Orthofix Medical (OFIX) 6 Mar 232022 Q4 Earnings call transcript

Good afternoon and welcome to Orthofix Medical’s Q4 and Full-Year 2022 Earnings Call. All participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Alexa Huerta, Senior Director of Investor Relations. Thank you. ahead. go Please

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

Joining me Serbousek; John on Executive the Chief Rice. of call today are Orthofix’s and Chief Valentine; as Executive Former Chief Financial the well Doug Board Officer, Officer, President and Financial Former as Officer, Jon Bostjancic; Executive our Chairman and Keith and Chief Officer,

facts our statements will risks goals, on than cautioned such beliefs, about call, occur. will matter we and no be forward-looking objectives. reliance not as historical statements and Investors those the All there is this statements provide plans, involve making any are strategies, expectations, During that forward-looking including assurance other uncertainties. undue statements of such we to in financial are statements, place that or contained forward-looking guidance statements any

statements The obligation forward-looking our as and expectations we on based do statements. are undertake make March We on forward-looking update today's such beliefs revise XXXX. or not today, will of call X, to any

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

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

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

John the and speak call will call by combined Bostjancic guidance commentary Valentine today’s XXXX quarter and will quarter Keith fourth commentary with on standalone Orthofix from Serbousek with fourth additional and on to from results followed standalone Keith including revenue Orthofix. future the SeaSpine company, information who looking some the newly Jon will We conclude results. begin Rice, Doug

At will the over to call this point, I turn Keith.

Alexa, you, this for you and thank Thank everyone afternoon. joining us

choice a we Before to highlight a take the company's increase our quality become each merger I'd efforts closing patient This advances significantly of to equals to moment SeaSpine. of recent get their results, life. between Orthofix like objective into in standalone mobility of and and the merger partner surgeon's to of

and quality new we profile of through continue to Together, Orthofix expanded scale, solutions potential The creative, commercial operating will to has an access commitment procedural and develop leverage. improved driven growth, innovation.

reach, meaningful a and commercial portfolio, to in and addition innovation. inorganic expanded investments capacity complementary make to highly organic In the

the to musculoskeletal us believe our this biologics highly combining a market enabling in clinical technologies, will therapies, patients space fixation, and We comprehensive product a position lives improve combined [lean] offering transformative We organization worldwide. [ph] as differentiated in growth Spine puts of in preservation, company the see unmet spinal bone motion by needs address that the

market Orthofix. had to capturing with the merger the consistent strategy execution SeaSpine pivotal by share strong the our Turning marked year of growth a results. the announcement a of and

fourth combination work business quarter have our by results done excited the on and coming teams since the out the January X. are We momentum our of

the the SeaSpine's representing fourth year. growth revenue XX% million, prior $XX.X for was quarter over

distributors. products over distribution with efforts of primarily up years U.S. result focused revenue $XXX.X full-year and respectively recent our for the year, the as of Orthobiologics partner expanded in Spinal Implants XX% million posted new Additionally, to XX% grew XX% we quarter in revenue and year-over-year. and larger, fourth prior more a

platform, six Technologies unit units countries, our Navigation placement Enabling base of the markets. and milestone a increased Systems into our achieved the expanded we XXXth installed Surgical new for commitment XD throughout placed global across XX testament XXXX, FLASH As our competitiveness for to

quarter, placed the X of in outside were the fourth units, largest and placed quarterly arrangements, U.S., record U.S. a the U.S. Of technology. in the acquired we X the earnout XX In since earnouts X placement those the

efficient implant products minimum are years. you As X earnout systems agreements annual years for for for a to in contractual recall, to spinal acquire hospital these revenue may return or capital a biologics way unit XD commitment X for our

