GMED - Earnings call transcript Q2 2020

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Operator

Welcome to Globus Medical's Second Quarter 2020 Earnings conference call. [Operator Instructions] I'll now turn the call over to Brian Kearns, Senior Vice President of Business Development and Investor Relations. Mr. Kearns, please go ahead.

Brian Kearns

Thank you, Katherine, and thank you everyone for being with us today.

Senior call CEO; Medical President, Dan Officer Keith today's Demski, be Chief for Chief and and and President Scavilla, Pfeil, us from will Globus Dave Commercial Financial Joining Officer. President Vice Executive Vice Webcast being section Investor Globus Website via the through at the This review www.globusmedical.com. available accessible is Medical made Relations of

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

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

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

President measures discussions for, that measures these Accepted Principles turn schedules certain be not and or call today GAAP GAAP. with replacements financial be of to measures comparable the most the These are read comparable should Reconciliations non-GAAP should not CEO. financial additional on include will believe Generally Our the in Dave accordance Medical our financial Web measures business and Globus with, our Accounting provide considered the financial on We together performance. and I release accompanying the now information are pertinent over that, to GAAP also calculated directly press will non-GAAP the Investor available section the measures. most directly Relations Demski, With site. to

Dave Demski

team outstanding report I'm everyone. Thank performance good very you, afternoon, and by Globus the QX. to an in excited Brian

the of could more quarter was external team the our environment was was the quarter. EBITDA enabling $X.XX million Solutions for XX-year $XXX challenge. from proud off was and history, per most the share adjusted down not I way XX%.non-GAAP technologies in by for XX% to XXXX. responded While was our QX Revenue challenging by be the XX% down was XX% it while Musculoskeletal EPS

to light and are outstanding metrics peers, While the in they compared and the earnings circumstances low typical our results, accomplishments. growth relative to are our of

Our to roughly the we two-thirds. continuing finish down are bottomed was by down accelerated in off and for into the within encouraging. through business continued April rebounded improved June July saw final upward Growth by in the quarter quarter areas trends The began XXXX. even a July but and was US to implant elective the certain the steady and climb into mid-April quarter. revenue surgery business compared again. by as dramatically June May into restricting double-digit XX% of growth mid-teens XX%

a function Our growth number a is factors. of of

competitive New products pull through. recruiting and robotic launches,

team XXXX. on six their Our spine built product strong products in by XXXX development new in launching performance

recruiting to experienced body in overall HEDRON MIS tremendous inner capacity expandable printed and during in seen Adoption We quarter. of uptake as the have our device. onboarding usage which successful TLIF come we so well grow continues Robotic our we Competitive our trends strong mirroring line online the are second manufacturing XD spacers, as quarter. that sable in QX. the business during remained doubling the been XD generation fourth has should

half the year that us. of recruiting for matched over a first half pace Our first record for this the XXXX, year of

in customers, supported our and best who to of commitment our the the dedication a to Globus have ever is recognize than destination difficult And choice operations take the want industry. more reps moment during patients this I sales steadfastly of team time. Now for the manufacturing. members and

procedures the see. we amounts beginning and record bounce and they deliver workers to essential in to back are have continued of As expected in have product anticipation now

generally in but the further July. markets pronounced international and most down Similar spinal been business later business to come implant back the not speaking trends, as spine procedures the and by are as bounce XX% June for a quarter, international the improved strong U.S beginning our US. was and back Our began to have had

business spot growth. over trauma nearly was in QX XXXX posting quarter second of sales tripling a Our bright XXX% the

