Ladies and gentlemen, welcome to NuVasive's second quarter 2023 earnings conference call. I would now like to introduce your host for today's call, Ms. Juliet Cunningham, Vice President of Investor Relations at NuVasive. Please go ahead, Ms. Cunningham. Thank you. Good afternoon, everyone. With me today are Chris Barry, Chief Executive Officer, and Matt Harbaugh, Chief Financial Officer. Chris will provide an overview of NuVasive's second quarter 2023 business results and trends, as well as innovation highlights. Matt will review our detailed financial results and full- year 2023 outlook, and then we'll host a question- and- answer session. The earnings release, which we issued earlier this afternoon, is posted on the IR section of our website and has been filed on Form 8-K with the SEC. We have also posted supplemental financial information. As a reminder, this call is being recorded and an archive will be available on our IR website later today. Before we get started, I'd like to remind you that our comments during this call will include forward-looking statements, which are based on current expectations and involve risks and uncertainties, assumptions, and other factors, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. The factors that could cause actual results to differ materially are described in NuVasive's news releases and periodic filings with the SEC. Except as required by law, we assume no obligation to update any forward-looking statements or information, which speak as their respective date. In addition, this call will include certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP financial measures are included in today's earnings release and on the supplemental financial information, both of which are accessible on NuVasive's website. Now I'd like to introduce Chris Barry. Thank you, Juliet. Good afternoon, everyone. Earlier today, we reported second quarter 2023 financial results. On today's call, I will review our performance for the quarter, share how our differentiated product portfolios and continued commercial execution position us well for the pending combination with Globus Medical, and discuss where we are in the merger process and our current views of timing. After my remarks, Matt will share additional financial details on the quarter. NuVasive delivered second quarter 2023 net sales of $317.8 million, an increase of 2.4% on a reported basis, or 3.1% on a constant currency basis compared to the prior- year period. In combination with our first quarter performance, we delivered in line with our expectations for the first half of 2023. Despite a challenging Q2 2022 comparison and merger-related competitive noise, the NuVasive team delivered a solid quarter. Our U.S. business achieved approximately 6% growth in U.S. spinal hardware, led by more than 20% growth from cervical for the seventh straight quarter. In our international business, we achieved approximately 10% growth on a constant currency basis compared to the prior- year period. This performance was driven by core spine and led by double-digit growth in Europe, as well as solid contributions from Latin America and Asia Pacific. We remain focused on our commitment to delivering core growth, a pillar of our previously communicated growth strategy. We're executing with discipline through our global teams, who are remaining resilient through the pending merger. Thank you to our teams for a job well done. Within core spine, we continue to address the significant opportunities in key procedural segments with our 360 portfolios, X360, C360, P360, and complex. Our innovation gives our commercial teams a strong competitive position to take share across each spine segment. In anterior, we continue to celebrate 20 years of our flagship XLIF procedure and 5 years of our X360 procedure. Across the globe, XLIF continues to demonstrate superior and more predictable outcomes than traditional spine fusion procedures. Adding to 5 years of clinical validation surrounding lateral single-position surgery and X360 SPS, a 2023 study published in The Spine Journal shows that lateral SPS and traditional fusions have similar outcomes two years postoperatively, while reducing perioperative complications and improving efficiency. Our know-how and experience in creating procedural solutions have only benefited our strategy in segments like cervical, posterior, and complex. In posterior, US interbody sales delivered double-digit growth, driven by our P360 portfolio. Key products, including the commercial launch of the NuVasive Tube System and the introduction of our next generation posterior expandable cage, ModXPL, have supported our renewed momentum in our TLIF business. Turning to US cervical, our entire C360 portfolio continues to deliver above-market growth, led by increased surgeon adoption of the Simplify Cervical Disc and RELIANT Cervical. As anticipated, the Simplify Cervical Disc is a door opener for our commercial teams, pulling through additional procedural opportunities and driving greater density in cervical accounts. In