Thank you for standing-by. Before the conference call begins, let me remind you that during this call, management will be making comments and statements regarding its financial outlook, its plans and objectives. These statements represent the forward-looking statements that involve risks and uncertainties as those terms are defined under the Federal Securities laws. Investors are cautioned that any such forward-looking statements are not guarantees of future events, performance or results. The company's actual results may differ materially from its current expectations. Please refer to the risks and other uncertainties disclosed under the forward-looking information in today's press release as well as the company's SEC filings for more details on the risks and uncertainties that may cause actual results to differ materially. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call, except as may be required by applicable law. You will also hear management refer to non-GAAP or adjusted measurements during this discussion. While these figures are not a substitute for GAAP measurements, management uses these figures to aid in monitoring the company's ongoing financial performance from quarter-to-quarter and year-to-year on a regular basis and for benchmarking against other medical technology companies. Adjusted net income and adjusted earnings per share measure the income of the company, excluding credits or charges that are considered by the company to be special or outside of its normal ongoing operations. These adjustment items are specified in the reconciliation supporting the company's earnings releases posted on the company's website. With these required announcements completed, I will now turn the call over to Curt Hartman, CONMED's Chair of the Board, President and Chief Executive Officer for opening remarks. Mr. Hartman?

Thank you, Jonathan. Good afternoon, and thank you for joining us for CONMED's Fourth Quarter and Full Year 2023 Earnings Call. With me on the call is Todd Garner, Executive Vice President and Chief Financial Officer. Today, I'll provide a brief overview of the financial and operating performance for the fourth quarter and the full year. Todd will then provide a more detailed analysis of our financial performance and discuss our 2024 financial guidance. After that, we'll open the call to your questions. Overall, I'm pleased with our fourth quarter results, which delivered record revenue for CONMED. Total sales for the fourth quarter were $327 million, representing a year-over-year increase of 30% as reported, and an increase of 32% in constant currency. These growth rates are obviously aided by the fourth quarter 2022 warehouse disruption, which impacted each part of our business differently in the fourth quarter of 2022. Fourth quarter earnings delivered GAAP net income of $33.1 million, an increase of 24% over net income of $26.6 million in the fourth quarter of 2022. Excluding special items that affected comparability, our adjusted net income was $33.2 million and our adjusted diluted net earnings per share was $1.06. For the full year, sales reached a new record of $1.245 billion, representing a year-over-year increase of 19% as reported and 21% in constant currency. 2023 was a year of balanced growth when you look at the full year growth rates across Domestic and International, General Surgery and Orthopedics, and Single-Use and Capital. My perspective is that this speaks to the underlying strength of the entire product portfolio that has been built strategically over time. 2023 GAAP net income totaled $64.5 million compared to a net loss of $80.6 million in 2022. Excluding special items that affected comparability, our adjusted net income of $108.3 million increased 27% year-over-year and our adjusted diluted net earnings per share of $3.45 increased 30% year-over-year. Looking back at 2023, I'm very proud of both the top- and bottom-line performance, which exceeded and finished at the top end of the original respective 2023 guidance. Early in the year, we quickly remediated the warehouse issues from late 2022, and I can confidently say our global distribution strategy has never been clearer. Our 2022 acquisitions performed well with In2Bones, now CONMED Foot and Ankle, delivering double-digit growth for the full year while absorbing the growing pains of supplier integration and leadership transition so common in private acquisitions. BioBrace platform is a game-changer and exceeded our expectations and as importantly has a great trajectory as we expand the market reach through sales channel expansion and geographic registrations. Overall, the entire portfolio was strong, and in 2024, we expect the introduction of several new products across each of our businesses. And while I usually reserve the financial detail analysis for Todd, I'm proud of the team for driving our leverage ratio down to 4.1 times as our increased focus on working capital and overall asset management continues to improve. In summary, 2023 was a great year for CONMED. Looking forward, I could not be more confident in our prospects to continue delivering top-line growth and leveraged earnings growth, driven by clinically differentiated solutions across our business. This stems from my confidence that we have a talented global team armed with an innovative high-growth portfolio which was built through a disciplined combination of organic and inorganic development across both our General Surgery and Orthopedics categories. The strategic outlook for CONMED remains strong and this will benefit patients, customers, employees, and shareholders in the quarters and years ahead. With that, I'll turn the call over to Todd, who will provide a more detailed analysis of our financial performance and discuss our 2024 financial guidance.

