Enovis (ENOV) 7 Aug 242024 Q2 Earnings call transcript

Good day, and welcome to the Enovis Second Quarter 2024 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Kyle Rose, Vice President of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us today for our second quarter 2024 results conference call. President Relations. Vice Rose, Kyle of Investor I'm

Joining Chair Ben and the call Berry, Matt Trerotola, today are Chief Financial me Officer. on Chief Executive Officer; and

in this Our enovis.com. in and issued release section earlier earnings is our was available the website Investors of morning

found using the be presentation on call be our We of can will today's the which the archived today. slide the a be website. website in Both presentation call, also on and later audio will

forward-looking statements forward-looking During our we'll to the harbor making some today's release events set any speak that forward-looking except These call, law. assume estimates language update our today. The and results. as risks those earnings future safe as make only and any statements about regarding forward-looking in including to be by beliefs subject statements the in we forth filings SEC. Actual in obligation and materially with and uncertainties, the do statements we them, required today, results of and might intend not or from differ are

the presentation. regarding reconciliation turn who any accompanying during of over call press referenced the non-GAAP our can begin and measures will slide I'll Slide to found financial the earnings release in details on those today's in relating today, be With to information Matt? that, further measures Matt, appendix it For X.

this joining morning. Thanks, Hello, us thanks and Kyle. for everyone,

comparable growth We've made our on of reported profitable X% X. Slide on on second In sustainable quarter, progress We had of an a tremendous and start year-over-year growth. we XXXX. X integration Let's and for on first of exciting the XX% basis. plans delivered Lima delivered the months

accomplishments year. improvements we've for from XXX EBITDA margins basis of pleased XXXX the that Recon, second mix reflecting a with in we are change Lima. set impact the expanded first our ourselves of step confident strong and of a half half points, We are adjusted and the Overall, by our productivity up

X, about delivered basis revenue integration-related growth. Slide or grew a estimated we on X% when synergies. XX% impacts planned global XX% for Recon In Recon quarter comparable on adjusting the reported in from

continue including and our directly We X%, in In impacts see overlapping U.S. X% grew the integration-related U.S. in Business. U.S. growth of quarter, Hips Recon and Extremities majority to Recon X% Knees. in the

U.S. these are typical growth growth the our understood numbers are levels, and While well below well causes temporary.

on to day issues. the international continue closing while resilient progress to gotten since a X, On no grew Since our on made acquisition a the plans. we in integration integration want start X. XX% we activities to our In major update markets, we've execute January Slide X, market with unforeseen have you Lima the I strong off

significant progress a as detailed us achieved player. have We premier orthopedics have position plan global that high-growth a developed multiyear and will

first commercial over been we've the acquisitions, from laser-focused channels As prior we've months learned our aligned. getting X

Our always drive to terrific to the put quickly teams do to goal long-term made and place strategy been term and and progress in our has proven move execute We've disruption here. a growth. processes sustainable short

are markets been international force ] XX% sales about solidified under [ legacy structure has ENOVA U.S. our Our complete. and

exciting second track of will and revenue as overall as We ahead dissynergies continues the move our Our moderate of [ opportunities. the we estimates. cross-selling QX expected peaked associated realizing to into believe with in and ] acquisition slightly the start some original half

of of to million to expect comfortably be $XX guidance $XX negative our With progress the we've range revenue impact. million within initial made we

plan Our similarly on track. value on is side creation cost the

footprint support XX% global years manufacturing X This of and represents Lima functions, from Our something comes believe and cost within $XX our synergy scale about million we revenues, achievable. legacy duplicative is business significant of targets improving but leveraging processes. eliminating

and an to have plans eye investment accelerating long key with near in the commercial term opportunities impact in teams and programs. R&D any these attack diligent towards Our minimizing

dig We'll U.S. into performance our growth X. Recon Slide on deeper

and to slower plan through a have are clear expected several growth We as accelerate. quarters but path passing

to earlier, the to half and As growth the X% estimated outlined impact of the business U.S. we knee X% first Recon integration-related across felt hips, most in shoulder. about be of dissynergies

and Looking in at divergence said, from believe X% consolidation. strong very business, year our our remain our comparison despite a market or start U.S. ] the and headwinds trend more. year-to-date channel growth USM knee XX% from hip per year the is of growth historical levels of above we rates prior That [

further and [ continued enables have nice expect to to and our growth ] into as grow a in surgeon Cones continues knee revision harvest We half base our acceleration penetration launch second the ramp.