complex, we're making progress in the pediatric deformity sub-segment with Reline 3D, which delivered double-digit growth. Our posterior fixation system for deformity correction unifies deformity techniques into one powerful and efficient procedure. In enabling technology, Pulse continues to make its impact across the globe. With commercial sales in several new European geographies and our first case completed in Singapore, we're seeing increased global surgeon interest in Pulse. Following the platform's 2023 summer software release, surgeons have shared positive feedback on the enhancements to their operating rooms. New hardware enhancements were also released to further optimize our differentiated navigation patient array, allowing us to better support revision, pediatric, and complex deformity cases. These software and hardware introductions highlight our commitment to continuous innovation of the platform. In our NuVasive Specialized Orthopedics business, recent achievements include the re-entry of the PRECICE system in the UK and the CE mark reinstatement of PRECICE Bone Transport. This all internal solution extends our PRECICE technology, treating segmental bone defects caused by tumors and trauma. The NSO business continues to be well-positioned for long-term growth. Turning to our planned combination with Globus Medical, we remain excited and committed to creating an innovative global musculoskeletal company together, as demonstrated by the overwhelming support for the merger by both company shareholders, the pending combination will accelerate our near and long-term strategy. Our commitment to the deal is steadfast, and our belief that this merger will benefit all stakeholders remains unchanged. As previously communicated, on May third, we received a Second Request from the Federal Trade Commission in connection with the FTC's review of the merger with Globus. Over the past three months, we and Globus have gone to great lengths to prepare our respective responses to the Second Request. I'm very proud of what our teams have accomplished in a short period of time. During the Q1 earnings call, we indicated that we expected to close the transaction in the third quarter. Based on our progress with the response to the Second Request, we are not backing off that timing. We are doing everything we can to make that happen. Given the recent M&A headlines, I've heard a lot of commentary about the FTC's approach to deals generally, as well as speculation about what action the FTC will take in the NuVasive Globus merger. While there's a range of potential outcomes when the FTC is reviewing our transaction, we remain optimistic on a Q3 close. Now, I'll turn the call over to Matt. Thank you, Chris, and good afternoon. I'm going to provide commentary on our second quarter results and full- year 2023 net sales guidance, which remains unchanged from what we provided on February 22nd. Our detailed financial results have been provided in today's press release and supplemental information. Today, I will discuss both GAAP and non-GAAP measures. Please see our press release for GAAP to non-GAAP reconciliations, and unless otherwise noted, all comparisons are to the prior- year period. Second quarter 2023 worldwide net sales were $317.8 million, which was a 2.4% increase as reported and a 3.1% increase on a constant currency basis. Foreign currency negatively impacted our net sales performance by $2.2 million during the quarter. International net sales for the second quarter were $78.6 million, an increase of 6.8% over the prior- year period on an as-reported basis and 9.8% on a constant currency basis. From a regional perspective, international growth was led by core spine net sales in Europe and Latin America. Asia Pacific growth, primarily in Australia, was offset by reimbursement pricing headwinds in Japan, as discussed previously. Overall, procedure volumes in Japan grew above market, and our market position continues to be strong. Turning to U.S. net sales, let me provide key highlights by product line. U.S. spinal hardware net sales for the second quarter of 2023 were $174.1 million, representing a 5.5% increase year-over-year. U.S. cervical continued its proven and ongoing track record of achieving greater than 20% growth, led by the Simplify Cervical Disc and Reline Cervical. U.S. surgical support net sales were $65.1 million, a decrease of 9.3%, primarily driven by lower biologics attachment rates, as well as payer mix in NuVasive Clinical Services or NCS. Moving to operating results, second quarter non-GAAP gross profit was $228.3 million, compared to $224.7 million in the prior- year period. Non-GAAP gross margin as a percentage of net sales for the second quarter of 2023 was 71.8%, a decrease of 60 basis points compared to 72.4% in the prior- year period. The year-over-year decline was primarily driven by lower NCS net sales. Pricing pressure remained consistent with historical levels in the low single digits. second quarter 2023 non-GAAP operating expenses increased 1% to $186.1 million, compared