Curt Hartman: Yeah. Rick, listen, I’m not going to get into competitive strategies on a public call, but I think our teams are well-versed on going to where the business opportunity is and taking advantage of that. And especially when you have a clinically differentiated product that has been used over millions of patient lives with a plethora of studies around all things related to patient outcomes, we believe that that combination, when presented to the surgical community, independent of the specialty setting, is a game winner. And our view on that has not changed. And if it’s a tougher sell in this market, we can either find new strategies to sell into that market or we can go to where it’s not as tough a sell. But let’s be brutally honest.
MedTech is a tough sell across the board, because you have to convince people of clinical value and you have to work through value analysis committees. And we know how to do both of those with AirSeal because of what it brings to the table as demonstrated in the eight years that we’ve owned it and in the years before we owned it. And that body of evidence just grows daily. So we feel very good independent of what may be in front of us, whatever path that we’re going to find success here with AirSeal.
Rick Wise: Gotcha. And I apologize for asking you three if you don’t mind. Just want to make sure we get in the smoke evacuation legislation. Two more states recently passed smoke evacuation legislation, I think both West Virginia and regular old Virginia. So I think you’re up to 17 states now. You’ve got more and more states. We’re further along post legislation passing. Are you — what do you think is this changing the dynamic and the outlook for the business? Any color would be great. Thank you so much.
Curt Hartman: No, I think it’s interesting. You would think at this point there’d be actually more legislation passing. It’s been a little bit slow and I think if my memory in reading the data is correctly, I think Florida actually pulled the legislation, so they’ve actually taken a pause for a moment. I could be off on that. I’ll have to double check that. But that’s what my memory says. What we know is where states have passed legislation is that over time as that legislation goes into effect, the growth rates in those markets is higher. And we think that’s what will happen in West Virginia and Virginia. And we support the legislation. We support the operating room staff nursing to have a safe and healthy environment. So our offense here has not changed.
We still believe we have a best-in-class product in the marketplace. We still believe we have a comprehensive portfolio that addresses all procedure types where smoke is created. And we still believe we have it in the hands of a great Salesforce around the world.
Todd Garner: Yeah. And just to clarify on Florida, so there was a Florida bill in process that, that process ended on March 8th. So that was kind of Florida had something in line to pass, but it didn’t pass. And they’re going to have to restart that bill.
Operator: Thank you. Our next question comes from the line of Robbie Marcus of J.P. Morgan. Please go ahead, Robbie.
Robbie Marcus: Great. Thanks for taking the question. Todd, just wanted to clear up some stuff on the guidance. You guys beat by $5 million on the top line, $0.05 on the bottom line, and there’s a $10 million headwind for FX, and you’re lowering by $0.05. So, is there $5 million I’m missing, or is it really you’re lowering by $10 million, but it’s a $15 million headwind? And is it a $0.05 headwind for FX or really a 10 set to get to the net down five after the beat in the first quarter?
Todd Garner: Thanks for the clarifying question, Robbie. So the reduction on the year is $10 million, which is entirely due to FX. So no change to our full year guide. You are correct that we beat consensus in Q1 by $5 million on the top and $0.05 on the bottom. What we’re saying is that relatively small beat does not change how we see the year on a constant currency basis. So no change to our full year guidance in constant currency. The only change is due to currency, which was that $10 million. So we still see the first half the way we saw it three months ago, even though we beat Q1 by a little bit, we still see the first half the same, and we still see the second half the same as we did, the only adjustment being currency for the full year. And that goes for the top and bottom.
Robbie Marcus: Okay. And then maybe just to help everybody get level set on what your first half expectations were. Anywhere you want to help set second quarter as we think about EPS or interest expense, which came in a bit lower, and you reiterated gross margin, which I believe FX gets offset in sales, correct? So that wouldn’t change any of the FX guidance.
Todd Garner: No, we definitely see FX affecting gross margin as well. So that’s why I did provide a little more detail on the Q2 in my scripted comments. So we see Q2 as a 4% to 6% reported growth. So that would mean, and I said there’s 50 basis points of currency headwind there. So that would be 4.5 to 6.5 constants currency growth for Q2, but 4% to 6% reported for Q2. I did not give specific EPS guidance for Q2, but I did give that back in Q1. We kind of talked about that, and I think the street has that in the general area. So if you take the commensurate impact on the bottom line to get to those revenue numbers, I think we should be in the right place.
Robbie Marcus: Great. Appreciate it. Thank you very much.
Operator: Thank you. Our next question comes from the line of Travis Steed of BofA Securities. Your question please, Travis.
Travis Steed: Thanks for taking the question. Todd, maybe I want to follow up on Q2. I think I heard adjusting for currency here at like 4.5% to 6.5% constant currency growth. You did 5.9 in Q1. Just want to understand the cadence for, I assume supply gets better in Q2. Anything to consider like why we wouldn’t see a step up in growth rate in Q2. And then I’ll ask my second question. That’s just on the [indiscernible] and Biorez. I assume you still assume that business is a double-digit growth in 2024?
Todd Garner: Yes. So yes, I’ll take the second one first because I’m remembering that better. Yes, we still think we still see those growing double-digits for the year. Okay. So Q2, why 4.5 to 6.5? We just did 5.9. That’s all kind of in the same range as I see it. So I see those as pretty consistent. You are correct that supply issue should be less as we move forward. But as we look at — the normal seasonality that happens between Q1 and Q2 sequentially, I think our Q2 guidance is reasonable based on what that normal sequential seasonality is. Now, when you start comparing that against the prior years, it gets a little noisy, right? Because not every quarter is normal and there’s been — if you go back a couple years, you’ve got COVID affecting how those played out sequentially. But as we looked at a pre-pandemic world and what would our business normally does between Q1 to Q2 sequentially, we think that where our guide is, is the right place to be for now.
Operator: Thank you. Our next question comes from the line of Mike Matson of Needham. Please go ahead, Mike.
Mike Matson: Yeah, thanks. I just really have one question and I want to follow up on Robbie’s question about the change in the guidance. So, look, I understand you don’t give quarterly guidance, but you did beat where consensus was in the first quarter by about $5 million, and then you’re lowering for the year by $10 million. So, I think that the — I guess pessimistic view here is that you’re taking down guidance for the remainder of the year by like $5 million. I know it’s not a big number, but in an environment where people are hyper focused on any potential impacts from intuitive, it seems like a — kind of sends a bad sign, I guess. So, I just want to know, why not just take it down by the $5 million net impact, netting out the currency versus the $5 million from the first quarter, $5 million upsides in the first quarter.
Todd Garner: Mike, we take our job seriously. We give you guidance based on our latest information and there is no change to how we see the year. You are right. We had a small beat in Q1. We don’t think that is big enough to alter our view of the year. We still see the year the same way we did three months ago. And we’ve given the guidance we’ve given today and we think it’s appropriate.
Mike Matson: Okay, I understand. But I guess the $5 million effect of reduction for the rest of the year, what’s causing that, I guess, maybe we’ll put the different way.
Todd Garner: That nothing has changed on how we see the year, any days later.
Operator: Thank you. I would now like to turn the conference back to Curt Hartman for closing remarks. Sir?
End of Q&A:
Curt Hartman: Thank you, Lateef, and I want to thank everybody for their time today and we look forward to speaking with you on our next earnings call. Thank you and have a good evening.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
