeil

we next in would as Enabling. next year thanks into well Musculoskeletal/Enabling, positioned year, forward think I as say the we're – of year the the for on not I off, and well, first and say out, we're Musculoskeletal out What think between very splitting coming I moving question. of is US/International. to excited. discussed this grow that, we're really We The I breaking will very going well like feel with some XXX, call, comments

about are some think drive help that will of I things Dave's with growth. coming Enabling comments

think the we're growth into that, we across think we positioned XXXX, we So, solid business. look drive to as

Craig Bijou

there's the to to we That's on just, plans expect there program for if your that if more Great. robotic guess, when can update And so beyond then, could any ask about see hear and ortho, helpful. I wanted in spine, I space.

David Demski

today with on But the think the think can Craig. We're and we'll to it we working making about technology be just happy market it. we're update, of bring official towards end We good advantages as the it. time year, the have we to exists some in is probably about. talking that. No progress We're this towards best

Craig Bijou

contribution to it there, revenue way? is line, a event? that XXXX follow-up about to we the think Just that Should

David Demski

Yes.

Craig Bijou

All right. questions, guys. Thanks the taking for

David Demski

Thank you.

Operator

Your with David Morgan with next Please question question. proceed will your Lewis Stanley. come from

Marissa Bych

today. David. This Marisa for two Hi. Thanks taking questions. on is the had for quick I've question

one, about for or the on Excelsius give a I'll in first be have can anything update quick any just XXXX? thinking we The follow-up. And timing you additional expansions us should coming of then, indication

David Demski

Marissa. a Sure, have – we couple now. There's that the module interbody

yet. we'll begin the prepared and it – system, be in the And we cranial file filing will it the launched we with second And FDA be the this that selling remarks, when haven't is at then, on the mentioned module then moment. in to imaging quarter it. as We then, hope to we that FDA can the up

Marissa Bych

to Okay, Spine detail, understood. any think its off more that since XXXX. Thank you is how in you is the drive you that you. continue core can strongest And extent do that digit or low-double share us assume To year-over-year this growth XXXX? you year coming decelerates digit again. the gains? can pull-through And high-single to Thanks then, fair give sustainable is Excelsius do posted rate think growth to it

David Demski

we're revenue grow, strong. in That's even of Enabling stronger. several Sure. Excelsius been development in the to are base base. more year. continues gaining this though that I'm pretty Spine seeing high to at clip. year. products Everything and has momentum. And this our got The then, up just was engine Competitive recruiting Business that installed XXXX We've is indicates really flat is added and producing back coming our there's install out out a product never XX

very of spinal point look those business. to our at implant bullish all So,

Marissa Bych

Great, thanks.

Operator

next Your UBS. will come Matt question. with with question your from proceed Please Taylor

Matthew Taylor

question. the Hi, Thanks guys. taking for

we rate some XXXX QX, that saw products the in growth also your think like you're what improve and are follow-up turning the year? biologics seems seeing could launching was hoping because trends for I to it liking I more around what you're How there. versus color you that about last wanted things you're on biologics on us there. I comments in So, give could

David Demski

to predict. have grow It's we're hope elsewhere, customers versus going drag. definitely supply well. the Those this to seek conversations year those products being we to Because restore relationships. hard are issues have to initial a caused those Well, going to

pass some As earlier, products our The predict still amnion risk at got is stem that the the supply, to cell and this we're at to I process a We the have mentioned point. more starting commitments we've tissue. products, little internal encouraged But get up of to to is be early we're year, quality the metrics back to the this what signs. hard it's those but by going impact launched. and

Matthew Taylor

Okay, you just now you see to for wanted thanks. of make what on can outside you an think how much the US to and system I date US, And kind opportunity the to robotic Can outside talk Japan if your have could approval. you opportunity have that be? been Japan comment able the of you especially about the

David Demski

been actually pleasantly internationally. about I've our very surprised Sure. growth

in be there few to about I leaders savvy weeks over a technologically our country, growth when the terms they're about it's US. bullish And – very much to is the wasn't of interested a going us think everything I the countries surgery the we're to nine sure in efficiency in into Japan from we very in years. the And market. got very we're that business. excited do. now ASPs technology. case the what couple over market next opportunity that some And very that could just they the key of spine of They're were standpoint. very very talking a opinion outside we utilize good, the ago mean very, in was big to And a and are

Matthew Taylor

Thank you. it. Got

Operator

proceed Your next come question. Newitter with your Leerink. will question Richard from with Please SVB

Jaime Morgan

international questions. is guess, international taking Rich. Spine Did growth a would Jaime the So, happen business? what for core that for was first, guys number I for on actual you Thanks the Hi. mention This be one. housekeeping. my on just the to rate business,

second, a XX%. appreciate then, is strong that And this growing year,

how should into a reasonable business looking So, rate this else that about is the XXXX, to growth it right we is assume for potentially place be XXXX? or to business be still just in mid-teens that thinking

Keith Pfeil

international Thanks the for between the did question. out break everything and of else. We not components Spine

for the the were the Dave quarter coming we think we on So, comps go we XX.X% and a tough grew made you X.X% of the quarter, about you alluded quarter and because first and than XXXX, into to in at I well, in up year. the comment go XXXX, XX% second in that for came distributor When into the comp year year. first QX. we're placed as When going roughly when half you be about of large orders last to to QX earlier