We invest products in expanding making footprint our systems are continuing to improvements to reps, by sales launching this adding geographic launched. new business, and already

developmental nail can system purchase clinical Europe. second setting. completed accomplished the called They the that outside be limb to lengthening implanted of developed clinical studied utilizes the a limited we SYNOSTE. incremental SYNOSTE system company in During in mangle quarter, trial with a expansion a of that stage have engineers technology the have patients Finnish facilitate

to We growing are develop in the rods patients treat patients, the deformity spine for as future. deformity and trauma about the orthopedic as potential potential pediatric to to excited apply technology this well

has we and to budgets, million a Revenue COVID-XX are working the by limb June the to lengthening commercialize XXXX. Enabling system was that in $X.X in continue fact market targeted created We around uncertainty while Technologies some are hospitals of deals the July. with capital we from the economic of launch to encouraged impact close quarter,

continued the hosting webinars on the focused of in GPS surge saw of the that capabilities of and advantages a interest inner body number quarter, strong in a During we our Excelsius module. technology, our robotic

of on robotic cognitive in hospital the value surgeons benefits OR the load terms shorter the less ever busy promises than in demonstrating procedures, are stays, more that MIS surgery time technology. reduced and Now in

are will to surgeons. care that has benefits in challenging time that We been patient and seeing invest Close and hospitals navigate. can improves capital

critically of and evaluate well We adjustments the ourselves to make business have the the to position opportunity all used aspects for future.

strategic all for us crisis. not anyone. Since structure or this year furloughed off to organization several laid lean We've company the the enabled and of start moves have we during made position liquidity support million that $XXX of financially people strong over double SYNOSTE; we the at we strengthen our of continued our the our recruits Our future. completed record to One, a stock footprint; we prices. pace; and at two, purchased bought hire acquisition a building our to depressed will we competitive manufacturing three, four, of have back

able to been by have have of millions who dollars we impacted addition, communities donate to front-line support and workers In COVID-XX. been

will this regarding now now might I that to we looking the year I be. and no forward that say the half will call to the While than stronger coronavirus, one been certainty bring what is whatever future have with Globus turn ever Keith. knows of the second over can

Keith Pfeil

Dave afternoon, Thanks, good everyone. and

with with improvements to expenditures. flow While the working of decreased and sales the impacted improved environment negatively storm encouraged and Though by prior pleased we was COVID-XX extremely the QX. capital we year driven I the macro COVID-XX, impacts am affected compared free has and way finished capital weathered cash profitability, Globus continued how our upon by the

In were acquisition to stage as we developmental Dave earlier, complete mentioned Finnish company. addition, the a able of SYNOSTE,

in down XX.X% same or quarter of revenue QX million, selling Our lower decrease with was US in the second more number days of selling constant basis XX.X% but to as XXXX. compared currency a the in one of were On the by a $XXX.X reported XX.X% Japan. sales day-adjusted day

million million cash delivering paid share. was Non-GAAP contractual $XX.X million. holdback. XX.X% was included SYNOSTE $XX.X pretax $X.X plus closing million loss the our of reflected was Adjusted per net income $X.X to cash was which includes$XX.X earnings and related acquisition consideration is The and a diluted SYNOSTE EBITDA QX and flow charges $XX.X million and $XX.X within $X.XX free non-GAAP total at million of for of million fully development was research Our expense. net our

of U.S part our second in of revenue impacts greatest Moving lower XXXX COVID-XX into business. the $XXX.X were million the sales, driven impacts than the was earlier the across second XX.X% our COVID-XX quarter or by quarter of The quarter.

we As in led QX, progressed US spine sales improved sequentially overall by business. our

down as growth the by double-digit implant with quarter in spinal of June million, XX.X% or business lower June concluded COVID-XX. driver revenue XXXX. in $XX.X we constant the noted, second International our currency. compared Dave reported impact the Again to sales of was as As lower US primary for was XX.X%

not did In first in difficult addition and orders year year-over-year of distributor internationally. placed large half the as repeat driving the expected thus last comps we

