CONMED (CNMD) 26 Jul 232023 Q2 Earnings call transcript

Before the conference call begins, let me remind you that during this call, management will be making comments and statements regarding its financial outlook, its plans and objectives. These statements represent the forward-looking statements that involve risks and uncertainties as those terms are defined under the federal securities laws.

Investors are cautioned that any such forward-looking statements are not guarantees of future events, performance or results. The company's actual results may differ materially from its current expectations.

Please refer to the risks and other uncertainties disclosed under the forward-looking information in today's press release as well as the company's SEC filings for more detail on the risks and uncertainties that may cause actual results to differ materially.

obligation during any may this by law. any may statements be disclaims applicable discussed be call, company to forward-looking update that required The except as

measurements management non-GAAP You refer also discussion. hear or will adjusted during this to

benchmarking substitute companies. year-to-year these management GAAP basis on in the a uses While performance financial for aid measurements, company's to regular for ongoing a against figures from are technology not monitoring figures other suitable medical these quarter-to-quarter and and

share per considered measure income net website. to posted income adjusting earnings Adjusted specified the or its are adjusted company, items the that be of in releases credit to These reconciliation by the the excluding ongoing outside and of company operation. supporting company's normal are earnings special the charges or the company's

will remarks. announcements and Board, Hartman? the now the required Chair Hartman, opening call President Curt these completed, for over Mr. CONMEDs, Officer, turn to With of Chief Executive I

us and is Thank Second Todd afternoon call Chief you, Vice Earnings Jonathan. Garner, the Quarter Financial Good for Executive thank President for With on XXXX and CONMED's Call. me Officer. joining you

Our open call your plan second you with questions. the to and results is share quarter to then our

saying in we in setting start pleased will team's handily incredibly beat performance we QX, I by new quarterly our QX our the performance. with After quarter. record second are a sales that with

$XXX.X a basis, of increase at year-over-year currency were representing finished of reported million, organic the constant in XX.X% increase XX.X%. quarter currency. and growth as Total an sales On for sales constant XX.X% an

product general balanced and first teams global the were in and growth offering surgery orthopedics basis. a we commercial in indicate the delivered on half Our outstanding across our results

exciting pleased and InXBones that We market in as its our this base. of this continued mid-June, look business I'd with reached organic growth anniversary. business in to remind part everyone the one-year forward remain

build driven by growing which positive momentum the continues market Additionally, through acceptance, experiences. clinical offering to BioBrace is being

totaled primarily XXXX the the notes. $XX.X to second of of net in of of quarter, extinguishment net million. the loss million perspective, our income $XXX.X due compares a to GAAP convertible quarter earnings an during XXXX From most This second the

that adjusted our $XX.X year-over-year year-over-year. increased diluted per special net net share Excluding income million comparability, $X.XX of earnings increased adjusted our X.X% items of and X.X% affected

a consistent my underlying surgical that quarter At care comments, levels healthy first continue macro serve and to and level with are improve. the staffing markets we health

the XXXX. on these see yet Conversely, material not we side to been and Overall, stable fully inflationary the has dynamics slower all dissipate supply of chains second recovered. half improving in as pressure to are

I'm summary, I'm in success build with and focus in our pleased will second delivered the In very results the confident half. and the on quarter, we

context Before turn and Todd, I the call standard provide position market to with about competitive AirSeal. to I'd like the over important our insufflation

one, is AirSeal low has both and standard saying start given that been From through technology. me delivered laparoscopic by competitors day in from insufflation replacing Let its it robotic only-in-class clinical an benefit unmatched all pressure. procedures marketplace

device or market another clinical stand-alone into algorithm, whether attached introduction it is to robot. our The it a will sales or the not insufflation of standard device a change

introduction replacing been pressure we that years. for The that the standard seven insufflation the the only will of existing companies inflation feel parties the are have standard device past from another

significant none investor that the related that again will posted consistent the benefits presentation in are nor I pneumo clinical deliver you companies and at pressure this remind we afternoon. are low of these included can which

reduced reduced stay, pressure. driven specialties we ER improved that XX been ventilation has length outcomes that and reduced that across Our peer-reviewed through reduced studies competitive and of have position, surgical metrics. enrolled visits, lower visits, support patient pain, postoperative To patients with over principally position better delivers demonstrate always AirSeal X,XXX XX-day devices, five

demonstrate that studies clinical benefits. clinical zero has insufflation of important Standard any these

argument compelling in a include make capabilities, can I patient risk can certain think done the that elevated are, populations of that through high we be surgeries growing and laparoscopically available clinical our mass patients. I index to number fact, In body