$X the spectrum commitments. full fourth insights System. [indiscernible] of XD of planning planning] across rate procedures a enabled to the executed in of such at the the also to date, the successful launch component in through through revenue represent company's support aggregate and a broad of to $XXX,XXX approximately percutaneous and million the annual expansion solutions Navigation of commercialization out services first suite execution like per further that quarter, I'd $XXX,XXX as we differentiated [pre-operatives have of Typically portfolio for FLASH year. software products To [ph], software our our grew call

launch cases room cases, also announced reducing strength operating complex the built Additionally, of versatility clinical requirements the adult surgical SeaSpine's of screw and full Deformity number system while of System, patient the the commercial in and deformity upon Mariner modular to trays we unique of first the was Mariner suite. address spine recently Pedicle which

portfolio to of highly to And in two industry indicative establish forward to are integrating leader further looking mobility an commitment patients. restoring to and quality of very technology. organizations orthopedic complementary are the our Spine and These much advancements we life

standalone full-year SeaSpine for to I will results XXXX. quarter now turn to Bostjancic and the call financial fourth the the over John review

good and everyone. afternoon Keith, Thanks,

million, XX%. growth. technologies category, for of Within the fourth revenue increase XX%. In fourth implant noted more a revenue XX% prior Keith the XX% quarter and increased the spinal the year. quarter U.S. revenue over XXXX spinal total increased by enabling in we SeaSpine's that U.S. was U.S. posted earlier, As implant $XX.X The than

U.S. within in in revenue quarter five were sales the the in from the fourth implant past for and extensions years spinal line spinal European continue XX% implant be the Bone revenue via the fourth International grow quarter [increased enhanced exit spinal Biologics market of family. fourth or due launched XX% quarter, Demineralized growth to Products of XXXX. down XXXX. implant U.S. the in recent OsteoStrand driven of to Plus continues quarter by product Fibers our to and XX%] in the [ph] revenue third accounted

price to implant revenue of year. surgery U.S. while XX%, and fourth spinal our implants declines prior and X%, the experienced of Utilization the over spinal in increased per no in the quarter Orthobiologics quarter XXXX, fourth XXXX, implant Our year mid-single-digit X.X volumes case to compared declines to increased per biologics. to spinal price average X% in a compared procedure increased systems compared of ago. X.X We products

was SeaSpine's of foreign exchange a dollars, the rate As majority our generated currency in reported changes did not growth reminder, on so impact substantial U.S. meaningful rates. have revenue any

XX.X%, for compared the of XXXX was the the quarter increase to of quarter the was fourth gross adjusted efficiencies fourth the the was the our in for spinal implants gross quarter relative Adjusted as in result in spinal margin continued for gross to recent higher The of market in of European due quarter revenue, XX.X% fourth manufacturing and reduction growth margin product to for of biologics realized revenue XXXX GAAP XXXX. exit, fourth compared of greater margin XX.X% OUS implants lines. XX% gross margin a domestic primarily XXXX. the

higher attributable quarter general increase and with totaled commissions expenses in million of of selling fourth other the in and primarily revenue million, logistics freight marketing the compared $X.X merger was to higher and administrative expenses for the million Operating and increased expenses XXXX. expenses, $X.X driven XXXX increase due associated Orthofix. to a primarily increased fourth related with in expenses, to quarter headcount $XX.X $XX.X legal The million the and preparation costs operating by growth, compensation fees incurred for in professional and increased

was XXXX loss improvement of XXXX million an $XX.X loss fourth of XXXX. for a to fourth Adjusted of for for for compared quarter loss loss to the net XXXX. the $X.X the million of Net fourth $X.X compared of quarter was fourth $XX million, million, quarter a quarter the EBITDA of

are performance EBITDA industry. period-to-period believe against valuable comparability other measures adjusted facilitating and our that in financial companies margin gross on information non-GAAP from results Adjusted by and of operating loss core our operating provide we our

adjusted X this afternoon. borrowings in issued of are merger loss December the totaled connection net outstanding GAAP XX, paid adjusted January cash in the XXXX EBITDA $XX in calculation credit included release to and million subsequently million under press margin of off presented loss on the reconciliation we gross the with $XX which Cash on full and a we Orthofix. financial The with equivalents tables facility, of of and SeaSpine