and XX.X%, quarter to expense primarily or company XX% % sales SYNOSTE of the training. well for businesses. tax spending is by gross or and second upset in fixed approximately structures to was as driven expenses was to deleveraging quarter in resulting XXXX. was my by INR first in decline areas lower compared windfalls by as SG&A lower deleveraging of continued of within XX.X savings rate review One, rate Consistent treatment has important write-off identify well with quarter our comments to the by of income as $X quarter acquisition, $XX expenses in compensation sales GAAP related of set our second and reflective bad due The million to costs its was of development no a within of associated Our expenses a X% for of COVID-XX. which other include debt impact COVID-XX. The the XXXX. of margin reserve which tax related $XX.X The XXXX. for the million margin $XX.X as lower focus XXs a second was donations profit the second affect inventory lower the commented combination higher pre-COVID result the gross expect the primarily and P&L of and earlier. which second instruments businesses. including sales profit driven and $XX.X revenues in expenses the the and research cost year. in as PPE our on quarter. in the the deleveraging of result is second the opportunities. businesses. EBITDA for results. with were were quarter compared our Two, were quarter of the will trauma our as on of decreased discrete performance were These factors. quarter to development earlier to for depreciation to and quarter travel as and XX.X% higher the the impact trauma expense expenses sales expected manufacturing additional with It Three, returned year expenses. additional Research was to for for and its decreased quarter, When effective Adjusted business COVID-XX compared as spine higher and The that compared SG&A. its gross note of historical fixed costs of impact spine driven QX and four, R&D Adjusting a of and mid prior affected Toronto and revenues expenses The expense X.X% or million driven tax would levels, comp and partially cost SYNOSTE spending to quarter XX.X% the within or acquisition driven result expenses prior of including SG&A the compared we stock with lower the was the XX.X% sales acquisition or increases in were line the million XXXX, the primarily million depreciation I XX.X% XX% impact $XX.X by million

XXXX to normalized the the would free cash $XX.X cash $XXX.X by flow with beyond million, return to assuming over from well and as working expect AR primarily payment provided expenditures, driven million prior ended We year capital million delayed ahead was lower $XX.X activities a Net federal cash, equivalents and resulting impact adjusted Looking quarter we timing non-COVID ACT. and was more the well of capital as a improvements both marketable as EBITDA of as operating range. cash CARES securities. a tax improvements a the mid XXs by environment,

the A previously authorized quarter, share in repurchase $XX.X with program. company repurchase the connection During announced million the shares and Class spent its common to

purchased We spent $XXX.X Thus not remaining million any $XX.X authorization. million have its have conclusion since we and repurchases. year-to-date QX on the of on additional original have shares $XXX million currently

the As with the and share excess company noted flows last operating quarter, will purchases of fund cash cash. its

the to on COVID exceptionally testament underlying strength. our quarter, the performed back business Globus in well a Looking environment,

to the and discipline will liquidity continue the profitability. by meet will further necessary our and flows, challenges to around We prudent while market maintaining cash improve focus take steps the faced and business,

questions. open now will the call for We

Operator

Suisse. Credit [Operator Instructions] from of with comes line the Your Matt first question Miksic

Matt Miksic

Hey, Can you okay? Thanks taking the questions. Great. Thanks. for hear good evening. me,

to couple a wanted on I up follow So things.

little not bit companies closed numbers Can surgery been cadence them and closed I larger compare interest second of yourself -- other follow-up. surgeons to how think the there's or a you quarter. have of deals you'd to the think in the get expect like mentioned surprising several love seemed and Dave in end amount but develop what quarter and the fruition? reported around talk to robotic among to And but you I one about of it other -- a then you in come those would activity by companies I

Dave Demski

get kind speak, other we're grabbing on An the as part close executives attention able in front the of more were and Well, noted, think the on their the even some interest we to making get the given and in up to given just more is Sure. of it their But to And to environment challenging we opening just it's of their we been seeing I now minds. deals. activity certainly happen executives It's as There's as attention well the matter of and access. get a interim. surgeons. technology. things

Mike Matson

was helpful. That's follow-up on the just Then volumes. the

I of start companies the out think right recovery. almost talking as you the gate about