hip pressure U.S. hips around product integration in needs. stem direct couple of offset headwinds designs between drive to sustained trend addressing in in year-end time include foot the with U.S. the and impacts, quarters, shift address some cycles system our ankle that a beyond. launched growth be been at impaction XXXX in anterior has we temporary and that to new business last have a Lima These are products by are Extremities market the double-digit new several of to growth under addition expected accelerating shifting been business. our surgical the to procedures. In strong and We're shoulder

overlap the is saw thus half. Shoulder channel the through with and segment the As first a the of Lima felt direct reminder, with U.S. brunt we disruption the most

a per QX, We in which a use addresses outcomes the of in been revenue significant our cases be technology for has of for to creating and also on also will for increase and launch augments the surgeons Altivate Arvis shoulder, balance already controlled a a lot in year. with used product the This Reverse We're Augmented Glenoid procedure. desire cases complex growing positive better launching has key from energy have the system.

workflow, growth or procedures to strong of as bring shoulder cost for creating above-market our Arvis the seamlessly innovation-driven with robotic procedural great leader connect limitation the will These shoulder. surgeons products opportunity new will a their reestablish repeatable solutions. the without time opportunity large planning in

ankle market across into built our levels and sustain with foot innovation normal innovations Overall, well we're we've newly the to year. the to the continue to we're the the channel And can market we as about accelerate strong aligned anatomies to above in our excited coming back our our growth we second half. more confident exit channel, that growth. Finally, we feed

Turning on to P&R Slide X.

Our disciplined X% comparable reflects growth a market execution. environment stable and

positions. reading portfolio and continue mix. We higher to consistent drive value portfolios improved improve P&R improving as margin work year-over-year XX higher innovations points bracing improvements both adjusted and leverage our the EGX segments. market-leading Sciences on growth, This to our new we tools shifting and continue is to EBITDA as portfolio through to strengthening by in doing and launching this basis productivity Recovery We're

small work unprofitable I'm which as we we're million portfolio, we set shape impacted of performance, the growth half. assets half in confident up Additionally, the to in off and XXXX by quarter. sold $X first I'm to profitability and and business, accelerate the Overall, pleased our exited sales with a second

you Now details. I'll let through take the P&L Ben? Ben

begin Thanks, on Slide my Hello, everyone. remarks Matt. X. I'll

We a up to year second comparable report sales quarter $XXX are on is pleased basis. of million, X% prior XX% and versus which

plans executed extremely reshaping commercial the created high-quality we've from have months teams the X our portfolio. we've pleased first been internal of year The required against integration and all future by with and bright that diligent execution our collaboration that the and members of and we've

at negative X% about P&R and Our X% we QX Recon growth of as X% in call. from efforts signaled channel remained growing of includes expected underlying on stable, headwinds and our growth integration

and segment Second driven growth Lima. This quarter favorable by leverage from was XX.X%, was mix basis up scale gross the includes of XXX adjusted margin addition points year-over-year. that

of XX.X%, Our second quarter margin adjusted up XXXX. a delivering versus XXX EBITDA QX points basis grew XX%,

Second Overall, quarter $X share we was XX% $XX posted of quarter in effective XXXX. to tax Interest XX% was last adjusted earnings rate expense for million $X.XX. million compared the versus year. per

currency per X.X% impacts translation unfavorable Foreign $X.XX approximately the and of share sales exchange quarter. for had on about

X. Slide to Turning

results are X previous adjusting billion. the reflect first our range now the We to in prior We in to tightens range and billion the $X.XX guidance. the This previous $X.XX year. our of expectations expect with guidance growth guidance remain of the line revenues months through

growth new this launches, in in We higher QX. as annualize comps realizing accelerate and second begin year the the product half prior benefits particularly year and cross-selling expect to of we from

expect EBITDA million line to also guidance. $XXX range with in $XXX of in our million. the This is prior We adjusted

quarter, by about an expense net the additional range million During $XX to we $XX reduces which put currency we updating interest second our swap our to $XX are million. in interest so place, expense million year full

to We X% the XX% to rate assumption are for mix. geographic year account for revenue estimated raising our tax by

$X.XX. Our depreciation and we per to guidance $X.XX all earnings Taking from of raising this adjusted prior guidance. remains our share $X.XX to count consideration, share into range by are unchanged for

plan half But second the and in to also to additional on would Lima, XX. moment a to I we guidance Slide This helpful year phasing do an X. the We given the on on will brought provide provide regarding it basis. changes by ongoing be want felt comments not quarterly into year. take complexity outline of

slightly to given expect its We seasonal forward a revenue higher different as Lima brings international moving profile. see mix higher seasonality

we a strong a down step the see to revenues fourth in such, expect seasonally quarter. by in step-up As quarter-over-quarter bigger in higher followed QX,

we trend on had margins Slide full will X. year guidance solid a expect is strong a start prior executing our our a adjusted to for QX by step-up our XX, with To full with summarize, in expect We followed against the aligned down We QX. and strategic our estimates similarly step a significant Slide highlighted goals. still EBITDA XXXX, on in which in year

positively as are Lima. to shape integration continue advance our momentum building and the We of business we

and strong leverage the system to our results. position second year continue accelerate will We half deliver and the to the business of business financial through

