Daniel Scavilla: Yes. Drew, one thing I would add to from my earlier comment, we are breaking that out more for visibility right now. We may decide that it fits better and consolidate that over time. But right now, we’re just kind of following through what our Nuva guys did as we got into the year for our first time announcing some of this.
Andrew Ranieri: Got it. Maybe one last question. But as you are looking at the the businesses today that you’re now combined, do you see any incremental opportunities to divest anything noncore or slower growth just to refine the portfolio and really get to more accretive growth out of the merger?
Daniel Scavilla: Yes. I would say no, not at this time. We’re evaluating everything. We’ve not seen anything that would be a good candidate at this point. We’ll always do what’s best, but right now, there’s nothing that comes to mind.
Operator: And your next question comes from the line of Ryan Zimmerman of BTIG.
Ryan Zimmerman: Glad I could get squeezed in here. Just on the quarter itself, if I look at kind of newest revenue, we look at kind of next quarter, I think — the Street was estimated around $445 million or so for consensus for Nuva, we’re kind of hone in on maybe $415 million. And just wondering if you can kind of comment on that delta. Is that in line with kind of where you’re tracking from a synergy standpoint, kind of how to think about that difference there? And then I’ll ask another question afterwards.
Keith Pfeil: Thanks, Ryan. This is Keith. Your question, you said the Street was modeling 4 15 for NuVasive.
Ryan Zimmerman: No, I think — well, if you take the 100 and you assume that, coupled with, I think, next quarter, which was maybe about $300-or-so million, you kind of come out to 4 15. And I think the is around 4 45 for the — if my numbers are correct.
Keith Pfeil: Yes. I think that it’s a great question. As I think about the numbers we put out, the implied guidance represents $2.377 billion coming into the year, Globus projected guidance of $1.1 billion in NuVasive. They were a range of 6% to 8%. If I take the low end of the range in our number, that’s $2.374 billion. We’re projecting $2.377 billion on a combined basis. We think that, that relative to what we’ve previously stated in our S-4, we feel that the business is lined up as to where it should be.
Daniel Scavilla: Yes. And Ryan, 1 thing I’d add in there because I’m not sure if I’m reading this between the lines, so forgive me. But we’re not saying we’re bleeding out because of dissynergies. We’ve not seen anything that would have materially moved us off of any of our estimates related to that.
Ryan Zimmerman: Yes. I appreciate, Dan and recognizing right now, consensus is kind of messy but with the integration on the merger. Just want to ask. And then the second question I want to ask is just around your margins, particularly your gross margins, Keith. I recognize there’s the step-up in inventory that you’re accounting for. Just maybe help us because I’m not entirely clear where your gross margins can go on a combined basis and how to think about those not just for the fourth quarter, but really into 2024?
Keith Pfeil: Longer term. Yes. No, that’s a great question. It’s always our intent to be extremely clear be in mid-70s gross profit business. That is the goal of Globus it has been and it will be going forward. As we work through bringing the businesses together, I commented on earlier about some of the manufacturing efficiencies that we see, some of the warehousing efficiencies that we see. Those to me will all contribute to us showing an increasing consolidated gross profit from where we are versus the initial combination of the business. It’s our belief that we can still drive mid-70s GP going forward. Obviously, there’s going to be some step change as we get there as we bring the companies together. But the goal of mid-70s hasn’t changed.
Daniel Scavilla: Yes. And Ryan, I’ll build on that, too. So we talk a lot about insourcing and investing in manufacturing, in addition to what Keith said, because that will be a key driver. We can drive our product cost down. That will allow us to not only improve gross margin, but instead to turn around and invest deeper into the sales force. So is a major focus of us to do in-house manufacturing, line up with our contracts and come out with the best pricing with our vendors. And that in itself will help lift us back to our targets that Keith mentioned.
Operator: And your next question comes from the line of Matt Taylor of Jefferies.
Matthew Taylor: I wanted to ask a similar question in a slightly different way. I guess I’ll start with some of your competitors have made noise about taking reps from the combined entity, big for them, kind of small for you. And everything I heard on this call from you today in terms of lower surgeon overlap and being within your target and seeing competitive activity coming your way, sounds positive for the integration. So question is really, is that right? Are you on track? And is there any thought or potential for you to actually outperform the synergy or the synergy estimates that you put out there? Or is it right to think about being straight down the fairway or the base case is most likely?
Daniel Scavilla: Yes. Matt, we’re early on on that. So I’m going to let you know in about 3 years. No. But I think what we’ll do right now is, we’ve not seen surprises. And I think we’re standing behind our numbers is what we’re saying. And again, there’s 1 month of actual and everything you’ve said is legitimate. What we’ve got to do is focus on getting the commercial team stabilized, make sure we train, get our products delivered, accelerate how we have common systems, bring in-house manufacturing for more flexibility, and they go back and flex all of that strength to become who we need to be. But at this point, we’re going to shy away from saying we can outperform or fall short. We’re going to stick to the synergies that we’ve thrown out. We’ve got a pathway to go get there as more data and experience under our belt, maybe that’s a different conversation.
Keith Pfeil: And the only comment that I would add there is, obviously, change creates disruption in the market. But as I think about Globus Globus needs to be Globus and focus on our plan. We obviously need to be aware of the competitive landscape, but we have to stick to our plan and work our plan. And if we do that, we believe we’ll be successful.
Operator: And with no further questions, that concludes the Globus Medical earnings call. Thank you for participating, and you may now disconnect. Have a great day.
