OFIX - Earnings call transcript Q2 2020

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Operator

Good morning, ladies and gentlemen, and welcome to the Orthofix Second Quarter 2020 Earnings Results Conference Call. [Operator Instructions] Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] I would now like to turn the conference over to your host Alexa Huerta, Senior Director of Investor Relations and Finance. Please go ahead.

Alexa Huerta

Thank you, operator and good morning, everyone. second earnings Orthofix the to quarter call. XXXX Welcome

safe today President and it and me with Financial on Executive over our call the our start I’ll Serbousek; Joining to Chief Jon. then are, Officer, Doug Rice. statements harbor and Officer, pass Chief Jon

based our During we’ll guidance any forward-looking are statements, as forward-looking any statements our earnings as expectations be today, beliefs, The statements and forward-looking and involve risks such contained plans, facts statements this to All of beliefs statements in August goals assurance statements to of about We do Investors update or X, historical there we expectations, call, obligation such forward-looking are that that any forward-looking statements provide cautioned uncertainties. the statements. are on on matters other place making or that not on is than no revise make undertake we and strategies, those including occur. reliance undue will will objectives. XXXX. such call not today’s

the different that materially results XX-Q, the include as and expected risks Risk for later as XX-K SEC under could filed actual our today, forward-looking Form the us in the well the additional Form to Factors cause XX, the we disclosed made be ended year call December future. heading in factors on our statements Some by from make XXXX, to be filings

in copies Texas. need documents, If you at contact of these Louisville, office please our Orthofix

our to non-GAAP I’ll to measures At US our with point, press this results. XXXX these our to results measures turn supplement matters in long-term GAAP. trends, financial announcing refer a refer over Jon. the for determined to financial In US properly that non-GAAP order financial and addition, various to measures. accordance financial financial to understand believe will of reconciliations GAAP wish in release as Please review on may call, We to second quarter investors these we today’s today’s short-term call

Jon Serbousek

XXXX Thank call. joining thank everyone quarter you conference results you, second our Welcome, for Alexa. and us for

Before Alexa group be getting and I’ll strategic of updates. are The done for business, thank on crisis. Relations. of call, the close of the over Starting of employees I’d who like discussing I’d the over by how been COVID-XX had behalf in I’d this and to performance. this our challenging challenges business care COVID-XX to who prepared on I’ll our presented finance we on safely Mark this the the now incredibly then second Alexa interacted our monitor proud patient the each environment, to we to before mind, impact quarter over on we’ve global questions. progress actively with one opening will times. will also we are and to update we trends address provide magnitude to seeing of initiatives the have forward, made eight going of like on by for it on taking tireless excited and pandemic will the have well start team. a today’s to will during On our our Head have as role past, by community start we who Investor everyone perspective years, the in role. care executed quarters. healthcare who every provided May, in line with our you the provide work are I of you we continuity. update. a keep our before our thankful in took supplying I to an coming handing like call the July, for each everyone my Orthofix as of effectively call customers we with that responsibilities taking saying for at of remarks, our With over maintain resolve of over Doug, financial Alexa IR into an introduce unprecedented you all business update patient will the safe continue has group. and be their the I’m our focus after their review actions has an our development quick, ensure the adaptability including her the which with business family to this created and leadership needs. in on truly through last an most our update situation with while in transitioning being On and employees with taken Mark Huerta, to and

second During focused everyone adapted facilities new sure the and to office and COVID were ensure making office. we new this operations our to the feels in quarter, environment implemented on safe procedures