Kyle I'll hand it over Now Q&A. Kyle? the start to to

everyone X queue first on welcome we I'll questions that, over in question. have question to to operator the to rejoin turn it and call, the an if effort X to the follow-up, ask the Before to we keep begin, With and time. we take analysts accommodate you that the are

Instructions] Vik Chopra first [Operator Wells Our comes Fargo. with question from

you In integration negative So impact from called growth your the to deck, for me. two X% X% about slide efforts.

want going that a you please. the had [ the And integration said of I You was thoughts half back I the ]. just the follow-up, what the to your headwinds? QX confident of gives bulk get on be seen to year, CapEx you've

] expect and There's the the Yes, now. U.S. CapEx we as Yes, which again, couple there's to factors sure, of worked last QX we be -- right? [ we've there, Vik. a integration, quarter, different through we did said

the we'll regions, have we both then that cross-selling could little balance expect in that of to can through can expected see then see and then And the way we're and we that we outside integration good the so there And the the coming work through as U.S. that's a increase benefits peak the in. in and a bit year. And are QX impact, impact off. taper

do QX million the so to expect -- as be [ and for through ] that within number balance $XX the talked APAC And comfortably. ultimate expect to about continue come be we year there go to that million of the that $XX range we've down to and we the

they I were And do And Okay. retention the hiring on recruiting then like Lima shaking just see What question XXXX, in had your the and QX? second given efforts out trends. was in deal. you how

think, I did transit? you say hiring

the to regards with deal. In Yes.

Yes. Yes.

great. Okay, No. Yes.

certainly, So comment, that, assume, acquisition-related well. comment assume I'll broadly that's I'll but as I an

attrition who hard foremost, the of of thrilled every leadership organization on work could we what had priority top positions of right for been really expect And field the with acquisition. leaders we've in That's very retention through into integration, we number terms company, the had in within the something retention. a there. taken a also the talent. had around technology that great fantastic that broader organization, below organization We've and critical there the we planned First of Lima our are has a in have we retention kind meaningfully and on

been Lima have had commercial the in realm great very it's or hire able happy company, and in been enabling talent. broadly more organization, and the then tech acquisition resource whether certainly that running a our places the and great attrition to we've in that adding, talent with So retention our we've are related we get normal resources levels the to

comes next question the Marcus with And from Robbie JPMorgan.

for Two me.

one, line a certainly First when track the result, sort looking wanted a and beat. you of guidance hoped I not what the for how record, range. about in it you're set quarter had the to for I you imagine bad but imagine played wasn't It's given I talk out.

more the the maybe than And was a the execution was second. So Was a competitors the what than more how original it do large little the far market I in what from about I disruption? of any expectation? on for the the so think you'd joint quarter, thinking delta or expected. didn't then have been extremities or see was versus We upside it really softer

our Yes, set position quarter, that the for we the Thanks can in also every so we question, expectations believe as -- to from execute been the for you quarter, or if to we plan. but plan, quarter you for through it's Recon And look our line commented peers beat with of look try at second what's there, whether Robbie. on ourselves if sure, terms out are in and the on, try you to at P&R front. the we published

a market view decent sort last year. was it broad market of that kind a there's strong of there think against a I up

to be But this through We're the favorable the the we're comfortable playing the market of so aligned sure, that than through back have year. the And could been able could quarters -- last is for way. we'll a more market our half comfortable with out it's with way last in that accelerate plan there there was. strong been have a in X the year

is that. the I then you Great. the right I given appreciate spot maybe the make helpful Street on in gave. third to want guidance quarter, focus just to sure here And

think P&R. I business forma, pro the half is is half now roughly if So Recon

is You high so say P&R's to think mid-single. out I X.X% single low to closer that, coming averages consensus single-digit today. growth, into or And recon, to me,

where was down which coming ballpark million consensus million, like on consensus up $XXX below implies to fourth coming I at to So was, P&L Is more right I a something was million. the $XXX Same out EBITDA, quarter. higher $XXX thing in? be the that below