And peers when of some of to to a are the share understandably are seems were call providing zip a -- element a understand imagine driving a of love you one new bit maybe around orthopedic above technology I teams although reaching reported spine different or it what some July think the this at specialties a there's but of I first faster is your hate activity the quarter. bit sort across lot rise that. talking It's June, you're it and moment. color were of you're have about but think do maybe you snapback to to hard same that code marketplace you like what seeing you and maybe just a that

would So in your or how be like relatively up what you're those color stronger pace do of helpful picking in than comments? again terms you of some any a peers you're feel

Dave Demski

Yes.

clearly I think we're of are share back a this the environment. our market but results taking function in coming

the look hit results XX% at were the COVID you peers if space in first quarter If of pace in before and for our we you spine the growth. on recall about

even competition last lost are our ground we're but to versus take share versus we though continuing So we year, growing.

it what is. I that's think

Operator

Shagun question line comes the Wells Fargo. from Your next with of Singh

Shagun Singh

questions. you Thank so much taking for the

question should mix of growth that backlog you to part last in that sharing that we for about cases? the deferred given the on procedures much your Are already cadence help Thank that. understand of was of it mix? flows you percentage the trends then is, the immune and heard have June, we a wanted just patients performed? half that touch us I of it's you remaining are year a funnel? funnel. COVID of So was July. more in been willing share so the returning the think Could should how geographic I you little And and to bit high think you how normalized have second saw in and versus that we into the How healthy think then new what the in to the of given of still number about about XX% -XX%, much we my ebbs

would there you the So questions. any color be helpful. taking for Thank

Dave Demski

the but a into surgeons insight from few And have the XXX% pre-COVID, a flow been at really future. full our terms flow case is surgeon; surgeons, to of We help little pre-COVID it continues asked with average that the we a versus clinic XX% is the think our bit own questions. clinic to in of the if of new a have I don't now the about deferred we to a versus through We the your then really talking Shagun. second outliers you or flow that's whether informal ranged two can a did today case will and them terms you in XX% question was XX%. diverse country. schedule? that case grab and is Sure, OR them a tried little from geographic the We've about seeing We asked the the survey throughout mix XX of clinic what I end you're understanding year

end full they is which pandemic. XX% maintain answer they opinion be was will So with it came rate through question if of busy the about the a at the schedule operating given where clinic them in of in that then we XX% my they yes, to year. strong would second are around the said, continue And very the

of back bit for if I room we and points I environment a So both of COVID think it the see in find that to does in XXX% leave back improves very terms of where Certainly, go clinic drop a the are. encouraging those you'll data well. some as little

I think thing is other the is procedure the you a spine see there for profitable hospital.

terms goes So to the of in is even there if spine the of procedures think getting electives, done. line on restriction I front some

So think of our I all bode for factors those well segment.

Operator

Newitter comes Richard from of next line question Your with Leerink. SVB the

Richard Newitter

questions. Thanks the Hi. Thanks taking for guys.

of piggyback June, there. you're off pretty kind it's growth strong to of about that July, talking the Just a

look we back growth that are purely some of to you business? work June thinking isn't maybe mean half that double of in that reasonable reflects the half, the and extrapolatable into second As but your based I today? what appreciating about in some view your half recovery July for in back see Is down, on digits backlog we the kind

Dave Demski

us. possibility way I but possible. definitely trends predict think that we're with it's it's for the certainly a Rich, environment, I seeing think taking share we're really external and challenging the It's to the

Richard Newitter

kind like would manufacturing performance there. COVID half? then the with and on very you launch by pretty could that on the And well. surprised Dave you on us Thanks. period? is are you Okay, it of commercialization be have outlook update just you the bit back little had if you where you hoped full the are previously? into a limitations where on Several of hear I line Was the business to during kind that the trauma guess that and going of encouraging sounds even in

Dan Scavilla

jump that Rich. It's Hey, for Dan. one. in I'll

pleased inroads making sales we're the for We're and certainly the progress with thanks with question. growth. So the

go. trauma inundated together still are something to long impacting COVID approved occurring. I hospitals those now certainly there the Certainly, getting while is committees or surgeries hindering things think us. are us through there's pricing with a way right that Getting type

