Good afternoon, everyone, and welcome to the webcast of ATEC's Second Quarter 2021 Financial Results. We would like to remind everyone that participants on the call will make forward-looking statements. These statements are based on current expectations and are subject to uncertainties that could cause actual results to differ materially. These uncertainties are detailed in documents filed regularly with the SEC. During this call, you may hear the Company refer to reported amounts, which are in accordance with U.S. GAAP as well as non-GAAP or pro forma measures. Reconciliations of non-GAAP measures to U.S. GAAP can be found in the supplemental financial table included in the press release, which identifies and quantifies all excluded items and provides management's view of why this information is useful to investors. Leading today's call will be ATEC's Chairman and CEO, Pat Miles; and CFO, Todd Koning. Now, I will turn the call over to Pat Miles.

Thank you very much, Pete, and welcome everybody to the Q2 2021 financial results and update. Clearly, we will be making some forward-looking statements. And just to jump right in, I know where we're positioned. I'd say that we are uniquely positioned for continued industry-leading growth. And I think when you start looking at the tailwinds, you have to think from a PTP perspective, we're penetrating the current market, and we're really expanding the MIS market. Now I'll go through further explanation of that later in the prepared remarks, I would say that our U.S. distribution is also improving and expanding. And so that's another tailwind. Love what's going on with regard to EOS from just our ability to have academic influence and so many of the other benefits of the type of information that comes out of a machine. And I think a lot of that is providing a halo effect with regard to more conventional procedures. And so I think we're earning our way in with some of our unique stuff and then getting rewarded additionally by the halo effect of other procedures. And then you'll love the building of a foundation for the international marketplace with EOS. If you look at the scorecard, year-over-year revenue growth of 93%, up 28% sequentially, which is good, 46% 2-year CAGR, which I think is good. It's our eleventh consecutive quarter of double-digit year-over-year revenue growth, another driver is there's real acceptance of our new products. And I think that's reflected in the 84% new product revenue, 30% year-over-year growth in revenue per surgeon. I would tell you that's a phenomenon due to PTP clearly, complexity of the type of surgery. So we're earning confidence and then the halo effect of the type of confidence that we're building and then applying it to other procedures. And then a 15% year-over-year growth in average revenue per case. I would say that that's a convoy reflection. So we're seeing more products used per case and then clearly a complexity dynamic. And now we're up to 2 products and that's a blended average of categories per surgery. So one thing that you may hear from us over the coming years is not a lot is going to change. We're going to earn our marketplace by creating clinical distinction, and that just means improving products and procedures in spine surgery that compel surgeon adoption unto itself. And so that will be reflected based on how surgeons are applying the type of procedures that we're creating. And then what you're seeing, you'll see an expansion and a clinical aptitude increase with regard to the sales force. So we're really excited about what's going on that front. And as they move more toward exclusivity and the type of people that we’re attracting, our clinical apps people, I like where we’re going. But starting off with regard to clinical distinctions, again, I think that the reflection of the percentage of revenue driven by new products would suggest that there's been acceptance of the type of things that we put forth. From 2018 to 2020 we released around 30 products, and you could expect 8 to 10 a year from now and into the future. I think, the relevance though really becomes in terms of how do you create and how do you pursue the perfect spine procedure. And I think that's really the architecture that most fascinates us. And that's why you saw the reflection of PTP really as one of the first kind of uniquely assembled procedures come out of ATEC. One of the things that we highly covet, however, are things like information that drives predictability. So what I want to do is spend a little bit of time on really the unmet need of clinical and economic predictability through the vision of informatics. When we think about information, I think oftentimes, we think about how relevant is the information? And is it actionable type of information? One, how do you integrate information into workflow? And then we also think about just the spatial availability in the operating room that makes information available. The three pillars of what we've done to date, first of all, SafeOp. We acquired SafeOp back in 2018. We said what we're going to be able to do is identify where nerves are and then tell you what's the health of the nerve over time. I think the utility of that technology has been very, very valuable. And if you look across the landscape of our industry, we are now the purveyor of automated neurophysiology in spine. We continue to invest there. We continue to make improvements in it. Nobody else is doing real monitoring, meaning the whole SSEP element of determining nerve health over the time in a case, and the value that creates. The other beauty of that is it comes in a tablet form. So when you start to think about the impediments to adoption and bringing huge pieces of capital equipment into the operating room, we're bringing a tablet. So you love just the dynamics of being able to make that information available in a very seamless way. When you start to go to navigation, really, what you want to do is make sure that the workflow is seamless and predictable. A part of the challenge that navigation has had over the years is that often, it is a very difficult tool to use from a workflow perspective. You start to think about intraoperative CT, which requires a 2-minute spin, there’s substantial radiation delivered to the patient. The surgeon can step away, but realize a lot goes on during an operation. When a patient moves, what you want to do is be able to update the image because now the image is no longer relevant. The beauty of TrackX is the way it acquires an image and provides biplane navigation, by a ubiquitous tool in a fluoroscope or a CRM. The beauty of TrackX is your ability to create an updated navigation of exactly where you are based upon acquiring an image from a CRM. So we love how that fits into the workflow of executing a procedure, and these things become very relevant. The other thing becomes is, as I talked about space in the operating room being finite, the ability to attach to a current tool that’s already accepted and utilized in the operating room is valuable and not have to introduce another huge piece of capital. When you talk about another big piece of capital, EOS is a very big piece of capital, but it’s not in the operating room. So the ability to integrate that information into the operating room through the conduit that we’ve created in a tablet paper platform becomes very, very attractive. And while you start to integrate things like a standardized standing full body weight-bearing image, there’s just such a wealth of information in these tools. If you think about spine surgery as being decompression, stabilization, and alignment, our ability to plan in 3 dimensions from a standing image is so opportune and the ability to really drive alignment. Alignment has been discerned as the greatest predictor of long-term successful outcomes. You start talking about spine; you start to talk about durability. What you want is an aligned patient. Just the ability to align someone and know before you get them off the table, this patient is aligned is such an opportunity for us to design and develop into. The other thing that hasn’t been touched very well is bone quality assessment. Utilizing some of the EOS elements to ensure your demand matches your stabilization tools in a way that ultimately enables you to fix and stabilize the spine specific to a patient. That gets the patient-specific type of treatment and the ability to contour your implants to specific patients. To understand the other unique dynamics really provides insight into the cost of care. Our view of this acquisition is that it really is a foundation for multiyear opportunity for expansion. The great part is the academic community has already spoken. If you look across the world, these things have been placed in a who’s who of institutions. The great part about us owning this asset is that we can avail it to virtually everybody through things like a lease agreement or an earn-out purchase type of an agreement. The ability to start to translate these assets is really tremendous. So you say, what’s the crawl, walk, run associated with this effort? The first thing that we've done is integrate our selling efforts. That means aligning the sales force, taking what used to be 6 people selling capital to now 306 people having a field force of implant people and then having a group of capital people really start to focus the opportune efforts, especially in North America. The other thing becomes driving utilization. When we start to think about a salesperson trying to change the behavior of a spine surgeon, it’s a very challenging walk. I think the opportunity for a spine salesperson to walk in without the confrontation of, 'Hey, will you use my implants?' but rather 'Hey, will you utilize our products to better inform your prospective patients?' is a much less confrontational opportunity. The other thing that is going on in real-time is really trying to focus the resources on the highest priority product development initiatives that will have the greatest strategic impact. One of our executives is going to move over to Paris into the EOS facility, Eric Dasso, who I've worked with for many years, who I have great confidence in, the ability to create a sound cadence of execution between the two groups. I think we were able to maximize the opportunities available to us in the most immediate term.