to $184.2 million in the prior- year period. Non-GAAP operating margin during the second quarter of 2023 was 13.3%, an increase of 30 basis points compared to 13% in the prior year period. Overall, higher net sales and intentional expense control generated favorable operating leverage that more than offset the gross margin pressure. Non-GAAP other income and expense for the second quarter was $2.5 million of expense, compared to $8.4 million in the prior- year period. The year-over-year decrease was primarily driven by less impact from unrealized foreign currency gains in the current year period. Non-GAAP tax expense for the second quarter of 2023 was $9.9 million, compared to $7.2 million in the prior year period. Our second quarter 2023 effective tax rate was 25%, compared to 22.5% in the prior year period. The year-over-year increase was driven by higher tax reserves and valuation allowances. Currently, we expect our annual effective tax rate to be in the mid-20% range. For the second quarter of 2023, we reported GAAP net income of $7.4 million, or diluted earnings per share of $0.14, compared to GAAP net loss of slightly less than $1 million or diluted loss per share of $0.02 in the prior year period. As a reminder, the prior year period included unfavorable impacts of foreign currency exchange fluctuations of approximately $25 million associated with the weakening of the Australian dollar against the US dollar. This was principally related to our 2021 acquisition of Simplify Medical. The impact was approximately $2 million in the current year period, resulting largely in the overall improvement in GAAP net income. On a non-GAAP basis, we reported net income of $29.8 million, or diluted earnings per share of $0.56, compared to non-GAAP net income of $24.8 million or diluted earnings per share of $0.47 in the prior year period. The year-over-year increase was driven by operating profit growth, as well as the favorable impact of unrealized foreign currency gains. Turning now to the balance sheet. We had cash and cash equivalents of $80.7 million as of June 30, 2023. During the second quarter, we repaid in full the $450 million convertible notes due in early June, using $350 million from borrowings under our credit facility, combined with cash on hand. Free cash flow during the second quarter was $3 million, compared to $26 million in the prior year period. The decrease was primarily due to lower operating cash flow, offset by capital expenditures as compared to the prior year period. We continued our investments in capital expenditures to support our net sales growth, as well as current and future product launches. As I mentioned at the beginning of my prepared remarks, our full year 2023 financial guidance remains unchanged from February 22, which was worldwide net sales growth of between 6%-8% on both a reported and constant currency basis compared to the prior year. This is based on foreign currency exchange rates being neutral for the full year, based on rates as of July 31, 2023. Lastly, I'd like to wrap up by reiterating what Chris said about our excitement with our continued progress towards finalizing the merger with Globus Medical. It's great to see the teams from both companies working closely together towards integration planning for a successful combined company, we continue to expect the merger to close in the third quarter. Now I'll ask the operator to please open the call for questions. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull for questions. Our first question comes from Matt Miksic with Barclays. Please go ahead. Hey, good evening. Thanks so much for taking the questions. Chris, I wanted to ask about, you know, some of the business trends that, that you talked a little bit about in your prepared remarks. You know, if you could maybe speak to, you know, anything in the results or in the operations or in the organization that you would say, you know, either indicates that, you know, the, the thing that folks might be fearful of here ahead of a, ahead of a pending transaction might be happening. In, in other words, you know, reps peeling away and, and taking another, another opportunity, or, or that that's not happening. Any, any color on, on, you know, how you felt about performance and whether or not it was affected by anything like that? And then I have one follow-up. Yeah, thanks, Matt. I'll happy to answer that question. The, the simple answer is, we're, we're feeling very good. If you kind of dig below the surface of the 3%, you look and see the U.S. hardware grew roughly 6%. A continued growth in cervical. We're starting to see a growth in our posterior strategy with P360. Some of that's offset by the U.S. support business. Partial is the NSO or I'm sorry, NCS business, which had some contractual headwinds. We have seen some Pulse slowdown, as likely as a result of some of the sign-to-close or merger-related anxiety from our customers. There's also likely some capital slowdown general in the market. I'm anxious to hear what others say there, because