decline made and then on through of I'd say, moderates half speak Yes, get in that bringing won't it be, the Lima, think of that while put the I the phasing a back But impact dissynergies and to a more does more we the the given as comments some Robbie. out plays Matt QX is in specifics seasonal in little I QX, we tried revenue [indiscernible] progressive factors earlier still here. of the will in do, what presentation, the in new there as year, the it QX. how we to with even

the channel So back of have year, as I integration areas. in think it decelerates the half still but QX we of impact some the there in we'll all finalize

we've down it and as Recon So have information components the that we can tried provided supplemental the your with of help some that use to you well financial you break in there with P&R and to there. modeling

components to lined again, out to it's able much to the I'd of very think deeper reasonable get face I you've up think So realm. the for the for look. a said, you But not But of to what on we of to be a it's there too say estimate. where math take do are you some guys is the

The Evercore. next Kumar from question with comes Vijay

million but the here. guidance at the ranges on you numbers, divestiture look pulled One tightening, guidance guidance is impact dollar does include think the the -- so this updated total includes is revenues, impact up, revenues? that actually divestiture I and go it your $XX When divestiture on may P&R impact did where as when based the of guidance about it just the I prior mean out without

Yes. Vijay. Exactly,

results. our million guidance a not had our divestiture did quarter of business. it of So include about $XX that Again, in we prior the

guidance that range. So there'll again, we're our absorbing be that in business X/X of updated

you. Ben. That's helpful, for And Matt, one

the pro to to I people forma. trying I a think you've know are -- covered Street

of people think underlying legacy sort to understand want I the still Enovis.

markets was -- half. the look impact, up dis-synergy you Have detail the Empower when about first helpful think you think you signals at there high some I when these in on you trends confidence growing well is are on share -- share up about talk gains, markets Enovis confident what you Recon, about still above core gains. maybe about still underlying and So gives

Yes.

at as ], and Ravi continue we look when in results the healthy gain, terms in reported all So we [ to surgeons both and things share that. up look particular, in of knee like we adding the trend at our have

really And get there. still and on high give and enough tremendously we've half from to as legacy, up pressures, year. clearly had you under But share of when a against the we're of comp so some integration also the knee not the much and confidence tried there we hood of because as people that, the to last first the that's

solid got within where still the product, performance We've our but shoulder that's integration we're of impacts. most seeing

a that So growth interiorized you One business integration. have is have different from did the the not things X shoulder hitting the shoulder. was lateralized Lima

that here U.S. U.S., declining U.S. business And nicely here declining the was growing the but we of so year, with the through the half as in outside in went back shoulder It Lima was last

fix growth and And as work quickly channel cross-selling products meaningful we we'll but certainly the products that's that here a new we year that drag. as so bring through into

and or Then over getting of shoulder. has integration piece And is Glenoid and become shoulder the the That's surgeons for had about we on new really amount the launch the rate shoulder impact ready of also there augmented an puzzle so down then, past few that important business synergy at as from which we dis-synergy for increasingly an have well. surgeons we've the important our quarters, for because the product sir, slowed the effect shoulder. added overlap a talked as in

a the balance And good so go strong of shoulder is we to going here year. path the as on get quickly through

last as on growth my quarters hip one side. talked here, so, been that's has of comments, our in then couple about And for the I where or lower the

of -- to gaining that we that the would really very certainly of really integration end and we we've -- strong, coming hip, And with in not that certainly year. in was by growth be share, solution a based quarter, now got would and the on impacts first top there trends the knee portfolio. versus our some Our was growth the on very,

-- Recon exit I is Understood. revenue Or It's was exits Ben, the thing, think, annualizing, indication? last apologies. that the some there And close revenue the maybe side. this dissynergies? $XX think like leakage one product I million, It's to on part were incremental of to

No. Yes.

We the So Vijay, of the agreements. lines regards dis-synergy some on we there. side put numbers Lima with that would those ] the and would to had those [ quote in about were included be on together. and full a we when be of the third-party Those MAA relationships, We net essentially. we to as in impact both couple relationships businesses product essentially the X what talk side exit had of

So those are included in those numbers.