Well, thank you, Pat, and good afternoon, everyone. It's a pleasure to share the results and our strong quarter review. I'll begin with revenue. Second quarter consolidated revenue was $62.2 million, reflecting 110% growth over the prior year. This includes organic revenue of $56 million, reflecting 93% growth compared to the prior year period and growth of 28% compared to the prior sequential quarter. Impressively, the organic growth demonstrated in Q2 was not simply attributable to an easy pandemic comparison, as our 2-year CAGR accelerated to 46%. Both the strong 2-year CAGR and sequential improvements speak volumes about the powerful momentum our business is driving. The strength of our organic sales results in the second quarter of this year is driven by a significant increase in procedural volume and continued growth in case ASP. With the close of the EOS Imaging transaction, we recognized $6.1 million in EOS related revenue in the second quarter, reflecting sales from the date the transaction closed on May 13 through June 30. Finally, revenue from our international supply agreement amounted to about $400,000 for the quarter. To summarize, the total revenue of $62 million indicates a growth of 110% and includes organic revenue of $56 million, revenue from the EOS acquisition contributing $6.1 million, and $400,000 from the international supply agreement. Looking at the rest of the profit and loss statement, the non-GAAP gross margin was 73% in the second quarter, a decrease of 430 basis points compared to the previous year. The decline in gross margins was primarily due to the consolidation of EOS Imaging, which had an unfavorable impact of 390 basis points during this period. Typically, EOS's business achieves gross margins in the mid-to-high 30s range after adjustments for GAAP to IFRS differences and aligning internal accounting policies. In contrast, ATEC's gross margins are in the mid- to-high 70s range. Therefore, we expect a lower consolidated gross margin profile due to this combination. Operating expenses continue to reflect consistent, thoughtful investments to support rapid long-term growth. Non-GAAP R&D was $7 million and approximately 12% of sales in the second quarter, compared to $4 million and approximately 13% of sales in the prior year quarter. The increase on an absolute dollar basis was driven by continued investment to support organic portfolio expansion and EOS activity. Non-GAAP SG&A was $50 million and approximately 80% of sales in the second quarter compared to $23 million and approximately 76% of sales in the prior year period. The increase was driven by continued expansion and advancement of ATEC's distribution network, increased variable selling costs related to strong performance in the quarter, and investments required to support the increasing size and sophistication of the company. Total non-GAAP operating expenses amounted to $57 million and approximately 92% of sales in the second quarter, compared to $26 million and 89% of sales in the prior year period. This level of investment in operating expenses reflects the emphasis we have placed on fueling our organic innovation team and transitioning the sales channel to support continued industry-leading sales growth. Turning to the balance sheet, we ended the second quarter with $77 million in cash, walking that down from our March 31 balance of $191 million. We had a net $74 million outflow associated with the EOS transaction, $37 million in operating cash flow, of which $24 million was for inventory and instruments to support the sales growth and a further $3 million in other investing financing effects. Our debt at face value is now $79 million with the addition of EOS-related debt of $15 million in OCEANE's outstanding at a 6% rate and another $6 million in existing EOS debt. With the $77 million of cash we ended with and access to another $40 million that remains on our Squadron facility, we are well positioned to continue to invest in the growth of the company. Turning to our 2021 outlook, we now anticipate full year 2021 total revenue will approximate $238 million, representing growth of 64% compared to the full year 2020. As a result of the strength in the second quarter and continued strong momentum, we are increasing full year 2021 organic revenue guidance to approximately $212 million, which implies growth of 50% year-over-year and is a $24 million raise over our previous full year guidance. Growth will continue to be driven by the impact of clinical distinction, which is expanding surgeon adoption and elevating our strategic geography. We anticipate EOS related revenue of approximately $25 million for the full year 2021, which includes the $6 million recognized in Q2. That implies $19 million of EOS revenue in the second half of 2021, reflecting mid-teens growth compared to the second half of 2020 as we take ownership of EOS' order book and thoughtfully integrate teams and technology. We also expect the international supply agreement to contribute about $1 million in full year revenue before it terminates on August 31. Execution against the commitments we outlined back in 2018 clearly delivered significant growth over the past few years. As I mentioned, our organic revenue 2-year CAGR in the quarter accelerated to 46%. We've updated full year revenue guidance today to $238 million that implies strong organic momentum, coupled with the inclusion of EOS will propel growth of about 55% year-over-year in the second half. That is certainly industry-leading growth. In closing, after having a quarter under my belt, I'm incredibly excited to play a meaningful role that will be an exceptionally long growth story. ATEC accomplishments to date are significant, but we have multiple growth drivers in front of us and have only begun to earn the market share that decades of experience has proven is achievable through an unwavering commitment to better surgery. I hope to connect with many of you over the next few months as we have a full calendar of investor outreach activities planned. With that, I'll turn the call back over to Pat.

