Orthofix Medical (OFIX) 6 May 222022 Q1 Earnings call transcript

Good morning, everyone and welcome to today's Orthofix Medical First Quarter 2022 Earnings Conference Call. My name is Candice and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for question-and-answer at the end. [Operator Instructions]. I would now like to pass the conference over to our host, Alexa Huerta, Senior Director of Investor Relations, Alexa, over to you.

Operator. you, Thank everyone. morning, And good Welcome to Earnings Quarter Orthofix First XXXX Call. the

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

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

cause ended future. ended risk well year as the SEC results Form Some the XXst, could March the factors include from the additional the by us actual morning, statements in our that to on call December XX-Q Xth quarter different Form be as XXXX, for risk we under disclosed XXst, the factors factors XXXX, in this forward-looking for heading the and May, XXXX, filed materially filings make made XX-K

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

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

you our progress geographies Doug, March, who'll we April and and provide of update. basis, balance year. increase our significant to Thank over you, the quarter the Alexa. of COVID Europe. growing of procedure perspectives performance handing due XXXX today's to line XXXX total the the with XXXX the in close saw lessening Welcome, million of to our our for In coinciding this first we staffing a and slowdown similar In performance, update before volumes constant-currency first-quarter margin by the the call declining the in hospitalizations opening restrictions. The financial with highlighted And an shortages to Starting conference with hospital global January our looks On provide growth, and the call a across basis. was I'll questions. first prior strong on year trends a most quarter I'll everyone. strategic an initiatives review in reported results call. over $XXX procedure X% on month-over-month quarter and February, on against for call restrictions revenue X% before joining volumes and approximately COVID our U.S. experienced our in thank

after products, our fracture. of are PhysioStim impacted Fracture which Therapies lingering quarter Growth due procedure million complex COVID, first the our a cases. growth prescribed X% of XX-day broadly experienced headwinds Despite which saw compared were the of to each of performance down volumes the product another quarter XXXX. on the or The in quarter Starting non-union for BGT, we to $XX sales Therapy the period effects categories. decline BGT, Turning with of of Bone was in to

portfolio am product non-union driver of year orthopedic Physio fractures beyond. for the in and the within I growth be is this reminder, market, and a proud us the a the focused key team's will on As despite environment. focus

Implants, preservation, disc and was currency a with quarter fixation and the our on basis X% to across artificial saw motion cervical was MX-C fixation compared growth period, portfolio U.S. first as during revenue international which in driven both the XXXX. basis reported and spine up the Moving Spinal growth to which constant includes We this by the spine of primarily sales

The broaden up other was our X% our was fibreFUSE to Biologics we sales continue our offerings portfolio. Turning XXXX. Biologics to by driven growth compared portfolio, and revenue to new of as

Global on currency constant in Orthopedics The basis contribution continued and Fitbone restrictions to our COVID increase our international stocking lessening XXXX. lengthening X% system. X% in from orders were business, due a and basis distributors, strong over a reported international markets, up limb the from sales Lastly, on was

supporting our strengthened in and commercialization Elting, pursue wanted the for Global functions, I addition mention transition at development Last Kimberley inorganic President Orthofix initiatives, discussing Before five against key to progress and the business to including device business. starting our who other organic years exceed in business became in Since of quality, leading group. her legal regulatory Officer, and Legal the announced XXXX, medical significant her of functions, development Paul more opportunities. Kimberley business. experience, has including years has than company. that Chief left to our XX Development month, and medical initiatives growth She's the communications, our the experience in device has development led orthopedics the and company She Orthopedics many product recently corporate cycle, and leadership Kimberley in more research Gonzalez, Orthofix. life and than

