Orthofix Medical (OFIX) 3 Nov 222022 Q3 Earnings call transcript

Good morning. My name is Gavin and I will be your conference operator today. At this time, I would like to welcome everyone to the Orthofix Medical Third Quarter Earnings Conference Call. [Operator Instructions]. Alex Huerta you may now begin your conference.

good and operator, you, morning, everyone. Thank the to Orthofix Third Call. Earnings XXXX Quarter Welcome

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

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

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

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

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

third call performance, will quarter call, provide financial our merger review Thank and you, will planned quarter Alexa. our the conference today's everyone, an Doug, perspectives discuss with questions. before over I Welcome, line results will our XXXX for the joining provide and update the to growth third of XXXX for our the progress against call call. our update. close and who initiatives strategic drivers On handing before thank you on I balance the of open SeaSpine near-term with I

our Starting with third quarter performance.

and X% the announced XXXX quarter As on over for increasing a constant million, was basis. reported on October, total a in $XXX revenue currency basis X% on

paying Our channel and strategic pipeline are investments our commercial off. innovation in

products Therapies Orthopedics, headwinds. global Bone macro pin-to-bar healing introduced The new strong market. received encouraged their Virtuos bone to by the As we are the lingering Biologics several system we performance Galaxy year. and Specific been this well TrueLok very in therapy, innovation, next-generation EVO, continue our and Lyograf have Growth despite Gemini, the

million, our the driven Bone or AccelStim, in of to up second basis sales volumes as quarter initiatives constant quarter higher currency of X% the categories. BGT, as the with to by each $XX.X order well revenue Therapies, both year. was Growth of Growth and for this launched of from were quarter performance Turning XXXX. reported on a product third Starting compared which

Motion competitive as in well to as headwinds a the down basis was procedure XXXX. not the both basis decline third reported Preservation compared on large includes Spine approximately U.S., and the mix revenue and due a constant Moving XXXX of Fixation change to Spinal was that to quarter X% did on currency in a X% in international in global area. Motion Preservation, The orders the reoccur Implants, which

U.S. the the exited quarter Preservation However, Motion year-over-year September in with in growth

Virtuos Biologics our successful Revenue products currency the launch X% FiberFuse to of AccelStim basis XXXX. and performance. a to new to up portfolio. like The and reported as on contributed was compared constant strong Turning

a Lastly, constant in third over our Double-digit Global of currency Orthopaedics XX% introductions. on was up international commercial reported X% currency businesses in by quarter growth strategic basis both new and a driven on U.S. and basis for revenue business, XXXX. in the at our was constant product and momentum investments our channels

well, Our the Orthopedics shown of quarters business X growth. is double-digit have and last X performing

to moving on our Now strategic initiatives.

rollout to third quarter, feedback with work Surgeon start Virtuos autograft differentiation. accounts. Let's our and shelf-stable we added innovation been Virtuous existing getting and our continue new on of as and to Lyograf we product the substitute. has In continued complete positive,

We bone and DBM commitment are meet also and our continued Legacy Both demineralized our examples saw Biologics. and with in produced with to initial cases MTF surgeons their new our offerings matrix strengthen Biologics to Virtuos expand of the of partnership of partnership Legacy, Biologics needs MTF our patients.

physician Our with adoption Early doctors. we tracking interest gaining has cells of new results. to growth and bone therapy we encouraged high ahead plan, traction, and access of seeing are are rate these prescribing us by is

to indications. payer sales fracture over XX of coverage continue. both addition sales fresh channel lives million With positive our trajectory to with grow X, added on expect and of management have and We we starting reps our October nonunions fracture

in at update just participation also quick Chicago. to NASS I would like last month on give Orthofix's a

with the we sure conference the with merger at SeaSpine. announcements off, a First created buzz

portfolio the see positive very excited about ahead They are lies value is the surgeon new and for combined opportunities the by what the distributor encouraged organization growth channel profitability. both and future and conversations. positioned are for the of We partner and

are share important support gather management surgeon Orthofix clinical disc radiographic events cervical preservation clinical MX to key data cervical practices. to expansion We world effort of the around research leaders motion in arthroplasty experiences and to our will This be and Turning long-term leading provide to from classification discuss market clinical evidence, develop best clinical successful disc. technology-leading pleased of to a and this hosted a cervical conference. to symposium the few the at and