Thanks very much, Todd. In conclusion, I think the reality is we still have a lot of work to do, but there are some great tailwinds. PTP is the real deal, and I'm excited about the years continuing to advance that procedure. Clearly, our ability to continue to improve our U.S. distribution, make it exclusive and expand it is in front of us. I think reflecting EOS is our next foundation and such an opportunity to make for better surgery and further academic investments. I think the halo effect of some of these things will be tailwinds, as well as literally just the transformation, as we've been a U.S. company only. Now the opportunity to march into the international space is something we find very exciting. So our transformation requires strong execution against our commitments. We remain committed to advancing the clinical experience in spine. We feel like when value gets created, dollars chase it. So we're just getting started and can’t be more excited about the road forward. With that, we will take questions.

Your first question comes from Brooks O'Neil from Lake Street Capital.

Congratulations and all of you have a confidence. One of the things that I'm particularly curious about is I have a sense that with the SafeOp informatics platform, now integrated with EOS, that there's a significant opportunity for pull-through product sales and product utilization in spine surgery. Can you just talk a little bit about where you're at in terms of integrating or linking those three elements, such that you can really begin to drive the product sales going forward over time?

I got to tell you, like it's great fun to be able to pull stuff into the operating limit, which ultimately makes for a real effect. So the ability to drive that information into the operating room, and even into the preoperative planning phase, we will inform the preoperative plan with our products. You start to think about all of the opportunities to do that, and that will reflect a pull-through that is abundantly clear. There are tactical ones, I think, that are going to happen soon, how do we start to place more and more EOS units across the world, ultimately tying implant utility to the EOS unit? I think there's been such a widespread acceptance. I very much like the combination of our implants to ultimately serve the interest of better information. When you think of pull-through, it starts to talk about the current population of EOS that can be upgraded, and then we start to think about acquiring more units through our currency. Those have an effect on the volume of implants utilized. The sophistication of a small intraoperative footprint and being able to deliver actionable information in the operating room is going to take work over a longer period of time, but that's where it's all going, and that will completely affect what type of implants are used based on bone quality and demand matching the type of fixation elements needed to stabilize the spine.