Our next Jeff comes Baird. Johnson with from question

off Ben, the maybe business you fourth the of fall quarter in and by phase off assume Would phasing kind trying another on that? Recon one to the loaded points quarter. XQ way the those second over on out Should quarters? ask question in half the X kind quarter? basis we half just fall disappear those the than of Or back-end to in more just more here then that it the XX to next the XQ the is in or U.S. third and be right of headwind dis-synergies X

both I'm points. upper where And then and that's ramp? the that quickly double do of more And How cones, fourth question, back saying U.S. impact? to do could quickly single a digits Is those as get well. to what maybe anything the think those Is glenoid on low same TT maybe how off the quarter we augments? conceptually it the there Recon maybe

there. question the for Thanks

And mean, is it of nature we put so are the or things surgeons to together. as lost that related dis-synergies, that agents are most the I of things

hit and and kind and an a hit impacts fourth up then started of those they'll to late we'll last hit anniversary year anniversary so in and before [ third them been wind ] starting of have to Apex start to and now And those ramping them quarter. the some to year for we

kick but that's of the at start in Apex terms in, second have the couple So there. do clearly a the we play to starting still and ramp of that an cross-selling has more third that ] dis-synergies, [ But then quarter, we the out. arc will there's same quarters to to some in -- time, have is

going sure, third than Enovis like the terms the some we Those of that have the third lot new but Cones quarter of ] to SEMCO the fourth be can impact. a addition for to glenoid. in have there'll to in But are quarter quarter fourth in more augmented going the coming more cross-sell [ impacts products in through impact, the quarter definitely cross-selling and

guidance, as apart although kind we growth return the to and in then lay pulled So a by next into it's fourth more and improvement for a year. it's quarter of third in region, tried to we've quarter out us roll a in the as not levels modest of more normal there the

I To I would comment in the terms there, thinking QX. bit being plays more of on about then a I your it with in think and in made there's it not QX decelerates decelerating QX it phasing, I about little say, mean from think that versus how so you're out think right shape. of terms tax

Understood. follow-up And question. then just last

double-digit foot in you -- on mention did quarter. the and ankle Just growth

bit comment, economically I there, U.S. little ], some me a you more more be on But -- chatter maybe was wrong correct out a that. sensitive, things little if a there's can deferrable. think can of just that I'm some these bunionectomy [ been although

foot now Lima the And just how there, remind ankle seeing the ankle much Just size and as in you percentage this what a are us business is foot point? your and at with Recon? of of

Yes.

and we very that ramp. we and our and for and hard growing aligned that $XXX market very, million strongly year. been put and There Look, has this having quarters talked did of to in we've that put strong on Lima we through the in which together work did comfortably any consequence above think that did number channel channel. a now came the together ankle last work now really channel bust based business foot But business passing bring we bank levels any the year, about in. wasn't have Novastep helped I through position Foot $XXX that foot that to us to million So Ankle

innovation and outside the growing business. we've also great And a of that in just ton then in We're into been pumping U.S. that that's U.S. the that business double digits

I our that we a think think & market are Foot year broadly this probably of gain as did done next for Jefferies. not markets we on now, doing teams think as would I have I a a commented executing really have that great the share Ankle I well situation as last engine that of year. in and apply think of and Li But to the earlier, more pleased good I really, and environment job with we're with number there. SPEAKERXX The question it comes Young quarters that we've built that from

Great. light guess, Xx Extremities side, ankle that market. foot do just the U.S. expect a I and I'll on But the And one. more. new bit the sustainability the shoulder robotic in I right. then on side. of a return follow-up of keep to the it appreciate into to that little the I'm on All curious, comments some Maybe business competitors when U.S. thoughts you the on market to of your X.X come to growth. just

improve Well, last lot within launched glenoid just we -- were controlled QX the the the expect so earlier, came QX the that Surgical the comments made shoulder Young. about I Yes, that in business then apply would business. think We'd sure, U.S. but is a to here. I generally to in QX improve as launch in phase. or but more out month augmented

And had really in growth. that. a very we not our QX it then on regulator on but it's but substantial our impact growth some can on important, and the impact up So beyond,

so And going that's be of dark that. to

and to little then starting of a improvement impacts acquisition will have the to start QX, in in on of that some impacts. terms just And anniversary QX. market of go same the Some bit in that QX to in we talked of we QX, more

a to the business. path. shoulder our shoulder we of year And in And fundamentals the expect we that path underneath business growth have supporting do also and so with then strong healthy our continuation that, growth expect exit to

going it's able analytics very a then in through predictive opportunity important as shoulder. a rate give that's been surgeons the have the use enabling do to forward. there Arvis manage clear important solution to do and your that, shoulder planning, technology for confident going we've fantastic market kind far shoulder, gotten positive. going Now as be for be the and It's that, to is procedure as of We're the to guidance in that be very it great Arvis to initial tremendous shoulder reactions and solutions, the and instrumentation workflow we've gotten surgeons that out to to

be we're so And confident tremendous for solution is shoulder. guidance going that to a