Award from for its the Spine in and procedures, the second the autograft Biologics note, with exciting in most widely late complete an and On this partnership launched which MTF the orthopedic week, spine year. is this publication in shelf-stable a Lyograf. Virtuos the industry read substitute kind for we Orthopedics received was orthopedics first quarter XXXX Technology Virtuos of of

at we're a Canada. celebration solutions graft commemorate rhBMP-X able and CGBio, held commercialize bone as our with the to partnership booth, U.S. Lastly, new our Novosis' to in

patient U.S. to QX, Turning Biologics hardware define to year. commercial digits X/X has worldwide. development to surgeon our over access expand product products which Year-to-date, Orthofix U.S. as our ongoing biologics we second of In strategic our as and generated strategic group double revenue. compared the partners channel of to categories Orthopedic and initiative, the multiple partners, distribution such that the channel when our grown carry Spinal our Implants, prior and

ongoing continue long-term our appreciate quarter development and the in building teams will managed these growth with how to initiatives and headwinds we We optimization transformation, throughout channels forward. of maintaining We our and the while innovation well invest how the to framework the support for moving macro growth operational our progress execution.

with Bone Specialized increase $XXX be and combined agreement portfolios Therapies, touch and to to and highly merge choice sixth partner leading company footprint Before manufacturing will This we a global to in The Spine and in their turning worldwide, over Solutions to the to of SeaSpine. and objective nearly announced are enabling surgical complemented by with I R&D on to XX Orthopedic will with Orthopedics become advances products combined most global needed a become Hardware, spine our Innovative leading Growth and patient ultimately global efforts companies unique is and merger creative with develop Doug? to The and scale, a products to will the recently technology, be and a of portfolio and road Biologics, company navigation broad Spinal I Doug ability over call expanded distributed million improve commercial a procedures system company of surgeons business. Doug, patient that competitives significantly largest revenues countries to positioned call the growth our surgeon's spectrum the want make mobility provides exciting. investments innovative, financial markets The profile provide to growth differentiated X performance. to broad best turn of combined innovative profitability, products incredibly clear ambitious us quality-driven services. and of across map of to the greater sustainable global combination technologies, increasing resources, of now will a The and importantly, top-tier solutions solutions. in outcomes. company's capabilities these review

Jon, Thanks, everyone. and good morning,

to Starting with As many today's reconciliations further revenue. measures financial basis, a our earnings are in refer today's please for release information on non-GAAP disclosures. the and of regarding non-GAAP call covered

sales up in global the inventory period direct risk and driven quarter quarter were X% third the total reflecting of of distributors. of prior sales In noted quarter $XXX million of product International for result the sales international drivers prior XX% expanding As X% XXXX of introduction total the noncash in XX% gross total coming stocking as disruption. were XX% growth total FiberFuse increased force expenses John orthopedic versus XXXX. or were quarter by quarter sales the The of AccelStim, U.S. XXXX sales growth Orthopedics. and safety finally, of XX% up product in due primary an sales year to when margin total approximately from for to within million the reserve compared growth in the to to net U.S., related net $XX stock set markets the year. compared and investments revenue, Biologics XX% constant requirements and second of international net currency the new million, at constant were builds revenue net the strong currency of in chain was Virtuos year the or $XX supply new third over introductions last commercial third a the to quarter; primarily in channel GAAP from of earlier, BGT increased

quarter timing the we quarter to to spending GAAP were sales from down For the in and is were by increased be to third XX% offset gross full XX%. of reduction a commissions XXXX, expenses XXXX. sales somewhat marketing This events. in third margin of event mix. approximately in These primarily and due our from changes in expect sales, training the decrease net due GAAP sales XX% year the of

quarter GAAP GAAP in fees to between up XX% the reflects full net believe year XX% expenses we and SeaSpine. of spending sales and third to The net were approximately the Orthofix and expenses from at net merger year prior third compared year G&A of XX% GAAP sales, higher of sales. the legal transaction increase period. expenses related XX% flat the on R&D stayed be expenses for professional the sales prior quarter the marketing around period. XXXX, For in will