So we if think had could weren't by I growth there's we that. COVID I back pulled and actually believe we have beaten more that with

go. say we'll it's the we for even year continue I would to again potential So think but on track this is stronger. I what for predicted

overcome about asked last We manufacturing. had year. had You hurdles those

of have the continue hindrance. manufacturing to that's We this date, to XX strong family without And very of have we capable out launched. facility a putting product

of the all with well. if year, potential up followed getting the to by few a works of have three out FDA this end with the We more two

Operator

Your line Krum next Securities. question from the comes Truist Kaila of with

Kaila Krum

Hey, guys. our Thanks for questions. taking

just you this questions give area can any prompted sense those acquisition? for So evaluating and just this tied the from still bit I a purchase recent today? now. you detail on what little other timing that of more then guess to new And deals potential Just contribution are

Dave Demski

Sure, for looking we've going something deformity growing Kaila. I into It's the to to treatment at trauma the for that product Thanks. technology itself tonight there's our sales in rods. an be It's while. definitely of of expand been to think opportunity exciting we an now begin carrying pediatric, force terms a -- think

be while Europe before end before So the before be going in get not it it to a but we we is get maybe probably XXXX to and of bit market. the much. a that U.S to little market can going till into the It's

tuck-ins In things yes, other nothing transformative improve could terms been a just our We're that it's business. number things, looking and again of at we've of -- active. deals,

Kaila Krum

during still guys Great. just this Thank our time kind across also is space. a the that cash rarity you. generated of And fact I looking mean you

and Thank you're to spending allocation at from new I approach your capital here? investments how thinking So about to again this love you. just time hear

Keith Pfeil

question. the for Thanks is Keith. This

normal at course. our look in to business run continue and in it We normal

do really, really in the felt the So AR can quarter, and to quarter, on in the balance continue to took bounce to trying to we That's flow we concerted business. as sheet most are a we one some this build a at approach our happen for just the no active focus a that and And an really going look was free hard inventory within generated improvements with is the manage preparation of to took it's effort coming was for into flows. what business. taken cash cash what thing management important bringing identify relates it we approach of your we We've to cash the there quarter. could but the back, you knew COVID things into control that

Operator

comes Your Sandler the Piper Matt of next line from with question O'Brien

Matt O'Brien

Good for really in the share wouldn't afternoon. Dave, you you're about? give you've the as so kind demonstrable. of got I what's and standout? because companies in here the areas I what is companies again the there why share you growth just coming Thanks U.S robot. driving taking in far worried reps why a just from you're this that's the it's half back and going cautious more that large as seeing small July? outbreak little mean I a taking know of guess, are I But -- and on How it where given pretty you're questions. mean a then bit growing clear be from really lot that us products forth. can getting bankrupt, tone

Dave Demski

Well, to our as our Yes. skis not about just different you I answer Thanks you because a seems here get and but tentative of I'll country we business. I just want over a Matt. mean have day-to-day COVID. excited plan is I'm like tell my

our really Our relative strong to business is peers.

to come have for a the one. We at count a competitors. even of don't Globus if it's bigger going It we're of when that a on you want like the about one We focused competitive, really I I looking really from of doubts recruiting we're any from to cylinders. those to don't lot it's recruit So to number have others. is respect is that's relative the competitors companies. perform and clicking I'm I at mainly competitive competitive say really, seem which how have become smaller But to on; larger

future but a attracted been would So leadership great that's technology, over has several we've their the enabling the and eyes differentiated where that really it's in the to implants that And they on and they that's for can our coming years. while, see reps really year to be part of from. this think I us last known side. has to technologies add And launches want that. our are implant the had I some

technology as had the install see So of multiple in that's something you're I of did just that last think really technology, there's And We a we now to we strong that the typically. it firing have came as will. pull we we comes then deployments year grows, through not cylinders. XXXX you that exponentially, when back robotic didn't year through probably we're aspect the on and it's pull kind to enabling that of have. And base if grow as going back

