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CNMD Conmed

Participants
Curt Hartman President, Chief Executive Officer and Chairman
Todd Garner Executive Vice President and Chief Financial Officer
Rick Wise Stifel
Robbie Marcus J.P. Morgan
Matthew O’Brien Piper Sandler
Erin Fahey SVB Leerink
David Saxon Needham
Matt Mishan KeyBanc
Call transcript
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Operator

Good afternoon, everyone.

Before the conference call begins, let me remind you that during this call, management will be making comments and statements regarding its financial outlook and its plans and objectives which represent forward-looking statements that involve risks and uncertainties, as those terms are defined under the Federal Securities Laws. Investors are cautioned that any such forward-looking statements are not guarantees of future events, performance or results as the company’s actual results may differ materially from its current expectations. Please refer to the risks and other uncertainties disclosed under forward-looking information in today’s press release, as well as the company’s SEC filings for more details on the risks and uncertainties that may cause actual results to differ materially. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call, except as may be required by applicable law.

management during these this hear non-GAAP to also measurements adjusted discussion. will refer – to certain You

While these monitoring excluding earnings special credits the and figures measure outside or on earnings other that supporting company’s measurements, financial share the management medical are from the per the a not a ongoing by these performance, Adjusted for to substitute regular figures be technology of basis, aid the website. to are items in normal benchmarking company its and companies. company, to adjusting adjusted in are quarter-to-quarter or income of the and considered company’s ongoing These the posted uses company’s charges operations. releases, year-to-year for specified against GAAP income net reconciliations

announcements With President the of will remarks. Mr. I CONMED’s call Hartman. Officer opening turn Board, Hartman, Curt over for completed, these required to Chair and Executive Chief the

Curt Hartman

through our on in outlook the to call us and thoughts is Thank current share first first Todd and business global recognizing you, call exists walk our uncertainty then quarter operating environment, Chief still afternoon Vice across earnings Good open Garner, the quarter the Financial Paul. for our Executive thank we President for With on the you will Today, XXXX that and for our CONMED’s the call. We’ll results markets. me Officer. your joining you questions.

million. million perspective, of to an the first of during earnings sales compares our the of representing total income quarter results, of currency. as year-over-year our in XXXX. net totaled $X.X net for constant income quarter first From X.X% first X.X% increase $XXX.X to quarter and $X.X GAAP were increase This Turning the a in reported an million,

in the delays of increased consistent speaking, weather-related share earnings $XX.X communicated aside expected, other of XX.X% special so that The latter particular year-over-year as income quarter see in Global $X.XX our Consistent later international adjusted Orthopedics adjusted to net in some following the what General Southwest. throughout and saw of market areas in year-over-year Overall, in procedure steady the Broadly was while achieve we the in affected the improvement comparability, States XX.X% saw the both growth great quarter markets per both showed procedure international diluted year-over-year U.S. performance. well and million across items increased challenged remains the throughout net and than Latin quarter. Excluding positive demonstrating it our quarter more performance half with with performance better the in United we Surgery from and later France the quarter, Global of America January, quarter, stoppage Asia Canada, growth markets. as year-over-year.

happy the Filter we’re XXXX. demonstrated to result to think of steps operating results validate in and response and we in the deliver growing the evacuation I to in very approve In of the of both team remain of the starting X, quarter. COVID. rooms AirSeal growth continue We XXXX CONMED Buffalo we state and many the the Kentucky closing, early these We see January smoke incidence in took proud the progress free that smoke in will going starting across during State legislation solid quarter

turn and through take a guidance financial to Todd, provide will you a I’ll our guidance As result first both now have that on of line. will and detailed analysis the increased the our bottom Todd. performance over our we call adjustments. performance, top of you quarter see more the our who