As difficult time during FITBONE and proud adapt execute on by to operationally channel. strategic effectively ability discuss I plan; will during proactive accomplishments this my represented integrate as our commercial I’m our comments, of measures later our very into and our

velocity program. million the toward $XXX a quarter. election million key Our The against demonstrated by second to took potential the and hedge a of advance successful of we safety innovation as creating high the new repay products chain supply management in strategic as our product cash for increase of $XX progress disruption stock

quarter sales quarter, provide are versus performance procedures. currency revenue The month; was April where strongest during net year driven by down Overall, quarter. very the prior encouraged of of we approximately into largely was the the saw as June that down compared less XX% on which and our second year significant prior volumes and quarter continued which elective were in XX% three versus the to and quarter the and backlog quarter approximately during sales year July, XX% with the the decrease to XX% provide you will during reflects year management than month; second sales in May year-over-year second and this months during the showed team. month has month quarter. the second to a procedure elective quarter, prior of into uncertainty. down that the performance. This performance decline the prior monthly XXXX in recovery strong execution we versus our of the compared of weakest the second the down of approximately month. the revenue compared down to the recovery basis face shifting execution month. year prior was were leadership the by a To the reopened Total surgeons our I the address the was nimble more of majority insight quarter drivers our follows: and believe was Now our quarter, reported they the in a Total represented were for We procedures patients, surgical hospitals XX% regions as of constant

and leading capacity medical the remain the environment, long-term the in the constraints. comfort operate, current believe We business return to which patients to predict near but to too balance are unemployment clinics, to lack in coverage, of return our a optimistic shutdowns, nature the of in increased of very and the about year. We normalcy a opportunities segments to localized we unpredictable cautious the to about hospital it term including continuing of is early levels

prior COVID of rebound quarter, were Therapies year. down was We in months. the the by Bone up April to compared Starting to as June nicely the XX% turn during Sales two procedure volumes units. each Growth business Therapies. performance order saw let’s versus impacted greatly in with volumes and within Growth a prior Now May. particularly our picked Bone in

of Moving our to the were in elective Spinal million constant preservation in first Implants. versus quarter, This Sales significantly products, fixation were quarter. year made spine motion preservation and $X.X the year. prior procedures. up Motion by which large are, is the over down XX% sequentially up and US up and also over prior currency category sales used

trends, adoption We to-date we’ve continue to best US our month being in had see with June strong sales. MX-C

versus now were in reduction with election April, our sales training down which primarily In in was of prior volumes. MX-C a $X of result the Fixation quarter year, Spinal Our sales of a over volumes. procedure revenue US as that to right drove able slower in XXXX, XX% on subset cases start line million second our are Biologics, performed volumes After quarter. virtually a the during in surgeons of XX train procedure team approximately

prior Moving the as on impact of basis to business. result Extremities the of reported year, Sales were versus primarily XX% on down procedure on a volumes. a COVID

our a which are we with made in our you within segment procedures now trends. with would strategic portion generally certain can believe I elective follows the first comprised be we and leadership. the a deformity initiative, mix to to progress trauma like postponed. elective While the procedures, this of business procedures, each have areas. provide focus Extremity Due is correction non-elective, structure and brief especially the Starting of overview of of are procedures, large procedure

completed of integration we the quarter, Implants and management second the the Biologics single categories a product under team. sales During Spinal

to bringing a and portfolio or under We our believe it this brand about are reorganization. the with businesses one business can sales as leverage management, we these us do better excited we making company. By easier

strategy Additionally by search leadership With identified of our a the optimistic We’ve the structure establishing with new roles of pleased to in a focus, are toward all we moving of completing about senior hiring qualified the this a I near Spine support and business, our the Continue in in process Global leadership president of and we are and in progress this term. new look team forward with Global several place making Extremities. of for announcement our our candidates Spine. are decision-making. commercial the can in key Global with we selection. unified market-by-market sales structure very future

our second to initiative execution. operational Moving

COVID. have the challenges associated We addressed with

is deliver a customers, to for We team. our to continue which our constantly testament

on initiatives the part rapid allow the of at as time, We demand. that strategically while manufacturing the to due was pandemic, focus chain the the meet during of put realigned improvement initiatives in We the future onset place there as product no or continuity in the disruptions supply second facilities say replenishing quarter. to to during at well demand -- the to to are implemented in inventories supply same are us proud This to near-term quarter. implementation