Matt O'Brien

as And today deals on Thank the assuming of you things, I'm Okay. happened a June. in then in talked of you June. everything lot follow-up side about the here closing printed robotic you.

to back You've one push announced going on and now some think Excelsius been to get you're where people factor environment? bit could July. any be a maybe yesterday. product? buying in kind robotic get of you delay executing access delayed, waiting that end see aggressive going more to Is and more to willingness side what on purchase versus more in economic done that has terms equipment there have their ahead little there your the And kind in the up you of Do on gating get do that to then volume Is they're front your to system are to end? one be the this among capital of a give competitors of the hospitals to

Dave Demski

Yes.

the me Let if see can track keep questions. of I

normally characterize as --that's an because In terms right I we get can't entire it's say about anything There's And spectrum. who there's more to now. placed. or than think to willing not systems pricing, of done hospitals haven't CEOs dangerous would we aggressive this even

with So address. on too things with problems many COVID, to have too many going I

are treated to So even ones patients a you come to places. that at are that their more them back to And the hospitals pull need who as to differentiate they're see opportunity an not by other maybe maybe aren't COVID other environment in more able themselves impacted to there be quarter.

don't speaking attention was it's but mentioned, So I spectrum, that's yes, get to delays, finally coming. generally think to versus yet, I continued as six it's challenging result -- if And that know way when months that it's then don't seen you the the the it an reality think their entire that's now really I of think though right we've we competitor coming is ago. a

So that'll addressing force who useful waiting. be for be our those sales of in might terms folks

Operator

Your the Taylor comes from Matt next question with UBS. line of

Matt Taylor

for Thanks the Hi. question and congrats. taking

wanted the I to ask recruiting. So about more

do it the going for and to make recruiting bigger difference You you competitors on your continue and just make some the what I of recruiting mentioned side? that continue you during in curious to your of performance have is record that easier this the in you're to able reasons levels some maintain now. was just ways? And how and are seeing time you

Dave Demski

we U.S and uncertain Harris, interest. they've backed nearly and folks company the they've financial seem been security. and bring been over continue generate built to become to people for to looking people are to going willing those to bets future. off of technology terms focused at that sales Executive are our to we're guys That's going our They his a to XXX% our anecdotal team the And and do off are ourselves to that to on credit we've back. convey bit. a just things going really in the things our that. on to strengths but have And it's And able our Greg to bet of a are this of period strengths, pay when And just accentuate that had strength the focus in come culture be aggressive that VP make

Matt Taylor

all. hoping at program Yes talk to it. an in get the on update and timelines about and contribution if from that just the large on joints, Anything then for you can expectations I was robotics

Dave Demski

to team get products That's way there. a not where to development The that fairly stages into do We're we Yes. to dispersed, challenged those point the labs the good early a so going see and on been to earlier need this labs we've it's challenging is probably stages in the at of get out. been that for bit finalized.

that of bit been than you I but I further of casualty So timeline have six think tell a months don't we to ago. say has we behind were COVID. a a are this at point,

Operator

Your with of Morgan line David next the question comes Lewis from Stanley.

Mason Austen

is today. for Thanks on This questions. taking David the Hi. Mason for

about days in Some differing selling talk there a quick check additional double I encouraging. specifically Just clouding When companies wanted year-over-year. comparability? clarification. June that's to obviously digits out that year-over-year is you called days very up just June have any device

Dave Demski

a a Yes. you. normally. adjusted good that than higher question. day It's gave I That's Even rate

Mason Austen

a helpful. as Got this rate encouraging growth then of to accelerating August? you still you look see off a Are Thanks back in half into to July worked That's so rates this the obviously that as to growth backlogs or be it. through week quick plateau of week follow-up accelerating the July of and seeing continue much. And as just continuing. off