Officer next strong role. I'd replacement to already over will drive a a in take leadership to new of our transition Kimberley orthopaedics And will endeavor. past has thank which the near-term to new and has wish for in his current will moment seen over search has and responded for contributions the significant his We we that in Legal Chief best growth confident Paul the business have leadership the to team I continue begun. am her we responsibilities and believe years. like business, continue. investment The him the Gonzalez momentum couple of well the luck very bring

will in margins. cooperate, and and focusing that this growth, with differentiated adjusted beyond, EBITDA with key Now, innovation course. channel. two our earnings to product update constant at order our are and assumes of accelerating an to like over technologies from call, provided macro single-digits growth years, mid-to-high initiatives: In provide Recall our last XXXX for the growth increase our expectations in environment I mid-single-digits XXXX I'd initiatives. we on key achieve All on commercial coming targeting the currency to

products. on includes innovation of growth to delivering our our and First, focus product new adoption recently differentiation. launched increased our This near-term

portfolio will and in also bone expand a during Growth product continue we market healing surgeons look we and procedures. spine the competitors. XXXX, This frankly, expand therapy, our in enable the partnership level a our In market out strengths. offerings space. with we're be our LIPUS in across addition, of building to the pulsed a healing goal we than made to for of continue to launch, build into the which to and FDA leadership is our both by leadership is our proud inorganic position leverage IGEA orthopaedic investments Biologics, and staged of ultrasound higher team the for progress products and first organic orthopedic non-union BGT Starting portfolio stem significantly use of for accelerated Bone in exclusive and a the Stimulator products. all our build products, this we and in training cell fresh making and product initial at solutions the have third spine significant bone, license indications, PMA the In our expanded U.S. IGEA new procedural quarter, the we with quarter. and January solutions We're on have us low-intensity any of fracture external will marketplace this or a our comprehensive commercial our launched second the will This to offering both recently core onto future. XX We've and to our product BGT, preparation of providing in With fractures. the that the result evaluate investment our of initiative of Since in as and categories. in way been meaningful planned we of

with have with we Earlier a competitive the this in allograft second leaders partners this Set hospitals, tirelessly synthetics our on our I'm We're to have our provide the important Trinity a built category. which extension cellular allograft week, of rapidly systems, Opus portfolio the comprehensive additions bioactive in in two Virtuos planned expansion to our spine through During announce commercial we growing the half our cases in and working Legacy. continued portfolio biologic Together, the and of we agreement our in completed and an to Mg new bone Biologics. worked fusion our solution investment is launched excellent for first BA partnership space with quarter, happy we our allografts. complement Opus out BA, saw become introduction procedures. announced bone channel and Opus with technology, our highly of MTF graft to allograft health XXXX. synthetic the portfolio launched

Trinity resulted space innovator in market-leading we Today, franchise. this in entirely have pioneer are the market, to Orthofix the category we're Lyografts. you the and with As an allograft calling together announce MTF know, beginning with been of with evolution a which next cellular-based of new our excited position the

clinicians. an to shelf-stable, for osteoconductive, inherent formation. the which and is and developed by offers developed The approach [Indiscernible] stable osteogenic significant in which innovative in providing over Lyograft its in processing this called efficiencies of bone first the is been to by month Lyograft necessary breakthrough of the available of and for commercialization several properties use preservation hospital, years, viable cells kind first the advantages preserved option year. which is for sustainability. substitute. begin tissue called graft complete a provide course and process a tissue growth factors the with immediate [Indiscernible] is MTF. autograft the being logistical Lyograft, operating shelf This preserves MTF derived launched has osteoinductive, tissue exclusive supports This the from are launch by preservation inherent later in the approach broad a room We'll [Indiscernible]

biologics to Biologics. excited enter next this MTF partnership phase into revolutionizing of our are through We with

pre putty, allograft that Rounding strong demineralized cost-effective out has allows clinical with by that asap the option with of legacy, MTF our to history of DBM positive a Our with second bone performance. of experience decades leveraging expand [Indiscernible] Legacy a out is syringe, providing ready-to-use us the an our offering Biologics. orthopedics. process portfolio is -hydrated DBM portfolio processing of

of portfolio reconstruction strong within focus remains investments pediatric solutions. correction deformity, limb deformity building our and on external and internal limb Our reconstruction on and