we're still somewhat nascent in the capital sales process. We saw slower than expected sales there. The underlying strength of the U.S. business is still solid, so we're excited about that, which actually speaks to the fact that we're retaining that top talent, and the sales organization seems to be very excited about the future combination and what that holds for them individually. International, still, you know, double-digit growth. That's with our second largest market in Japan, really being offset from a good solid volume growth, as Matt Harbaugh talked about in his prepared remarks, dealing with the transitory pricing headwind, that should come and go over the course of this year. If you really look at the underlying strength of the business, 6% growth in the U.S. spinal hardware business, and still double-digit growth in the international segment, with Japan coming under some pressure this year from a pricing perspective. those things indicate to me that the business is holding its own. We're minimizing distraction. People are excited about the combination, but we're taking it one step at a time. Okay, that's helpful. Just to follow up, to sort of make sure we're thinking about, you know, expectations for Q3, you mentioned, you know, and then other folks have mentioned the, the possibility of a, of a maybe more, more of a August lull and, and more seasonally, you know, softer Q3, higher more vacations, that sort of thing. You know, if we would normally model sort of flat to down in the third quarter, you know, is that, is that down mid-single digits? Is that down more than that because of what you're starting to see? Or just any color in the back-half cadence would be super helpful. Yeah, I mean, unfortunately, it's probably I'm probably the worst person to talk to in this particular subject. You know, I, I did mention in Q1, we saw less seasonality, December to January. That was really interesting. I would say Q2 showed signs of return to pre-COVID seasonality, meaning you had the June summer and July summer vacation. You know, you saw some of that starting to take shape. The problem is, I've gone three years of either a COVID-related, now a merger-related disruption to our, to our business. It's a little hard for me to sort of see through some of this and really identify market trends. I would just say, in general, my perspective is the market's moving back to normal seasonality. For that, you know, I would expect some softness, generally compared to market from a normal seasonality perspective that you saw likely previous to the COVID years. You know, we'll see as it unfolds. I would say the Q2 seasonality looked more consistent than Q1 from previous years that were affected by COVID, if that helps. Yeah, Matt, the only other thing I would add is, you know, typically, our fourth quarter is our biggest quarter, followed by the second quarter, and then, you know, our first quarter tends to be the lightest. Yeah, we do expect some lull, to use your word, in August. With regard to your, your first question, the one thing I did want to highlight that was in Chris's prepared remarks is, and I know you guys don't see our internal plan, but from a, "What did we expect when we set the budget," you know, back in the January timeframe versus where we landed, it doesn't get much closer than where we landed, in the first six months of the year. We're, we're tracking right in line with where we thought we were gonna be. Next question. Next question comes from Shagun Singh with RBC Capital Markets. Please go ahead. Great. Can you hear me okay? Can. Okay, perfect. I was just wondering if you can shed some light on any conversations, updated conversations that you're having with the FTC. You know, are they still requesting documentation? You know, is it, is it more specific or, or more broad? You did sound more confident in the commitment to the deal closing in Q3, and I'm just trying to get a sense of, you know, you know, what, what's driving that. Thank you for taking the questions. Thanks, Shagun. I mean, you know, I've said before, we, we, we walked into this, eyes wide open. We're very confident in the, in the, in the combination of these two businesses. Our team has done a great job, preparing our responses to the Second Request. The Second Request is something that is clearly not out of the ordinary for the FTC. We are working feverishly to make sure that we're doing everything we can to fulfill the, the comment that I made earlier, which is our confidence and, and doing everything we can to make sure that, that we do deliver and close the deal in Q3. There's a range of potential outcomes. Obviously, the FTC is in a dynamic situation, but we remain very optimistic in the Q3 close. The team's done a lot of work. We'll continue to, to, to meet the requests as they come. It's a dynamic situation, but one that we feel confident, confident and are working very hard to, to make sure we're resolved. In the meantime, you know, like I said, we continue to make progress on the integration planning to