Good morning and welcome to the Enovis Fourth Quarter 2023 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one, on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Kyle Rose, VP Investor Relations. Please go ahead. Good morning, everyone. Thank you for joining us today for our fourth quarter 2023 results conference call. I'm Kyle Rose, Vice President of Investor Relations. Joining me on the call this morning are Matt Trerotola, Chair and Chief Executive Officer, and Ben Berry, Chief Financial Officer. Our earnings release was issued earlier this morning and is available in the investor section of our website enovis.com. We will be using a slide presentation in today's call, which can also be found on our website. Both the audio and the slide presentation of this call will be archived on the website later today. During the call, we'll be making some forward-looking statements about our beliefs and estimates regarding future events and results. These forward-looking statements are subject to risks and uncertainties, including those set forth in the Safe Harbor language in today's earnings release and in our filings with the SEC. Actual results might differ materially from any forward-looking statements that we make. The forward-looking statements speak only as of today, and we do not assume any obligation or intend to update them except as required by law. With respect to any non-GAAP financial measures referenced during the call today, the accompanying reconciliation information relating to those measures can be found in our earnings press release and in the appendix of today's slide presentation. With that, let me turn it over to Matt, who will begin on Slide three. Matt. Thanks, Kyle. Hello, everyone, and thanks for joining us today. 2023 was a year of significant progress toward our long-term strategic goals, and I'm excited about the future of our high-value medtech growth company. We had a terrific year with continued share gains across geographies and business units, strong execution on new product initiatives, solid margin expansion, and truly transformative acquisitions. We completed the year with total revenue growth of 9%, which included 8% organic growth, right in line with our high single-digit strategic goal. Our talented team continues to develop exciting technologies and solutions that improve patient outcomes and satisfaction around the world. In Recon, we made considerable progress expanding this high-growth and high-margin platform and drove full-year organic growth of 14%. We delivered double-digit Organic Growth across all major segments, continued to win in the ASC and in the U.S., and had strong execution internationally as we continue to ramp our very successful 2021 Mathys acquisition. We also closed the year with the strategic acquisition of Lima that step-changes our Recon business starting in 2024. In P&R, we've been reshaping the business for sustained mid-single digit Organic Growth. In 2023, we once again outgrew our markets with full-year Organic Growth of nearly 5%. We improved Innovation Vitality in this business from close to zero in 2018 to double digits as we exit 2023 and have a strong pipeline for 2024 and beyond. We also made good progress on margins in 2023, improving our EBITDA margins by 70 basis points, more than offsetting growth investments and headwinds from M&A, currency, and inflation. Our gross margin improvement is a result of our mix-enriching strategy and the powerful impact of our EGX business system driving operational productivity and pricing improvements. And finally, we continue to accelerate our growth through focused M&A. Our acquisitions from the past few years grew double digits and started to scale. We expanded geographically and enhanced our innovation capabilities with Lima and Novastep. And we continue to follow our proven EGX playbook to make sure each acquisition delivers strong strategic impact, financial contributions, and long-term shareholder returns. And they bring great talent into our company. Let's go to Slide four and talk about how we finished the year. We grew organically by 8% in the fourth quarter with 11% growth in Recon and 6% growth in P&R. We continued our trend of double-digit growth and share gain in Recon as our markets had normal seasonality. We believe the elective surgery markets we serve remain healthy with higher than normal procedural demand in early 2023 and the potential for above-normal demand again in 2024. In P&R, we had another strong quarter showing our reestablished leadership in these markets with global share gain in a stable market environment, plus a bit of tailwind from the light prior year comp. We expanded our gross margins by 150 basis points, reflecting continued impacts from productivity, mix, and the scaling of recent acquisitions. Overall, we exited 2023 with strong momentum in line with our strategic goals and are excited for a great 2024. Digging a little deeper in Recon on Slide five, we had double-digit growth in the U.S. led by 11% organic growth in hip and knee as well as extremities. Outside the U.S., we grew 11% organically in a resilient market. I know there are a lot of 11s on the page. Trust me, it's just a coincidence. We have a very strong Recon innovation pipeline that will allow us to continue to gain share. We're off to a great start on the ramp of our EMPOWR Revision knee, and we've also launched and updated ARVIS 2.0 with full EMPOWR capability. Additionally, in foot and ankle, we recently launched the Evolve34 Lapidus Correction System for bunions, one of the fastest-growing market segments in the U.S. We've had terrific feedback from surgeons on all of these great new products. In P&R on Slide six, our organic growth reflects a healthy market environment and disciplined execution, albeit against the easiest comp of the year. Overall, this business is performing in line with our strategic plan. With global bracing, grew 6%, driving share gain from strong customer service, improved innovation, and MotionMD clinic conversions. Here too, our pipeline is strong and includes a new OA brace called ROAM and the next generation of clinical electrotherapy products for our recovery sciences team. Gross margins in this segment expanded by 240 basis points as we continue to sustain traction on price versus cost and roll out additional EGX tools, which are driving consistent productivity improvements. On Slide seven, I want to pause to quickly highlight our significant progress in our first 2 years as a standalone medtech player. We continue to execute on our strategic pillars and have quickly built to consistent high single-digit organic revenue growth. We've also delivered operationally with EBITDA expansion ahead of our annual commitment of 50 basis points, even with headwinds from inflation and dilutive strategic acquisitions. 