Todd Garner

GAAP currency. prior numbers release. reconciliation Thank compared our to The year in in you, growth I included All given Curt. will sales today is numbers press the be constant reference to

also QX, and day results of results an less we XXXX view. included for website updated our one have did the investor selling that the on guidance that have interested in summarizes compared both you the basis external We to those of sales not quarter, the Normally would on quarter. in QX, usual, years, provides to but quarter, be XXXX XXX to points in deck As between abnormal impact compared our the we the we environment to impact XXXX. given estimate would on attempt and quantify XXX that

strong COVID a compared capital March January and our levels. total grew quarter QX was the sales the to of and prior to quarter. In grew the year, In and February, both Capital For below a QX, on meaningful we first each was XXXX, had compared XXXX, March over but XXXX full domestically global products. and our basis XXXX. increased significantly on still impact in month single-use X.X%. slightly grew internationally QX,

quarter, the quarter. first U.S. sales prior-year total X.X% increased versus our For the

Our declining. international compared Europe the in quarter. for saw some growing the sales XX.X% mixed the and to year. with bag, Canada quarter countries some increased growth good and prior Australia a was

Europe in whole, a slightly for us grew QX. As

by the in of and geographic therefore the nicely most us. impacted the virus was Asia QX for grew easiest against XXXX, comparable

US, AirSeal globe. in most X.X%. against the surgery near X.X%. Latin grew U.S. is lagging. the Internationally, the grew surgery revenue virus general in X.X% increased across Curt as revenue surgery challenged was Buffalo the quarter. first As strong continue America increased revenue internationally grew and term QX, have sales expectations grew progress X.X% in Total our said, to growth X.X% and decreased for show XX.X%. and general Filter quarter. In geography orthopedic orthopedic worldwide our that sales Worldwide region the general orthopedics

let’s expense income to the Now, move the side of statement.

lower acquisitions total decrease quarter. be move gross we include told intangible and little the fees expected of and for special you as first XX January deferred in of the positive sales, after Adjusted expected, and points to to periods. financing forecasted of the recent development charges expect excluding the a year, compared quarters X.X% amortization we a XXX we QX, profitability, quarter quarter the of assets that. XX.X%, we was debt which and margin net than discount, We amortization prior-year expenses discuss to better tax. we to related was basis restructurings, prior-year had the impact gross basis will lower and integrations, We and continue from from This from Research QX through margin XXXX. production than of negative was expense that levels points for first as adjusted items,

SG&A excess expenses expense adjusted due effective to stock on future quarter The XX.X% First sales, of million basis same in QX. XX.X% were of we lower Interest basis. prior-year expect the $X.X quarter. was rate tax to plans. lower adjusted than QX an nearly adjusted on but an the the in was from basis tax than points in we don’t expected, is principally difficult quarters. benefit benefit This predict, was This XXX

adjusted rate to XX% the effective XX% remaining our continue We in to be of XXXX. quarters and tax between model

share, First per over increase quarter GAAP million quarter. of was prior-year or the net diluted XX% which income an $X.XX totaled $X.X

Excluding adjusted. shares quarter notes. for was we value per the discussed above This an of items prior-year increase addition impact hedged of and XX.X% of approximately QX as to conversion where XXX,XXX is diluted the impact $X.XX, the convertible reported The special count our diluted price average the to income net compared the share net has adjusted in earnings first the of earlier, million of share adjusted of $XXX.XX $XX.X the period. been stock

EPS future cannot can approximately QX, in As calculate, on this stayed impact this the adjusted it predict course stock if levels, price, $X.XX. immaterial by an you adjusted decrease our of at we and we full-year of current estimate had but would EPS

XX, term quarter-end XXX Inventory days XX, the of end XX of at at the a the XX XX, balance balance $XX.X March $XXX year-end December our year-end anticipated for days XXXX. Accounts XXXX. build to to quarter were as million versus compared were million the XXX, $XXX from at of volumes. at days with compares This days year XX, cash at December ago. Long XX. was sheet, of days, end to million increased and as at consistent we days down receivable debt at and Turning $XX.X was the quarter XXXX as XXXX XXX March million March

XXXX March times. on ratio X.X leverage was Our XX,

Capital you of the As banking the for expenditures pandemic, million original the debt in therefore parts turns Suspension of worst through during first appreciate million did times compared exited never and need a exceeded we ago. ago. We hindsight, Cash million our QX Agreement month $X.X with support out our the entered $X.X banks uncertain year a the from XXXX. partners we to provided the in quarter probably $X.X covenants the million in flexibility even Suspension not in our Agreement. compared $XX.X into this the to of a saw, quarter ago. year year we very operations It flow provided were was

on year impact year. how our of XXXX to view to assumptions months framework a turn we on of full the guidance. let’s our based opted would virus provide ago, Now, updated financial Three guidance the