XXXX in year XXXX, GAAP R&D within third financial to of bringing and revenue to expense sales, net quarter approximately the be to on adjust net continues We focus related implementation impact to driven expect XXX events Adjusted decreased we to sales the metrics. be our timing training. which on R&D products for EBITDA of an EU due Our marketing MDR increased XX% XX% points non-GAAP to new quarter including differentiated of of market. directly to sales full efforts XX% in third about the and the basis still our margin compared by increased of expense and and innovative

year to approximately continue margin EBITDA adjusted our XX.X% for sales. of XXXX We net to full the be expect

in taxes income before GAAP benefit $X.X to of GAAP in tax both period year of income driven compared in as the of the before quarter as $XXX,XXX turning XXXX. benefit. rate tax. by loss timing losses million as of expense is same tax the taxes a tax Now well loss to income or corresponding XX% prior of earnings We or had The the periods of XX% without

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

well IGEA, remains related in the net with primarily over at third and compared end Fitbone of quarter to approximately at million partners revenue $X to expenditures strong $XX million the investments as of $X Regarding our this increase XXXX. our compared for experience year is million in to CGBio, quarter million third $XX $XX headquarters now This liquidity center CapEx cash, increased partnerships and $XX be due improved the growth. range inventory $X operations, an in million contractual related nView in and with the our of quarter to at training customer capital We the capabilities period. as payments the year million to end our expect accelerate decrease the position in in milestone of was our to the million for manufacturing XXXX. primarily CapEx expansion Louisville, prior the of in to Texas. to

Now shifting guidance. to

the related the XXXX end XXXX, due rates. to perspective, staffing From the revenue the in guidance represents a continue year macro issues in expect million and now Key For to we through when or reported until This for range the an X% AccelStim do rates to million, that and see products at to $XXX million X% to to like hospital of million year to to XXXX. strength expect anticipated U.S. initial Virtuos momentum, the the expect $XXX at reflects dollar X% environment. currency. $XX to products FX growth our from to year of $XX full we these patient reported XXXX line significant X% headwind contributions into overhang constant and of the FX we sensitivity but be gaining current compared to rates to to FX full not inflationary revenue utilizing new top which are revenue

or is XXXX, year I the and adjusted For Jon. range expected to of over $XX $XX the $X.XX to and between back to now EBITDA full be approximately to will the our expect turn $X.XX. million would we now EPS million call adjusted revenue, of like be XX.X% our in

Doug. Thanks,

of remainder focused in the in Biologics highly with technologies space and the Growth leader regenerative spine Therapy our solidifying remain the and Looking on healing we as XXXX, ourselves orthopedic portfolios. Bone to the leading

our system driven innovation Fitbone portfolio product growth We spine work products, within advance Starting are BGT we R&D and quick focus product these launch, solutions on our with our I'd X spine update next including optimization well projects platforms introductions, commercial fixation developing key to our we In generation deformity correction of These on drivers. continue innovations the of Orthofix's spine channel. adoption the projects. new to minimally increasing with continue our of several our into each deformity for fracture the and and our through will fifth the growth posterior term, of our solutions. as XXXX profitable portfolio products TrueLok, disc, comprehensive X continued Biologics invasive differentiation towards product our long-term fixation, cervical key will drivers, are developments and remote near innovative cervical support, XXXX. We lumbar expand These also a build key spine spinal sustainable to be channel growth expanding spine highly the in introduced beginning system, provide complementing the and platform. and of by of technology launches SeaSpine's and telemetry focus these delivering phased for upon fixation already launch the spine expanded anticipate a like leading AccelStim channel product expansion, with MX-C and continued orthopedics the artificial to to portfolio and in as

our share Next of quarter, coming and In the BGT AccelStim, up growth the our fracture channel capture. full ultrasound market product acute from launch the fractures. our for we fractured completed bone nonunion healing is through

XXXX to finished trajectory a now as to and are continues our revenue the In significant payer anticipate the good more contracts. and getting product gain on have a AccelStim We into commercial in force training it we sales traction. contribution beyond, from

obtained lengthening product anticipate our investment regards growth double-digit platform With efforts result and products of the launches system, reimbursement Fitbone of launch additional recently been to limb a higher a market-leading government French already already the the pediatric XXXX that beyond revenue Fitbone our introduction in have of for we in U.S. channel business including We mid-XXXX the and growth trochanteric Orthopedics in in surgeons. as through expand our experiencing and platforms. nail

XXXX during Virtuos we following foresee our the the launch portfolio Lyograf. early balance and Biologics, due of across XXXX, For the in excitement into part increase demand in to of an

well-established thanks of Opus our and Elite Virtuos, industry to and Our the Legacy in DBM Spine CDM, portfolio is for the Biologics Orthopaedics, of offering Trinity one our comprehensive most FiberFuse, about synthetic graft Novosis' With U.S. conjunction with the future, in view investment to excited clinical partner, new rhBMP-X in the our a materials. for trial advanced we CGBio. activities are our

driver growth artificial our near-term the cervical differentiated final is disc Our MX-C.