market it to look average at comes socket ball a is One shoulder the some surgeons. there other shoulder. less factors the things out going be And solution be important lower that are about the solution in a that more for great tremendous solution you time efficient is a you the in that version on enabling have important technologies is space matter. procedures When constrained shoulder anatomies, and than does that going when that guidance it's -- there. shoulders how average for are a a addition, versus or hip hip we low-cost very like or as have is hip lot knee. out volume shapes And knee to lower surgeon And the think to a a that is you those

partner feel solution the Arvis alongside we continues And to we opportunities to market well go of have to as also plenty as and about that as more develop evolve. confident of shoulder. So automated

in our forward. shoulder we're leadership sustain confident we So going can

Vazquez Blair. comes with from Brandon next question the William And

is more about trying get I'm a talk at trying I'm to bit specifically talked about seeing what you understand to question what little dis-synergies. as you're Can you better. the Part of

of products to an from standpoint is year frankly into the dis-synergies? execution surgeons as of the altogether, Enovis the move trying past half in to with do accounts? to needs get re-engaging just back simply go to to and As the exactly happen deeper kind you back look to need what understand just reaccelerating growth with half reengage you kind on Or them their even surgeons reengage to of second you

based a working some might And overlapping arrangements from distraction combination lose choices based different together of just commitments surgeons. they have places, we're then come the dynamics And new dissynergies on The sure. of kind second, different needs away then factor that as in us from and/or that new putting some competitive on working on move versus together on of to that adding channels. Yes, channel we channel from also surgeons the et of from cetera. putting the products

get back. surgeons of them get of where as anniversary, we so will back will and drag But that leave looking will them whether that some to that certainly them us. go And be get forward, back kind some we we lost behind not, like will we've or and

have in, products we with and away, where cross-selling products. where take some those But the we that's comes can replace products had cross-selling

of we from will back will starting the happened year the half the year slowdown to in And And bit back half to in on next funnel year from that more at that We've in so surgeons down here nice the that of really and of second few can we get surgeons, us ones over that's the year and that got the we right half been really way. in the a back we engine of up see to it there's and there. then benefit had build go of adding the half. get the year. of the had in first start as ahead the even an back past nicely, healthy half a little opportunity then dialed something that's the And quarters the benefit the

that [ Brandon, in learned did of together just would mean Flotek terms acquisitions we I too. channel Yes. put to I we on in how the a there, the lot weigh ] we're offense to then go ourselves you've quickly allowing sure exclusivity, ability with and move ourselves regards protecting then focus to also but make gotten solidified. that to the channel to on once

strategies able think new the that's together in these having I ankle faster foot because that we on offense. So and now the the as in behind of the we it are get back we terms had shows offense that seeing to we our and channel move, we're Matt to that just but putting move said of results as ability quickly on we faster go of one and on go the product and back good were playbook the through really of coming half to now things these to our focused our flow side, perspective, year exactly the from the knew some drivers, getting have on a channels

ones Okay. integration. still that XXX% Great. still topic we meaningful the of, being should done talk for update mean And any done maybe left then if there really internationally XX% And of on done today, that dissynergies maybe integrate about U.S. follow-up dissynergies think at in to as side there's the a XX% according to Does of international the despite just the internationally? Or little in you're some potential business? the only there? what's are but that to bit a

very they're way. in hybrid understand would to Yes. that the markets of hybrid of this either and successful understand kind done combining the The we've be at see terms or key most distributors combination of that remaining to all distributor a And already of markets markets. is able impact we And a What's of time. certainly we in some we're have and pretty of can direct point indirect through international, actually that and that and XX% direct were or large there, in a combining. we've through worked handful those worked limited had the or those direct be markets indirect

on are we and things risk come as pretty terms that, what tires able together. XX%, limited. been see to And well them line the we as be pretty might the that kick for And I got how in would think say we've sight of going do I we've clear that of to

bit that to the yes, think nothing there in But we put we so numbers we've there's a do we be little could dis-synergy enough international, And back developed that in of large half there. with consistent there of sure out the gone have negative looming. year, see far also that the that made

with Antalffy UBS. Danielle from comes question next the And

we number presumably, question to you peaked take on dis-synergy guidance year should quarter, -- we are through But just things basis. a enter improved the appreciate half this to launches. on an then provide think new year, got mean, of this? the we I not the side back And You've of about about -- as how here. underlying going Just next think how I you a of on guys if we product XXXX

I'll synergies with at mind you question. it behind that you maybe for guys. sales some dissynergies that growth directionally potentially XXXX comments now got moving one You've in all can towards or leave Any pre-Lima trend us, trend just actually here. say, Could being above year and pre-Lima growth