As a QX be reminder, linger impact that and and would from were into then QX that significantly impacted ameliorate by those the assumptions would there. virus

months, virus. disbursement the known at was reducing from would be vaccines take on assumption but the Our the burden that healthcare of global effective the of variance

but be relatively case We counts elevated with proven continue year at has Global to levels, remain to see XXXX resilient. transition our those same assumptions. as a business COVID also

full-year notes a As headwind the and I to adjusted Latin related concerns convertible share expect diluted mentioned America earlier, additional a count higher have EPS. also we to now in to be

between revenue billion. the just and year new now is top points the earnings. guidance absorbing basis as months Our the expectations for to QX discussed. XX to the to the revenue favorable XXX on QX basis points bottom ago, through the expect currency $X.X approach had That full-year to the over-performance for $X.XX recognize favorable be in and but and remainder of QX just full-year, line billion slightly them results maintain three for our and I adjusted between modeling while to headwinds in we We

call $X.XX. expect EPS, like between be adjusted And we’d to $X.XX full-year hand it Paul. with For to to XXXX I’ll we the that, questions, and back to open and now your the

Operator

the Wise [Operator Instructions] Our of is Thank Stifel. question line you, first with sir. Rick from

Your line is open.

Rick Wise

comments help more that if that that sort that momentum the of with improvement April, areas? scenario particular you’re color into us would. and start I’ll heard and area maybe Curt folks. Is Maybe America seeing one of or just March, and the Good ex Todd, in else. weakness through companies similar both that of a January continued the us slowness the as what any from think you’re Just cautionary the seeing we on or Latin the February that product giving you afternoon something question on suggesting where and strength, on were and most is significant you of and environment etc. that part a emphasizing procedure little in current

Curt Hartman

pretty that the think to saw I the we’ll past double don’t really that fourth that February from the top a were probably want of Southwest January, a suppressed did of then in area slowdown opened little and volumes, that things the good one were a in that given of little a think of week. A we the beginning impacts bit COVID but happened the quarter. procedures weather what place. bit, I was of part the just this month of as at of a continue, in restrictions I continuation on California lot slow impact quarter got of skip on portion of had of case rapid fourth in year up you XXXX. addition, across and then March, a a down were in for impact COVID people second a February in the the shut obviously pretty commentary team because know the event comparables surgical of That is into were case procedures, country. and Rick, markets Southwest the tougher just things that, The most March half the the lot profound also

we As gotten have March, vaccines through rolled better have came things out. as

to vaccines it think we’re our headlines other year in as I know, at a tough etc. India don’t challenged You of the remains American based bit, second there’s be and availability on very everybody’s quarter this that, is obviously at than organization. Latin any a an so and commentary little might to I more We said markets spot Latin of changed disbursement what as challenged. the the America even lack point, have a aware. think relative just and seeing we’ve in beginning a the little of started

frame relative I’d it. if Todd how to comments know has So that’s I other that. don’t any

Todd Garner

in remind not relative this would No, are quest know just from on is to hear mean, agree. everybody we I and progressing I I Rick. normal, as there. right, are Obviously back – everywhere we’re and else basis certainly I a to for that, we’re everybody you things when anxious normalcy

than February. consistent QX so long on say a everybody perspective. Again, market, So certainly is January and more but you about looks March would February. normal April talking a my know just April March a does this better January we’re yes, it and not saying, as like whole from what lot I way call, else with still But we’re than that’s

Rick Wise

How we an you when beyond? is on in you. And that was decision making, acceleration my about customers thing for expect interested, more accelerated approval more that And they we question. you. general, recently think are second know get kind due what and smoke legislation. a and like do what bunch the around or did thank XXXX diligence right we on what heard this from faster just move the on feedback, business trialing, smoke Kentucky adopters potential Maybe, we faster hospitals We did are Thank of hearing has are COVID legislation? we your that you – Yeah, right mindset? decision are hear the do adoption, impact your the expecting you get of making