$XX.X was the million burn, flow capital of $XX.X Our as well XXXX. purchases inventory fourth recent full-year with amount of for our XXXX the quarter launches, build consistent and large operating equipment a and million the is expenditures which free support property cash necessary includes flows of cash for This and spend set revenue product upcoming to U.S. full and growth. market above and as

orders mentioned International additional driven XXXX. U.S. was for $XXX XX%, over As XXXX revenue Keith XX% on earlier, Enabling results exit third the from stocking significant XXXX, with Technologies by European quarter growth from from primarily Spinal distributors franchise. SeaSpine's that XX%. a was full-year increase grew in detail connection revenue the million, by and in final Implants revenue to market the revenue revenue increased the and the

to full-year U.S. Spinal as to procedure Implants year-over-year spinal volumes XX% systems per XXXX, XXXX X% XX%, XXXX. X.X the per case grew in revenue to revenue implant over compared Utilization products Orthobiologics prior XXXX. surgery U.S. Orthobiologics increased compared and in in our of year. increased X.X increased

Jon on standalone the to to call XXXX I'd results. Serbousek now highlights turn like to over provide Orthofix’s

John. you, Thank

was as to announced a through on Orthopedics year continued a Therapies investments performance on in XXXX and basis. fourth early basis their quarter strong X% January, off Global reported and Strategic revenue Bone currency and in total the million, our XXX.X channel commercial Growth flat over new are in paying decreasing products constant quarter. As XXXX the

are for leading our we all in encouraged fixation market Gemini, marketplace. system next to The EVO, products XXXX. have fresh therapy well new healing added nonunion rings struts bone fractures, system by TrueLok Galaxy stem innovation, pin-to-bar and generation and our ring and the Specific fracture in we Accell radiolucent which several received introduced to been

bone complete two with Virtuos and partnership legacy, a launched Biologics. XXXX Lyograph, in biologic demineralized with solutions our new also matrix. stable substitute MTF We've a shelf autograph The

most was a as XXXX of by XX% we new driven bone therapy indication recent stem, sequentially roll-out. grew the X% our fresh to categories, quarter and performance for XXXX. reported compared sales basis, on or each were the to our $XX million, BGT, both product Turning quarter with third Bone Growth our which growth continued fracture constant starting for revenue quarter currency a Growth fourth almost of care, cell solution the Therapies the from of a up with of over commercial

in did see Spinal Fixation We preservation global volumes disc decline area, approximately Moving both the the Spinal preservation, mainly as X% in revenue for an as XXXX. surgeon both a increase The compared basis, MX-C on the encouraging procedural quarter Implants, is the in reported well to fourth competitive was driven in in which by currency artificial includes quarter continued on down training flat and a Fixation U.S. decline fourth motion U.S. to sequential our cervical XXXX. Spine the constant ASPs XX% in headwinds of motion and

sales and reported Turning to solutions. primarily to accounts, offset some by from We disruption our our XXXX. and by Revenue a sales channel coming on was X% trading compared declines basis, somewhat driven constant Biologics newer our biologic currency of saw from portfolio. down

these as as currency solutions well our basis a as The was able we In a over going to will X% XXXX. constant and partners. results on the to will down offer merger additional on Global surgeon X% fourth in Orthopedics reported growth franchises the options be innovation our initiatives up business, help for revenue new from our customers, for basis forward quarter

at constant driven and channels mentioned momentum our International from both in earlier. commercial businesses in U.S. by currency new was and investments our introductions strategic Growth product

from a Now highlights few moving strategic our initiatives. to on

gain traction. innovation continue see differentiation. stem product bone fourth the healing and with start therapies Accell we quarter, In Let's to

physician We and doctors. access prescribing interest a rate high to new seeing now are of have

XXXX encouraged revenue and our We by are commercial sales. roll-out

We with XX includes have Currently that added lives increased X% and sales number for fracture fresh over management expect reps, indications. positive channel Accell additional and payer continue. to the non-unique coverage help our our fracture and million to of both stem we trajectory sales grow

off patient both orthopedic expand fracture support growth. our access development our to development in paid of the have second and our to XXXX, Turning international worldwide. products our ongoing and we in continued and of investments channel initiative, In have channel to to to at surgeon invest the and channel, commercial our continued optimization our U.S.