2024 is setting up to be a transformative year for Enovis as we integrate Lima and execute on major new product launches. We're confident in our ability to continue to drive this compounding growth and margin formula. On Slide eight, we highlight several of our key new products for 2024, many of which were on display at last week's American Academy of Orthopaedic Surgeons Conference in San Francisco. It was great to see the teamwork at our booth between our Enovis team members and the talented leaders who have joined us with Lima. I'm excited about the lineup of new products for 2024, and our R&D pipeline for the next several years is more robust than ever. On the Recon side, we continue to make substantial progress with the rollout of our EMPOWR Revision system. This gives us access to almost 20% of the knee market that we could not previously access, an opportunity to sell deeper into existing surgeons and also to continue to drive conversions. The late 2022 launch led to very strong knee growth in 2023, even with inventory constraints and without cones for more difficult cases. We entered 2024 with healthy inventory and recently received 510(k) clearance for Lima's 3D-printed Trabecular Titanium clip cones for use with our EMPOWR Revision system, quickly enabling one of our first major cross-selling opportunities. ARVIS 2.0 continues to get positive market feedback after the launch in Q4. This breakthrough enabling technology gives our knee and hip surgeons a space, time, and cost-efficient solution for repeatable procedures and intraoperative data capture. The 2.0 version brings a simplified procedural workflow and registration process to provide the physician with a unique wearable navigation system suited for all operating settings, from the ASC to the hospital. This is our first step in intraoperative enabling technology. We plan to bring ARVIS to additional anatomies shortly and also have an exciting pipeline beyond ARVIS. Our foot and ankle business also continues to execute well with a powerful boost from the acquisition of Novastep in mid-2023. We have one of the most compelling product portfolios in the market and are excited about our expansion into the billion-dollar, fast-growing forefoot segment, where we've recently launched the Evolve34 and Pecaplasty systems. These products give our teams the most comprehensive suite of technologies for the bunion indication, including MIS approaches. In P&R, we formally launched the ROAM OA single-upright brace for patients with osteoarthritis at our sales meeting last month, and the feedback has been very positive. The single-upright category is a sizable, growing segment where we have limited share. The simplicity and comfort offered by ROAM will be meaningful differentiators for patients and clinicians, and we expect to capture significant share through our powerful channel and clinic presence. We continue to build momentum and vitality in our rehab business with the global launch of our next generation of electrotherapy products, Intelect Legend and Transport. These bring freshness for our very strong Chattanooga brand in the largest global rehab treatment modality segment. Turning to Slide nine, I want to take a moment to remind everyone of the powerful strategic and financial impact of our Lima acquisition, which closed the first week in January. The addition of Lima represents the next step in the evolution of Enovis as we execute against our strategic goals as a high-growth medtech innovator with a clear pathway for sustained operating margin expansion. The transaction reshapes our mix to faster-growing, higher-margin Recon and increases our exposure to the fastest-growing parts of the Recon market in extremities. We took advantage of the opportunity to do significant planning before the acquisition closed and really hit the ground running in January with the new combined leadership team and a robust integration process in place on day one. The feedback from customers has been very positive, and we already have strong traction on both cost and growth synergies. It's been really exciting seeing our team come together and start to shape global innovation roadmaps that leverage our combined technologies. We remain confident in our ability to deliver the 2024 financial benefits previously shared and exit the year with strong double-digit organic growth momentum across all of Recon. I look forward to giving you additional updates throughout the year. Moving to Slide 10, before I hand it over to Ben, I want to reiterate my excitement about the momentum we built in 2023 and the great opportunities we have in 2024 and beyond. We have a diverse global business, a talented and energized team, and a powerful business system that we will continue to use to drive our compounding value improvement journey. Now I'll let Ben take you through the P&L details and our 2024 guidance. Ben. Thanks, Matt. Hello, everyone. And as Matt said, we'll start on Slide 10. We're pleased to report fourth-quarter sales of $455 million, up 11% versus the prior year, 8% organic growth. The growth was fueled by strong demand for our products and solid commercial execution in both business segments. Fourth-quarter adjusted gross margin was 58.6%, up 150 basis points year-over-year. Growth was driven by leverage from higher sales, favorable product mix, and cost discipline. We continue to leverage our EGX business system to drive productivity in the supply chain, and the results continue to read through in our gross margins. Fourth quarter Adjusted EBITDA margin of 18% was down 30 basis points versus 2022. The year-over-year decline was driven by one-time cost benefits in 2022 and some dilution from recent acquisitions. But results came in as expected with a strong sequential step-up to finish the year. The fourth quarter's effective tax rate was 22%. This is compared to 22% last year. Interest expense was $4 million in the quarter versus $5 million in 2022. Overall, we posted strong adjusted earnings per share of $0.79. 