XXXX, to continues globally. to market AirSeal introduced have the Competitively, since win surgeons new been and devices six insufflation

ease advice market While to of paradigm the do with clinical concept a on we of we'll robot integration it may and continue use, of market taking been which to have enhance the change will nothing take share, share.

that and also the XXXX, a the and fine. position. From remind in patent of their XXX we our think pending. equivalents, suggest we you introduced end They we have that patents AirSeal results XXX own I add and I standpoint, continue to technology through position to two another sustainability extend navigated competitors strong period would our this issued and will just XXXXs

This and our system in AirSeal a across AirSeal is is clinical protects IP of way tube access manner box, in the one that seminal integrated rather ports. the set include IFS function the is but makes not to system that benefit. integration patents us, all of and that what a crosses such Further, delivers aspects the the patent

of Each in being allow manufactured unique not will another to function mode. device here CONMED. critical of with a the at work in-sourced is currently parts low-pressure a in that components We're aware these separately facility any patent

teaching AirSeal is XX the June just XX%. surgical started rates utilization Finally, based practice. they on the with is they in over are best what top getting depart utilize physicians procedural present given that a This US the on of to teaching hospitals significant in when institutions category, to trained from MIS XXXX ranging statistically hospital XX% fact

created same market will knows somehow dismissive insufflation details minimal impact market mind We our device. results. of the will the old to that the this the think entrants, about of but rest be materially it's assume Never to competitive never partner misinformed technology same I that by

provide clinical pressure studies insufflation my From it's another chair, not is that just through low at shown, standard device. it AirSeal can if obvious as proven like has consistent it pneumoperitoneum

a the that would market clearly to by about optimistic standard with AirSeal. moving extremely clinical in The embrace AirSeal progression, been low only not do in-class offering that extensive We technology through we pressure our remain insufflation derived solution. future slow supported see anything and our benefits has

prospects quarter surgical growth tenure. the diversity have best portfolio if just the for they my More you ever our balanced overall the look the we delivered, digest in looked is and of demonstrating given importantly, really CONMED, and

over who turn the Todd? further updated will on call discuss outlook. now to details provide performance Todd, I'll financial our our and

Curt. All is you, today Thank be release. in reference will numbers to press GAAP currency. numbers The in sales growth reconciliation our I constant included given

included some on with line, supplemental that product consistent it our the comments. on we've deck Curt's investor includes information the results this AirSeal our usual, and our summarizes time, As guidance around the and quarter website of an updated moat

Biorez turn quarter sales organic XX.X%. organic anniversary total the August second our Xth. on XXXX, XXth, On will We grew the For XX.X%. of June acquisition an increased basis, and on revenue InXBones

For the XX.X%. QX, grew in sales XX.X% our increased versus US the sales international our year prior and quarter,

revenue Orthopedic quarter. second XX.X%. XX.X% Surgery the revenue revenue Orthopedic US, In the US General XX.X%. grew worldwide grew increased General sales Orthopedics XX.X% in XX.X%, and in Surgery quarter. XX.X% Worldwide increased revenue sales while internationally, General the Surgery increased grew The Total internationally

of Now, let's the expense income to move statement. the side

profitability software amortization net legal assets, financing restructuring quarter, and contingent costs, distributor which the of tax. and acquisitions charges implementation expenses matters, termination discuss agreements, second of and items, will amortization fees consideration, and intangible of special for excluding refinancing of We in debt include costs, deferred

skewed so XX.X%, quarter. has points the of the decrease Adjusted end a of QX, of lower-margin XX year geographies, guidance the prior for we to the was our QX. consistent far. our second was basis from guidance which mid-XX growth gross Similar quarter saw some our exceptionally This for lower strong to margin with in of margin

We remain improving excited ahead. margins about the

For between basis points. QX, then XXX by and QX XXX gross sequentially points. we XXX again, approximately QX improve And improvement margins sequential over to from expect to QX basis

development was X.X% points quarter sales, expense higher year for than and Research prior XX the of basis quarter. the second

Leverage gained adjusted basis SG&A the quarter. Second sales the the improvement on drove of points expenses XX XX.X% year higher were prior quarter over sales.