quarter Doug over XXXX the Orthofix financial Now, Doug? fourth I'll to performance. call review turn to

afternoon, good everyone. and Jon, Thanks,

in for the regarding quarter quarter with compared today's measures earlier, fourth of covered basis, as reflecting are reconciliations in on noted refer currency financial at a many the XXXX. flat please further the disclosures. release today's Starting As information [John] non-GAAP were [ph] call to and earnings sales million, total constant $XXX.X revenue, sales to when non-GAAP net our of

continued net down BGT and Orthopedics. competitive or in Spinal Implants Spinal well approximately of by U.S., coming $XX.X offset procedural total year. as revenue, million and Accell introduction drivers momentum pressure the were sales the new product declines The somewhat primary biologics In in from ASPs of X% growth XX% as Implants, decreased were versus the and total stem from coming prior

or in revenue, XX% from from currency strong over total the $XX.X fourth introductions. quarter new result International in of product constant as coming of million, total and strategic a growth the commercial sales channel of X% net up momentum investments were XXXX

Full-year at result X% in and in Orthopedics revenue currency a strategic our as we down the and channels our XXXX momentum. currency of $XXX.X reported. investments came The for constant made X% in Global highlight million, XX% growth at was as constant segment product new commercial up

in was distribution. as in prior with primarily year quarter This of timing consistent to driven marketing and quarter quarter increase in up shows, as sales, event in GAAP XXXX of the were XX%, XX% and expenses the was spend net GAAP gross marketing from fourth an new which by in the period, margin bring to increase is changes sales XXXX. commercial trade of due volumes. fourth despite and an spending, training XX% well mix sales the the sales increase of in on fourth

fees, prior were quarter SeaSpine. recent the related period. with expenses from the expenses stayed for at GAAP net R&D sales, year GAAP spending quarter fourth increase sales, XX% legal of professional reflects primarily in the of The prior to XX% on the up year G&A XX% in period. higher to and fourth the net merger compared flat

quarter margin XX% differentiated on continues from in Adjusted of sales, quarter adjusted million in to sales, Our be focus quarter the innovative bringing the EBITDA in million, the compared was from net in year. products a $XX.X market. basis, same down was EBITDA of R&D prior down On net the fourth XXXX. $XX XX% fourth new to fourth to of slightly the and quarter of dollar the

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

was the disproportionately a In reported XXXX, which particular, GAAP reserved tax year. fourth the assets component tax significant high U.S. of fully quarter last deferred rate we in our of

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

in liquidity facility. borrowing the of at strong $XX current Regarding Orthofix December nearly capacity with under credit XX, position XXXX and $XXX cash, our remain million cash million

investments MTF support CapEx accelerate and innovation set headquarters million integration included Lewisville, in implant actual builds, in new [indiscernible], to merger spinal builds and for [indiscernible], in spine to Our to as XXXX to growth, costs leasehold and and product and related CGBio, milestone million with inventory implant and revenue improvements Texas our partnerships $X as burn full-year the flow free over cash million payments well strategic set was our and $XX.X building. for $XX

December no XXXX, had secured million Orthofix borrowings its As XX, revolving credit under of facility. $XXX

repayment fund expenses. XX, facility, full capital $XX outstanding for working SeaSpine's million the purposes its as January facility borrowing against XXXX, $XX.X as certain to in-part under on However, credit for well merger-related of this credit Orthofix borrowed and million

Furthermore, for help working borrowed XXXX, million merger additional March integration related under credit and capital on XX, Orthofix fund the $XX agreement an purposes to continued costs.

I'll now Keith over XXXX to comments turn the call and guidance. to provide closing

Thanks, Doug.

organizations of to The much As years energizing. a very company you've in two heard looking excited the XXXX we momentum are and today, innovative come. generated coming global standalone out forward combination ambitious to and and spine companies the building is leading of are about these both incredibly orthopedics

combined The And offer believe post-operatively. best-in-class improve patient to and the We innovative the for with complementary. ultimately procedures leverage best are product of the the and needed solutions portfolios can importantly provide pre and very along surgeons resources, the care, products, we each company technologies, that continuum most will combined outcomes. to most that technologies organization