the leader and -assembled only international at Fixation TrueLok first the We because a of surgery, and Initial rings with we the long post announced care. assist framing and frame EVO markets. and has clearance been expand kit EVO U.S. this have in during the of Allowing to circular ready-to-use, in application visualization, System TrueLok a a launch radiolucent when traumatic particularly with it's the are of the first for which system is prudently been pre the allowing also Ring external radiographic as FDA during injuries. that system feedback encouraging treating the search surgeon quarter, Fixator clear in both Fixator struts for the market packaging. The and clinical system cases available in potential we time-saving plan sterile ease single-use

needs, also components two Galaxy treatments address and fixation fracture The rods, for sterile choice Gemini provides lower a of in modular and sterile of limbs. Fixator for combines limited anatomical ready-to-use of different the wide the tray, next-generation released offers the one Gemini procedure Galaxy to better choice instruments customer applications. configurations system different We a system markets, radiolucent clamps, versatile of in and and kits upper

the comprehensive this TrueLok its we new XXXX. Importantly, limb already hybrid XXXX growth them correction products, family on innovative can products deformity to system in and our in and extending and up-to-date pin system our portfolio conjunction of a These and with be used as functionality. contribute Orthopedics business to the expect bar reconstruction build in

categories expansion worldwide. Growth to our and the Therapies the trips access such partners, the development a investment we're we with quarter. our which prior our distributor initiative, U.S. of product surgeon with partners define the direct products year Bone cell XX% channel biologics, preparing commercial commercial our revenue as second was carry multiple Most QX, adding increased quarter in training. expand that launch and business. stem compared and channel focused to readiness with our of ongoing grew Turning hardware to strategic patient rep activities the channel for our Along In to channel as U.S. in on initial of direct hires, Orthofix

to clinical data will as resources we gain continue would in development. continued commercial traction. also We investment to highlight like dedicated expand I our

As where we're long-term supporting highlight disc, and two-level support Conduct real-world we the efficacy product One our in artificial while IDE indications. collectively example growth factor the see MX-C in surveillance, of the this clinical as evidence future indications. and our is and study a current safety safety future innovation investing post-market protecting the critical to of investment. that collecting support will devices expansion the to and and efficacy

work disc ourselves and in new of provide for in some the thousand capitalized early to XX of the marketplace. will be strides We've our market. in expand efforts data continue working year, Doug team's the enter great the elevate and review business turn transformation, great space and implanted disks, great while beyond. performance With We clinical success towards and us companies despite financial built start artificial had which the for build the has the cervical performance. developments our our a Doug. our on in most quarter, for position with putting efforts call I'm evolving invest to These of one segment robust a growing foundation for utilized help of marketing portfolio MX-C XXXX, assisting and XXXX which the enthusiasm over our hard Overall, the of cervical have will and to challenges strong a made demand the COVID on. us market growth that, our I'll in arthroplasty over to disc elevated in sets with to our we've products These very created competitive upon proud highlights products environment. database as

will Jon. financial of our covered further of basis, financial and some our Thanks, into And in regarding non-GAAP everyone. are a today's results earnings to net details call good I today's please some for discuss the many information million, additional non-GAAP In currency basis to sales and provide Starting the of $XX the for both reductions in business procedures were experienced in orders both constant flat sales over as distributors, decrease quarter our prior was primarily revenue products. gross in International first mix, the XX% certain of to of XX% COVID was periods in the costs total to total new to XX% by restrictions. increase as component chain due of increased period. complex sales morning, our basis earnings Because on the refer then up net with measures other from measures. our currency were total a reconciliations global approximately net well global quarter on had supply in disruptions. Jon a reported and million were revenue, the first driven year changes $XX as as X% in net X% sales mentioned, and sales in U.S. short-term as compared contributions up due disclosures. as the quarter XXXX. first on well total quarter XXXX year-over-year units constant GAAP XXXX million the first $XXX of of compared stocking when from of release as our quarter margin or The XX%

year We raw under China. remains XX% global full XXXX, to materials chain continuing not source to Russia, gross XX% a war Ukraine, including expect staffing shortages, approximately supply or related Russian we from top on the pressure do any margin components the or the For disruptions and given Ukraine, and is priority. COVID-XX be our