and focus While as focus our initiatives, long-term the programs well. majority the are receiving of been our on short-term mid has

growing the for marketplace. and Fusion System System. announced fusion, In highlight SI and stabilize during the is technology with of Fusion is third first to launching we SI would in and or the the The initiative joint SI our progress This providing October. Our joint the is I launches SI SI like products of upcoming treatment a differentiation. procedure and FDA sacroiliac Firebird for first new slated complement compress our currently bone the US that another early during screw new to Fusion product to patient product in NASS Firebird XD innovation June, commitment nano clearance We to quarter the solutions printed this System options of example implant designed dysfunction. solutions is our product and for just delivering year’s the Firebird service one made innovation solid in portfolio. conference system

virtual conference opportunity, While of to products unique our use will this be spine to new we intend a number and across event the setting launch a portfolio.

are team you further We process starting our this conference and is the developing. Our team innovation procedures. we spine as focused can entire plan products progress. are showcase with see, NASS building new on gain and to innovation our to portfolio use as product traction But to still

FITBONE. Moving good with we progress to on, continue make early

acquisition, in still additional users delivered the U.S., the adding and have surgeon quickly distribution on building we are we and new results clearance process the regulatory new inventories partner. of integrating in by While gaining bringing

is market-leading out solution the volume a As building surgical deformity of deformity is external we fixation. and for development It’s a correction limb high focus one offering. portfolios, of every about think candidate reconstruction area not

the osteotomy early with demands preoperative focused System both JuniOrtho is platform which deformity reconstruction and this of marking trauma best in address pediatric anatomy. internal prior external The by and orthopedics adding we’re surgical by to the the for of of device fixation optimal represents is FITBONE to received the a even the to begin A JuniOrtho selection system launch made System enables XXXX. body. positioning patients. just The targeted and the is This advancing visualize This in solutions. and planned implant are the the planning the quarter implant now to U.S. We Plating JuniOrtho U.S. of extremities, need aids currently continued JuniOrtho in pediatric during complemented position election We designed ensure CE advanced internal to for software later Plating and lower clearance commitment to third treat FDA software relationship available patient’s is the offering size in smallest actually to that assist surgeons the surgeon will of The procedure. Plating recently. to in release to Europe correction providing the the This this specifically the and fit they our Systems, plan the on toward year. progress the unique patients. devices for innovative

Our our channel commercial development. fourth and final is initiative

There in to focus using on surgeon physicians and during level. to with distributor the to second over remote order quarter to we instances a we preparation and long-term facilitate some during change of support training XX continue our over representative continue adding continue case in sales developing were XXXX training. started have In events to service and and partners, strategic without partners training knowledge the expand We sessions. quarter, X,XXX product

As the quarter. trained MX mentioned there XX earlier, over in were physicians I new

We the utilize our will into future. virtual platform and to training enhance continue

So quarter growing in the the efforts are our which and for in marketplace. of our as team’s portfolio demand very well summary, proud evolving organization, performance, of we the as throughout second products our highlights initiatives

a creates and looking forward. level COVID-XX While uncertainty of

work to performance. and execute With the talent, foundation, Doug Doug? on I’ll commentary success. our build call over initiatives, further a Orthofix hand long-term strategic for now to our for expand financial solidify winning on culture that, We our have our position

Doug Rice

covered other information today’s I call will to earnings non-GAAP Please today’s measures. the then results of on net in and details refer Thanks, discuss of some sales financial Many further measures our additional basis. earnings a our John. are non-GAAP and and our into for release also provide reconciliations financial regarding disclosures.