XX Orthofix planned on unit We product Analyst each on growth within investors segment facility at our join complementary Lewisville via drivers provide will these us hosting portfolios, and strategies President invite an color webcast. commercial March our be Teach-In business where additional expected and franchise. our to will future

In of reclassifications revenue XXXX represents range revenue million are for for providing company full-year point, terms after a effect forma to anticipated to guidance, which the between to pro XXXX SeaSpine's giving this approximately to growth, that full-year to of compared the to financial year-over-year X% revenue reporting at we Orthofix. X% million $XXX $XXX constant $XXX conform of million, currency combined

we risk the towards low-end early analysts and still take we the clarity we million year later of in than [ph] managing their phase, effectively that can that revenue suggest the we more provide advantage are Because $XX integration in the million of quickly of until range expectations can opportunities are we this set how $XX of cross-selling very and approximately greater [dis-synergies] XX-XX. how on investors

are our pleased possible revenue ability dis-synergies. with manage we far, very to So mitigate those and

we constant of $XXX for currency X% growth XXXX. of Additionally, to first expect represents compared revenue the range million, the XXXX forma first which quarter the company approximately $XXX million year-over-year quarter in pro combined to XX% million to revenues $XXX

anticipated guidance to not We revenue quarterly to giving After conform reporting of SeaSpine's revenue do effect, Orthofix. reclassifications plan provide to forward. that going to

and a that XXXX provide data to since providing because the completed, on are for wide However, this quarter two-thirds additional we than the range initial is wanted full-year, call. we of first more point revenue fairly

[I’ll the sales for combined by X, also] [ph] full-year will XXXX note XXXX not any SeaSpine that January January generated through or first company's period pre-merger of in be included revenue results. XX, quarter the

marketing, and headcount We in meaningful program by many operating and initially spinal from post-merger, year as on-track synergies of and with generate sales with G&A, systems. approximately of system-related to implants we a overhead integrate in are synergies IT and from of the still a redundant expense costs and overlapping in million spending expectations portfolio reduction those coming included R&D, bulk reported corporate common redundant IT $XX cases three very

those we the synergies and million XX% expected in as XXXX, are incurred provide the in metrics. XXXX, will achieve get to occurring XXXX. we further that to process, guidance into And Cost additional majority the be reporting and remainder spend of integration around $XX with in

employee of Director a Jon coming upcoming He Executive I Chairman year. change Orthofix XXXX. remain up Serbousek, this to Stockholders highlight of of will re-election Before Board XX, like of Meeting as through closing the company to will July our June our company's at XXXX prepared for not Directors. an out an the would stand my in Annual remarks,

look the of regenerative know I'm in and forward. Jon, one very and I from our appreciative to friendship for are team and of extraordinarily great create biologics We industry. leadership to the I the portfolios is maintaining about the making forward our prospects And contributions excited the already strides Orthofix. going years technology of broadest

line questions. the operator, At this point, for open-up please

comes Instructions] Stifel. from from first ahead. Mathew Blackman Our question Please [Operator go

line is Your open.

questions. taking my everybody. Hey, Good Thanks Keith. for afternoon,

can philosophy maybe at you me sitting be we [ph] for Let know time you views before. your the top can hit, think your how on your Is you, I we've line you in in obviously this guidance appreciate guidance SeaSpine, [seat] in Keith on but and beat? with from helpful, and now XXXX, about for your integration? during particular, the, guiding know and guidance put both worked We guidance John, but start philosophy XQ new with should out we we guidance

a business to quick there any revenue the the that commentary want there I press unknown? dis-synergies one there material XXXX then spinal revenue in the so, baked from sounds XX of or release, synergies follow-up the like I've that least no full baked at cushion just Is on the that. million that that implant And guide? clear, manifest into are got if perhaps question. Is for in it global And into of follow-up guide. be just does in business? largely no And then spine

a to All That's right. lot unpack.