10% earnings growth versus the prior year. For the full year 2023, we delivered high single-digit organic growth of 8%, expanded our Adjusted EBITDA margins by 70 basis points, and produced double-digit underlying earnings growth. We continue to strategically shape our business mix to Recon and utilize our EGX capabilities to scale and drive leverage across our business segments. We're delighted with these results and the momentum we've built in 2023. I would like to take a moment to thank and congratulate the entire Enovis team for delivering another strong year. Slide 11 lays out our execution in 2023 relative to our guidance over the course of the year. We were able to deliver results consistent with or better than our commitments to stakeholders and look forward to managing our business for more of the same in 2024. Moving to Slide 12, it details our quarterly progression in 2023. Our 8% revenue growth was highlighted by 14.3% in Recon and 4.6% in P&R, with notably stronger results in the first half of the year driven by strong Recon markets and some softer prior-year pandemic-related comparables. Overall, our results reflect underlying share gains in both our businesses. Our Adjusted EBITDA margins increased sequentially throughout 2023 as we improved mix and demonstrated operating productivity in our supply chain. Impacts from recent acquisitions and foreign currency offset our core margin improvement of 130 basis points. However, for the year, we managed to improve margins by 70 basis points while managing external headwinds and investing for future growth. Turning to S lide 13, in 2024, we are projecting another strong year of operating performance and expect revenues in the range of $2.05 billion-$2.15 billion. We expect another year of double-digit growth in Recon against a normalized market backdrop and stable P&R growth in the low to mid-single digits. Our expectation for Lima remains consistent with prior revenue guidance of $290 million-$300 million. On margins, we are expecting at least 50 basis points of underlying margin improvement in the core business, along with $70 million-$75 million contribution from Lima, resulting in an estimated range of $365 million-$380 million of Adjusted EBITDA. From a phasing perspective, we expect revenue and margins to follow a similar sequential trajectory over the course of the year like we experienced in 2023. Depreciation is expected to be in the range of $115 million-$120 million, driven by growth investments in our Recon segment and the addition of recent M&A, including Novastep and Lima. We expect interest and other expenses to be in the range of $70 million-$75 million. Considering the impact of Pillar Two and the composition of Lima revenues and profits, we expect an adjusted tax rate of approximately 21% in 2024. We note that this represents a $0.03 headwind to adjusted earnings per share. Along with these estimates, we expect a share count of approximately 56 million shares and are forecasting our adjusted earnings per share to be $2.50-$2.65. Overall, we are excited about our opportunity to create strong shareholder value in 2024. To summarize on Slide 14, we had another strong year in 2023 and have been building solid momentum as we turn the page to 2024. We have demonstrated clear focus and execution towards achieving our strategic goals and have shaped the business towards accelerated growth and scale with the acquisition of Lima. Maria, please open the call for questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one, on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To redo your question, please press star, then two. The first question is from Vijay Kumar with Evercore ISI. Hey, guys. Congrats on the nice sprint here, and thanks for taking my question. Hi, Matt. Maybe my first one on the Q4. Double-digit Recon, that's pretty solid. But then when I look at the market, your peers had a pretty healthy Q4. So while not taking anything away from the 11, it just feels like the market accelerated in the relative spread versus market. Historically, you guys have been well above market, perhaps. That spread narrowed. So I'm just curious, was there any timing element or when you look at the 11% Recon growth in Q4, was that in line with expectations? Yeah, Vijay. I think we finished in line with our expectations. I think you really have to look at the multi-year numbers to kind of see the picture a little bit clearly. We had a kind of strong comp. Even if you go back to the 2019 comps, you can see that the pattern from Q3 to Q4 is a quite normal one and that some of the differences in sequential patterns kind of come out in the wash when you look at the multi-year views. Understood. And Ben, one for you. The margin expansion, I think I heard you have 50 basis points for core, maybe 75 for Lima. But I thought Lima was supposed to be 150 basis points accretive to gross margin. So I'm curious, are there any OpEx assumptions that are different? Why the gross margin accretion shouldn't flow down to operating margins and cadence of that $40 million cost synergies that's assumed in the guide? Yeah, Vijay. I mean, everything's coming in relatively consistent with what we kind of expected in terms of the overall numbers. There's a little bit of shifting as you think about translation of U.S. GAAP versus IFRS. So that's probably kind of one area where maybe our assumptions between gross margin and OPEX kind of flipped a little bit. But overall, still fully in line with kind of the thoughts that we had in terms of the profit that we can generate in year one, which would assume some cost synergies that we get after right away, but still very much confident in the pathway to $40 million by year three. Understood. And Matt, if I may, one quick one on the Lima integration. You had some helpful comments out there, but I think in the past, you had mentioned the guide assumed some disruption from integration. I'm curious, what the early experience has been? Are those disruptions in line with expectations or perhaps coming in about plan would be helpful? Yeah. So as we shared, we've added the Lima numbers. As we shared them when we announced the deal, we've added them on top of the core for our guidance for this year. Certainly, we've done a lot of very proactive work on planning for and then starting to execute the integrations in the different markets around the world. And our goal will be to have the minimum amount of leakage in terms of how things come together. We know that it'll be a little bit, our goal would be to have the minimum. We still feel very comfortable with what we've guided as to how much there will be. And it's early days. We're executing our way through that. Thanks, guys. The next question is from Young Li with Jefferies. All right. Great. Thanks so much for taking our questions. I guess to start, I wanted to hear a little bit about just the new products cycle that you mentioned earlier, multi-year cycle. Seems like some attention being paid on enabling technologies and foot and ankle. But wanted to hear a little bit more about specific areas and what are some of the white spaces you're looking to fill or improvements made on existing products? Yeah, for sure. Thanks for the question, Young. As we mentioned, we're really going through a period now where we've got some flow over