basis, an On was adjusted million in $X.X expense second the interest quarter.

that expense level a rise of incorporate interest from today. the in similar QX, and does expect We

principally XX.X%. to expect tax rate The adjusted around be going in expect is future forward. to quarters. due don't was benefit we tax effective in lower but This predict, stock still excess benefit tax the from to difficult XX% than the QX Taxes plans. in the expected, came We rate same

compares GAAP quarter $XX.X net GAAP income in XXXX. net was This loss million. to of Second of $XXX.X QX million

were this compared share $X.XX loss per to share quarter diluted per $X.XX ago. earnings year a of GAAP a

items X.X% compared Excluding discussed net an special in the the reported impact of of second income of we increase quarter, XXXX. $XX.X quarter second of adjusted to earlier, million, the

an QX per prior diluted earnings share increase quarter. of compared Our net were the adjusted to year $X.XX, X.X%

balance Turning sheet. to the

XX as March compared the QX. at were of XX. the of the Our compared was at end flat were as $XX.X of days, days compared days June XXX cash Accounts at end to quarter XXst. XXX receivable to million March $XX.X balance end XX of Inventory to million quarter

Long-term of million debt XX. quarter of $XXX.X at March end versus $XXX.X the million was the as

was on leverage XX, ratio Our times. X.X June XXXX,

expect year. the by to continue to of ratio our below We end be X.XX the leverage times

the million the flow ago. in from second of $X.X $XX.X provided in were compared million cash flow million XXXX. in operations from year quarter expenditures operations to Cash $XX.X a $X.X was quarter of million to Capital the compared quarter second

change the currency expected $X.XX billion of compared now now turn guidance We year. between let's of to between between be revenue expect to adjusted to billion and on previous our $X.XX $X.XXX material expect for billion to range $X.XXX and We $X.XX. be Now, EPS impact no billion year full previous to and full $X.XXX to XXXX guidance. in with the reported range $X.XXX the financial year $X.XX compared and our

day As had will will selling one discussed QX have days. day The two XXXX calendar sales fewer full QX extra XXXX. the and less way to falls, previously, have our one year compared

at between third and points includes That basis we expect we XXX $XXX FX the $XXX of look approximately million quarter, reported revenue million. As headwind.

adjusted to be $X.XX between We in expect $X.XX. and EPS QX

with and while our of the our we above-market customers profitability growth We our said, in strong performance and first pleased As through executing continuing move we and innovation the on as remain QX build Curt to deliver driving our to half the confident over rest long-term. XXXX. on ability focus are to

we'd like to the back up Jonathan. your to it I'll open call and that, to With questions, turn

first from Marcus of Robert question comes [Operator line Our the Certainly. from JPMorgan. Instructions.]

please. question Your

start like out we're Yes, the It ortho from hi. underlying Two Congrats question. Thanks and participating peers. with strong trends. I quarter. of hearing lot looks the first, could on in surgery you're questions. for other a good Maybe a trends taking

I But in filtration love ortho and -- is sense sense you and smoke revamped the the love a script, get force but doing how sales of would get to to evacuation a and ex-air touched quarter? the would did specifically surgery on US it a know in how I bit in

speaking. just I overall, excited about say, the broadly would very we're performance

of bit that the was of renovation. in a XXXX. undergoing been to October We're team. that has business a Pat brought Orthopedics under labor. him leadership of US in Our He's really tucked see in Beyer, new a fruits starting

overall helps Orthopedics for by The delivering better organic for better in of to marketing, I second best But seeing quarters. put that markets was is the better the performance that second also supported question we've the quarter together, of a you think the half our number good US point that procedure results. levels. support, well it all bodes And are sales, that but higher underlying and had

quarter. On of a delivered was growth. our this have of We advanced amount just on Buffalo a but category, understand double-digit AirSeal people performance grower we endoscopic business technology was probably the call don't absent by on the we that usually great General that, in it talk mean basis. don't in global shy a side, Filter, and that Surgery about business the and that I

different a across had performance with on a global we globally, and but look in and the each the of categories. one really business And portfolio, take some -- then unique in angle if our that strong our core company performance that had challenges it of except really I market market strong

talked Great. script. lot And a I know about you it the in

lot of with are it. of lot worry reports there's conjunction is much, a that newfound intuitive robotic in product third-party market a growth surgical So, and delivers might great not it be and the pound too lot but making with that of that insufflator a to AirSeal in incremental and OEM an the you, for to a placements use procedures integrate a on