Curt Hartman

market, surgical societies smoke more reflected the work because on changed, to did the is going of that has it more the financials. survey think said Yes, the transcript, said back the smoke, devices wind that the product, this the it’s think up a definitely starting not of not ago that hospital was environment. not the consistent showed and surgery, that call on staff, end what just it’s the welfare challenging and and that you the you and that it’s there’s market of legislation necessarily great I as as whether just I is, first we of the at for the those it of the time the publications of quarter AORN more also pulling up facility. and AirSeal We’ve and and a who’ve the world the for the this because happened this employees now who surgical the for and growing impact by it the well-being smoke-free by work of that’s all really Rick show back surgeons plus, third at was it’s second in you’ve reread commented the the been staff evacuation awareness and societies, think – have or year lot appreciation that more that probably smoke was quarter by of is society around the in benefits the there awareness stated we back overall administration awareness there then and in other know environment, a a decade advocating health that with to we if you has to in financials, in the in In attention go

like direction legislate mandate, along positive, the timeline. because move when obviously they or it comes a sets something market of Kentucky and kind in XXX% and helps it’s it this of So

the starting look would So, that we’re from not little had doesn’t appears to as using I much were we’ve also a if evacuation in positive. you There more legislation though State so teeth. to Kentucky and accounts have But, it, have say, smoke This already more other bite one filtration. zero. of

ones just the haven’t motivate as it’s So quite moved that helping other quick.

frame I’d the it’s way it. think I

Rick Wise

the to nice you. in a Thank Got you. Thanks, quarter. and see progress

Curt Hartman

Thanks Rick.

Operator

with from the of Our Robbie is Morgan. next J.P. Marcus line question

open. is line Your

Robbie Marcus

Hi on a the congrats Great! nice really quarter. question and for taking Thanks guy!

Curt Hartman

Robbie. Thanks

Robbie Marcus

maybe one. to from me, questions first two with the start know You

you’re I turning out management to know very tease historically a appreciate, just You want team like I the that, and but just and conservative the to guidance and answer. try

something first had know just raised less sure you lines assumptions I you to for uncertain along third, is make what be still but known the that yourself the and of you mentioned you it, get them tease to environment the out forward bring and Just that quarter prompt more to coming is of first quarter there. that not want don’t ahead to try here You seeing you want all? mentioned first you you at exiting guidance would or and take know quarter is into answer trends the the second, it you’re from fourth are want and quarter, good

Todd Garner

year. Yeah, got we’ve the to than so we right know ago, the months is really QX business flexible, make lagging, was QX time, we’ve same were stay three as as release just just being with you going fuel and had The and from we got Robbie and where decent counting the be very but actually We we better the sure a QX. year out to flexible the – fuel were we right. to measurably pleased of the assumed but at don’t year, is through right, is make it kind the stay we manage QX of a got opportunity we the it’s and brake navigate to better on ahead laid had still We the to did and than where improvement, expected, already sure QX. and step-up opportunity brake

was, as we’re but and globe, around essentially we enough we leave it’s and had uncertainty over QX knows, it’s there U.S. international. where QX XX-XX smaller a the think than there So still it, step-up I it out is and everybody improvement

just is know of no ahead uncertainty, here. is yourself enough there there get You reason to

as we’ll from we talk and it QX take play the a there We’ll versus continue have three and it on we’ll and months now. focus through and about count from appropriately quarter-by-quarter. it to will we’ll pandemic win we the expectations So business as managing executing

Robbie Marcus

here. I a just great, follow-up appreciate Maybe that. Great,

wanted you if tell see Morgan AirSeal Buffalo now of how and comment could the Thanks. Conference business on first sales, least were You in XX% grown the Filter J.P. the you so know nice were did I us at at of quarter? to XX%. that part that to

Todd Garner

and least said QX. least of think in Those, business at it’ll both XX% XX% that I beat growing at numbers those we true; the of remains

Robbie Marcus

by? Any big. can dream they’d pretty on beat much how color We

Todd Garner

product going the to going but there, get into not how pleased we’re and that’s We’re specifics thesis intact. remains with line

Robbie Marcus

tried. a lot. Thanks I Alright,

Operator

from Sandler. is question next O’Brien Our line Matthew Piper of with the

line Your is open.