in the from data disc cervical results We of continue we MX-C cervical XX indicated to replacement XX towards supporting EUROSPINE real-world evidence the in from the market. and evidence study clinical believe years, at growth the the of versus cervical of market next-generation value cumulative the the of brings MX-C on to the article disc We XX% cases. NASS Kaplan-Meier and arthroplasty, of to of survivorship presentation continue IDE devices. including the artificial proven suggests our X-year believe our the move U.S. consistent fusion designed will sponsored other uniquely October, with that At market years a joint analysis global based at motion for data

we conclusion, company of In of about combination formed Orthofix future remain optimistic the the the ultimately, new by SeaSpine. and

to you. look members please results for the for We and for like for to see thank deliver their open organization With done, and creating operator, over lines that, those the set you would Orthofix Well to moving the impacts to accelerated to to success. of the the thank extraordinary near We platform commitment a channel efforts In future up could long-term dedicated executing team and closing, these and initiatives term positive product and expect our I continue success. new commercial forward accelerate forward. innovation questions.

[Operator Instructions].

first JMP from Turkaly Dave comes question Your the from Securities. line

that, was either of number on about might of you the quantify how be would also on all kind at little the investments. that be X thoughts and I'd some and a these after SeaSpine more look a there that commercial those channel or possibly street their or anything you of wondering lot distributors closes? granular? I efforts a your deal coming feet would And keep will or that those if love you like like new talked distribution Jon, you way investments together, and initiatives

need Orthofix, about channels, down and Regarding let's BGT. break for you them to talk

building months, comes not it this Over for XX been but the channel, we've fracture to only last fracture nonunioncare. delivering

We're investing So as areas the we've in seeing that are the feet world feet of as on our U.S. and in only as in that and not coming people results fracture and been been managers far direct that we've the putting subsidiaries with orthopedics, the on the not the on channel but only around U.S. and distributors. the to not building also [indiscernible] but street. investing managers that street with effort as well with

of seeing look result from Orthopedics the So we over our we posted our side, revenue on is we've as growing of as And Spine growth with you're in that business far period and Orthopedics. X/X forward a group XX% in -- highlighted the those put time. of to partners place, then the that our strategic coming we

investment, seeing we're do we to And have still investment. the of as So we the work the results go forward.

results those look channel combined great and as they're SeaSpine, works and process, really as we're we equals far the in see even forward As we combining X building with looking as both partners, far strategic a this have area to momentum our one-on-one greater the partnership forward efforts in because effort. to they as

more why Fixation done you procedures then there's we from follow-up, the to love and get case. just think mix something I that that something I could if quick would being about the thoughts? thoughts I that in your is was get I about be on guess, out curious I I emerge I'd called mean complex levels a case. as less as per read COVID, Spine or, And your And just the saying

it's David, And the out on you we're depends right an decrease. point surgeons from. with increase of but are, Yes, saw levels are mapping coming where who lot procedures that procedure dynamic per still working interesting we basically it in time. quarter, what now. We distributors your in that's saw And

does the activities patient basically comes same we're analyzing and world from We macro the drive that. see behavior in inflationary staffing that so the everybody headwinds to it that copays when else And around.

of will end copays more odd point making BTT the area at accumulate in Some and complex -- situation, procedures, will as there in postpone are their in basically start we when go we patients But they the because quite defer the basically seeing large maybe copays our that some that investment patients products It's year an talk clinicians, well. are sometimes you but those also large time. resist looking can less that in where deductibles. having their that know to practice copays they [indiscernible] the get for of or where towards specifically

Your Stifel. line from next question Mathew comes of from the Blackman

I've got start two. Maybe to AccelStim. on

full with broader it XXXX a AccelStim profile? coverage does a should into And then have portfolio broader how step growth thoughts about go and there? halo the think overall we up? we As again, launch Does Any BGT on the contracting, portfolio? one And follow-up. effect

acute Thanks, has in arm in Yes. nice our the been Matt. a in. shot investing been channel that we've fracture [indiscernible] AccelStim