into this year from some of the launches of the last year or so as they ramp. And then we've got other exciting launches coming within this year and next year. And so it's a very kind of healthy period in terms of our ability to drive vitality across all of the businesses. And in the Recon side, that's continued focus on vitality within those businesses, but for sure also now has enabling tech coming through with ARVIS in the knee going to the 2.0 launch there late last year in knee and hip, and then opportunities to bring the next enabling tech offerings into other anatomies as we work through this year. And then over on the P&R side, we've gone from very little vitality years ago to now being in a period where things are really inflecting. And we've had some really nice bracing launches across the last year or so that are ramping through this year, and then more launches coming through this year and the following year, new knee segments, refreshments in other knee segments, moving deeper into the attractive spine bracing segment, some extremities braces. So a really nice lineup there that we're working through on the bracing front. And on the recovery sciences front, we've got our largest modality there, electrotherapy, is one that hasn't had a lot of innovation a long time. We got some great fresh new products there. And so, yeah, it's a nice period of time. And a lot of this is going to build as we go through this year. It's contributing nicely right now, but we'll have even stronger contributions as we move through to the back half of the year. All right. Great. Very helpful. And then I guess a follow-up, just I guess more specifically on ARVIS 2.0 and AR in general. It's been getting a lot of attention from surgeons. A lot of times when we ask them just broadly, "What are you excited about?" AR comes up pretty frequently, more often than not. I guess from your perspective, how's the receptivity been on the surgeon side? And what do you think is needed to make it more of a mass-market product? Yeah. So thanks for the comments. And we're getting some of the same kind of positive feedback that you're getting. I think the reason people are really excited about AR is because ultimately, surgeons are looking for things that are going to improve the way that they can take a surgical plan and flow it in intraoperatively in surgery, make the decisions they want to make, capture all that data while they're doing that, and have that ability to do efficient, repeatable surgery and capture all the data. At the same time, and they also want to be able to market that they've got the latest and greatest technologies in order to do that. At the same time, they're not looking to add cost and time into the procedures. And so AR seems like it's the perfect solution for that, right? You can get really those benefits of that intraoperative guidance while at the same time having really limited cost and time into the procedure. We've gotten great feedback from surgeons, which is a combination right now of surgeons that we've had in the past as well as new surgeons that have come over because of ARVIS. Getting great feedback. The improvements that we made last year after the initial launch really have improved the usability. This is a new-to-the-world technology, right? So at least in this industry. And so it's something that is coming up the learning curve. And we're getting really good feedback on the usage of this 2.0 version and looking forward to rolling it out broader and broader in the knee and hip space. And then certainly actively working on the next anatomy for ARVIS because we think it has every bit of opportunity to bring AI into shoulder that there's been to bring it into knee. All right. Thank you very much. The next question is from Vik Chopra with Wells Fargo. Vik Chopra. Hey, good morning. Hey, sorry, I was off mute. Good morning, and thanks for taking the questions. I had two. So maybe the first one is just on the state of the market. How long do you expect above-market growth for Recon? And maybe just talk about your expectations for 2024. Thanks. Yeah. Thanks for the question, Derek. Look, I think we've consistently said that if you look at the math back to 2019, there's a year and a half of growth missing for the market. And maybe we worked off a little bit of that last year with some of the above-market growth. But I think there's definitely a fact base to suggest that there should be some pent-up demand around the world for surgery because the patients continued to need it, but there was a period of time when less surgery could be done. So we still believe that there's more pent-up demand to come. We saw some of it last year. And what you really saw last year was that there were periods of the year where capacity utilization was able to go to very high levels. In the U.S., it was early in the year. There was just a very good period there early in the year where I think surgeons were able to really kind of run at the upper end of their capacity utilization. There were certain countries around the world that consciously opened up capacity utilization early in the year. And when that happened, we ran above normal rates. And so I think that certainly last year had at least a point or two of extra growth in the elective surgery, orthopedic surgery area from a market standpoint. And you can see that extra in our very strong 14% growth for the year. And certainly this year, if we hit periods where you have that extra utilization opportunity in the marketplace, there should be an opportunity for that above-normal type of demand as well. We've planned for a normal R econ growth year. And then you can see we've guided double-digit growth again in light of a normal Recon growth year. There's certainly the opportunity for more. And certainly, the shape of the year is going to mirror last year because there's some very, very tough comps early in the year. And so the growth is going to build through the year just in terms of the market environment. And then for us, we'll also have the ramp of the innovation pipeline. Great. Thanks for that question. Just sticking to the same theme maybe, just a follow-up question on GLP-1s. Are you starting to see an impact of patients coming into the funnel? Thanks for taking the questions. Yeah. I mean, certainly, we have heard from the marketplace an expectation that there can be more patients in the funnel due to weight loss that could come from GLP-1s. I wouldn't say that it's a meaningful effect at this point, but we can continue to have the same view that we've stated that for our portfolio overall, likely that's over time more of a slight positive than a negative. But I wouldn't say that it's having any meaningful impact