in of observed affecting as have effective environment, a quarter margins Sales customer With anticipate we XXXX. mainly We including modest quarter a volatile price an that raw net is result. availability first of materials, However, have a worth that strong impact the of chips ensure of XX% XX% use and that in sales meet we and semiconductor and the as our marketing mind, highly of in year's balance demand, such we year. is purchasing this and of of supply taken the this step expenses and titanium sales, XXXX to prudent supply. sheet up from a believe items net first and worth our ensure will to the were step

and sales of As investment communicated in previously, indirect direct BGT, the in AAOS have XXXX, global is training and investments were we in the spend back prioritized direct meetings. trade-shows internal commercial of as person, the in first the orthopedics and made Travel conference efforts areas. for sales and channels in quarter our over have our couple In our brought both both years. reps up and we quarter last increased including we've sales

be This and expect our of expenses the our to and support investment the XX% XX% year range in increase to early spending launch the to well year management channels continued revenue For in of further including of the [Indiscernible] sales XXXX, sales in-person expected and events. marketing full growth, we sales. distribution as in and our in travel AccelStim net reflects as

As a of XX% the throughout of sales as percentage expenses This levels prior spend. year in net to were the period. decrease of we expenses return compensation expense GAAP revenue, in year. sales quarter will G&A increased historical over XX% first increase from up reflects of the XXXX marketing and stock-based

management also team including the tenure we travel saw of medical As spending, and in expenses. related increase an new increases, our employee

full certain $XX expense in XXXX, which stock-based the approximately analysts about of and non-cash the recorded XX% For of we those expect is compensation G&A. full-year million be impact calculating to investors items year for

planned of new studies, efforts. support million increased increase to COGS. our to year net $XX is prior around XX% for the which MDR be of development, to amortization in our and depreciation XX% expenses compliance up R&D full-year quarter the as costs product sales GAAP about expect in reflects The first associated with also spending as well period. from XX% EU We clinical

We to and in our drive will and trials orthopedics. to to spend the product build innovation indication in study a continue continue to and both efforts repair two-level pipeline within rotator BGT such as through and our investment clinical up ramp organic differentiation robust MX-C cuff study, spine

to spend implementation to both and related the our revenue of We for XXXX including to the percentage full-year, approximately metrics. of as basis we basis R&D will EU of this within a be our expense and on in MDR non-GAAP absolute financial expect will quarters the sales R&D and product enrollments, adjust based milestone XXX directly XX.X% net which be achievements. highest an on impact launches, GAAP about of XX% side efforts clinical year for relative an of third certain timing the second points

decreased We by implementation to quarter channels first the requirements growth X% margin net this in first development. the investments the as expect related Adjusted EU XXXX spending MDR to somewhat and XXXX, our on of of well our the as compared XX% costs to quarter increased sales taper to EBITDA sales after product year. in driven

the our for to to year invest EBITDA of of expect as continue adjusted full profitably We total approximate net margin we growth. XXXX continue will in XX% sales

sales to in reflective Spinal expense April acquisition-related throughout leverage the of We in a increase quarter re-measurement must including within adjusted as operating the EBITDA back This of environment, decrease liability. heavier the expect million of I this new first-quarter revenue of spending related our the the XXXX. expect well GAAP which of the year introduction in milestone growth year. reflects from first of XXXX, fair the $X as that our the contingent half strong half we value products. earlier, the on final be first based Based is mentioned The margin the revenue XXth, payment results to current and in $X.X million non-cash primarily a milestone competitive five-years credit achieved Kinetics sequentially change

XX, contingent Using our was the than lower approach, revenue was updated $XX.X extended trigger XXXX. Our the this XX, profitability forecast the and at December March liability million of this QX XXXX achievement balance current $X.X value XXXX. forecasted million, estimated which to was of fair at milestone

without Now, tax, positive both primarily income of X% low rate is of as rate period turning XXXX. by tax driven negative GAAP The effective before we tax to GAAP same of had benefit. loss in a corresponding compared to losses taxes, in X% tax the periods

non-GAAP and for adjusted expenses XX% in long-term results which have effective operating our GAAP are in tax normalizes For a beginning law, we certain rate, benefit. tax changes XXXX, no acquisition-related losses utilizing that