Thank you, Curt. All sales growth numbers I reference today will be given in constant currency. The reconciliation to GAAP numbers is included in our press release. As usual, we've included an investor deck on our website that summarizes the results of the quarter, the year and our updated guidance. For the fourth quarter of 2023, our total sales increased 31.5%. As a reminder, during the fourth quarter of '22, we were dealing with our warehouse software implementation that affected our ability to ship products. For Q4, our sales in the US increased 33.3% versus the prior-year quarter and our international sales grew 29.0%. Worldwide Orthopedics revenue grew 19.4% in the fourth quarter. In the US, Orthopedic sales grew 6.0%, and internationally, Orthopedic sales increased 29.8%. As we talked about last quarter, supply constraints in our domestic Orthopedic business, including our MTF allograft tissue, kept us from being on offense as much as we would like. The MTF supply returned to normal during the fourth quarter and we expect to be able to move more fully to offense on the rest of the Orthopedics portfolio by the end of Q1 2024. BioBrace again delivered strong growth in the fourth quarter and has good momentum going into 2024. What we've previously referred to as In2Bones, we will refer to as Foot and Ankle going forward. As Curt said, we are currently dealing with normal growing pains in this business, which caused Q4 to be below trend, only growing in the high-single digits. So, still above market, but below what we're used to and what we expect. We continue to expect this business to outgrow the market and be a double-digit grower for us in 2024. Total worldwide General Surgery revenue increased 41.7% in the quarter. US General Surgery revenue grew 47.6%, while internationally, General Surgery revenue increased 27.8%. Obviously, these elevated growth rates are aided by easy comps from the prior year, but we continue to see the same trend of strong growth from our leading products on this side of the business. For the full year of 2023, our total sales increased 20.9%, which represents 18.4% growth on an organic basis. For the full year, our US and international sales both grew 20.9% versus the prior year, which is amazing from a balanced perspective. Worldwide Orthopedics revenue increased 17.7% for the full year of 2023. In the US, Orthopedic sales grew 15.2%, and internationally, Orthopedic sales increased 19.2%. Total worldwide General Surgery revenue increased 23.4% for the full year 2023. US General Surgery revenue grew 23.4%, while internationally, General Surgery revenue increased 23.5%. Now, let's move to the expense side of the income statement. We will discuss expenses and profitability in the fourth quarter and the year excluding special items, which include charges for acquisitions and contingent consideration, termination of distributor agreements, legal matters, debt refinancing costs, restructuring and software implementation costs, amortization of intangible assets and amortization of deferred financing fees net of tax. Adjusted gross margin for the fourth quarter was 56.4%, which is a 50-basis-point sequential improvement over Q3 and an increase of 220 basis points from the prior-year quarter. So, the product mix tailwind we're counting on is real and working. The challenges we had in Q4 in the US Orthopedic business affected gross margin. We also made some process improvements in one of our plants that drove some period costs that we recognized in the quarter. For the full year, adjusted gross margin was 55.2%, a decrease of 10 basis points from 2022. While margin improved sequentially throughout the year, inflation experienced throughout 2022 was cycling through the P&L in the first half of 2023, offsetting the underlying favorable mix impact of the product portfolio. Research and development expense for the fourth quarter was 4.3% of sales, 60 basis points lower than the prior-year quarter. For the full year 2023, R&D expense was 4.2% of sales, 30 basis points lower than 2022. For the fourth quarter, adjusted SG&A expenses were 36.7% of sales. Leverage gained on the higher sales drove the 300-basis-point improvement over the prior-year quarter. So, despite the gross margin headwinds, we delivered 15.8% adjusted operating margin in Q4. For the full year, adjusted SG&A expenses were 37.4% of sales, 140 basis points lower than in 2022. On an adjusted basis, interest expense was $8.0 million in the fourth quarter and $33.7 million for the full year. The adjusted effective tax rate in Q4 was 24.2%. For the full year, our adjusted effective tax rate was 23.0%. Fourth quarter GAAP net income was $33.1 million. This compares to GAAP net income of $26.6 million in Q4 of 2022. GAAP earnings per diluted share were $1.05 this quarter compared to $0.86 a year ago. For the full year, GAAP net income was $64.5 million compared to GAAP net loss of $80.6 million in 2022. GAAP earnings per diluted share were $2.04 in 2023 compared to GAAP net loss per diluted share of $2.68 in 2022. Excluding the impact of special items discussed earlier, in the fourth quarter, we reported adjusted net income of $33.2 million, an increase of 156.5% compared to the fourth quarter of 2022. Our Q4 adjusted diluted earnings per share were $1.06, an increase of 152.4% compared to the prior-year quarter. For the full year of 2023, we reported adjusted net income of $108.3 million, an increase of 27.4% compared to 2022. Our full year adjusted diluted net earnings per share were $3.45, an increase of 30.2% compared to the prior year. Turning to the balance sheet. Our cash balance at the end of the year was $24.3 million compared to $30.5 million as of September 30th. Accounts receivable days as of December 31st were 67 days compared to 68 at the end of Q3. Inventory days at year-end were 198 compared to 