Dave Demski

certain July. of up so to we're is good We're typically plateaued sequentially a be off we're we a seem comps another Yes, maybe for we're July where of plateauing against question, our but yes, tail at sequential level. week-to-week. for kind in terms easier it's month vacation, we

and comps So August we'll that's enjoy then obviously in people September back. come would when normally those easy

us for harder get will comps the September. So come

Operator

next comes of from question with Capital. Wittes Jason Our the line Northland

Jason Wittes

talent very you the at forming can your the you're say you of kind One, at are important see you describe Thanks, two talent? questions. where back for Did which up competitors way follow poaching Hi. pulling to is time companies situation the the larger story. recruitment on just same that the obviously and

Dave Demski

ask anything I end a to because with and at and enough catch that folks they but may of point. competition that doing. -- you I and is around I want seem and They're -- a just when then that are we're shop they're to them said a them be I about usually talking feel usually really like if They aggressive it pulling choice I folks, lot they apologize up behooves don't thinking don't doesn't we've to move; know where didn't narrowing to as making sure for in it competition ourselves know not this we our bit differentiated their back. be

Jason Wittes

related continue where that at anticipate fair really a poach lot the there was amount kind something situation that's from? year and even larger was this of to what's into for guess movement? to driving quick rest I Is follow-up of Is to that the I you uncertainty generally that a of the you and a of next? companies had

Dave Demski

I it's if don't know uncertainty.

technology. I of is they're think the it's moving to there of seems folks be of they're then related on in larger just terms clear key the If the buying just from where maybe a all some more future the peer lack elements at is. and that

of it's enabling that that that with So platform building. we're power imaging, it's the here technology to the the robotics we I culture have think our and have -- them sell combined technology, just the we the for the implants navigation,

it's than -- all what it's doing. what doing what versus think I more doing they're we're actively they're not something and maybe that

Jason Wittes

while expire that and things it to of that behind contracts that but you of Okay or or now here impressive on quickly took you place is contracts seeing are kind drivers kind of sort a that we're of kind as bit new are other things numbers. and waiting is get of what that of guys game a there number? else spoke you're the picking mentioned expire growth they place, just When for to up kind originally of it's a in trauma, then in I to

Dan Scavilla

we're again. that Hey, small. reps board, Jason. you penetrate multifaceted, right. It's It's and on recruiting be It's going to a given bringing Dan really so about market

market through get able It's us. things whether that's those And certainly into hospitals for you're we territories. all new it's ASCs working more So of course products out or trials that more access and continue at regulated usage more to fashion get a are us allow more in creating in to to GPOs, into or as build the and getting sets about relationships. surgeon

So all not the we that are of jump on not contract's It's do working. but is it's and sole really a and It necessarily of reason. those expired part it. it

Operator

Rose Kyle with from Canaccord. next comes Your question

Kyle Rose

technologies. much up platform on the taking the additional the the of And comments very with on to robotic I for timing imaging to any but in the wanted well. respect then specific side, update maybe as with spine procedure respect insight on these indications arena? timing the appreciate for questions. the you Thank earlier I one to questions on follow enabling Great. any

Dave Demski

what Sure. dozen quarter, the the FDA. well. module now, Yes, go with to stages a that's reference the We've your The during just is this procedure system imaging accounts, in going sort testing at of Thanks And a specific week last continues inner also Kyle. well. quite cases we to We're body of of we're this all full the our actually if soft in the half it's which was. the in launch going before that final agency the right by but step launch and be will commercial rate. if in is it

major well that goes don't assuming we any see there. pickups So

filing FDA be months. within We of the with couple next will the

Kyle Rose

I go on against two characterize compete think then those to and you're you in lines just contract for guess, a Dan, facility I going we those to taking are you line share a taking, or as Great. contracts in smaller when level and into trauma one the the one accounts to facilities? side update bites full of entering product and material when are one trauma what the about players able and on you trying appreciate get follow-up Dan. of

Dan Scavilla

obviously position Yes. products, We're that with two as large to in of there. get out he's then We're surgeon or begin take depending displace one places if kind through some usage lower build portfolio. not to full player. in and upper, towards you're the going we the and most a at a on working But expand yet

disrupt a the put launched need can with do continue the again So we to to on before still knew But quite really more bit. displace we competitors. or bigger families we product market out XX