and GAAP compared tax certain earnings reported for was for to For share spend items the share per share differentiation, per quarter driven $X.XX supply increased first out disruption, non-GAAP first After share for and channels. loss per line an tax R&D commercial rate, of The increases decrease in in the GAAP first adjusted compared internal quarter expense normalizing by to spend share and EPS $X.XX $X.XX primarily was the and XXXX. innovation due when increased of of of of of XXXX. per our loss to effective quarter to per quarter of adjusting a was chain adjusted build XXXX, with our to we of the loss XXXX $X.XX using drive organic our expectations long-term as in first short-term

the a of to and year, over investments to well product and support in as prior as center raw million our experience expenditures launches increase in with our over the final compared second investments for as liquidity to are of primarily the of due were in to flow, to the million repayment the quarter, down of at the buildup the year beginning million operations period increased to cash facility. in $X inflow million training their to decrease down quarter first The quarter $XX outflow year define The to to its minus expenditures build first in of out to million approximately to in supply our contractual the first top-line, timing million XXXX from Net of increase was the million from end new which Consistent Advance for currently and Capital the $X now fourth our obligations. to $X prior outflow XXXX activities by of and operating the million was strong compared recruitment the $XX be due first to facilities this the decreased XXXX from distribution. year an was credit million million materials cash, continue technology main XXXX, range XXXX. payments the payment of the $XX with is Medicare have fulfillment manufacturing $XX manufacturing The of of inventory, the we of the primarily of prior our to during cash year, million Regarding operating the customer our quarter capabilities XXXX. quarter, from $XX investments is the flow, protect outflow the which of as in maintain the expand end provided $X Medicare the end XXXX in quarter of the compared CapEx, cash position capital quarter a seller headquarters Lewisville, the in inventory $XX and first primarily we -- XXXX. still under senior we for operations facilities We $X in cash quarter at of quarter, secured abilities, expect of and last our partners in complete. is FITBONE our Advance at We bonus cash no under the borrowings flow due in revolving Texas. the operations. in outstanding free an and

somewhat new launches, response macro-environment support the XXXX, impact full year new from in estimated we and cash risks, the distribution as to build raw free For headwinds. for acquire materials inventory expect of we product year-over-year absorb to decrease up flow FX

rate represents full in due rates. from shifting which we $XXX guidance our revenue a million still guidance reflecting FX growth to currency to expect $X previous rates. in the XXXX, be range the constant guidance Now mid-single-digit growth of million modest The to reported of $XXX a our of year represents headwind at raise for at the about absorption for to million,

and around strength to to a perspective, We we reported compared modest rates. FX XXXX in the to U.S. our the with year anticipating revenue expect procedures currently and in stem are like virtuous top-line macro gain From deferred made in continue dollar due the the COVID X% acceleration headwind the overhang up. end of delayed key to back a quarter, second to or continue as to of rates momentum, products Axell, be a the half

be to do continue into growth. in we However, show QX expect challenges timing assume quarters a hospitals to that and and this perspective, From prior revenue XXXX. year third we will year-over-year and throughout the fourth workforce to similar the year expect strong

adjusted expanded expect $X.XX or For FX million $X reflect These XXXX, revenue. headwinds adjusted expect distribution to I'll trajectory. -- million we between be XXXX EPS and to $XX to our pipeline Supply the to approximately of our ranges due war back be XX% of now a dollar continue growth earnings EBITDA call. top-line the chain we full And to products Jon. U.S. year the range will continuing our will have in in the continued $X.XX. to in robust since the and channel of $XX million our our expand Ukraine, are in since year-end strength the turn which delivering Russian differentiated the investment call accelerate over issues, to

Doug. Thanks,

Looking will to believe point an our for be inflection ahead, continue we that business. XXXX

across organization a over As the largely our we result growth, XXXX made we last our beyond, anticipating investments top-line of our are in move years. and acceleration two into

made business have will to we balance especially year our of progress product key the continue invest we have areas in position. with of XXXX, important in We And leadership competitive this our a approvals and introductions. for growth, where

these a reminder, tissue stimulation bone and and category includes are a areas soft regenerative that biologics. and As both biologics technologies,

and solutions. limb implants and reconstruction in Second, third, deformity. which pediatric spinal And specialize where we cervical includes technologies, innovative orthopedics,