215 at September 30th. Long-term debt at the end of the year was $903.1 million versus $942.2 million as of September 30th. Our leverage ratio on December 31st was 4.1 times. Cash flow provided from operations in the quarter was $56.4 million compared to cash flow used for operations of $11.6 million in the fourth quarter of 2022. Cash flow provided from operations for the full year of 2023 was $125.3 million compared to $33.4 million in 2022. Both Q4 and the full year are all-time records for this metric. Capital expenditures in the fourth quarter were $4.9 million compared to $5.7 million a year ago. For the full year, capital expenditures were $19.0 million compared to $21.8 million in 2022. Now, let's turn to financial guidance. For the full year 2024, we expect revenue in the range of $1.34 billion and $1.365 billion, representing year-over-year growth of approximately 8% to 10%. Q1 2023 had the benefit of the backlog catch-up from our 2022 warehouse issue. So, the Q1 2024 growth rate, we estimate between 3% and 5%. Q1 also has one less selling day than the prior year. Q3 and Q4, both have one extra day, so the full year has one extra day over 2023. We believe the growth rate should accelerate as we move through the year. Q2 may be more like mid to high single-digits as the Ortho business ramps back up, and then Q3 and Q4 performance should get us to that 8% to 10% for the full year. Based on current rates, we expect currency to have an immaterial impact on 2024 growth rates on the top- and bottom-line. For the past seven months, we have attempted to allay concerns regarding a potential insufflator integrated with the new surgical robot, beginning with a very detailed discussion of the clinical benefits and patent protection around our technology as part of our second quarter 2023 earnings call. To be clear, we continue to believe the impact on AirSeal will be minimal, but we don't think it is wise to have company guidance that ignores such a pervasive theoretical market overhang. So, we have elected to include in our guidance what we believe to be a worst-case estimate of what that impact could be. While we aren't going to share the specifics of our model, I will tell you that our guidance allows for a conversion rate associated with placements of the new robot that is roughly half of what we have seen historically. As a reminder, AirSeal has successfully treated millions of patients and has significant data showing a 50% reduction in length of stay and other significant benefits. We believe surgeons value the clinical outcomes and associated data, and will want to see similar or better results from any new technology before making a change. Finally, to mitigate a theoretical slowdown in conversions, we would accelerate the shift of our resources and energy in favor of general laparoscopic cases. Turning to adjusted gross margin. The improving mix of the portfolio remains strong, which we think should drive between 100 basis points and 150 basis points of margin expansion in 2024; that's gross margin expansion. This is a little slower than we envisioned for 2024 when we talked about it a year ago. The expected slow start in Orthopedics and some improvements we still need to make in our manufacturing processes are contributing to that headwind. Having said that, it is still a very good gross margin story, and it should build throughout the year. We expect Q1 to be about 100 basis points better than the prior year, and by Q4, we expect to be providing about 150 basis points of improvement over the prior year. So, where does that put us on our quest for 60% gross margins by the end of 2025? If Q4 2024 is around 58%, and the mix and improvements should be accelerating, we believe it is still possible to be around 60% by the end of 2025. If not, we would expect to be on a strong trend and hit that milestone comfortably in 2026. As a percentage of sales, we expect adjusted SG&A to improve between 60 basis points and 80 basis points in 2024 for the full year. Q1 will likely be at a similar rate to the prior-year Q1 given our typical sales expansions to start the year, but we expect to gain leverage as we move through the year. We expect full year R&D expense in 2024 to be between 4% and 4.5% of sales. We expect Q1 in the mid-4%. We expect adjusted interest expense to be between $33 million and $34 million in 2024. Keep in mind that we have $70 million of the 2.625% converts that mature this week. Those will be funded by our revolver, so expect interest expense for the first two quarters of 2024 to be between $8.5 million and $9.0 million per quarter. We expect the adjusted effective tax rate to be around 24.5% in 2024. We expect adjusted EPS in 2024 to be between $4.30 and $4.40, representing growth between 25% and 28%. Because gross margin is expected to build throughout the year and interest expense will be higher in the first half, we expect adjusted EPS in Q1 to be between $0.72 and $0.75. And we expect the first half to be between $1.65 and $1.71. We expect full year operating cash flow in 2024 to be between $145 million and $155 million, with capital expenditures in the $20 million to $25 million range, putting free cash flow between $120 million and $135 million. We project adjusted EBITDA between $270 million and $280 million for 2024. Given the heavier cash requirements in the beginning of the year, we expect our leverage ratio to stay relatively flat for the next six months and then drop into the low 3s by the end of 2024. As Curt said, we are pleased with our record-setting 2023 performance and are focused on delivering a stronger 2024. We remain confident in our ability to deliver innovation to our customers while driving above-market growth and profitability over the long-term. And with that, we'd like to open the call to your questions, and I'll hand it back to Jonathan.