the script, review talked What's of And Thanks market to just I robotic think again, in be I and the you helpful AirSeal in beyond know from AirSeal maybe what maybe is procedures. percentage it'd amount today a currently the but reasons of used and and that growth? procedures that an some good platform AirSeal the even forward lot. comes if of still will be insufflator robotic a still in with be used

that And mean, those can differentiation the the and that verbally, AirSeal brings. you studies Thanks in and we provided patients some Rob. of deck, the clinical we the shared that of the and proven it look, data of has in it's Yes, over I shared power back in see of over this is that's today, years. Curt millions many deck

many AirSeal. going far this said, finally in three you're as This do years, last said, has not competition everything things And found all to okay, times Curt AirSeal. As much has like wanting once. several we like answer to you found does just the -- at our as is so the because it been

remove measure. put abdomen, and You gas into smoke the

pressures we're that done lower to key it procedures and patients. no because over doesn't AirSeal, simultaneously, and of myriad turn at feature of our operate and And lots Everything everything because much consistently and lots simultaneous is on off. a with allowed is of valves

difficult. practice I'm in not. opinion, off smoke, and that with very And that I'm or nothing valves now in turns removing our -- is Doing on comes now

Now, not. I'm inserting gas, now I'm

Now I'm I'm measuring, not. now

Anything the anywhere of saying escape close that that has valve that to to you gas with to is going has come is even promotions far, and that a with be has everything the stops of do. functions outcomes starts to market And they close. so the capable is trying match clinical see AirSeal about entered nothing the those operating constantly fight how AirSeal, not all out figured that and why

-- coming in we're because can is quarter of differentiated post-acquisition. years of as years And we're every on it up product space. growing eight north This X.X -- is line XX% you how the

company sells. works. not they like space to our they it doctors another backwards are just sells -- People company not That's go going that clinical in -- like that something because really outcomes how else

procedures, it in is that that to of especially there's of on procedures, To the features high nicely. working the specifically robotic answer risk attachment but robotic MIS risk and the built question collapsing the to US all the it the and was and where about the robotic of your wake of very the of happen. added product are having because relevant And procedures, arms, -- all it's to the time business procedures, in that then to added if were the added there's space reset sells

US to there a procedures a procedures frankly, robotic high weren't the robotic years the as is So, US. in there ago. attachment US outside many There's low attachment the outside because

into And US outside so that procedures. non-robotic -- our sales force MIS the sells it very effectively

develop Our US to sales those force been muscles. has not forced

to shifting And so, a for have good enormous by slow, the still still if procedures -- in life opportunity were just reason, robotic behind very the grow that could we fast wake of as non-robotic. been there's they've any someday as focus AirSeal robotic into But lived procedures.

challenge nothing we about down. that We And would expect that. So, the we and see product, anything discussions slowing filings, our don't nothing in been differentiation. a years post-acquisition, in terrific about now feel we nothing eight strong very the -- market, see almost it in any position any competitive it's

considered And any that OEM Robbie, provides a standard this an have been And going who an for standpoint, to same device. insufflation video platform the the in device. technology. from is And it's insufflation surgery MIS competitive by that's the company a category marketplace Suspect OEM. provided traditionally providing has is insufflation

a at video When stack. robot, to you look it's attachment a like

smoke low consistent can putting removal in integrated the pressure. at doing that without You're may working stable the there. be the space There can But that some handle pressure handle at features. low that movement ease-of-use platform on pressure, pneumoperitoneum again, of

across benefit elements the and three differentiation and the the the technology intellectual provided. That's property of clinical

that marketplace, that different hopefully, little understand people brings to and the a clinical clinical bit value aspects helps AirSeal So, the the marketplace.