My second question is about international expansion. Your agreement with Globus concludes this month. Could you share your thoughts on how you plan to increase ATEC's presence and leverage international opportunities over the next year?

Yes. I'll speak broadly about the international opportunity. It's something that we are very enthusiastic about. We're also very realistic about how we get contributions out of respective areas of the world. I think we will be very well served by being narrow and deep. The clinical distinction that we're driving requires engagement at a deeper level. For us to lay a foundation for depth through a narrow focus is in our interest. Anyone who's been around the spine space knows the great five or six markets that are very apparent. It will be a walk toward markets that have a good paying environment and a clinically sophisticated environment. We're not going to go into these markets without the best products. Our opportunity is to go in there with first generation products that are the best of the best.

So just really two for me. One, I wondered if you could just talk a little bit more about the case mix you're seeing in the United States. And obviously, with the growth from new products and the average product per case, the whole scorecard is moving in the right direction. But could you give us just a little more color? Are you seeing more of those PTP cases come in? Or are they going toward one side of the product portfolio versus another?

I'll start off and then turn it over to Todd, because he's going to be more precise. The people that come through are super excited about PTP. The underlying sophistication from a product development perspective means there's great enthusiasm. It's funny if people come here and they say they want to come learn PTP, and they'll see things like SingleStep and SafeOp and they'll say, this is the next generation of stuff. The beauty is that people are compelled by the PTP thing, but to your point, there is a training requirement and it’s going to be a long walk. What's earning utility becomes the sophistication associated with our design prowess from an engineering and marketing perspective.

When we look at our product portfolio, it clearly was a strong contributor to our growth, very much in line with our overall growth profile. We saw a strong contribution from our Alpha InformatiX line as well as Biologics in the quarter, above our corporate growth rates. We saw strong contributions from both Invictus and Identity, which would be expected and is reflected in the fact that 84% of our total revenues are from new products.

You talked about the strength of the exclusive team. Are there gaps in the portfolio you think you need to address? And on EOS, what kind of exit velocity should we think about moving forward? Is that the kind of run rate we should expect? Just trying to understand longer-term modeling implications of EOS.

Yes, that’s a good question. There are still holes in our portfolio. The most specific areas will be corpectomy devices. One of the real opportunities with PTP is the different types of surgery. It’s similar to an experience that we are familiar with. As you teach someone how to do a procedure, they walk up the sophistication curve. You’ll see applications of PTP in corpectomy, and that’s what we’re running to catch. As we get more sophisticated about the utility of PTP in longer contract surgery, we’re able to go to the back first and release the facets to ensure we completely control the angle of a specific level. Expanding our device offerings will continue to keep us ahead.

Yes, that exit velocity for EOS guidance is implied at $19 million, which reflects mid-teens growth compared to last year. That’s really core EOS revenue reflecting maintenance revenue and revenue gained when we sell a unit and deliver it. The ultimate economic reflection will come from core EOS revenue and pull-through of our products and services. We have a strong order book and a lot of interest. I think we have excellent prospects for future growth.

A couple of follow-ups. First, you mentioned international expansion. Do we see it for this year or something for next year in terms of when it can contribute to the top line?

That’s a good question. We’re in the foundational phase and not ready to give specific timing for our participation in the international space.

Does the EOS guidance include assumptions on pull-through? How should we think about the growth rate of EOS going forward?

Yes, the guidance includes core EOS revenues. The order book is solid. Our ability to drive interest and yields is excellent. I like our chances for growth moving into 2022.

Just one last question on EOS. How are you keeping the sales team separate, or are you integrating everyone to cross-sell both products?

It's a good question. In EOS’s case, it was an imaging company selling to radiologists. What we need is someone who utilizes the type of image. That’s typically a spine or orthopedic surgeon. I think it’s important that we overlap the selling forces. Our structure allows for this integration. They all report through a single channel, making it easier to promote those products together.

It's really one sales force, but we've added resources specific to the capital sales process. We want to ensure alignment with the objectives and how we’re going forward.

Looking back at SafeOp’s success, we try to recuperate that with yields. There's a real effort going forward to ensure the findings translate into ATEC products. You’ll see our surgical planning platform be informed with ATEC products, highlighting the tailored approach to surgery. Thanks very much. I wanted to thank everybody for their interest in ATEC. We have a long run in front of us and am super excited about moving the field of spine surgery forward. I appreciate everybody's interest.

This concludes today's conference call. Thank you for participating. You may now disconnect.