Gross the down driver the inventory year in the due non-cash, well a to quarter As when for period. absorption XX% reported both Jon XXXX. in quarter $XX.X XX% from was compared margin reserves, quarter to sales The COVID prior million, of was recognition second this noted, cost compared total the and the the second as net was XX% to as fixed primary basis basis decrease impact. of constant on lower currency revenue lower of XXXX

and net volumes Sales in the a revenue revenue expect increase This the approach of commission historical support of As margins was quarter sales levels. rebound marketing we direct to of of XXXX. leverage XXXX, were from in XX% the gross procedure and primarily the result second sales expenses in quarter up for our and increases, lower quarter XX% second reps. loss from

the by quarter, and reductions, approximately decreased to of of expense down in as we As noted near-term G&A million succession included prior the This deleverage hiring. revenue our last dollar of by the XX% year in step actions, second from a this the travel On direct was in a were related G&A a was deleverage was due spending a savings strategic partially our expenses short-term net sales up restrictions quarter expense offset lower initiatives. short-term increase XX% as This sequential which percentage from period. $X.X in net XXXX, lower quarter, by in salary quarter. basis, offset savings of expenses significant or initiatives. XX% a in as and our result well savings initiative and transition slowdown as sales

the income systems expenses postponing our FITBONE were spending on spending levels primarily Since, integration office was up in offset quality from sales, XX% We these acquisition quarter lower increase was quarter of flat well second up This We related place second percentage R&D of expense million, keep expenses expenses and due as approximately patients clinical additional year-over-year, XXXX. functions. regulatory to Interest of to basis, to as lower until on other appointments. R&D the by year the the due in initiatives to in a the improvements study we and had normal quarter for revenue the prior increased follow X% some sales. $X.X $XXX,XXX in for up and net this were dollar approach quarter. of period. is our from expect in in net

borrowings, the million Although more from Services offset and the million during by we was million investments, of A to out from interest the short-term of or Health CARES Spinal planned $X.X I from the that quarter portion would due partially income to remainder was Department the as of Human by X% the bank to expense than of sales milestone related this a to due deleverage did of $X.X our second $XX.X increased of the recognize COVID savings value two Kinetics to this incur the $XXX,XXX related in and offset mentioned decreased actions of point negative of the part fair impact lower the of expense like significant EBITDA to the quarter XX% Act XXXX. or from down revenue non-cash in Adjusted million remaining benefits. in payments. quarter expense we revenue, the negative $X.X earlier. liability

Although calculation liability at expect predicated as milestone of get elective this dates procedure expected to will fair staying end or that the value we was above levels. of this continue current to on we the volumes June, the performed payment increase at closer

tax primary to as acquisition for related our well XXXX factors the affecting under remeasurement, expenses of of of GAAP income for tax the income compared had Now negative tax. of before million rate of income the Act. CARES We same X% period were as purposes taxes in to the expense recognized tax carrybacks not to XXX% The related or second turning of expense possible taxes income loss the of financial to our GAAP refinement quarter quarter XXXX. effective $X.X as tax for related a before estimate

as long-term and results, rate, law For tax acquisition-related our certain adjusted normalizes which for use expenses effective we changes. to non-GAAP will XX% our continue

tax diluted to $X.XX reported compared as of $X.XX a adjusting loss quarter items quarter loss certain per second using the when quarter For Adjusted XXXX, of a normalizing $X.XX effective $X.XX in loss the in a After we GAAP EPS for share long-term share per the second of for and second of XXXX. the a of tax was for quarter XXXX. second compared to rate. non-GAAP XXXX earnings

of short-term adjusted and to due was the year of with related prior planned investments remainder strategic for the savings quarter As the offset sales mentioned. we portion by lower areas, the EBITDA, the due over decline COVID to impact this the from focus expense a significant second our to the have

due onto days of the were sales at outstanding XXXX, highlights. XXXX. days quarter primarily end sequentially to to second lower the revenue in continue comfort from quarter of XX that gives the customers. our $XX.X at accounts period. Day collect million This end from the and sheet or went was second increase were the receivable in QX the Moving DSOs able XXXX quarter balance from The balance up XX to the down us we

were turns X.X X.X inventory the at second at times of compared XXXX Our second in quarter the of XXXX. quarter times, the end with