Stifel. Thank question from the our from comes you. of line next And Rick Wise

please. question Your

Good Obviously, afternoon up you where color warehouse related things get can maybe issues and help understand recapture, stand. implementation on Curt. done, and Hi us were quarter running. Curt more Todd. was and or software last customer completed, you little a back the the

or had do be? if -- disrupted where see said returned. did we some that been in you benefit I'm of Where are or remembering way, how And who you were where we back get customers greater I think XX% would quarter? much when in to than you now aspire correctly, you the had to

pretty the think talked supported procedure to we're some have make back and to path signed uptick recovery we've to speaking, had on entrant competitive the some that good will on our up I -- the in we've we're There volumes, I like overall going be really about had and generally may return back feel majority quarter. with an We far of in stragglers always commitments. a quarter. by probably fourth customers. first

can these that the it, way good we've best We soon job Rick, of about back. to around departed think time. period come have customers I But are we're may like walking how are us going worried a people some frame for any recapturing I not feel done

markets the in nice customers and have and and those back we're And underlying I again. sales the overall teams innovation our front we're think and in that strength a job reassuring of really it done portfolio,

And try out, brings month journey the that out, we're we've continue platform, all call, implementation a you to working to state-of-the-art the have in, last opportunity continue. on still time that. us, optimize work and that and will you're day the Any said software warehouse it month going we'll to in, on software on day

about or the we important CONMED launches your is to to broader way about portfolio any impact to or that a of you us innovation Okay. what might sense? are strategy. give new characterize see mind kind in have know the in Can And how having and color product I any

they're and Maybe terms more just on and are how roll where understand that, little into acceptance they doing like help It of growth InXBones seems think detailed well. a about contribution. us update Biorez. the we and And maybe just in

half Thanks two Just so much. those might second make four growth? two topline alone or

Yes.

by I we're So, now that encouraged our would across right the new Orthopedics company is introductions. the contribution And product probably say from leading business.

new saw when way has of products. been you a at product the on had product Biorez, a of look globally, products our lot was not contribution business, If the at it, obviously, a Academy, revenue we our in were you new And Orthopedics, focus, new based lot but measure helpful. very just Orthopedics at quarter, we I that

and And with again, team our revamp, to group. new innovation the that the they're commercial and integrating credit how team, approaching that's with manufacturing leadership

last And the through I business, only-in-class mentioned product reception going called our AVEO, purchasing endoscopy product and is so on longer think think has capital on introduced very favorable. boy, little I call, feedback marketplace the market we strong. cycles. really that has really, been in an components it's it's interventional Obviously, But which a been we a

part It's continue the brought we are our on will So, it innovation. job nice our and new always part be really push what we of it right of a teams to of to product and now. company, doing fabric

commented, business, mark. comprehensive on now, of ankle, in And to It's sunsetted organic of the the look both as comprehensive and going doing forward portfolio, second the we becomes organic half August. about contribution good the that Biorez and work. of in and those. InXBones, InXBones we'll and business forward, one-year part the PCR Biorez we good kind iteration feel very I rolling plating next really out

drive and it, we're experiences we this, and approach surgeon this the about the they and It's approach super seeing clinical educating technology good it. how good that, so understand market But drive they we're excited boy, outcomes how it's and by surgeons reaction.

strong. that we enthusiasm about is about in think good don't the And very half. commented acquisition. the I second specific contribution market again, But very we've feel

not break here. I'm going probably out that So, to

line Matthew our Thank Sandler. next O'Brien you. from question And the comes from Piper of

question Your please.

I want Thanks growing did flesh grow XX%. AirSeal Afternoon. XX% said to taking just out my as sure, questions. side? you growing little has it more for I make Buffalo quarter? a Todd, bit the been can you well. smoke Is XX% this on think

was like comp maybe effect here from looks I'm a going just about General if at is in differentiated rest I expected, XX%, bit would there? on that the those easier it halo not still what there something little especially Or than have being two all a of grow the versus lighter bit And Thanks. the getting yet products? else little getting Are QX is with Surgery those you QX. two business

Yes.

QX. definitely organic So, easy We quarter. But I the XX% second pleased we're company. grow XX.X% going. how business is grew And of across comp your north did that don't the on grant the they I'd know in with look, comment

just growing obviously which We've -- turning just strong. these are acquisitions, anniversarying, nicely they're got new they're

incorporated So, the about we in the feel profile of very company. guidance just we the gave. growth good That's organic

our judge Obviously, have some double-digit that. right two remind really the sales But will slower. well business fewer I you we number. you growing that that now. legacy So, as going know right? does having look, days, there's growth the But QX range remember many the the grow well. parts of all is QX, include organic that We business despite products