Our these are technologies, are we value important these single-use product and to product our portfolios investments ways enabling in development, deliver as pack sterile to focused technologies, believe site on alternative surgical customers.

growth investments FITBONE lengthening these in in important on over cutting-edge market, positive specifically first remains near-term Legacy. engineering an [Indiscernible] that of the U.S. [Indiscernible], driver still track several cell our development believe quarter for first XXXX a exciting surgeries we have The XX% which is FITBONE on from the stem impacts and XXXX. German system with technology for on FITBONE, pediatric updates launch. quarter as a demonstrated the limb growth, will uses of have We new growth

second first As Virtuous are soon in is in that in will Virtuous the cases stable necessary the a to addition launching formation be initial shelf graft mentioned bone the and the meeting in to quarter. of June. earlier, form deliver all early we anticipated it upc for Lyograft [Indiscernible] stating properties is

Our clinical bone we be in In growth graft from contributions putty drove this allows fiber despite has launched addition happy while initially million This COVID of U.S. second FibreFUSE towards two a progress investments significant us performance conjunction made demineralized over QX during the early Legacy, customers. products, $XXX solution strategic is made with we've the available that our with last will bone biologic effective summary, year-over-year top-line the very biologic maintaining quarter validating I'm that the and for supported We of by compact restrictions year. years. recent recently quarter. and anticipate. the our initiatives, our in to a our have solution in compete value cost-effective new an in Legacy almost option allograft to extender We market. an Strip

a efforts Opus Galaxy including of accomplishments, We Gemini. achievement BA, product of TrueLok launch and continue the of innovation EVO, key number to accelerate our with

year, stem Additionally, market the well a be including ourselves release as we about, hitting as biologic near-term second the two talked of number quarter, introduce a of we market third launch put of game-changing products offerings the initial cell to will position which key this a in second and in in the the quarters.

with commercial our growth as together Taken brings the see to of the what pipeline, over enhancing and like on rest I'd call our of the portfolio, transformation. the turn made progress strength organizations, that, to rest excited the we Q&A. growth existing I'm XXXX our to of With our execute

Stifel Financial Corp. with to questions start Thank you. Mathew would of now Instructions] [Operator like the Blackman I

line go is Please open. Your ahead.

Hope questions. well. the everybody. morning, question for you're or Good doing taking Thanks

Great.

guidance. start, I to wanted Maybe start just the on to

the it particular couple of basis raised franchise it Is is had I or or underlying XXX by geography it You is more that followups. just And any manifesting? broad-based? Where in growth. a about points then,

star for QX, With Matthew, last was guidance by to a of outside on primarily it's year, based U.S. year-over-year, they our get quarter so of think we benefited good a products. flat, X% rate, were the strength effectively going we primarily and And it by right even the point. raise. with that about reported about dollar basis of another a orthopedics revenue have us shining impacted though on we're good our XX% in other Yes, had and growth euro-dollar was just a the FITBONE you're new

an feel metric so, achievable like that's And for we us.

Great.

picture question, just back commentary about complex Another bigger cases coming reflecting on your slowly.

Biologics Is coming are pull through on easier in and the come cases back you say how how portfolio. trajectory through thereafter, of flows of As And see potentially recovery, to flows that line? recovery then the more that the particularly the follows, think your and spine of business. complex should which that the some then, cases lag think fair is stem or a maybe then your that through about the right uplift top portfolio, you about it then, first, way to then cadence

also to by Jon. have they And multiple way have is question. hospital Matt, think the this backed to for Thanks have to go as oftentimes be the that not nature but is by ICU, far the their capacity. and night have they they ICU, as the kept complex about we up cases that stays,

of having hospitals are have will looking we're and back physician's on. coming capacity, What people cases in seeing as those the office, take towards those more that So they done. cases

and point and and come those complex we as your coming have to other saw complex the in business in we're far to has as the been and those as saw will come stated know so they're up a X.X% cases. So such eight six see back are lift does know to in their biologics, we we periods from seeing those cases products our go then indicator in anywhere coming To quarter more back. first complex those we're biologics, four about patients Physicians And there well. biologics that out wait with a BGT so back. and far small the backlog BGT so as cases coming We as you momentum there past as back. leading question, weeks reduction

so follow they And along with that.