-- a I'll into nicely us that doing strategic would executed is and our not organic continue to step question. to goals year our in execute over our of innovation-driven strong I year margins our driver a $X company to Yes, high company, Recon the profile to able combined we've continuously is growth and put growth through margin be that but for year, single-digit beyond. a change give expanding portfolio next billion-plus I a position in everything $X step say we've to as long-term with against appreciate billion this We're growth guidance going for XX% and and just next been to

side doing been be continue of on year change journey then put the we've and us other to -- to everything on a create So this. that to possible step on able this

from And the Cronin with Genuity. next question Canaccord comes Caitlin

the on Where second the in you'll cross-selling to think see terms are do early in Just to half? the start And off wins portfolio? starting where benefits. see most synergies you of you product

our but tremendous is -- market, Recon, teams tremendous. U.S. by can there, created some come Lima energy the acquisition outside just see Yes. energy, talent about leaders frankly, it, one in The our wins together. and I of that wins. has No, that the sort in and is it's reviews of a to have of together country good, healthy one part energy teams how talk outside the exciting the the early Mathys done we've of -- And growth we mean, most are the the definitely have see the energized. part of absolutely is the fantastic country Honestly, that hearing positive seen early has that come combined you is been their most U.S., country

lot a there's before of products sold. being synergy even So

like wins, in some area, Definitely, early revision here wins. ] them in terms the just helping have of of in and of they're people in I U.S., think early a feel cones knee terms momentum. been it's and going our [ a been in custom benefiting part company, the fact anatomies implants with bigger, out both the more that nice represent the in we've powerful and from market, the across the Lima ProMat

and [ the and just quite the full in where quite by are scratched in we march EMPOWR that of not Lima has one outside then other opportunities countries countries teams to seeing we the the And that's move just really wins to customer Mathys getting there. already interesting ] early portfolio mass out helpful coming been physical Outside and and Disney we as U.S., Lima there's the continue can in the U.S. was weak together forward Mats year. through on but base help just approvals have key the surface got in Altivate Lima some the last channel, some

that has already Mathys products those selling needs key ceramic-based Lima didn't address products anatomies pulling Lima is have they the some around product customer there key mate. would some but patient-friendly didn't add have channel. some, and that are Pro into more

great early of created positive pretty get how the of sets cetera, out things given quite et energy being world. limited takes around in but nature long they're wins, terms the get it of that's the in just So they're terms some there ramped, growth and to impact,

do basis. more Great. more comp start mid-single X% digits this a growth. just on P&R, And can then business ramping When think you one on to X%, you consistent

Yes.

we're be plus X working shaping X% be clear extra we And pricing were strength. last extra time. well So say that and market X% to It's P&R a we've been to a was it last we is over that tried there year. on grower some consistent above to an year, to X% -- grower that was

the business in years key content well. sure, coming first running at that shakes I trimming also bit our we so in the that will in some strategic X% think, But a is more as bit on this ramp into and talked business that as the today. with year divestiture SKU a about innovation well are of balance And like the small the a muted, market that doing I shaping parts plan. working hard some the of that's line of right little been for year that in as for We've little of half this

a great see still to market maybe the focus the we grower opportunity cash we're then it growth that more is of X% X% very a do Recon strategic this X% X% if try work within growth nice the continue that's the fuels over further. X% side, and X% generator, shape a P&R healthy we P&R That's on so diversification. to time into we grower of year. grower a for a X% and see than have as go And to But range to strong from got and can use to more and there to which to

& comes with Needham Company. Matson question next The from Mike

to P&R. on wanted on Caitlin's follow just up I question

maybe a What than P&R business? of have happening growth sensitivity there recession concerns seen the little more does about the is P&R. little have a the again, There's business side prior recessions slower now. So a potential economic that in you with recon

think if Yes. look, I would but think business. a little apply I recessions industry bit I lot impact. broadly, had impact, of our sides study And a both of you to prior of not mean, has the that

side, On a the is surgery. to there's the side, related elective P&R percentage on that positive smaller

in rehab recession-related we is our have a capital products also for kind little those. that bit might clinics so and sensitivity you that, sell might of things that business there's in small obviously then like in rehab impact. that And economic our less But purchases you that are argue things there of like

a so of terms I there's P&R side don't and the meaningful between the in sensitivity. think difference economic And side recon

are but very they not I band of are bit sensitivity. both both economic economic sensitivity, a a positive that limited little have fundamentally think of immune from and

there's helpful. you know you it. And any update I of would Got don't terms And Okay. but share could wondering give metrics if the sort on that then I of how in launch. can if doing, be X.X, us it's on just an Arvis