second a precaution Regarding quarter $X.X million in advance was million the the July, we XXXX took end year’s second second from as in $XX.X of as bank CARES in million QX of be payment cash Medicare this quarter from cash, as up earlier, of quarter operations flow $XX for cash million borrowings QX from quarter. Jon the $XXX April. end and in Cash Medicare for mentioned equivalents previous restricted second that to and as XXXX $XX.X Also, of part submit liquidity includes we we new XXXX, the Medicare the cash million balance repaid by million, the at second XXXX. million will claims at quarter a position, the reimbursement. recouped we $XX strong with This compared the Act. maintained $XXX the Note that advance

part positive the million quarter, as the receive CARES XXXX. we in of were did we in While $XX.X Act during quarter second the relief

the from As fourth throughout the will quarters, Medicare advance payment third it our is cash flow settled and reduce operations.

facilities, $X.X in as in due were on spending expenditures billings. the Our prior as capital and quarter the a to million our Capital payments also minus was inflow as by of our $X.X Free million reduced lower capital during bolstered quarter. well from in of year. flow collections remodel mentioned. was inflow reduction to $XX.X the second outpacing of previously year down an period the working quarter in from cash savings million commission initiatives define near-term the from $X an which cash last we This the second from operations million cash expenditures flow quarter was up

like the every and partners Lastly, deep turn all back sure times. now I’m with employees sales making patients but everything results thank I’d are time the for team grateful very Jon. such executing to delivered pandemic team people. our of to getting has our all of a call impressive had facilities to quarter. from safe time, of at to during a I’ll over the work Orthofix on This products impact dedicated

Jon Serbousek

Thanks, Doug.

committee the discussing and of year, has been FDA Before comment want Device X, our I on the which September on to Rehabilitation outlook upcoming Orthopedic meeting, advisory remainder for the XXXX. Panel rescheduled

in conditions, to Our that and require service with this is will of marketplace support. Bone the proven III to believe Should we exceptional other that to patients, maintaining and we efficacy changed clear continue believe We Growth Class any provide our and interest clinical Therapy experience technology II the the safety our device with BGS based the and get and has entrant believe and of devices, and physicians remain status that a this robust, peers device. special position best products efficacy, manufacturers reimbursement along payers insurers new plan Class safety to therapy. downgraded best-in-class continued data, surgeons a and efficacy prescribing on on of would Class a not III and device

believe the our timing situation, guidance result, will at As a we to Despite continue be of remains shift the be pandemic the time. quarter the as of of the uncertain quarter remainder the XXXX, this uncertainty of and forward-looking and will we year. our worst scope recovery to not outlook the global and the COVID-XX we of duration that providing second

noted, which in points recovery as in procedures. trends positive seeing are elective to July we the a business, We

that pace near is in general are in the are term. of it business to confidently optimistic predict While aware timing we the early about recovery, our too the we

to are situation global the However, closely. to continue meet recovery hospitals we and customers needs our ready plays of the and monitor operationally and the commercially surgeon out, we will

COVID-XX to successfully maximized up our improvements ready set structural more the the organization execute have disruption, emerge and have we and continued to During for strategic to future. operationally

long-term Our of and underlying Extremity view the on dynamics and bullish as unchanged result remain pandemic. markets the a of Spine

volatility be there patient surgeons improve will in this there’ll surgical While needs. uncertainty Thanks to challenge. lives, the term, help require their that, and and line continue to solve now With intervention healthcare to to I near patients at those open the for the would be Orthofix providers and we to all questions. to everyone will world the meet like working around

Operator

[Operator Raj with Jefferies. Instructions] from question Denhoy comes Your first

Unidentified Analyst

Zach Raj. This is Hi. for on

few a Just for us.

a sequential mentioned of the is this scheduled recovery procedural newly How procedures? then backlog. on through how much much recovery basis July. You into And is