at this point in time. The next question is from Brandon Vazquez with William Blair. Hi, everyone. Thanks for taking the question. Maybe first, can we focus on Lima for a second? Just wanted to go through. You mentioned a little bit on the revision side. You've already started to cross-sell kind of the cone from Lima. But can you remind us maybe what are the biggest products that you can take maybe from your U.S. organization over into the international markets with Lima and then vice versa? And maybe what are the milestones for these products through 2024? Yeah. Yeah. I think there's great cross-selling opportunity with Lima and even quite a bit left to go with Mathys that we acquired a few years ago. And if we start from the shoulder, our market-leading AltiVate shoulder is the lateralized, inferiorized design of reverse shoulder, which has become very strong here in the U.S. and is starting to build more and more momentum outside the U.S. And so we see a nice opportunity to sell our AltiVate reverse shoulder in certain markets outside the U.S. While at the same time, Lima has got a few different shoulder designs, one that is a little different design that'll be reversed that'll set up for surgeons that want to stick with a little bit less lateralized design. But then they also have this SMR, which is a convertible platform that really has been something that is very good for some of the toughest indications and enabling surgeons to make intraoperative choices between an anatomic and reverse or to go back to an anatomic after the fact and convert to reverse. And so really nice complementarity in the shoulder portfolio, taking the AltiVate outside the U.S. and bringing some of those technologies Lima has for some of the toughest revisions in shoulder into the U.S. Kind of a similar picture as we get over into the knee space, our EMPOWR 3D knee with its dual pivot capability has shown to be a better knee that leads to better patient satisfaction in the U.S. And in the places we've taken it outside the U.S., there's been a lot of excitement about that knee. But at the same time, we have not had historically as much of a focus on revisions. We've been just moving into revisions here in the U.S. Lima has not had the strongest primary knee but has been very strong in revisions around the world, including a little bit of traction here in the U.S. And so again, just a perfect opportunity to cross-sell great products from here to there. Lima is excited to start to bring our enabling technologies with ARVIS into the business. And we're very excited about the 3D printing. ProMade is a custom 3D printing capability that at this point is used on some of the very toughest revisions and situations, but over time could have some good broader applicability as well. So a whole set of cross-selling opportunities. Yeah, we've been able to hit the ground running in terms of having plans in place and in some cases, already having the market access to start to pursue those cross-selling opportunities. In other cases, having active initiatives to go ahead and get the additional market access. Great. Thanks. And then on the EBITDA margin guidance for the year, I think if I'm backing out some of the Lima benefits, it's implying EBITDA margins for legacy and Novastep to increase by about 80 basis points year-over-year. First, am I kind of right on this math? And if so, what's kind of giving you guys the confidence to deliver another what seems to be a good, strong year of legacy margin expansion even with what I'll call maybe some noise from the integration of Lima? Thanks. Yeah. Thanks. Thanks, Thanks, Brandon. I mean, I think the way that we're thinking about it is we continue to execute our strategy of driving good mixed improvement in the business, continuing to scale acquisitions that we've done, and then generating operating leverage into the plan. So as we think about it, we remain consistent in terms of feeling our confidence around generating at least 50 basis points or more of core margin improvement while we add on Lima and do the work to integrate that at a high level. So overall, we feel confident with the guidance that we've put out there, and we feel it's a good kind of strong step-up year for us in terms of overall margins with the additional Lima. The next question is from Caitlin Cronin with Canaccord Genuity. Hi. Thanks for taking the questions and congrats on a great quarter. Just starting with 2024 revenue guidance, the 7% core business growth really kind of implies a slight slowdown year-over-year. What are really the expectations that are built into this? Yeah. I think I wouldn't really look at it as a slowdown in terms of our performance versus the market. I think it's sort of broadly accepted that the Recon market had at least a point or two, maybe two or three points of tailwind on it last year. And then we also on the P&R side had some extra price that we know is going to start to moderate. And so the 7% guide is pretty similar, relative growth performance versus the markets. But also, it's consistent with our approach of trying to be a little conservative in terms of how we're creating our plans and how we're guiding as we come out of the year until we see how the markets are going to unfold a little bit in the early parts of the year. Got it. And then you said earlier similar cadence sequentially throughout the year versus last year, but Q1 was particularly strong in 2023. Do you kind of expect that similar strength into Q1 this year? Yeah, Caitlin, I think in terms of my comments, there is if I think about kind of the percentage of the year in terms of what Q1 was of the full year in terms of revenue and EBITDA, that's kind of what the comments I was trying to convey in my commentary is. We think kind of what we've seen in 2022 and 2023 is kind of a new normal kind of seasonality that we'll see. So if you kind of do the math and look at how 2023 played out and look at kind of the percentage of each of those quarters, that's kind of how we're thinking about providing the guidance of quarterly movement. Got it. That makes sense. Then just one more quick one. The $40 million of cost synergies for Lima by year three, what does that really look like in years one and two and where do you really see most of the effect down the P&L? Yeah. I'll start with kind of the first year. So again, as we contemplated our guidance for what we had said when we closed the or when we announced the deal of the $70 million-$75 million of EBITDA, that would include some of the near-term synergy that we're able to capitalize on. And what you think about kind of there in terms of cost synergy opportunity is areas where there's duplicative nature or overlap. So again, AAOS