Matthew O’Brien

for taking Great, questions. the thanks

guidance, on is going on keep to more versus by but $XX know QX not million. a Todd, getting like million before. now you you expecting beat the $XX Currency path were what here So just tailwind you

that So of in some it’s seeing midpoint increase in the the headwind the Is about up only of and think million. of the big year. U.S. currency and in $XX versus the between QX midpoint It here things here in down It cases are for Latin back $XX of just raising the going you’re here to QX down million, America saw of and the you seems pressures like you’re the know some or is a those loosening range? in EMEA really get a $XX rest million you’re we Southwest the to seems by India that delta there in in what like

Todd Garner

some little Well, first your guy. an you’re I I bit. Matt, optimistic a that you’ve and done like optimism like of all, rounding out Also

left the QX alone. on months your was the we $XX and works what you last if and prior-year so think a million million, we I’d take for the had All out $X caution think year between nine the XXX guidance our million, But to right. wider rounded rounding. on XX I out $X basis of million, there look, for did up points and of so yeah range, to you’ve for $XXX actual had math do you we a to I

now a And our range our we’ve specific has so a right. delivered we that million $XX QX on number, so $XX by million, revenue range had revenue, shrunk

– we’re that get there’s very don’t more the that all; out We pieces specific. and no bearish So not just there, moving we’re need year QX. to enough get on the need see with granular there’s that to at or pleased

manage lots keep dynamic doing good work of to and left year. have of So to do, it. external been start levers we we’re deal going it the to with to doing and Lots as

Matthew O’Brien

side. so it, that everybody an sure Got appreciate me And you knows the out. curious I’m easy comp. as the uber okay. in community capital on I had I know also pointing was I you optimistic, investment

deferred, in strength capital is million clearly How guys the for capital obviously QX hospitals QX some of We’re capital volumes it deferred the we QX know in demand? does much about How and mean which we you as was across guess in pent that $XXX into should of is real what seeing up expect durable here say year? med of tech saw. I of that was for of that go COVID remainder rest as there is that or that I the number you the year, these purchases, are worth front then that? purchasing and that,

Todd Garner

I the is think essential we the is, procedures based done. of capital Matt, our it’s the half dollar way I smaller saw would comment procedures latter in that picking being the and and on up of capital on a quarter more capital obviously,

if did would because there thing of need, a we I video going they platform into potentially capital. otherwise to a of tool comment, market. purchase, the the and We top come on large bone lack new just they we is other power are we of the And procedure new because the are capital had a deferring make that a platform. new is had add So had

capital that, relative items, favor a but some to have on new and box, force generators, couple Buffalo of going like sales customers, right gets anytime then a IFS if to your put up general revisit have in items Helix that will. small then dollar have all you extent now adds lesser the also our products to two So It in them capital, new you item, bigger the too. we offense. And our capital box, we AirSeal surgery enthusiastic back things so Filter

that those scheduled. open are slowdown That a up financial on was more dollars capital never getting where capital, and and up existing to saw puts we tear as were good put a opens of I opportunity markets think being capital here said, It about wear related we’ve the of have more capital the there critical going and procedures been height of they and in capability. We lack and the to were more can COVID more, other if on addressed, in routine they that’s move lot to now needs so pandemic during A call there. capital it the is take you much backlog there? don’t really quantify, really to a so would hard at think that How will. hard It’s guess I capital out I quantify, to one. as

Matthew O’Brien

Thank Totally fair. you.

Operator

is the line of next question Richard Leerink. SVB Newitter Our from with

line Your is open.