question, First obviously of than were more number through the guidance, the quarter. the the two-thirds on way QX

up we and things are just both shaping on about feel QX how see the to numbers. growth in all across companies So, portfolios those pleased good really about pretty

that I that confidence we speaks talked first have merger. concerns the to the of in about So, mitigating risk we seemed the a think be lot dis-synergy to when

know bar wide historical Keith's range were us expect we're the not you gave to, to and wanting set Matt that fairly baseline, still that comments everybody kind sure low number, we'd for a the For because the to and it range think is we come full-year under. we end towards a why and set kind yes, spot that's that of on as make set I realistic early of practice full-year of expectations to going our a of

to good on with is growing dis-synergy we've be for a because the the trend quarter, all sides a cautious managing still fact we months expectations portfolios the The are both the wide about is company do there merger. such success that. potential about we full-year I risk. full-year. think first the the that timeframe for want Two the feel for dis-synergy good But into far setting risk, of And yes, really in so had that

fairly We implant revenue lead to when the in realistic get of create think impactful opportunities synergy the timing of some spinal is QX extended will most a which to year timeframe. probably set sets be we'll times, the upside later

see So, lot the opportunity still upside need manage risks near-term we of dis-synergy a on the revenue don't to we for those and synergies.

we those, ordered the and the also about of hopefully clarity those by full-year continue and everybody are Keith on So, have to to being as be can possibility for have cautious that revenue year side. setting the mitigate full-year as as get expect as start to dis-synergy upside the some we’d and of said, synergy what goes raise those sets guidance on low-end implant better that we'll to but we've the and spinal opportunities the of get past on we more revenue risks delivery

I So, that’s [indiscernible]. think

I this John. shorter. I'll that, Yeah, appreciate try follow-up to little make bit a

as days still, tracking I you’re early and as touched sort maybe you've, but of dis-synergies curious on Just expected. think

the Just announced and commentary into in sales XQ on any now after force deal stability XQ XXXX.

any, on that would of folks distributors any in Appreciate pulling exclusive going commentary and be Just retain entirely? distributors it. to discussions on Just with color moving any helpful. in retaining or the you to new early more want on sort

Matt. bet, you Yes,

importantly, be? as months we lack color gave being if is very did there to about kicked-off. how So, review overlap, the overlap for part excited I two the QX excited kind really because we we and we some first, strength is concerning of just that are a of mean, great deal in We're of of opportunity our of you [indiscernible] will. what synergy. real when anticipated But had would more has

products seeing seeing that's using We're company, that that a on already as perspective. approaching already how legacy I that to are XD true we're we're merged a also as of original testament management And both including as company sales cases. cross a from it part so, go And cases together well. think

I what's even marketplace a think process and of looks right a doubt, the selections other with of there penetration, greater sales going also think, those for to sales I the is we've combination from brings think good that leadership opportunities I opportunities a number deal to advantage a to made companies it, with And us of we're nice the sales about the like team what teams. and management excited in without interesting other on very of, take out merging. now due stability

And other thank let people you everybody. I'll that thread. Keith. right. on follow-up it, All Appreciate

Ladenburg Our next Cohen go from from comes Please ahead. Thalmann. Jeffrey question

open. Your line is

Hi, Keith, are How you? John, and Doug.

you? How are Good.

Super. Congrats on and the call merger. the to

So, I be U.S. going guess firstly, was to to biologics, Is wanted this segmentation at going that John, but Is How you about I be look ask forward. one to going coming, going reporting you're that? knew it to International? hardware etcetera?

we're still we portfolio business to we're how to will out reportable in figure what going the evaluation segments phase the run because right of Yes, be like, got the internally along lines.

decisions reporting those deadline. and to first the we've once final have we'll by made I quarter So, we'll color think segment definitely plan to those as reporting more give the

made go want but at this to So, yet, run how no clearly evaluating point as at we forward and we decisions look business. we're something the

Got it.

a and talked G&A you for million us from and side synergies synergies higher from on had about? give plus [X these like each [indiscernible] looked about X then expenditures G&A before the some how about [ph] we front? you sense should can QX least that of of on then It And in QX of the of the some start the G&A X] kicking Okay. think of that at balance year and some

for costs? in about will QX So, compare expectations to how asking QX you're deal

the looks million X you're like – in it think spend as I about fourth quarter. Yes,

that off take few to kind the of So, swiftly quarter it a quarters? first going does tail or in or not swiftly is

of So, end. still probably of spend, in at QX will terms to costs because the in deal it heavy paid ongoing read get quarter fees kind lot specific A legal post-closing. of will there's another fees, banker be right, the