is a good example. We both don't need to pay for a booth. Now that we're one company, there's some overlap in terms of leadership positions that we're able to make quick decisions on. So we're able to capitalize on some kind of synergies early on here in the program. And so that would be kind of, I'd say, in that $5 million-$10 million range for year one and then building up to the $40 million kind of by year three. Got it. Thank you so much. The next question is from Danielle Antalffy with UBS. Thanks. Excuse me. Good morning. Thank you, guys, for taking the question, and congrats on a good end to the year. Just one quick question on the competitive landscape. This morning, you did have a competitor announce the approval, 510(k) approval, for their robotic solution for shoulder. I'm just curious what's baked into your guidance as far as potential competition heating up here on the robotic side. And if you could remind us where you guys are with the robotic solution. And then just one quick follow-up on Lima after that. Yeah. Yeah. Sure. I mean, first, I'll say our guidance contemplates the full competitive environment that we're in right now. In shoulder, we're a leader in shoulder. We've been an innovation leader in shoulder for many years. We've got the best shoulder implant in AltiVate with the longest data. And also, we've got continuing innovation that we've done around that. Enabling tech has been a significant force in shoulder for a while. We've had an industry-leading Match Point solution for creating preoperative plans, being able to then feed them into the surgery, being able to do patient-specific instrumentation, to be able to find the glenoid bolt in difficult cases. And so we have also been a leader in enabling tech in shoulder for many years. That ability to kind of do pre-surgical planning and use patient-specific instruments is something that's been around for a while in shoulder and is well used and part of what's enabled us to continue to succeed. We definitely see opportunities over time for additional enabling tech in shoulder. We've made significant investments as a company in augmented reality as well as predictive analytics. And we can see opportunities to take what is already quite valuable to shoulder surgeons in terms of the preoperative planning and some of the patient-specific instrumentations, simplify the workflow of that with augmented reality guidance and predictive analytics, and create the next step change in terms of workflow in the shoulder, and do it in a cost-effective and space-efficient way that I think there's quite a bit of excitement about over on the knee side as we're bringing ARVIS into that. We're confident that as the year plays out, we will remain a technology leader in shoulder and that we'll have the right offering at the right time to move that next step in the shoulder. Okay. Great. Thanks for that. And then on Lima, I know your guidance for Lima sales includes some exits of product lines, etc. Have you guys confirmed where you're exiting yet, or how should we think about that transpiring over the year? Yeah. So that's something that'll play out through the year. There are, yeah, a few things that we've just kind of small amounts of revenue that we've stepped away from because they were not as attractive pieces of the revenue. But most of the revenue impact that we've factored in for this year is related to working by country by country and putting the channels together and in some cases, having to make some choices as we do that that can result in some revenue going away from us. And definitely, some of that will start to hit in the first quarter, but we're really not seeing much. And then in the next few quarters, we'd like to be seeing the rest of whatever impact we're going to have in the year. We're working very hard to minimize that, and we're working very hard to try to find more synergy. Certainly, each time that we have a little bit of breakage, there's an opportunity to have synergy on the flip side of that typically. And so there's a little bit of a question of how the timing plays out and how quickly can we cover whatever breakage with synergy. But that's something that we feel very confident with what we've put into our guidance in terms of what the Lima revenue will be. And we're off to a good, strong start so far, and we'll keep you posted as we work through the year. Yeah. And Danielle, I would just pile on on that and say that as we think about kind of how Lima strengthens the overall portfolio and the registration environment around the world, there's not going to be any kind of major product line discontinuation. We're going to make the full portfolio available to our customers. And then over time, we're going to continue to refine that and strengthen it as we drive new innovation, as we get registrations cleared in certain countries and things like that. So I wouldn't expect any kind of major kind of gaps or discontinuations in product line in the near term. There are some kind of choiceful things, as Matt said, that we'll be doing kind of in the near term. But overall, I think this only strengthens our portfolio in terms of our ability to serve customers. Perfect. Thank you, guys. The next question is from George Sellers with Stephens Inc. Hey. Good morning. Thanks for taking the question. Maybe to switch to the P&R segment. You mentioned a few new launches there. Could you just parse out that low to mid-single-digit growth, what's assumed from the new launches, maybe what's assumed from pricing, and then just from an underlying market growth perspective, what is all baked in? Yeah. I mean, so first, I'd say I think that looking at last year, it was a pretty normal P&R market overall with maybe a tiny bit of tailwind on the market but not as significant as on the Recon side, but a healthier price environment in terms of recovering some of the inflationary pressure from the previous years. And so when you look at our growth that was pushing 5% on a full-year basis, that's a little bit elevated from what we envision being able to do on a go-forward basis in that business. We've got a percent or so of price that we expect to more flatten out and probably a little bit of tailwind there was on the market last year. And so we still have a P&R long-term view in the sort of 3%-4% range, which would reflect kind of getting to a more normal price environment. And then as the innovation that we've been talking about continues to ramp its way through the business, that's how we can kind of push towards that 4% realm that we've been showing consistently over the past few years but with a little extra price into it. We also continue to work on shaping that business to be, let's say, more