So we'll area. gaining market share that growth and that in continued see

in is Stim, side, well, On people of channel. also move in but do seeing we're necessarily in those we'll in, are that go for of be Stim, there build what marketplace but have the to our whether the in cervical as discs out that are more we're BGT seeing And value And the us it lumbar more growth there's surgeons re-emerge. and continuing for we're in growth of CervicalStim, because or the plenty cervical are cervical that drive those -- to fracture. see and seeing we investing we cans area, work and that as the our as complex we're seeing cases there lumbar balance area, nature, not then to

channel and and that's to out invest And it's us that grow that upon incumbent information -- basically so there. continue base to that

more September, on also XX, we true at real-world but I data community the some And clinical And MX. it. question NASS about out does next, mentioned be How it months. was I paper some full a grew data know, you growth of coming for to the over clinical that there'll MX XX it then narrative heard the don't think Australia? should just Got quarter? Jon, in we counter out the down think until you mean that sees a said

developing Matt, clinical X-year published Yes, successful. clinical basically great actually We spending time data. been our IDE which that we've a data, deal of is very

And X-year that that, so collecting in area. from well standpoint, we're we now our data as have that

at continuing We countries have world other data our in and are XX-plus to year and of had and the Europe areas invest not out Australia at experience. in evidence collecting we that going you real-world other had NASS, out the been country evidence. only which had in And This -- it have put seminars basically basically also we publishing forward build that's one data longer-term a there's episode, activity real surgeons that EUROSPINE there looking we're present your has to whenever to to is their highlighted and data there, forward. clinical coming world

time of investing that right spending deal now. great we're in a So

experts with cervical basically space forward. we're headwinds, from and from to it these through area bringing the data share lived outside there's and competitive large with their data. We're and On been have around with information also joint dealing the bringing that highlighted we've experience out the bringing not activities and headwinds but the investments. experts basically researchers only with their competitive it with world dealing from dealing there, We're

pleased disc our really data, us, here, we're expanding cervical incumbent the this -- upon MX spend we're to it's and sharing market future. the we good in effort disc but assist basically we're has So that to the in cervical growth so think invest in to a in and opportunity place probably market basically leading a

where now. we're on right that's so And focused

of line from Cohen comes question next Ladenberg. Your Jeff the from

follow -- any X-level MX to ongoing? the for up I did study on question Matt's as want far the update as us with that's

spend we're and trials but patients, we that in little to and found that. have now. our continue those in We we're and enrollment clinical taking are enrolling on Jeff, living in patients longer effort we that now, this our increased a add increased right there add towards sites track environment

come and fast from So we study you standpoint, forward results as come as to we'll completing to that that look possible, that the to back have with enrollment forward.

We collecting real evidence only for X-level, X-level not have data. our world though seen in but

So have coming out to complement data our world a IDE as far our as experience X-level we'll in U.S. study. evidence set

Got enrollment complete of to it. Would middle 'XX? you expect

We XXXX trajectory forward to that the announced haven't We time that have date. going set done have haven't frame. in we basically date. that Well, a

then talk a about Okay. a how that and Got the far guess little of I look it. partnerships Legacy. as the And on was to partnerships updates I was SeaSpine? bit platforms, the as goes could And you referring MTF the I as -- the through merger and might number the including

Yes.

even with be And base and is pretty continue the SeaSpine synthetics. As the portfolios SeaSpine, with business. DBMs portfolio grow of this that preferences broadest across preference we be inclusive to with value we we have within and broader grow the that'd that the Spine because CDM as portfolio us MTF based, the this whether whether combined relationship, the cellular relationship be allows merger positioned, of as when as Biologics whether Orthopaedics, both continue area well of the -- one what Biologics adoption will have think combination we whether market. looked of at well this most and the the and with spine, only but a portfolio not the in portfolio well, opportunities And highlighted the and is overall we and with believe Regenerative And we'll to that to as space. surgeon we address surgeon we at that far orthopedic as look

merger the in merger lastly through... if about commercial organization European and us, the for somewhat it. could And the I'm briefly about Got XD, you then of some sure for excitement the probably of opportunities Okay. and about aware their other they're talk reaction the

whether forward. of it excited one will channel be it going down the the them, to that about products energy building or is of the come international comes We've our they spent merger time and to be this are Yes, synergies whether that true X Biologics. distribution and it

for forward. for We revenue of the also as -- cross-selling and or parties powerful both the down expanded down the breadth or in see Preservation -- it channels the that in well as of whether -- It U.S. of comes U.S., or the XD globally we the that combination looking complementary outside to of going Motion great really international we looking whether that to the creates whole be portfolio it a have opportunity opportunity this commercial and this see at because we we have that, deal opportunities comes the conversions be a in BGT assisting see pull-through great What U.S. it. of And it area we're portfolio and that also distributor because

