All right, great. Why don't we kick this session off? My name is Young Lee, one of the medtech analysts All right, great. Why don't we kick this session off? My name is Young Lee, one of the medtech analysts All right, great. Why don't we kick this session off? My name is Young Lee, one of the medtech analysts at Jefferies. Welcome, everyone. Really pleased to be joined by management from Enovis. To my right, you have Damien McDonald, the CEO, newly appointed CEO, been about half a year now. Then Ben Berry, CFO. In the crowd, we have Kyle Rose, VP IR. I guess to start, maybe for Damien, you joined in the middle of the year. I'm sure you had a—you've been very focused on the customers and talking to a lot of people, employees, drilling down to the business. Maybe wanted to get a better sense about, so far, what are your impressions of the company? What are some of the positive surprises and also maybe some of the negative surprises that you have seen so far? First of all, Young, thanks for having us. Appreciate you being here with us. Hi, everyone. The surprise is on the upside. I would say one of the things I've loved about the conversations with our customers and our associates is just how so many of our audience think we have products that punch above our weight. It's unusual for a small company across a broad portfolio to have such a great plethora of products that work in so many anatomies, so many solution sets for customers. A lot of my conversations with the surgeons, particularly, have really focused on that, that as a partner, we have just about a solution for everything for them. I think that's pretty powerful, both in terms of our partnerships with customers, but also our ability to attract talent on the commercial side. I will say another thing that's been really a pleasant surprise is often smaller companies have a hard time attracting talent, especially as you're building scale, which we've been doing over the last five plus years. On average, we have really terrific talent. I think that speaks a lot to the brand promise, the product promise. I think that's going to really be a tailwind for us as we're growing into the future with what is already a great portfolio. On the downside, less of really a downside is more of an opportunity, but just the work we have to really embed the Enovis Growth Excellence business system. Again, we've grown largely by buying a lot of companies over the last five plus years. As you might suspect, when you integrate companies, it takes a little time to get the flywheel going. Putting the business system in place is really an opportunity for us. There is a lot of work to do there. All right, great. That's very helpful. I guess maybe, Damien, you have some Danaher business background experience. And Enovis can trace their roots to that type of operating philosophy as well. I guess, are there any material differences between the business system philosophies that can be applied in this case, given your experience? Is there anything sort of beneath the surface that you can sort of highlight for us? Sure. Jumping off the last answer, the thing that I love about the opportunity in front of us is lean manufacturing is a journey, right? Continuous improvement is a way of life. If you look at the benchmark for this in industrial businesses, Danaher, they've been at it for 40 years. We've been at it for about four. For us, what we really get excited about is the application of this more broadly and more deeply across the organization. As I said, we're early in the stage of making this really who we are across the entire company. It's embedded in parts. It's evident in parts of the company, some really tremendous examples of deep understanding of how lean and business system can drive the business. Templating and replicating that more broadly is an opportunity. Our foot and ankle business in Houston, for example, has a great example of where productivity gains in the way they've approached their Kaizens and the way that they're doing the machining and the production of our foot and ankle business is a great example on the operations side. I would say the work you're doing on AR is really starting to pay off in terms of the way we approach cash flow. We've got it in businesses. We've got it in parts of the company. The important thing to do this well is to bring people along for the ride. You can't sort of stamp it in with a baseball bat mentality. You've got to enroll and engage people. I think we've got the foundations that give us the ability to do that well. Okay. Got it. Maybe shifting gears a little bit. Just on the portfolio, half of it is OrthoRecon, the other half is PNR. More recently, you started to make your imprint on the company. You sold the Dr. Comfort foot care business. What's your view on the business mix as it stands currently? What do you think about the key synergies and benefits of this mix? Your views on shaping the portfolio even more, either through divestitures or M&A? Yeah. When I joined in the first earnings call, I said there are things that we need to focus on, which is commercial excellence, operational excellence, and then the discipline of cash flow and debt reduction. I think the Dr. Comfort really feeds into that last one about capital allocation and debt reduction. The sale is accretive to both growth and margin for the PNR business. I really look to the portfolio as being synergistic in a way that gives us a lot of opportunity to grow, but