So as we for BGT look and they're well. at the back open orders coming

those forward standpoint, have to into So the market. you we're coming [Indiscernible] cases from and back looking that correct

can or color in improvement some April, playing in that's sure love -quarter in any it to complex comment. color. seeing give the you how the April to Just you out. you extent, mix? any played Are on out But you'd I'm how intra

'XX prepared months it several are We shared 'XX. shared can't mix. between March prepared later. our and that's our We mix until is cases [Indiscernible]. necessarily of tell and from what we April trajectory weeks to the a we And -- consistent analyze that in in the Yes,

more cell little then And stem. the in earlier. Okay. going I'm one to bit a sneak on It came

How to we part that. two, broader stem unreasonable bigger the with could that congrats question. company part can now of That's visibly that quickly only that I contribute think multiple on modalities, self picture -- the on then it all anticipated, growth? one. effect Orthofix to It's one a now and a And approved a portfolio. halo potentially to being indications the BGT think have so the

the direct PhysioStim, collectively put good we quarters to it And from be teams on the question, say the we XXXX. May stem, but technologies simply direct on working and first little feet Matthew, cell more the yes, fracture that we channel non-union more does of into technology quarters, approval -- our relationship. last licensed PMA April here yes, remarkable IGEA -- Truly a of that in been of that building I the far into you within life week of effort is has generally we've answer had in way non-union, over proud in our we the as the highlighted, and several IGEA, in Orthofix and a and and me success areas. XXXX, as also that at detail us PEMF reps received in like those as let get with rephrased fresh couldn't put

April. powerful that plus stem BGT from more the is also non-union. And with the fracture week's expect month carry there'll had of in -- will the channel XX cell the the our to excitement proactive franchise. around momentum with them the that some stem. standpoint, combination broader [Indiscernible] So first BGT line. number be set just -- We for on we reps training in reps took way each expect overall a of that a the and last more -- We be those up, them the both cell of those combination in fresh a PhysioStim and we train And do of

great excited product could where first into XX take So it's the us it's and the first new put product product a about -- category BGT in put product we us it for the really we're we years. for BGT

portfolio forward so well seeing our cell really the looking accel. BGT as to teams most mature as and it's there, broadest the stem, We're And channel. distribution our product

Jon, queue. Great. it. I'll Thanks. really in back appreciate get

Thank you.

Thalmann & comes the Ladenburg from question line next Inc. of Co. Cohen of Our Jeffrey

ahead. now line open. is go Please Your

you? Jon Doug, Hi, how and, are

are Good you? you. Thank morning, Jeffery. How

Fine.

platform the as critical is end? work walk being your biologic just that filings and for MTF through in could is well on in virtuous you're the XXX as XXX? about or will First, Could has something you responsible And taking the talk the or you legacy? be

is with do -- the is That's believe business Legacy relationship This we XXX, we manage absolutely we've with so looking I them how that Biologics tissues, of looking tissues. in align forward traditional another that a have. XXX process the as to brought how MTF with manages on your marketplace. the both process are MTF that, whole question. our And in and could this forward new Virtuous expertise, best years. we really in which we're and to MTF, to -- thank us Lyograft, that, that and past, the new rely performs highlighted and MTF for a is partner which their seeing and Virtuous, processing relationship And how of in we've us. for extended the I the said they you, XX with the have This last Jeffery, and align for week

of with one then, body, you Perfect. technology? the the processes I'm jump number of also the it you're and And currently [Indiscernible] manufacturer just on are planning back after assembly going and that other about co-joined then, stem. going about SKUs are you scenarios could cell talk that to talk or or to similar Is the Could introducing? you living

the There's this skew. there's it, Yes. with ancillaries that is we one -- one and and one than but beauty Italy, It is in fact There's The go worked technology. that some skew. collectively them. That's of with more effectively manufactured skew. are the major it Asia there is

it well. so system And runs under as our quality

goes operational all have connection them forward. as We a as far direct work the with that

the approval as the holder these Texas. here And through are paint products have might we're labeling, producing been do Lewisville, are we've going over technology, last sitting final in products you to But so months. that imagine, shelf that. you our PMA. of responsibility We we six There a for to in the nine just

bring aligned and to we're on we're So market. product this we're where with excited this to forward at IGEA