So, growth going expect more to little we into In accelerate, would drive to growth expect first a growth half year, to the the bit of into back XXXX. be muted. would we the half, overall

David Demski

Japan only is just heavy from caution and Jaime, I'll experience that, I in And, that. The got which Medtronic. to on add team mentioned, that we've a it's leadership new

is KOLs had large the something of we've some before. to never access their So,

take opportunity. big But question. the break a how is going into us it's that's So, that long to to

we've So, as expansion our business, internally, long-term growth conservative about table in little out in set XXXX the terms for broken more there. we've of the been how in a Japan we

Jaime Morgan

it. Got

profile margin be then, gross just should a we cadence And quarter-over-quarter? you in us mid-XXs a sense give about XXXX, just how perspective of from that Thanks. the could Okay. thinking

Keith Pfeil

overall, sort I would the whole just say it's year. the of mid-XXs

I think good. the a throughout margins. gross think continue provide think I mid-XXs very quarter-to-quarter, assumption we're I think year, profit strong to going to I And you're

Jaime Morgan

Thanks.

Keith Pfeil

Thank you.

Operator

from Your question. will Matson Needham proceed with Pleas next your with Mike & Company. come question

Michael Matson

wanted start modules. new with I taking guess Hi. Thanks robotics these just I my for questions. to

customers Hopefully, there giving ability you robot? the existing the could those. how Or the to So, are Or software get more Is you it charge do just just that curious for? sales. monetize simply a implant there more with is additional disposables? you

David Demski

The Yeah, same hardware it's both, own software. The hardware and opportunities. module has software interbody thing. cranial Mike. and Incremental really module, its

for with will that through pull along The interbody it. implants interbody thing the us hope with we is that other comes module

it's overall, But, an cranial. can really package we account, So, those two items. to enhances value bring the particularly it just that

makes the just address utilize both – on easier got buying you've for a technology That decision to can additional layer platform needs. it the can They So, same those their applications. hospital. disciplines little bit clinical

Michael Matson

you So, then, in the other that – fully just but And resolved? on just that in thanks. Okay, gone on if XXXX? apologize earlier, headwind words, has been biologics the going issues, said – to that has this is

David Demski

the The matter process than to need of encouraged think a process, we the cell But, us subject We of middle one. longer timing. are. by to are amnion our is where It's take get in we're – just again, we of the one through and that's which it can will. reevaluating are we risk stem that

Michael Matson

Okay, a great. lot. Thanks

David Demski

Sure.

Operator

question will Oppenheimer. from question. proceed come next Lichtman your with with Your Steven Please

Steven Lichtman

Thank you. Hi, guys.

ahead guys well you Any the helpful. to volumes market. the from your growth Wondering of on heading underlying price obviously, you're very thinking is the market overall. year be or So, would perspective of the where into the state around continuing market grow color

David Demski

Steve. to Sure, generally our hard strong the as speaking, other four or as the Medtronic last strong I it the It's years. to it's tell day. me, from seems But in been results size. five saw

they leader entire for market did, the that's the grow encouraging For to market. like

some larger I one, companies, growth. but think the for decent putting up are

going around, ladder. good on are on. it But looks from So, look we some I the our think there's also, good I growth perspective as where

Steven Lichtman

just obviously, you it. then, investments Got secondly, the Thanks, elevated. mentioned remain And Dave.

in Just color there it directionally, be Just XXXX, investments relative the in but as of impact EPS less, XXXX they in XXXX still XXXX be be higher actually would terms will or any helpful. will XXXX to were elevated? the versus versus

Keith Pfeil

Thanks question. is for This Keith. the

we really I investment into hold the call comments of the level plan of earlier is to long at the on us will spending really right term. see looking If out relatively to XXXX, we based make we going some for are flattish but see now, investing really that things invest, our and that flat, But more a and about what into year it's talked would the I come invest. looking advantageous move As head investment. up

Steven Lichtman

got Okay, Thanks, Keith. it.

Operator

proceed question Ryan question. with final Your from will BTIG. Zimmerman with Please your come

Sam Brodovsky

of length delays to for Ryan. seeing next competitive quarters. the incremental first I Hi. the the you is newer on question. Sam for see if not some any the taking color This for wanted coming Excelsius. on I'm the options Thanks have any few of cycle within selling with there's out just

David Demski

the about Thanks, been where selling six months. been last has Sam. it has to The nine cycle for

than almost market. we're going only this but competitor, But competitor it big, really they're every entered there's the longer when deal. it's at important at So, we one for first and point, a

technologies take that their to a for So, both through of longer hospitals evaluation way full make does the contracting and process. work

is of So, when than it no we a extension but in longer years further the it, business couple ago. started of

Sam Brodovsky

should On may the about a for then, thanks. of a where expense, investments may the way not that there question. we thinking Thanks. And be year, any more that Great, just is modeling year or be in cadence R&D with lumpy?

Keith Pfeil

I We assume finished year I this at pretty that's think straight-lined into And that, year, X.X%. the would the next going roughly across year.

Sam Brodovsky

appreciate Okay, it.

Operator

ladies no queue. conference this will XXXX questions are at earnings in today's conclude fourth At time, call. Globus there you and further for this And this participating. Thank time, gentlemen, quarter Medical

You may now disconnect.

Globus Medical (GMED) 20 Feb 202019 Q4 Earnings call transcript