Again, there. Arvis knee Yes. and hip and Yes. in this is

and that the up we're using most the with about so creeping that learn surgeons and ramping a benefit our it use dozen. procedures, on the feedback we dozen to working the around that we've to before, way can surgeons was couple get some from usage using best some some couple it. a I to and number it Last and of specific how other get educate is As continue looked, time talked the there, heavily, that we've turn of to from got product surgeons are very using

year, important to So like work ramp this to start as of feel there. do through that's part to we knee and going our I be an offense

And excited so that. about we're

of team found a some answer Now a and in that allows we has us handful the need we've little there where more are a surgeons we've right might the of in whatever for robotic that surgeon and got got that's [ have the something for reason. kind ] that to also bring [indiscernible] cases partnership prefer been Sincere with a

being to very the market sure that about thoughtful there to evolve the continues segments technologies anatomies and we've enabling all to super about as multiple make but in Arvis, we're And that got are serve how so develop. excited needed the of each also out we're

comes question with last from Stephens George Inc. Sellers The

of significant tail that think how terms geographically? dis-synergies? Could about on follow opportunities? year color great those tailwind up color of breakdown of And But cross-selling cross-selling the are. could the offsetting provide some this then I devices breakdown some additional into what think on about You geographically and be XXXX What's to that some of of beyond? the you back in we how we magnitude as wanted also the and that those and the just and half opportunity on tailwind that And should that discussion. in just gave cross-selling

make I'll comments Yes. on some that.

a bit there. that But outside things opportunity probably opportunity ramp term, I cross-selling the out U.S. U.S. the there's is number think a of little outside the in over as U.S. years, the extraordinary. than short more the in

year then going cross-selling some is start to start And that going to offset going so headwinds you're see in business next the that Lima a what I the this of the be is following in and strong up in to really grower think business year years. our to grower the particularly been the to a good, the U.S. U.S. and to as not Enovis had strong legacy help against

growth the also is the there's strong U.S., Outside we're a market supporting very executing and well. that double-digit there out

as I think we support is by what's year by going to well happen improvements outside synergies the year U.S. we're make to be the ramp year as going able as that in other to a much investments single-digit our company nicely more and path growth strong of environment. together very normal there growth growth kind continued market terms of in double-digit And in long-term those come Recon path. high our will

globe. the takes we're the in so the Yes, building inventory as think feed our more too, and as the leveraging sure about strength depth robust the channel just and that now portfolio George, that say to those together in through, channels across now able you I'd making of of some just products scale to you're and is the that right there, weigh you're as then much time But with working we've place. put

continue future with anatomies. also support across Mathys, drive cadence Innovus Lima, Matt innovation to have the the will there's capabilities that this So develop development with time. bags And then these as of the described, we that legacy we [ to to benefit over with leveraging the have of that legacy into now just ]

leveraging things and the term will as United our as more the described to much putting as the is half that call a this your we grow XXXX outside think one in said, above us is to here in together help also these the But continue view to those market impacts that you're to of States, we've we're of with things back it's robust believe we've net some portfolio. year. help longer now sales of start going I the So moderate

maybe out. follow color. on How your devices a devices P&R there investing how should that about there? bit price segment with I some And helpful segment. impact out with been rolling we And that growth all you've some ability and little Obviously, to take new think to that. up pricing devices then forward? been Okay. the coming That's think going should you've new really we pricing updated and appreciate and the of about from that some in specifically the rolling have

burnweren't whether there's coming more through where growing product environment things in kind And by through like technology business making an eye negative the P&R, then I that's we of in price in it's whether rest have then there price a we it's had sort new mix and running little areas a we've our business, be higher a and line. sure existing that products towards been out to We're the the and of passing a now Yes. amount we [ products a inflation. get the bring the base, mix where we in positive think or line where that can, weren't product some been have that's environment at right been going margins ] the is historical, of recently, of than and new than about we we've little but having products the time line to there's a more P&R there's kind faster pressure. And also product range really price P&R. right really And of positive where price got been price flat innovating. bit for kind innovation flattish lot a

that margin those and into things that I think as kind of gross equation are well. price factor

would from helping So and in continuous margin also price that to market, expect assumption to this -- that grow P&R continues markets the kind that have be our standpoint, innovation we is our us a helping also like but think ramp is but kind neutral to us of year, forward above I growth and expansion. grow of

That the for would question-and-answer over like any Matt closing conference turn back Terotola to I to concludes session. our remarks.

morning. thanking day members I end to and their our joining in for to Thank want team us you the out. day this commitment call by excellence for

value delivering listening internal to remain momentum look of of forward and organization and today, We third the have for excitement for external our and to Thank quarter sharing lot we stakeholders. a with our results all in committed you across you and October.

has you today's attending conference now presentation. for concluded. The Thank

now may You disconnect.