One of Could some heading and little for like to picking does about more an there bit basis? it and you dollar traction me. headways talk one up the global $XXX Outside currency, million on OUS quick on you're business a back the annual business? feel

to The They -- the are Well, there thank very XXXX and -- let's are question. performing as they specifically performed in have far we From in as the there. traction strong for we team team talk you standpoint well. perform. continues as XXXX commercial -- the orthopaedic

quarter. are generated And indicator highlight what talked been distributors we the Regarding about we've stocking group also in they're to products. will for a continue and getting this That's our excel. I markets number our spine building a international spine When sell. open to stocking they going that's group, results buying distributors and good buy markets our available that the and buying ready products, that forward. -- of

to work where still have working businesses look do but at. for our as us we're there, well So we we're we and at pleased international

Appreciate questions. our it. taking for Thanks

Thank you.

Thank you.

Our final the Sidoti comes Sidoti of question of Jim from line Co. &

ahead. go Please open. now is line Your

for full as the I've products AccelStim it Good you calls little these that? now. never for else, on Can as bit XX in you everyone morning. product. taking right heard Thanks When that been more using about to use and opposed as PhysioStim? actually, is I've pipeline the a question. interested talk the I'm new years Like would

Jim, thanks the for question.

question. last the in away faded You

physician as PhysioStim. a the would using use to When opposed AccelStim the

Okay.

both fracture for Okay AccelStim, LIPUS it non-union. approved and technology. It's fresh thanks. is

Our non-union. previous PhysioStim was approved for just

because So reps we are the which in to working fracture fresh really channel sales AccelStim category, will beneficial fracture of area management. is PhysioStim the in our our be using

had to And would PhysioStim wait -- so non-union. for they

on looking for they fresh fractures, and non-union, AccelStim demonstrated go excellent PhysioStim clinical to And apply Now, sell can will fractures. results. be has everyday then the basically which then fresh the really

the have best of we So worlds. both

We have categories. that those both go in technology

safety you that due more just it hand higher on to Doug, million going $X or that like forward? fourth And chain looks up since supply sales inventories $X goods quarter. Is in of issues are or million or stock finished about having anticipation the is

advanced kept over went and the of fairly We've of the flat balance our and all about chain invest decided you're right, sheet chain up and risk our we inventory it QX Its take Jim. supply and with our [Indiscernible] our supply deploy the above. exposure. last destruction a Thank script mentioned In good $X yeah, million to use just in inventory the question, to in quarters some cash buying titanium. we proactively several All out of around you.

last that several semiconductor we some out chain chips we the supply sheet good of time And the we've our ahead and take of over risk. to way like seen it's a balance out You've feel ensure that gotten quarters. deploy

to said And then XX.X% for of revenue year. XX% you think I on the R&D,

It's sounds going is $X like the million, to or third up million for? $X considerably what it's still pretty it that in second quarter. So tick and

Jim. That's it,

includes to are study, as It You should as as 'XX end spending MX around the into innovation that remarks, pick will clinical this for that R&D in spend also of this spending up it impacted also trials we've around get clinical COVID year. feel rotator the trial that cuff and of should well and line. XXXX taper our a investments our as correct hits by the further bulk start lot is we got and deadline, like prepared QX. our We two-level but and MDR EU summer

as launch and support So that's products their new up. where show pathways, regulatory we those costs

Right, thank you.

Jim. you, Thank

no additional Thank in this at queue time. questions the you. are There

So I management will pass the conference over remarks. to the closing for team

QX our the Thank behalf in day. thank you call great of XXXX team, Orthofix for and you. On -- release have participating earnings call, a

call. concludes now conference the This

disconnect may your You lines. now