the extent we can with Globus and both teams are working closely together. Great. Then just one on guidance. I, I believe it implies a step up in the back half, if I'm correct. Can you just talk to the confidence in the back half? You know, what's driving that? Thank you. Yeah, Shagun, it's Matt. As I mentioned earlier, when we were talking with Matt, our fourth quarter tends to be, in a normalized world, it tends to be our strongest quarter, you know, particularly in the November-December timeframe. Yes, it will pick up, particularly in that fourth quarter. Thank you. You bet. Our next question comes from Allen Gong with JP Morgan. Please go ahead. Hi, this is actually Lily on for Allen. Thanks so much for taking the question. Maybe just digging a little deeper into surgical support. In your prepared remarks, you called out headwinds from biologics and NCS. Maybe if you could just dig a little bit deeper into what happened there and what drove the weakness, and how should we be thinking about that bouncing back in the back half of the year? Yeah, it was a bit pronounced, in the second quarter. I would expect it to soften as we get in the back half of the year. Part of it is, is we had a pretty strong second quarter, last year. We have had some pricing pressure in NCS, but I would say we would expect in future quarters for that to more normalize to, to lower single digits on the negative side. Thanks, Lily. Great. That's helpful. Then maybe just as a quick follow-up, you know, spinal hardware I think was good, but, you know, maybe not as strong as one might expect, just given the tailwind to procedures that we've been hearing about. Is there anything specific to the spine market or to NuVasive that you'd call out that drove that? Thanks so much. Just continued growth. You know, we, we, we, we're, we're happy with the growth we've continued to see in cervical. We're obviously standing up our P360 strategy and saw some good results there. You know, you're coming off of a bit of a rebound year, but, but generally speaking, this U.S. spinal hardware business is, is on track and where we thought it would be. As we talked about, and Matt kind of spoke of earlier, the one area that we are managing is the Pulse system. You know, the customer base that's using the system is very happy. You know, obviously, the sign-to-close period in the merger created some level of pause, probably coupled with some level of capital pullback in the market we're still looking at. Generally speaking, the U.S. business is, is, is on track where we thought it would be. Great. Thank you. Next question comes from Josh Jennings with Cowen. Please go ahead. Hi, this is Eric on for Josh. Thanks for taking the question. Was hoping to hear a little bit more on Simplify's adoption and commercial success in recent quarters. Then more broadly, what would you say about the durability of your U.S. cervical spine business continuing to deliver 20%+ growth going forward? Then if I could squeeze one last question there, are you able to share the run rate, excuse me, for Simplify? Thank you. Thanks, Eric. I'll answer as many of those as I can. Listen, we're, we're, we're very happy. We continue to see the ramp up with Simplify. We believe that the CTDR portion of the cervical market is the strongest subsegment area of growth in that very large market. We think we've got the leading technology with Simplify, and, and we continue to see growth. I think we've seen consistent growth over the last several quarters. That's really led to 20%+ growth in, in the overall cervical business. As far as, as far as the durability, I would just continue to point back at the overall cervical segment, still a $2.6 billion segment. If I had to characterize the CTDR market, and I think I did this at our, our, our analyst day, our, our strategy session we did back in October. You know, I think it was upwards of a $400 million segment of a $2.6 billion market segment with a lot of capability to cannibalize the ACDF procedure. For those reasons and our relatively low position and market share position, I do think it's a durable growth engine for us for some period of time looking forward. I'm not gonna put a date on it, but I'm happy to continue to see the growth. We continue to, to reach and, and use it as a door opener for new customers, and so it's a force multiplier for us as a, as a, as a company. Obviously, following C360 with P360 is also the next phase of our growth to really reinvigorate our TLIF business. You know, the strategy that we laid out over the last several years is, the team's executing on, so we feel good about it. As far as the run rate for Simplify, I don't think we've given that in the past. I would just say we're well above and well ahead of our deal model that we put together some years back. Okay, understood. Thank you. Thanks, Eric. Next question comes from Matt Taylor with Jefferies. Please go ahead. Hi, guys. Thanks for taking the question. I guess I was, you talked about confidence in the Q3 close. Is there anything that you can