also to improve our financial performance. The capital-intensive, but high-growth recon business is really well positioned in its target anatomies to continue the growth that we've outlined. What I love about having PNR is that it generates a lot of cash that enables us to support the growth in the recon side of the business and at the same time continue to build out its brand and brand promise, which is with the DonJoy and Aircast and some of the other brands really powerful in that side of the business. As markets evolve, where you've got the continuum of care really being considered by more and more customers, I think having this whole portfolio where we look at prevention, repair, and recovery is really powerful. I don't know if you want to. Yeah. I mean, I think your question on the portfolio is it's improving. We've been very focused on shaping both sides of recon and PNR with regards to higher growth, higher gross margin opportunities. I think you're seeing with the deliberate mix that we've created on the recon side with 50% of our business being in extremities and 50% in large joints and then 50% U.S., OUS, it gives us a weighted average market growth that's going to allow us to continue to shape the top line of the company in a positive way. On the PNR side, I think Damien mentioned in our last earnings call that now 50% of our portfolio is growing 5% or higher. We've been deliberate in terms of building a portfolio that's giving us a mixed advantage, not only on the top line at the enterprise level, but also to drive profitable growth as well. Okay. I think the PNR side of the business probably gets less attention from investors. What are you most excited about that business? I started to mention this, but I love the brand loyalty to things like the DonJoy bracing or the Aircast walker. Those things have a lot of stickiness with customers. I think we've got an opportunity to continue to build that. We're global market leaders, but we're still only at roughly 25% market share. Think about a lot of these categories as Coke versus Pepsi sort of battles where 10 basis points of market share gain repeatedly really starts to add up. I am excited about the opportunity there because the metabolic rate of our innovation engine is really solid. I think we've got an opportunity to continue to build that out as well as finding new technologies like with Manifuse and the bone stimulation portfolio, which is growing double digit. It is definitely accretive from a gross margin point of view. You've got portfolio expansion opportunities like bone stimulation building on top of the brand loyalty of brands like DonJoy. It's a great cash generator. I mean, PNR for us is [crosstalk] i s that to? Is an opportunity for us to continue to generate cash and invest in the growth of the company organically and create opportunity for us to continue to run that offense of getting up the cash curve, driving down leverage, introducing more M&A into the future. It is a really strong cash-generating business. All right, great. I guess on the recon side, I'm kind of curious if you can make any comments on the Ortho market so far that you're seeing in the quarter. If you can't say anything about it, is it steady, stable, any incremental changes from the last quarter or within some of the segments? I think our view is that the procedural volumes remain pretty solid, both in the U.S. in terms of seeing how it's progressing so far in the quarter and outside the U.S. I think our view is still a little bit cautious with regards to how it is going to play out over the quarter, just given the way that the holiday schedules fall in the U.S., particularly in Christmas and New Year's ending on a Thursday. Overall, I think from what we see so far, procedural volume looks pretty solid. All right, great. The three key results, it was pretty solid, I thought, feeds on the top and bottom line. Maybe some of the segments you can sort of pick at a little bit, like the U.S. hip and knees, there were some, I think, 7% headwinds from prior year capital sales. The implants grew 6%, still above market. I guess maybe if you can sort of unpack the implant growth number and why should Enovis be growing meaningfully above market on the implant side, just given your size? I think the trajectory for the last two quarters that I've been experiencing show that we've got a meaningful opportunity to continue to grow in the way we've outlined. There's definitely opportunity for us given our market share position in hips and knees. I know it's a bit hard to unpack sometimes with the equipment from Arvis last year not reading through it this year. We’ve talked about it being a $3 million headwind in the quarter. If you abstract from that, I think 6%-7% growth in hips and knees is definitely above market, which I'm really proud of the team being able to execute that. Shoulder and foot and ankle continue to be double-digit business. Again, we really see a great trajectory there, especially with some of the new product launches. On the other side of the house, PNR, as Ben said, continued to perform well. I think in the quarter, we were very pleased about it. Again, we understand that abstracting from the equipment is a little difficult. That is why we have tried to be very transparent about it. All right. The OUS business on the Ortho side has actually been performing really well and better than the U.S. With the LEMA integration, not much disruptions, fairly