Jon Serbousek

we X time. backlog, But we a is backlog difficult point to answer the business of time. more we Clearly, We and is in period there, of backlog believe. than left good those the on will continuity but that procedures what’s the right That the now periods during tell the this months, at continuity time, we over a clear did don’t next percent in know if for question. so but saw one there we’re of Thanks marketplace. there Yeah. is out through left

Unidentified Analyst

get the you works here? your how then, interaction do and semblance and to interacting pandemic And been that think COVID with some reps have moving how forward surgeons normalcy of helpful. sales as Okay, through we

Jon Serbousek

Yeah.

flipped calls As when training also we significant The advantage and news the that official seeing not not mentioned they’re and training, to interactions, that. prepared remarks, of we they to ran good took surgeons talk patients to a very and how so but time quickly is not we we you in only or sales virtual have in operating such.

nature products technologies going those relationships, the as But of also back get replaces and forward, continue we’ll attributes but nothing face building methods your many We as of well. to to used face positive locations. continue as will detailing the to to virtual in use be of those traditional the interaction measures we’ll but the far

Unidentified Analyst

as Okay. you Great. margins. mentioned recovery. And margin there. you detail came more but light, bit on if the you and If then one it’s to fluid, any curious, it should that Gross just you historical on timeline can levels. more in detail just of last provide Do said a have recover one that

Jon Serbousek

It’s the or a fair hard return to It’s historical to margins will else. historical approach when should We but rates, COGS happen. And like as and sooner say everybody we recovery question, marketing. levels. happens, our items did some as our on on last COGS fixed and was until just our variable we that provide a reminder, call, and guide of obviously hope those sales line insight least mix our at some like into what the

that in way happy help well. to So as

Unidentified Analyst

you. Thank Perfect.

Jon Serbousek

Thank you.

Operator

Ladenburg Thalmann. question Cohen from comes Jeffrey with next your And

Jeffrey Cohen

How are you? Hi.

Jon Serbousek

are you? How Good.

Jeffrey Cohen

great. Doing

quick couple just a from of ones So me.

some of like velocity good So And is July your you the again looks out it that continues. quarter. for coming commentary had

somewhat at So at access? August this you’re the into of mercy is far openings of hospitals as point confidence or good there still and kind as the

Jon Serbousek

in Texas the going there. cases cases volatility you is see That’s flare up. the on know when as a open never to go see or Yes, and even territory actually elective is We’ve a heightened regionally, to you have Jeff. California marketplace through, up continue Florida,

we’re need even procedures, are call of when they the surgeries. elective though and day, patients you elective the procedures operate and patients at and yeah, want mercy lift them at seeing execute those care. not their the End want spine cases of always and say. sometimes good this surgeons they treating are the to continue we’re we elective end But So that really to

Jeffrey Cohen

then And for it. Got debt. Okay. cash question and me other on just one quick the

got million TED should Is right? QX, So $XX repaid the million $XX in -- the because on peeled side quarter $XXX that to third that and the third the subsequent off you $XX quarter. you’ve the Medicare off on and million $XX in then off million-ish then cash in take million come the

Doug Rice

off in peel at way by QX the it of Yeah. expect be we That’s to Jeff, end zero. the it, to will look it and down right the QX, but to year, except

Jeffrey Cohen

Perfect. for That’s Okay. it me.

some of forward to again. Looking the data. Thanks, NASH

Jon Serbousek

you. Thank

Operator

from your And comes Zimmerman question next with Ryan BTIG.