Okay. of BioBrace that. on are InXBones, or want largely far deal you still expectations? then I expecting those were on And specifics but what as plan ahead Appreciate as two or don't

everybody already And is the numbers, through but am the result space the side way, which back because Thanks. then asking like think even year have this I XXXX next the this comp well, in about can half seeing, strength sounds a year. you seeing, but is, next only year, is a in strength volume it volumes of that to we're is into Todd, something in do that tough this of everybody it not just the year volume going no this growth and continue as as on

deals, least the plan. on high We XXXX. millions single-digit at that the QX both on Yes, for to performing from kind talked expectations millions of call mid-single-digit Matt. to the yes, raised we about Thanks they're Yes. Biorez,

the of out was a we obviously thought. that little So gates better than

procedures It back, feels to tech spaces in back feels where our halfway in med saying and think through And don't yes, we environment I be they to are like growth good. and be. are rates back XXXX, is would the alone where used getting I the think pre-pandemic, look,

it's right, some -- all through about maybe. tailwind You're it pandemic from we but the that didn't and when does probably maybe does it but should we've demand feel too here, gotten talk have get early -- and some on that knocking disruptions people I'm have like care barring XXXX, finally pent-up they wood do to there's

think us. I probably really future there think a But And tailwind of we're tough for sit it's quantify. to all I that think out yes, I as today. the is we feeling here good about

Thank from next from our question you. Fargo. comes the line Vik Chopra Wells And of

Your question please.

taking Thanks Two to afternoon. congrats me. good Hey for a and the quarter. question on great questions

one the international is your on maybe So, business. first

strong numbers You pretty just trends you're seeing wondering year-over-year tough put geographies? comps. in what various your I'm up on

the question, topline your just by sort on about Thank my end end midpoint. towards follow-up of And gets high talk you. your you've the raised at the versus you the in $XXX guidance, then billion low what of about guidance? And maybe

easy So, -- let one, leave Todd and Vik, I'll take the one. me second I'll the

They're and across has really nice business steady Surgery. exception. a international Our doing no performer a very year is this job and General both been Orthopedics

assumed. with really than a even had And have really probably had speaking, Asian faster the of strong I commented markets export Asia, China, Japan, Todd markets, we our some think broadly performance growing little

doing market is nice job. very Latin American job. is doing nice Europe a But a

Orthopedics. So, it's been General balanced performance a and very Surgery both international across

a the country they've channel leadership of that the stability years. the number to the infrastructure, team focus market testament and of a the put and in of evolution the place that's And over

question the So, answers international, hopefully, guidance on and that I'll let question. take Todd your

Yes.

Just to make sure all level we're set.

when Our billion billion Originally, $X.XX billion. $X.XX we year, started billion. current guided revenue $X.XX to $X.XX is the guidance we to

a been it's So, increase. million $XX

Million.

same just doing end million that's said. better end million. from increase the right? the the in than reflected of have the million Things the And the gone performance, on we start year low high from and start thing. the year. our on Sorry, A $XX a $XX $X I'm increase of really

the this expectations had year. always back high of for half we And

executing. have half to and expectations year, the back continue and high focus to this to We we're for we're of on continue going executing,

Thank Matthew KeyBanc. comes And you. of next from the question line from Mishan our

Your question please.

have for afternoon. taking around Last years the good the margin into guys get towards from a over What's the gross clicking or the Thanks seems just closer is been XX%. you half beginning like expecting It of enabling Hey this next, as quarters, been the the about low that's like, ramp you second perspective. three XXs change? this questions. you've two

Yes. gross mix Thank -- clicking, you, from is been the elevated continue right? get all to And you're first come been product Matt. really we lines differentiated better high-growth, Things has the right. to through here. XXXX. that has well, clicking, get This of also What's waiting margins. half of do business, have These with highly the do

the those actually And mix the so that faster as up speed tailwind It's of is picking rest than portfolio. up things speed. grow not waning. It's picking

weight inventory and starting but that we've that show there's knew the which, a therefore, had know, now mix some side, on seen And can you XXXX, tailwind as our cost through would be because that the And is the we prices on we digesting to the through flow through. right? half And to while we get do lot side, financials, we on to stabilization XXXX. stability of allowed from a show a of our as takes improvements -- in think being is increased that that finally the side, so we've still as first cost cost

and gross we out. about we confident to six XXXX, we good that very we made get gross there. start be margins, XX% And we you've confident expect months now to of ramping margins are by we can and And about pointed said end excited as the disclosure so, feel the feel to we very ago when