Certainly. Our first question comes from Rick Wise from Stifel. Please go ahead with your question.

Good afternoon. Sorry about that. Let's start off with maybe one big-picture question. My follow-up would be something specific. I appreciate and you've laid it out extremely clearly some of the moving pieces in the timing. What do you think, Todd, how should we think about fourth quarter growth, let's say, on a normalized basis, let's say, adding back if allografts had been normal, what kind of growth might we have seen? And maybe you can talk about your confidence in the timing of getting that back on track? And what I'm really trying to get at here is we've heard from some other larger companies how the environment is improving, procedures rebounding, a lot of strength. Do you feel like you're seeing that ex some of these moving pieces?

Yeah. So, let me take that first part and maybe Curt can chime in on that second part. It's really impossible, Rick, to try and normalize what Q4 would be, really not because of the allograft tissue. That's a smaller issue, right? It affects margins because that's a 100% margin product as we've talked about before. What's hard about getting to a normalized growth rate for Q4 is that Q4 '22 had that major disruption of our warehouse software implementation. And so, it's just impossible to know what a normal quarter would have been a year ago, and so it's impossible to get to kind of what this Q4 is normalized, because it's impossible to know. So, we feel very good about all the growth drivers of our business as we talked about. The Ortho business has had lingering supply issues that are getting better. Every quarter, they get a little better. We're just not out of the woods yet. And we think we're a few months still from getting out of the woods there where we can move back to offense the way we want to be on that side of the business. But that's the beauty of diversification and balance that we talked about. And so, the total business remains healthy and headed in the right direction. And when we can get all cylinders pumping like we like, it will be even better.

And, Rick, on the last part about the markets, we just came a week or so ago from our global sales meeting, leadership meetings, and I would tell you, our teams are pretty optimistic about the markets broadly. That's across our categories of Orthopedics and General Surgery, but also across our geographies. We have a higher concentration outside the US than most med-tech companies and having folks from the various markets in attendance and talking about what they're seeing and what their experience, we feel like healthcare generally speaking is pretty solid right now.

Yeah, that's great. And just as a follow-up, I mean, it sounds like BioBrace is in great shape. Talk just a little more about the challenges, the near-term issues affecting In2Bones or Foot and Ankle that drove high-single digits. So, what happened and help us understand what you dialed into the '24 guide, and why does it get better and when? Thank you very much.

Yes, I think the first part of that question I'll take, and I'll let Todd talk about guidance. You buy a private company, you go through the integration steps, putting them into your systems, your process that includes supply chain. We're working hard on international registration. There's far more demand on the supply of the product out of the gates and working with that new supplier base and trying to get them integrated into our systems and our processes, as is typically the case in smaller private companies or some evolution transition and disruption, and really those are the things that slowed us down. And we think to Todd's earlier comment, we think those things clear up here as we get through the first quarter, and we get back on full stride as we get into the second quarter. So, I don't think it's anything systemic. I think it's all about integration and taking a private company, putting it into a public company's framework and trying to let those processes work the way they should.

Yeah. And as far as guidance, Rick, we definitely have included in our guidance the assumption that that business grows double digits in 2024. As Curt said, we think this hiccup is temporary. It doesn't magically go away with the turning of the calendar. But we do think it's a short-term hiccup that we will get through and get this business back to double-digits, and we do think it will be double-digits for the full year.

Thank you. One moment for our next question. And our next question comes from the line of Robbie Marcus from JPM. Your question, please.