Unidentified Analyst

is Hi. on Ryan morning. for this [indiscernible] Max actually This

in Just that decision it million up on are that flow and the are the follow just would pretty few maybe cash to positive about reps wanted but good positive and into you’re by some moving to aggressive to ago. cash feeling expected have quarter looking flow cash seems forward, on higher I based being $XXX to a given of positive little your revolving cash the flow generate a at facility sales credit a new terms was your you half repay bit, bit some of months R&D in consistently be ability accelerating and in investments like more if flow maybe impressed

Doug Rice

a impacted operating good it to over $XX With the that outlook, income count of It’s terms flow, answer numbers flow have I’ll our million question, CARES roughly as we negative Jon Yeah. cash burn. regard, positively it operating in expect to of but to some and with did cash money turn Act Matt. questions regards that then the we a

we recoups advanced a we got $XX roughly said ago, in of million second payments I Medicare as April. As that repay as

overall break invest we negative on will take our top optimistic feel say we and pressure So line. foot need and I’d to of cautiously invest to continue and like that in areas cash our QX. the QX and in off in our sort And flow we put grow where that we’ll the be

let said, that Jon. with I’ll So

Jon Serbousek

continue we be Matt, are to disciplined. Yeah. incredibly

being our and marketplace but in where transitioning to need you COVID February, market business accelerate we focus investment, this of off As a to come that we investment. key areas activity and of R&D be them, out we’ve we’re we one taken poised of have we’re the of foot doing that. and not this told the

that to that this You’ll see as you’ll forward looking SI, way and doing in to and results NASH, invest with work far But disciplined a JuniOrtho Firebird very into transition. time we as think it’s that as to that. we more good see through we we be activity continue come we’re as and then a the of

Unidentified Analyst

And just commentary. follow-ups then Thank a helpful. really here. It’s couple it. that for Got you

that I So desk you with up obviously $X I already the the half you my pre-COVID, put to million in for million math MX $XX but you -- the XXXX first know guided of by million and think nice another $XX about year. previously quarter

next couple COVID, years? where get for then It -- think thing help in might I you market over $XX hard know this the now the half from but right and appreciated. that still just to of -- might play. the million year. there through And any back think sense a go where product might the can in be the say you revenue trying range of the can this where to of like to with would $XX us it’s potential Just MX go actually million commentary feels be

Jon Serbousek

we we’re get seen heard bullish long as approximately if of very And the that and we that haul, continue it we just talked month FX incremental train off MX. We’ve $X are invest. going. commentary, and So is about on you we an they that to where continue in quarter. the the dynamics and the slowed as about additional the and we’re but XX COVID, challenge to takes We million surgeons grow marketplace brought positive through

continue and on right but it’s market we share to fault to our is, and out so short And $XXX market that’s get go different that. share space. portion million points focus in get the there’s overall we of will this What execute now, our and that it’s there, over market out

Unidentified Analyst

is, for one last then some then, back and to investor And kind during first FITBONE. earnings you. transcript regard quarter recently May Thank your in conferences going of just more and it. June. in And to Got me

optimistic those it on are May six investor next following I conferences primary the June earnings and of over drivers months growth on you at more months, quarter the the in first call. XX think to whereas

it the kind driver over potential for six in growth not made just you to you comments around extremities some that as XX product bit. reconcile made where months? as contribute two the little the You a near term. maybe that next FITBONE months main trying to think near-term to specific those there a case something or you been it materially comments that the of I’m saw to expecting always viewed you, Is

Jon Serbousek

portfolio that FITSPINE. we in asset Yes. FITBONE, that not FITBONE but was product only wanted got we’ve our basically an

activities the strategic the key FITBONE. business a was acquisition transition it the knew so product be that We And into us. in US, for US to going to there were for

in continuing making on the we remarks, of we for the my as we’re in that far we so first are FITBONE And seeing highlighted prepared I track. year and integration do we’re those as were projections but Europe transitions on goes, track our invest, but transition, that very we’re as especially traction, is modest in as

Operator

next question of from comes Sidoti Your Sidoti. Jim

Jim Sidoti

hear Dallas. ones. A and couple to Glad your safe morning. of quick found Good in

reported For correct? US sales only that the you MX number, the

Doug Rice

MX, that’s correct.

Jim Sidoti

X.X The million?