of a solid mid-single-digit grower versus a low to mid-single-digit grower. And we see opportunities for that, and we've been working on them step by step. And so we're still guiding it in the 3%-4% range. We're still working on making it something that we can guide in the 4%-5% range. Okay. That's helpful. And then maybe on margins, you talked a little bit about price. And then also with the new product launches, how should we think about the flow through to margins? I think some of the EGX initiatives, as you've been developing some of these, are maybe driving some more attractive margin profiles with these new devices. But just curious, for this segment specifically, how should we think about margins progressing through this year and beyond? Yeah. So again, George, I think from a P&R perspective, I think that's your question. What Matt said is we continue to look at how do we drive shaping moves within that portfolio, which would focus on higher-margin products. So it would be around continuing to try to drive some improvements in the mix of the business within P&R, driving some leverage on the growth that we're getting, the consistent growth that we're getting as we're continuing to just kind of drive good behavior and productivity within the supply chain there. So overall, I think that the contribution of mixing the portfolio, shaping moves, and then just operating leverage/productivity is what we would see kind of helping drive incremental increases in the margins of that business over time. And as we kind of think about that business, we see it to consistently increase margins year-over-year. Okay. Great. That's helpful. I'll leave it there, and thank you all for the time. The next question is from Mike Matson with Needham. Hey, everyone. This is Joseph on from Mike. I'll start with a question on ARVIS. Could you maybe remind us all how you guys expect to sell the product? I guess will this be a direct source of revenue? Will you use it to drive implant sales indirectly or some combination of both? Yeah. Sure. So far, we are primarily placing ARVIS as CapEx. It has a relatively low cost. And so in most of the places we've put ARVIS, we've placed it there. We're getting a recurring revenue stream on that on a per-procedure basis, which we've been able to get on contracts at rates consistent with some of the other enabling tech devices out there. And in some cases where we've placed it, it's one of our existing surgeons, and it's a way to strengthen and deepen our relationship with them. And in other cases, we've been able to convert surgeons and get new implant sales with it. So we're tracking both the way that we ramp the recurring revenue there, well, placements, the way that we ramp the recurring revenue there, but then also the pull-through revenue on implants where we bring it into competitive environments. We expect to contribute in all those ways. We have also been able to very successfully sell it as capital, and we'll make thoughtful decisions about when it's better to sell it versus place it. But one of the real advantages that we have with ARVIS is that it is a primarily software-based solution. And so there is not a very large cost related to placing it or selling it. And that gives us a lot of business model flexibility. I think in a healthcare environment where there's a lot of pressure on the system around healthcare economics, I think that over the next couple of years, you're going to see a lot of excitement, as was mentioned earlier in the call, around augmented reality, even mixed reality as a way to really bring some of the real marketing benefits as well as the procedural benefits of enabling tech in knee and then other anatomies while at the same time being much more cosT, space and time-efficient. Okay. Yeah. Thanks very much for that color. And then maybe just one on Lima. In the quarter, could you maybe give us some color or tell us what that Lima's gross margin or operating margins were in the quarter? And just given that the ongoing integration of Lima, could you maybe talk about your outlook for M&A? Can we assume that some deals may be on hold as you guys continue to integrate the Lima? Yeah. So let me comment. First of all, Lima is coming into our financial picture exactly as we expected it to. They had a good, healthy finish to the year in terms of their growth as well as their margin profile. And as we've created our plan for 2024, we've been able to take our base plan that we're already working on and then put a Lima put on top of that the Lima revenue and profit and margin impact right in line with what we had expected in the acquisition process. And we have good, strong confidence in that from everything that we've learned and from everything that we've got in flight. So feeling very good about the start on Lima and the growth and margin picture that's going to emerge from that as we execute through it. As far as acquisitions, look, there's no question that we've got a significant amount of work to do this year making sure that Lima is a tremendous success. We've even still been kind of up the curve of taking full advantage of all the great foot and ankle acquisitions that we made. And even the laser acquisition we made three or four years back now, we're still kind of ramping up further and further in terms of where we take that product line. So we've got a lot that we're doing in terms of taking advantage of the things that we've acquired over the past handful of years. At the same time, we've got a little bit of space financially for attractive strategic bolt-on acquisitions. Certainly, it's a healthy environment out there for bolt-on acquisitions. We've got a healthy funnel of opportunities, but we'll be very judicious here in 2024 about the acquisitions that we do. We'll focus really only on the most strategic and on ones that are more in that kind of bolt-on range in terms of how they affect our balance sheet picture and how they affect our execution bandwidth. At the same time, we can continue to do the work on medium or larger things that we could think about in 2025 and beyond once we get through a fantastic integration of Lima and as we start to delever and have more space on the balance sheet. Okay. Great. Great. Thank you for taking all our questions, and congrats on the quarter. Thank you. Thank you. The next question is from Dane Reinhardt with Baird. Hey, guys. Thanks for taking the questions. Maybe just two kind of follow-ups at this point in the call. The first one, though, kind of on the revenue guidance, if we just take out Lima, can you just kind of help us level set kind of what other factors you're kind of expecting in there as it relates to FX? I think you still have some contributions