Then the transaction synergies. achieve cost we'll QX a more to that's So, timeline. to shift

mentioned Keith and right, in year. in As severance part heavy can scripted the costs middle this most the comments, of probably his will increase be

the likely achieve occurring now call the So, costs which QX QX closing this what and I will synergies, costs – year setup to headcount in integration deal to from IT system to over we'll cost and be costs cost of transition bulk probably. one-time

Okay, Thanks us. That it the taking got does it. questions. for for

Our Instructions] Please from Dave next JMP comes Securities. Turkaly question [Operator from go ahead.

Your line is open.

Hi, about but of either not you guys. spot I'm you're want to of and or range how look earnings. put that this to timing, on some when either together I one directionally cash have the for imagine flow put targeted think I trying area understand, guess them I do even or don't comment targets at to going here want what like line is I good bottom like evening, we'll to, Bos. on and here, well? Maybe as sort free ready to but sort be for

first get clearly synergies Yes, built the operating be a the to plan annual combined model. quarter digesting for integration going and into the the focus and our deal company the for now through we running able we're through to what

we talk not on I P&L into early give suspect level I better So, first working deal kind picture just more that still and but we're and that of about think any first be big in we'll color position we're in operating the the because and flow position beyond some terms built But line financial quarter at in combined plan, we're top of down a a clarity yes, cash company in to a level sense through call May. a expectations model. to high have good high metrics the give our

know expanding commercial, the on both I teams. the that the Got it. have companies know you then And worked

would the be larger able SeaSpine focus advantage distributors said, the side? Will the you've these Orthofix you not of you've Spine both true to new be take combined new able changes, a of overlap, maintain think of made made be late. to both some but you all changes the that that of I choices some they you'll think I on even of said, lot sides? on and guys

do. I

they I think discussion current and even some of that we're how light there's already combine that territories even opportunities can in together. overlap there's

broad growth that that I of think about fortunate we there's is. portfolio company's and excited think want have teams part this how we're new I the – to are be been is what it they And profile. distribution a

comfortable future. plan excitement as the be today, because them a looks just see have future X-year very will marketplace. see They not the but will what exciting for continued X-year that we feel that do So, more like for innovation as I even of the well company the the to they innovation drive

one, cross-sell when had do or your last you Orthofix are products? with with thoughts some some you Is if in, and the could SeaSpine in other for I Italy of just what on at And specifically been, a one some geography least and squeeze them Orthofix and stays for combine, think still recently, there exit the places Europe your important. you you least know, that part, on exited of you sort certainly of was maybe that mentioned you if it's the wind-up I one I from legacy Europe, know at

Yes.

is Europe a a now to be of think I frank. There's complicated challenge right regulation. lot

going dramatic to to to the expense sell Some great and getting even road, how a and product in product market say, promote additional, down you're it's I able but pushed still creates it's a of Europe. a not be would of, deal

of spinal has think traditional business than that a implants they're [indiscernible] out very with. would place what has specifically and long very in categorize in the been based a I I for situation deal to fortunate time orthopedic different we're

to regulatory such some continue at we evaluate. this new the And Europe pursue and drive effective, to that But for in be promising. cost time, wanted they're so, we'll Spinal to plans continue evaluate to profitable We’ll a venture forward continue a in a we'll way. it Implants how European groups with

lot. a Thanks

the We have for questions in back queue. closing call like further turn remarks. Valentine Keith would over to to no I

over interest again for to we forward have the of to you this look I'd Event March Orthofix in employees appreciate great the rest throughout family, in coming us speaking us join opportunity the to Have you all online at [ph] of joining dedicated and Teach-In many up you XXXX to XX. hope us on X,XXX a thank evening. the some today. your joining call [say] in afternoon. like So, We the

This conference your for concludes today's Thank call. participation. you

may now disconnect. You