Globus Medical, Inc. (NYSE:GMED) Q4 2022 Earnings Call Transcript

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Dan Scavilla: Thanks, Matt. Again, a really good question. So it’s always — it’s obviously interesting from the seat for years. For eight years, investors have asked what are you going to do? How are you going to make an acquisition? What are you going to do? We’ve made an acquisition and folks are sort of stepping back by it. But the fact is we’ve been patient, we’ve looked, we’ve analyzed, we decided this is the right time to do it. We’ve looked through multiple scenarios throughout our portfolio and really came back to this being the strongest opportunity now to go do this. And what you touched on is exactly right, the combined company will be stronger than the individuals, and our cash flow itself, when we combine, will be significant, which will allow us then to move on to other larger acquisitions over time.

Doesn’t mean that we’ve just shifted and won’t create innovation and launch organically. We’re just saying we want to use the financial strength to our benefit as well as our engineering prowess.

Matthew O’Brien: Got it. Makes a lot of sense. Thanks so much.

Operator: Thank you. Our next question comes from the line of Craig Bijou of Bank of America. Please go ahead, Craig.

Craig Bijou: Thanks, guys. Thanks for taking the questions. I wanted to focus on Enabling Tech here. And — it did come in a little bit lower than the Street was expecting. I know you guys had a record quarter. And you guys have talked about the strength internationally — so maybe kind of wanted to parse out U.S. versus OUS trends in with Enabling Tech. And then you really see kind of what you see in your funnel? And has anything changed over the last three months or so since the last quarter with the funnel, either U.S. or OUS.

Dan Scavilla: Yes. Thanks, Craig. I will use my first — I’m not sure I would apologize for delivering 20% growth in a recession and a challenging market. I think that’s a very strong performance that was done by the team. And so I’ll stay by that one. Certainly, last year 2021, you had a lot of sales robotically in the U.S., because of pent-up demand, a lot of activity along with COVID. And while I say we came close to that this year. The international has, I think, recovered economically a little bit better than the U.S. in some of these concerns. So what we’re signaling is we’ve seen some great placements internationally that kind of put us back into a strong spot overall that way robotically. And as we’ve said, we’ve also put out the imaging system. Really U.S. right now with where that is and what we’re doing with that and just continuing to take advantage of that market.

Craig Bijou: Got it. And just following up, I’ll stick on Enabling Tech. But Keith made the comment about looking at into a recession in response to one of the previous questions. But your view on ’23, you still feel like there’s a strong hospital appetite for capital, and you don’t see any concerns or any changes in either the thinking or the actions of hospitals?

Dan Scavilla: I would say it’s a little too soon for us to call. I mean, certainly, even getting all through COVID and into last year, we’ve seen behavioral changes and concerns and shorting of staff that they have to divert funds otherwise, all things like that, that have been a ripple through this. So I don’t know if we had a chance to look for really the last two to three years at a steady state and understand what’s normal and now, we’re in the face of a recession. So difficult to call. Again, what I would tell you is we’ve placed out stand-alone guidance. And in that, we have fairly strong numbers that we feel we can achieve, recognizing that there may be some pressure on the Enabling Tech. But again, there’s enough levers throughout our overall portfolio, we feel confident we can achieve those numbers.

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