Operator

from BTIG. of Your next question comes Zimmerman line Ryan with the

Unidentified Analyst

for products Hey, there those you contributed the I anything to in that half little about could you might rollouts more Ryan. take the products if back year? just product bit I be whether is how the rollout was a talk mentioned environment really actually the go during the Max of to those guys. forward on wondering different the did This launches here given know by you're encouraged that and but just to HEDRON additional you of to top able line. with COVID to quarter, back both wanted sable. And

Dave Demski

Nothing than it and I norm. undershot Matt. I that differently on we'd blew we I really, the our Thanks projection did we will any say of much sell that. how

kind we producing capacity. to needed more capacity our manufacturing to and but we've for our So at need set exhausted this point. we lot a that expand make Those of are

orders growth And So don't those is year. in you this again I contributing machines significantly QX. that normal. components and that and the We what impact that will tell granularity of capacity the got new than of see in our typically we And the you should board. the on in terms we've coming of different the products give are are. nothing

Ryan Zimmerman

that some through it. switching segment of cranial upgrade And it a a in Got separate can you. to Is approved, hardware software is commercial around please? given Thank us That's the just just detail helpful. more emerging then helps module your strategy now unit the itself? kind very it and think technology provide that is the over model entirely you or some

Dave Demski

don't kind does Excelsius into quarter. the same require roll on Yes, on unit call who a year the a this But addressing but it to cranial who procedures. we module, for neurosurgeons and go revenue bringing going on folks. different it customers we're core will buy and capacity software. It expand our They're a We're also area, software. to be have the going putting probably new that's probably of out focus from just their the hardware point initially obviously the new touches rides different it's expect unit's but some the of the out fourth and the roll it meaningful final any platform. I to

revenue until good really we anticipate clinical I data there that get segment on the and So meaningful out system. from some get don't

Operator

Your next Needham. Matson with comes question from Mike

David Saxon

Mike. or for a imaging the questions. is launching also just current timeline are David Hi. follow-up on and system, thinking how you risks taking can the And This environment? opportunities Saxon a had you I then Thanks commercialization. on about wondering the to the for give in just

Dave Demski

with along against technology that goes David. with competitor. number for I other capital that the we Thanks our I that. competitively quarter what this at going one be system we're not some risks at do. point been in this us think issue launching end the first environment? and can and navigation It's is Yes, but in excited up time the having same is that the we'll there are, about to an Yes, out this with think current as go there

greater to to put the equal it going or is gets this on once So market. us footing

So to can't there. wait out -- we we're get it

David Saxon

of taking follow-up you think how just margins, as a on Thanks as recover and Thank normal much so about Great. gross revenue margins. to to the then starts ramp for should we the gross questions. back kind

Keith Pfeil

the It's question. Keith. Thanks for

to July, ahead mid in business. on a know on return basis, err think of for that the going I back quickly reason far half's we half a to optimism what still a but saying normalized I on target bring. specific providing how again so But the we second looking we're not sales Yes, err do no see with year. some the that I there don't we have XXs given we believe

go mid-XXs on I think at a basis environment be what we business. forward say would I should is non-COVID

Operator

last Steve from line with Oppenheimer Your question of comes and Lichtman Company.

Unidentified Analyst

It's David for Hey. Thanks Steve. actually on for questions. taking

me, how and Excelsius half? in maybe for second Just you you should an selling one color impact for provide can the Japan second expect the quarter have so, much any that of you. during on rollout begun if Thank we units,

Dave Demski

David. Thanks Yes.

marketing it there. We are

Did we about the with question? are But great, yet pretty nice you. have the We have you sold a future follow-up and potential it thank optimistic Japan. there. pipeline of in Okay, a not have leads unit

Operator

And Medical's disconnect. call. Thank ladies and earnings are questions. now quarter may gentlemen, participation. for today's you second Globus conclude And, there no this does your further And you

Globus Medical (GMED) 5 Aug 202020 Q2 Earnings call transcript