Erin Fahey

Erin Thanks Rich. is taking This for Hi! questions. for on our

in a sports sports couple you’re up organized talk wanted pick ones you what Just Have quick with of been those about maybe throughout quarter starting? me. area? see Just Could you volumes segment? what seeing in guys to have noticed the starting medicine from guys the to that

Curt Hartman

I think progressed. they the strengthened as quarter

including video, report within orthopedics, know products of a We power. You including lot orthopedics. different had we

in be sports tissue that procedure specific and used in at tissue you the on the MTF our the that in the portfolio, item directly both other that soft quarter. in and market, the U.S. international growth that, biologics we procedures in markets which If we reads category, medicine then category, generated generated is would U.S. and and the international the both in repair, look anchors are growth

soft obviously to group continue in hip etc. that the expand to is the we’re the and procedures foot as innovation repair; Obviously a as and and on hip, clinician a soft of as the biggest to just there set lot well elbow presence CONMED’s doing knee, extremities shoulder. So reminder, tissue ankle, occurring was focused be a gets more tissue relative in that and shoulder, growing knee of repair, the wrist, the

to as we’re we up So further that’s starting quarter into got I what think and the the procedures for. pick were prepared

Erin Fahey

of quick Okay, And has heard then legislation the filter; – congrats pipe? similar great. I guess great, on mean, Kentucky thanks. other down the any on is legislation a that one Have of coming I just type states Buffalo another you

Todd Garner

close think states you were dozen process a pandemic actually are and about there’s Erin, the know started. that before we in the Yeah

back across it, something service seems sure as So we’re of have counting we safe the the to it’s you, this share we deal happy holding as they make market’s legislators just one is the on we not grow, around welcome really and that We see remind trying will to I’ll Curt demand states expect We are but the so rules with. the all not will necessarily would said, customers this be keeping it. get to things the following some and first think the leading become country to just for it, workers legislation or we’re care at to as of we our eventually is that standard breath and that here market going that and as of logical, to going we’re CONMED. know can get much work, can.

Erin Fahey

so Okay, much. great. Thanks

Operator

Matson with is of Needham. the from line Mike question next Our

is Your open. line

David Saxon

is Hi, David Mike. questions. taking This Thanks the on for Todd. and Saxon for Curt

can AirSeal. can you March then robots. how April, utilization to just one attachment of The was just first about intuitive you what rate I give levels? and with is the that I could over pre-pandemic And the and drive if an higher time? how update on in that on kind trended talk wondering compares guess

Todd Garner

you your about On question utilization talking broader? March, April or David, are AirSeal specifically something

David Saxon

Yes, AirSeal.

Todd Garner

Okay.

Okay, the and box way you that AirSeal we to has a where several in that right, about room, we footprint I an into before the da see see been robot, you before so time an over that, and past far you’ll that continues framed attachment, half climb. Vinci also the walk framed climbing think right, is so the OR years and

also grow. now, footprint the XX% continues that to That’s below more percentage. approaching probably probably it’s it’s safe So number a say, like to so continues procedure grow. to footprint The capture

because using procedures now be on right. the just that’s So of AirSeal, Vinci, we you it’s are north doctor-by-doctor, of done XX% da will that are that where the and

all, and continue well. we Just because to the got got Specific continues those go expect procedures, this but in to will it numbers and surgeon-by-surgeon that, they from the about talk continue you’ve we’re room, you’ve not going AirSeal, utilization, to machine is of is a up, to to This not Both a – definitely go here. adopt that get up go tied QX but to try doc-by-doc, first here. call, April about talk so to right. is we’re going to

procedures as up, usage, were you open in February, then they So have and depressed, those we January fewer more as are procedures right. get like

So so still the from February certainly in March. between February some and and also we’re normal. way Curt as United a a by issues long think decent We March. February a And States, impacted between to was nice increase weather said, pick-up

We’re globe. Hospitals or to impacted the course maybe delay having reasons still defer and also to have and of are the still own be again by then or hesitant. manage are across Procedures prioritize patients still and adjust, their virus.

back but direction. still So to in trending the right normal, not

David Saxon

that’s And Okay, then another maybe Todd. for helpful. you,

you but we I the should year-on-year color improvement, thinking my some margin, gross Any on Just trough, think taking line helpful. just quarter given there show much second quarter? saw kind said the was Thanks we for would in second be what first be with last quarter year should in so of questions.