consistent. Why and why is that? How is that happening? Yeah, the LEMA integration really was transformative for us. We went from 22% of sales outside the U.S. to nearly 50% almost overnight. We became an international company. That global footprint has really given us a lot of momentum. It has made us be very visible to customers. I think that momentum has started to read through in all sorts of aspects of the business. Firstly, our ability to attract commercial talent and build out various jurisdictions and a footprint where we were not available prior to the acquisition. I think things like the cross-selling of the LEMA products with the Enovis products is starting to read through. We are in early innings on that. That, I think, is a very exciting thing. In addition to that, some jurisdictions have become available as competitors have decided to exit. It may not have worked for their business model, but it does for us. We've been able to start taking share in those markets. I think that's pretty exciting. I'll come back to it all revolves around the talent. I think we definitively got a great talent base by having the LimaCorporate team join the Enovis family. As they get momentum, I mean, look, think about it. In 2024 was the integration year. 2025 is the first year of that team inside our system. It's like rebuilding a football system, right? You don't do it in one year. The fact that we've now got a bit of momentum with this family inside the Enovis system is exciting. Okay. Excellent. Where are you with cross-selling opportunities? How's that tracking versus the initial or earlier expectations? What should we expect going forward in terms of cross-selling showing up in the numbers? We still see a lot of opportunity to capitalize on cross-selling opportunities. I'd say it's been really encouraging to see so far putting that business together and still growing double digits quarter on quarter while we start to build the ecosystem to really capitalize on the larger portfolio that's at play here. I think one of the things about this deal that we did with LEMA that we didn't really appreciate as much until now, it's been part of the family, is how truly complementary it was with Mathis. I mean, I think where LEMA was strong, Mathis was not as strong and vice versa. We've had a lot of opportunity just in the short term of building those two muscles together and capitalize on kind of the collective strength. Overall, we believe that the cross-selling will allow us to continue to drive above market growth in international recon and builds into our conviction of high single-digit growth in that side of the business, especially outside the U.S. I guess from an industry perspective, one of the major competitors in Ortho announced their decision to split out that business. That can be potentially disruptive. I'm sure everyone in the industry is sort of gearing up for that. What's the pitch for an Ortho or hip and knee rep or an extremities rep that's looking for a new home to look at Enovis versus one of the bigger guys? I would say I spent 12 years at that competitor. Seems we're not naming names. I know very much how the credo is important to people there. I would say that if you're looking for a place that is a credo-based company but gives you the opportunity to grow and take market share and develop customer relationships in a very agile environment, then maybe you'd like to come to Enovis. Okay. And then I guess would extremities guys be potentially easier to pull than hip and knees? Oh, I think it really depends heavily on the relationship. It depends on the skill and competence and capability of the commercial partner. I don't think it really matters about anatomy. Got it. In terms of new products, so I think one of the more important ones is the Ultamate Reverse Shoulder that's been contributing to accelerating growth in shoulders this year. Where are you in the launch? Which inning or which period? How many years of growth tailwind can that contribute? I think the short answer is still very early. This is only year one. We've really paced it out to make sure we've got the kit and instrument availability to grow the procedure. This is a multi-year product run for us. We are super excited about it because the response has been so tremendous. Okay. Got it. Are there any incremental changes in terms of the competitive dynamic in the U.S. shoulder market? Just given your sizable shares there, there's some new competitive product launches, maybe some renewed focus from larger competitors. There's private players and other small, more specialized players. Yeah. Candidly, I think there's always competition. There's always someone launching something. The best thing you can do is double down on what you know works, which is developing really great talent, building out a great med ed program, and then being very focused on customer service. Competitors come and go, but I think we've really shown that we've got a competitive offering that's valued by customers. That's why we punch above our weight in the shoulder anatomy. Got it. And then just in terms of some of the other key new products, you have the Prima Shoulder, you have Revision Cones, Nebula Stem, the Surgical Impactor, and PNR. There's Manifuse. So a lot of stuff going on. How would you rank those in terms of relative contribution over the near to midterm? I think what I want to point back to is how innovative we are, what a great pipeline we have, and