from Novastep and Mathys in there. And then it looks like you also pointed out some selling day impacts in the slide deck. So just help us kind of frame all those things together. Yeah, Dane. Thanks. So again, the guidance range that we've put together contemplates the factors that you mentioned, which again, I think from an underlying core business growth, we're kind of seeing around 7%. Right now, if you look at kind of where currencies are, we would say that's kind of relatively flat in terms of the impact outlook for the year. You've got kind of within the guidance there, the full contribution of both Novastep and Lima as well. So overall, I kind of feel like all the components are there and kind of fit within the guidance that we gave. Okay. Sounds good. And then the second one, just kind of a follow-up on VJ's point with the hip and knee growth, I think 11% this quarter relative to 18% last quarter. And I think your prior year comp from last year actually eased a little bit. So I mean, just anything else that we can kind of point to regarding that comp-adjusted slowdown, even either from a competitive standpoint or potentially end markets? Thanks. Yeah. I mean, our knee growth is still driving that hip and knee growth number. We got nice growth of hip, but the knee growth is still very strong. Certainly, within the knee, we lapped some of the strong contributions from the revision launch ramping. And so that had some impact in a little bit of deceleration in knee from Q3 to Q4. But yeah, I mean, the market environment from the front half of last year to the back half of last year was certainly a slower, an elevated market environment in the first half and then more normal in the back half. But in any given quarter, sometimes things are going to bounce around a little bit. We try to focus on making sure that each year we're driving that full WG growth and the growth in relation to markets in each of our anatomies that we've committed and talked about. The next question is from Jason Wittes with Loop Capital. It's Roth MKM, but that's okay. So just some follow-ups at this point as well. First off, in terms of just the margin expansion this year, can we assume most of that's in gross margin and there's some offsets in SG&A, or how do we think about how to model that for this 2024? Yeah. I mean, I think I would say that, yeah, you're thinking about it right in terms of how the composition happens here. Again, we'll work through that as we go as we kind of get the full integration of Lima into the organization. But again, in terms of kind of the macro-level picture, again, we see really strong EBITDA margin improvement lift by adding Lima plus getting the core expansions that we've also talked about. So overall, we would say a lot of that comes from gross margin, but then we'll kind of see how it all plays in as we start to integrate Lima. Okay. Okay. That's helpful. And then in terms of just modeling as well, I know you weren't specific about 2024 until now. You did mention Lima would be accretive, which it is. But if I look at the way at least we modeled and even consensus, EBITDA is much better, which is great. EPS is a little bit lower, I guess, from the guidance standpoint. I assume much of that has to do with interest rates, or are there other give and takes in there that I'm not aware of? Yeah. I mean, I think you're right on, Jason. So think about it this way: underlying core business EPS growth of double-digit, slightly accretive Lima. We got about one-point tax headwind, so that's about $0.03. And then with interest rates and the paydown that we were able to do in Q4 with the financing that we did for Lima so we paid down the revolver, we got about a $0.05 benefit as well. So if you kind of take all those components and you look at the underlying growth, you would say kind of you see nice, strong core EPS improvement as well as contribution from Lima. Okay. That's helpful. And then a comment you made earlier about having sort of tailwinds in 2023 largely catch up from COVID, etc. But it sounds like you don't feel initially that will repeat for 2024. Just curious in terms of what you're basing that off of, is that just looking at physician backlogs or just kind of what indicators are out there from a macro standpoint? Yeah. No, it's true. I mean, it's really a conservative planning assumption, right? I think, as I said earlier in the call, last year demonstrated that if you get periods of time when the utilization of surgery can be high, that for whatever reason, if you get periods of time when there's extra ability to drive surgery last year showed that both in the U.S. and outside the U.S., there is pent-up demand, and we can have elevated growth rates as that pent-up demand gets worked through. I think the math suggests that there's still quite a bit of pent-up demand that really wasn't satisfied through the COVID period. And so we would expect that this year and in the coming years, if you hit parts of the year where things are really clean, right, you have not a lot of COVID or flu or storms or whatever, if you hit parts of the year that are very clean like the early part of last year, the system's going to run at a higher utilization rate in the U.S., and you're going to get extra growth. And we saw that early last year as well as an easy comp early last year. And outside the U.S., there were decisions early in the year by a couple of countries to put extra capacity into the system and pay for more surgery in a period of time so that some of that backlog could get cleared. And that led to things running at a higher rate for some of the early part of last year. So we think a reasonable planning assumption for this year is a normal Recon growth rate, which would mean that a little bit of that tailwind from last year gets recreated, but we don't get an extra growth. But at the same time, there's certainly the opportunity for more of that pent-up demand to be worked off and to have another oversized market growth rate. We just think it's more prudent not to plan for that. Got it. Thank you very much. Appreciate it. Thank you. This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Trerotola for any closing remarks. Thank you for joining us this morning. I want to end the call by thanking our team members around the world for the success of 2023. We're stepping into 2024 with a lot of momentum and excitement across the organization and remain committed to delivering value for all of our internal and external stakeholders. Thank you for listening today, and we look forward to sharing our first quarter results with you in May. The conference now concludes. Thank you for attending today's presentation. You may now disconnect. Thank you.