Todd Garner

say David, in yeah, that question Yeah, range, and I’d yeah. great

and area as same over prior then QX over be around year QX QX the know should growth decent probably QX, growth the and quarters. and So you

David Saxon

thank you. Great,

Operator

is from question Matt last our And of Mishan KeyBanc. line the with

is line open. Your

Matt Mishan

And orthopedic that the and down XXXX can X% orthopedic things in a out and the you a end U.S. maintain surgery bit you the like like plus thank fascinating liked you do a a versus and was And versus positive growth is that think this five bunch difference Hey, is slide little about XXXX you versus about year? Could guys questions. XXXX, there? think I and the really how of one versus on Great! for taking down you laid whether international the talk bunch the you side, the of internationally, XXXX,

Curt Hartman

I of Yeah, internationally thing orthopedics. first that the would of XX% point business, that about guess that to is I business is XX%-plus

still have that that is point retained bigger, CONMED our place when better being is the market of a infrastructure comes the statement of that that much from in Bristol-Myers much existing position late there market bought and and a with in assets in consistent. ‘XXs. presence Linvatec driven So much the in Squibb We event internationally share historical lot that is infrastructure the pronounced, that orthopedics and more

back COVID market The good returning. respectable to for Places that’s they places other us. like good really were on of markets for and which heavily experienced presence procedures Japan, procedures in had New – performances Australia, a CONMED. the doing orthopedic China, and is, first of markets kind that some our for CONMED Zealand In are thing foremost, and orthopedics orthopedic because we Canada, market like focused

gotten a terms their to have that in and softer quarter. So as healthier the the of with COVID variability comparables lot markets had procedures, deal then full those for they

In our the happening a are and I the challenge feel where employed number now, got to U.S., from day half top about biggest continue we the second over a to orthopedics our good and that think So they to It’s have we’re and and internationally things this said our of of U.S. and of outside been years. practices been the and into market innovate we’ve continue orthopedics market, think where looking forward have I U.S. our for for positive outside start U.S. a business bringing We’ve business, business we lot continue the the traction. to the there. buyer same orthopedics that positive way momentum. the I good and we’ll doing U.S. will having really U.S. orthopedics year labs going the are of very evaluate one, a has

Matt Mishan

the follow-up as margin you you worked costs question, to variances And gross freight the the experiencing? Okay. and have through a were manufacturing of higher unfavorable kind

Todd Garner

behind from accounting they works four-month that It the are all us deferral. perspective. a how not is right. It’s yet, No,

P&L example, as in the it variances so the hit will unfavorable manufacturing an December then works. December, April, how saw hits external we so and And in in May, So right. that’s January

obviously was were so bad. December January bad, February and And

of of before, that, a will So that move be the less when factor impact half it kind – as margins continue then we to and into said into QX clouding back the year. hopefully we of mask will will continuing

Matt Mishan

follow-up question with a to last question, da And the Okay. Vinci. just AirSeal

the on when do into it to schools, at Just medical are have and AirSeal, are learn – AirSeal training to trying the curious, initially so platform? da school, get medical learning the from when also doctors AirSeal train Vinci procedure, you how you doctors or on they they’re Intuitive on

Curt Hartman

Matt. first So Intuitive, long-standing events with CONMED that there’s given Obviously where that the Surgical there occur parts of relationship lot has that question and AirSeal Intuitive to SurgiQuest training a two present. continued are with is

time. to to the and So see an there if a Intuitive likely get platform exposure at coming that event, an same doctor in they’re AirSeal training is

success, so our just products school anybody we couldn’t part dynamics. customer the those. all look all medical trajectory say of programs, those XXX% obviously, are programs as far the obviously school of I we of direct in As resident certainly priorities. to training target be that’s with is eye our and But kind have in growth medical

Matt Mishan

Thank you. Thanks Congrats! guys.

Curt Hartman

you. Thank

Operator

As remarks. I’d Hartman Mr. this Mr. back there any concludes questions, call further no now the Q&A Hartman? the session. to turn are for closing like to

Curt Hartman

look today next you, Paul. to thank to forward and everybody want I a call. evening. you have Thank on for and just Thanks time we with our earnings good your speaking

Operator

today's concludes joining. you This call. for conference Thank

now Have day a stay may and You safe! great disconnect.