give us kind of inside the response that you did that gives you the confidence or, or back and forth with the FTC? What are, what are some of the range of outcomes that you see just potentially happening if you do not close in Q3? Why, why would that happen? I mean, I'm not gonna go into any specific commentary. Clearly, it's, like I said, a dynamic situation. The team is working very hard to make sure that we're getting everything that's asked of us, and I think we've done so effectively up to this point. As far as, you know, the range of outcomes, clearly, you know, the, the, the FTC review the information that we've, that we've provided, and ultimately come back to us at some point. I'm not. You know, I'm confident in the Q3 timeframe because I feel like everything I've said before, I don't believe this is anti-competitive. I think there's lots of competitors. I think there's a low bar of entry for competitors coming into this space. For all those reasons, the combination of us and Globus, I think, actually is much better for patients. It actually opens up the opportunity to further innovate, and ultimately change patient outcomes, which is our focus as a company. For some reason, if it doesn't, which I'm not gonna speculate, it won't, but I've said all along, our strategy is what we're executing on, core growth, enabling tech, pursuing market opportunities, and strengthening our bottom line, all of which we're executing on as we speak. The merger accelerates our strategy, but it doesn't, it doesn't negate it or, or in any way change it. The execution you're seeing in core growth, our focus on enabling tech, the opportunities that we see in the market, strengthened obviously by the merger with Globus, and building strength in our bottom line and discipline to, to expense manage some of the things Matt talked about, those things stay intact. You know, whatever happens going forward, we feel very, very confident in where we are and where we're going. All right. Thank you very much. Yes. Next question comes from Vik Chopra with Wells Fargo. Please go ahead. Hey, good afternoon. Thanks for taking the questions, too, from me here. I'm just wondering how much benefit you had from backlog recapture in Q2, and what your expectations are for the rest of the year. Then, Matt, you know, I heard you talk about pricing earlier in the call, but I'm just wondering how you think about pricing for the rest of the year, and are you able to take price in this inflationary environment? Thank you. Thanks for the questions, Vik. I'll cover the first and then hand over to Matt. You know, I've been looking at backlogs for three years now, and I don't know that I can see any difference between normal volume and backlog volume anymore. It's all a blur. You can always go back over the last three years and go, well, you know, that we've obviously forgone a certain amount of volume, but it's ebbed and flowed, and as I've always said, you know, the, the, the demand-supply relationship dictates the throughput. I don't think, I don't think there's a significant strong demand, or I don't think there's significant amount of supply. Either way, the volume is about the volume right now. I wish I could tell you more and sort of discern what is normal volume, what is backlog volume. I don't know that it's worth really looking at. I think obviously, all med tech is benefiting from some level of rebound over the last, let's say, three, four, five quarters. How long it will take to normalize and actually go through any sort of a backlog scenario? I think it'll be, I think it'll be an even cadence to that and not a bolus type of event, hard for me to answer that question, but, but something that we've looked at, but I don't know if it's worth looking at too much. Yeah, Vik, with regard to your question around pricing, I'll just echo what I said in the prepared remarks. We're in the low single digits. And, you know, having been with the company now for a number of years, generally, it's kind of been for us in the U.S. market, kind of in that -1% to -2% in any given quarter. As far as your question as it relates to the back half of the year, you know, it may be... I think it'll be in the same ballpark. It may have some more volatility around it, but, you know, having seen so many quarters in a row where the pricing has been relatively consistent, I'm hopeful and believe that that is likely how it will continue to play out in the back half of the year. All right, next question. Questions. At this time, I would like to turn the floor back over to Chris Barry, NuVasive CEO, for closing comments. Thanks, Victoria. Thanks everyone for joining us today on the Q2 earnings call. As mentioned earlier, I believe we're making great progress on the planned combination with Globus Medical. As I've said many times, we believe the new organization will create a leading global musculoskeletal company that is well-positioned to change even more patients' lives. With that, thank you for all for joining, and have a great day. This concludes today's-