how we're continuing to put singles and doubles on the board while we develop other bigger needle-moving things, like obviously our projection into the Arvis anatomy opportunities with shoulder and knee. This list that you just mentioned, I think, is a really great example of who we are, which is a smaller company in a space that reacts well to singles and doubles and innovation. We're continuing to put runs on the board by having those sorts of products come to market. Can you talk about the margin profile for all these new products collectively? Collectively, they come with a little bit of a, I'd say, mixed benefit for the company because a lot of these are price premium type opportunities to help us drive further value per procedure. I'd say collectively, as we look at it, it's adding to the mixed advantages we have as a company to help us grow our gross margins over time. We would expect them to continue to be a tailwind with regards to that. Great. You mentioned Arvis. That is the AR headset program. There are some limited market releases. Now you are, I guess, incorporating some feedback for Gen 2 ahead of a wider launch in the first half of next year. I think competitors have their own options in that category as well. Can you maybe sort of help us understand how does Arvis Gen 2 stack up versus the competition as it stands? I think what we've seen with our customer feedback, we were at ASES, which is the big shoulder meeting in North America. We were at Orcus, which is the hip and knee meeting. The response from both anatomies was that this is definitely an improvement on what we had in Gen 1, but also definitely something that provides options for clinicians. The reason it provides options is, firstly, it's a zero-footprint option. What we're seeing, a lot of physicians move between venues, and you can't just pack up your robot and take it with you. We want to be able to work with people to provide solutions where they need that sort of fixed asset solution. We want to be able to move with them when they want to be in a different clinic. I think the other thing is from an ROIC point of view, this is a low-cost alternative that enables you. We respect that there's an enabling tech play. We are trying to provide an option in instances where people need a different equation for their financial performance. The other thing is the way that the headset works in terms of spatial orientation. You do not have to take your eye off the surgical field while you're operating. I think, again, it's very clear that the robot has a very big opportunity to provide assistance. We are trying to provide other ways of thinking about planning and navigation. Got it. Maybe turning gears to financials a little bit. Can you level set us on the key financial metrics that you're focused on in terms of cash flow, conversion, leverage, growth, and margins? Yeah. Overall, we're really driving the company towards profitable, capital-efficient, top-line accelerated growth. How does that play out in terms of financial goals and metrics? They're similar to what we've already laid out many times before, which is shaping the company towards high single-digit consistent top-line growth, expanding our margins every year, at least 50 basis points, and getting up the free cash flow conversion curve up to 70%-80%. We're still marching towards those goals as a company. We're not quite there yet in terms of the business performance consistently, but we're making good progress. Overall, I'd say we still see that as the trajectory that we're on and continue to make progress towards those goals. I guess for Damien, when should we expect an updated view on the outlook for Enovis from you as you get more comfortable with the business, either early 2026 or whenever ready? Should we expect a fairly incremental type of updates from you on that front? I think when we get to the conference in January, we can talk a little bit about how we're thinking about 2026 and a little bit beyond, but it's still early in my days to be coming out with a grand strategic plan. We look forward to updating in a new year. Okay. Great. Definitely want you to be thoughtful with that. Totally get it. Finally, I guess Enovis still, from my perspective, seems it's somewhat under the radar for a lot of med tech investors. It's definitely underwhelmed from my perspective. What are the key misperceptions that you've been hearing since you've been engaging with investors after you joined? Do you have a better sense about what investors' expectations are and what can get them more excited about Enovis? I think we're a challenger brand. I think we've got a lot of market share opportunity in places where we're already competitive. I think we've got a business system that is going to drive capital efficiency. You can see that we're making progress on the cash flow. We're going to get the debt down. We've already taken the leverage down from 3.5- 3.2. We think we can get sub-3 in the near term. You've seen that we're programmatic M&A executors where we bring in assets and make them part of the business system. I think when we get back to a place where it's a little more risk-on with balance sheets and the world looks at SMID med tech a little more favorably, our ability to execute, integrate is going to be really valuable. Okay. Great. Really appreciate the color. Thanks for coming to our conference. Thanks for having us, [John]. Cheers. Thank you. Thanks, everyone. Thank you.