And basically to in of those forward and so looking synergies as we're we post the the seeing deal. signing forward in further move digging

next of comes from Sidoti of & the Your question Sidoti Jim line Company.

a So lot in merger. the of interest

overlap now? there and -- channels happens? most spinal bit confident -- same your you just about do as products from what investors guys lot geographic after orthopedic But a one biologics, think you more your for territory be than line. X areas there's there overlap for in it continue where now? on of that feel and is distribution Currently, talk the the there isn't And a point distributors where you product in the have the that a I that can the assume little the much there? side, have Stim merger. will But Will more distributor of that and I sense. separate not distribution view, makes on line

Jim, the for Yes, thanks question.

break down me little Let bit. just a that

very has that they take we item, with as area. direct that to and other as and specific, will orthopedics, first work opportunity both they a significant leverage far BGT the in that space. but channel, in but Orthopedic and see indirect opportunities have in separate, to BGT partnerships The then remain basically distributors Spine

So we a going the merger opportunity see that as in positive forward.

the individually in be saw run the looked channels when deal, where Spine we overlap. at And that area. our minimal On party see and might had -- side, created only a looked and third at we not ZIP about we far overlap as overlap looked and spine actually code then significant a didn't as Biologics overlap, a this own we at we we analysis we there

comfort. And that have you So small, we're we we area, X it, in at say thought sub-X% distributors share if gave as market we looked us even players.

in brings and And minimize to we with have very have we already distributors work carry which the be are basically we've marketplaces that to merger that channel, those this disruption. both talked bigger we SeaSpine portfolio, for opportunity bigger that have distributors and looking to So certain us. other nimble and the Orthofix,

nature -- as company merged when It we only utilization, efficiencies as far now. and that efficiencies that also inventory, comes helps are distributor asset get the which of things there, helped looking as not together around partners for

or a also different could portfolio a in build with than an creates like area, strategic can carry surgery, SeaSpine and powerful product When company channel lines a companies. you're line, basically they a recruit in and get all that that. have and organization small one you and You that our merged of X come distributors one-stop you distributor and product will more when a Orthofix, be technologies one X very sell expanded be those to like an to shop individual can position and

average goes your so procedure as up products well. And per

very synergistic but this with of opportunity breadth see area, the consolidate and out And Biologics of this so frankly, gives SeaSpine distributors the as one those not way. very-- and come Spine a because there And think organization. about in very to only the both Orthofix, the from portfolio, we similar it

look time every -- business very deal, industry, our we much this like is like behave and at SeaSpine who SeaSpine model looked behave Orthofix. like the in most go-to-market we at the we As we

And bring So provide our the procedures combination to from is goal surgeon. about own services products portfolios to of that really, we excited and patients. product, both is those with we're people, And the going care basically more products that for forward. market power this can so the physicians more or technology, to their

merger think And this that as other quarters? proceed continue onetime the those of in merger? you go away quarter through to you will the expenses right. one And there in All then question. any couple next related Were the

is Good This question, Jim. Doug.

continue away You'll would adjust costs the see will characterize as of to over that go us sort we what time. transaction

we cost but synergies next expect our XXXX, increase only also into of activities would preparation, adjustment the around quarters. into in to and the strategic tune an of QX, million earnings the that back not our get line in the in closing $X continue release the see the about to spend over achieve all we transaction to and that as cost You'll few

Okay.

So roughly $X million a quarter?

I closing. think will the done costs at all it transaction will vary. But be

planning around achieve can announced terms But when as forward. would occurring the companies, forward, $XX deal of of I achieve a for to sort would of about lot to in the of imagine, the we at we've big of year a that we we cost you As synergies and would set all the X synergies X about But merge in now. be talked sort stage going we synergies, of integration the the to the got amount the expect same cost million. incurred going -- synergies most effort

time. further questions [Operator Instructions]. at And there this no are

to I'd comments. for like So hand back our closing presenters to

Yes.

this like you So our joining interest the to activities post going your company morning exciting organization. look SeaSpine in at really and and interest your I'd for great was powerful time, and to a call Orthofix close. forward and forward everyone We merged just Orthofix Thank have for as ongoing day. your a in thank continued

concludes today's This call. conference

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