So, noticing, I and question. thanks hope answered your for I

aggressively laparoscopic Thank the -- built aggressively, Yes, you. as non-robotic And as muscles like such I your over US in probably US. opportunity as big wanted or seems procedures switch to a hasn't on just I just really like. would long-term you the hit as over did. think, the It then you hit force on to that to sales

of planning long-term, it sales shift kind were when make a US? When you force? in does to were or you that the -- planning to something as modestly And in different of think you kind incentivize that of solution of require the kind or update kind R&D an shift like

a our sure think a in is team probably commercial I'm being seat. right squirming I it's question. for business Matt, are their And I and now, that good little Todd But harsh. leadership

a laparoscopic system-wide swap-out. delivered wins examples several have that team nice on general has side of We the very earlier total which the was year, on this

of that point resistance a much to move robotics relative extensive which like you're procedure. to surgical is a to more expensive biggest volume, single ratio The asking XX:X is

in So, up uphill years health benefits incur an where pressures, been the additional though been even systems climb. they to have has and clinical inflationary last and convincing the and couple recognize pricing cost, period a volumes more down pressure of change and of

broadly realm. more We hope and into as the procedure customers is speaking, step stabilizing markets are are pricing that costs, back, volumes that coming as that etc., to and material are everything willing and normalized

story that really and when that's they Todd late we've and We I again, our ones force this a path takes And early that journey and going that. for a nice to done like had frequently. the see on. know tip and businesses last big And contagious sales couple they talked the year. the things they're few to and of a it wins over, year and

We're annually. we expand it that in continuing structure the cost but customers, sure will this Part And product there. XX doesn't change to force going it years, work. of part got to is forces incentive been just there of to sales people for plans those right not industry we've it making is have get

it's way are be we buyers doesn't them especially value clinical the the go and it designed, like and just product let people It that that ready with simple sell customers to keep a show AirSeal. the all to work have,

He's Yes, here. think team commercial an add, part the Curt's that important that's wisdom of I kind brings about And and I Curt just funny, that's that I focus squirming. would think talking Matt.

money third that thing, it talk them and know much let's Yes, check customer make and signed give for this drive of this by for Curt's but sure make customer to customer. go this the compensation work let's make what CONMED, you they the they clear let the like, this let's always how is the about, make money Whenever well, they look, and work want. much they sell of plan and of they really make and and them the the much

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Your question please.

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time selling market when point super important candidly, who a are is talk massive some there competitive in users zero that the product in product are is a interested from re-tear. But the of about this first-generation strength feature because you the

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actual cetera? sales of just number the with investment of or which increased R&D, about path can then to close, sets, And et either you just being there, force year you to talk degree a now Okay. maybe InXBones sort

because as it channel a business. obviously, bought as channel. business, we and run and We sales InXBones Mike, have Yes. have it we're a And there not the internationally, did sales doing we integration a stand-alone stand-alone more

building US channel, regulatory So, is the -- about was where we It's investment sales outside there where getting lower about more channel. extremity approvals. sales no

presence to an orthopedics this. we that can tuck But we're do which able under we because have

distributor you're the more management sales building channel. the agent of or building piece, the direct not sales you're So,

R&D team, feet street space essential Todd before, we with the global have reports said matter R&D the I leadership, think to and the manager, Beyer top-down, everybody and don't do more us engine, again much as in Orthopedics. local under a on local the this the into the Pat general team, moving spend But came I street R&D, marketing which this say forward. great mindset would In and under great US, same the market the matter, where that is a it's on InXBones a lower extremity in and we're feet

They once feedback. R&D their R&D take business at of engine portfolio. period can and sales run they over what years build build or They a the They know support their channel market They reviews. that. to an consume

to business, anything leverage scale doing the that on just our US occurs we're medicine medicine standalone back we about, because and couldn't bring straight-up services InXBones in a US some that education side, lot shared infrastructure of that education scale their scale have more through we're just back-office if medical of bigger up. the then business, the do that couldn't our because they sports probably think able I the on as that our can outside own both a of and talked do medical So, through sports and office we on we

Okay, great. you. Thank

Thank you. hand This Hartman remarks. to further program. does today's for the to conclude like the I'd of program back any Curt question-and-answer session

earnings to speaking Thank and Jonathan. with I your appreciate a everybody. you, we want you to Today call. but evening. have went a you time our we Thank good thank look forward next little I than longer normal, and on

Thank program. in you and conclude today's conference. your ladies This does the participation gentlemen for

now disconnect. Good day. may You