Doug Rice

Yes. Jim. Correct. That’s right,

Jim Sidoti

sure make the wanted down correctly a is typical year. from a quarter, this June hardly September sequentially Okay. typically heard I year you just but I is to

think you’re to So -- likely sales saying September up you sequentially? be

Doug Rice

trend that if so on July seen QX trends what based above We in we’ve will QX, hold. far think

Jon Serbousek

this hard the July is in Jim part that to year, those go the that physicians see talking part vacations talking the are we’re don’t and on hard August. Yes. surgeons there and -- the is about about when typically to. Jim And activities we’re that we

it’s year-on-year of QX direction and QX. predict a that see to being ahead hard we one QX So but

Jim Sidoti

that tax over the charge in that quarter, the for you and again Okay. process? that can tell is this what at And just now me point was then reconciliation

Doug Rice

quarter was significance congressional of loss what the with as the position a first benefit relief and saw for But QX, that the change. the up reversed release carrybacks we anticipated some quarter the of reversal year-to-date the with some overall the on end catch regards with take at of to that in itself a different quarter basis to to a books that regards able in tax based have tax the to year, in the to on the we’re the Sheets Well, But Fact were we reserves going expired. we Right. for just expired. GAAP itself, so of to -- of would regards had from the was we items and

Jim Sidoti

then Okay. for products. say, about All little to Jon, you you bit when the a you happen? FDA And stimulation right. expected decision classification talked Did

Jon Serbousek

there meeting make will the is process panel then take and September FDA a it that panel Xth. the final they make the the on And that typically to back Well, recommendation decision. and is

We So point September the know X, we will at with time. make their don’t decision know timeframe. panel the that on a but does the is in what that FDA exact unclear. It’s in hands

Jim Sidoti

And and take device get players let’s the marketplace? products to the, would conduct does the it say long get think down classified, that studies into new do you how

Jon Serbousek

oftentimes, panel, down There asking There different highlighted. no Class we’ve is because the particular reasons is coalition this people them III are company there And administrative a for maintain and actually in asking is a because On reclassification. it’s one this. BGS out company asking to for that no classification. it This comes is wants purely activity. of the all FDA for

we there right anybody So know, take now. don’t if advantage even of out there’s it would

Jim Sidoti

Okay. Yeah. years was this months got if it Even into players like before sounds it it down any new space? if theoretically be classified, would not

Jon Serbousek

Yeah.

their set up their Someone all. reimbursement set would have trials, contract, up and to run clinical

clinical clinical special if I’ve even the now required is, there controls those so And has Everyone considerations, typically data. data. so require special far seen or with XXX-K

FDA come, present and would have and the basically to a FDA. study someone run to then clinical then that So petition

be would it in more years regard period of time. like So shorter then that

Jim Sidoti

one last for And Okay. me.

Are a in US? in in do how ahead, the recovery to things relative Can Europe. than -- there characterize do You the recovery here you think here you several business months have they just the US. significant you are see

Jon Serbousek

still have if you had the doing comes the is mean by to is they they’re doing well. slower look -- are is And is at what areas country. UK to have COVID it down that look and them. the they’ve very it you Germany a well. countries to that Nordic country impact UK at the the is not Scandinavian slow, ahead. Italy I Jim, because and

if country to so to a course they by they and look back business you their adapting by COVID country, back to And but lifestyle and large they lives. to they’re -- that daily heading of at heading but are back

Jim Sidoti

you. Thank right. All

Jon Serbousek

Thanks, Jim.

Doug Rice

Thank you, Jim.

Operator

would to I’m to now showing back the no Jon turn time, questions Serbousek. And like further this at I conference

Jon Serbousek

forward look morning. on operator. this quarterly a you day. time progress We Thanks, call. your Have everyone’s appreciate We updating and great our to taking at time our next

Operator

Ladies have today’s and gentlemen, wonderful for conference. Thank your this participating day. a concludes and you

disconnect. may all You

Orthofix Medical (OFIX) 9 Aug 202020 Q2 Earnings call transcript