Thank you for the question. I wanted to follow up on Rick's comments and reframe it this way. The fourth quarter fell short and margins were low, and our outlook for 2024 relies on improvement throughout the year, although we acknowledge a potential challenge from AirSeal that hasn't yet materialized. A lot of this hinges on the trust that the business will improve. I would like to know if you could provide us with any more tangible reasons to believe that growth could reach double digits by the end of the year to meet the guidance range. What are the specific building blocks you can see today, as opposed to just a bit of optimism?

Thank you, Robbie. I believe if we slightly adjust our expectations beyond just Q4, looking at Q2 and Q3, we saw the business growing in the low double-digits organically over the last two quarters. This isn't merely an aspiration; we are confident in this portfolio's potential. We've pinpointed the reasons for the slower performance in Q4, which we consider temporary. We think we're taking the right actions, and the hiccup we've experienced is just that—a minor setback. The business is designed for growth, as we have indicated, and we are comfortable with the guidance we've shared today.

Got it. And as you think about just the M&A you've done and where the leverage is right now, how do you feel about your ability to continue to do M&A and your thoughts on the need for additional assets in the P&L? Thanks a lot.

We ended with a leverage ratio of 4.1, which exceeded our expectations due to effective asset management in the second half of the year. We have publicly stated that our business development teams were not given time off; if a valuable asset presented itself, we would seriously consider it and we are still evaluating potential opportunities. The criteria for acquisition are higher now, especially with increased interest rates in the market. Currently, I don’t feel any urgency to pursue anything. I am pleased with our portfolio, particularly in General Surgery and Orthopedics. We have new products in the pipeline that will enhance our overall strategy, and I believe our teams worldwide have substantial discussions to engage in with their customers regarding unique clinical offerings. However, fundamentally speaking, if a compelling asset became available that aligned with our long-term growth goals, we would thoroughly assess it. But I’m not indicating that we are compelled to make any acquisitions or changes to our outlook or guidance at this moment. We are confident in the guidance we provided, which is based on our existing portfolio.

Great. Thanks for taking the questions.

Thank you. One moment for our next question. And our next question comes from the line of Matthew O'Brien from Piper Sandler. Your question, please.

Good afternoon. Thanks so much for taking my questions. Todd, when you were at our conference to the end of last year, you were talking about a double-digit grower at CONMED in '24. You're backing off that a little bit here today for a product that I don't think it's supposed to be out until the end of the year, and most likely, will come earlier than that. But is the lowering of 100 basis points, maybe 150 basis points versus what you're expecting entirely because of this hypothetical launch, or are there other things in there specifically that look like your Capital business was a little bit slower than we were kind of anticipating down sequentially versus in normal years being up? Is there something else going on too that's impacting the business just beyond your conservatism on AirSeal?

No, there are a few moving parts here. Let me clarify. You're correct that in Q2 and Q3, which we reported on ahead of your conference, we achieved between 11% and 12% organic growth, and those quarters had normal comparatives, not particularly challenging ones. This reflects the performance of our business. We are still guiding for 8% to 10%, which is based on some conservative assumptions. We're confident in the strength of our portfolio. Success for us has always meant growing faster than our markets, and achieving double-digit growth is a milestone we would all appreciate. We're indeed growing faster than our markets, so we consider this a win. I believe that our guidance of 8% to 10% exceeds market growth, even with those assumptions. The Ortho business is currently experiencing a slowdown, which we need to address. We've been quite accommodating in evaluating our company and its valuation, treating this situation as a worst-case scenario regarding a competitive launch that has generated market speculation. You're suggesting end-of-year for our expectations, but we anticipate it happening sooner. While I can't disclose the specifics of our model, we've been as thoughtful as possible in making conservative assumptions. Given all that, I don't believe there's any inconsistency here. We were on a double-digit growth path, and while Q4 was disappointing for the reasons we discussed, the rest of the portfolio remains robust. We will work to revitalize the Ortho side of the business and ensure everything is running efficiently.

Okay. On the margin side, I'm slightly adjusting my expectations for the full year. The Q1 gross margin is below what I anticipated. Can you discuss the potential for significant improvement in that metric throughout the year? You mentioned aiming for close to 60% next year, but I was thinking it might be around 250. Could it actually be more in the range of 200 to 250 next year? Why not adjust that number now? What insights do you have about the business that we might not see that would support this target? Thank you.

I believe we've been quite clear about all our assumptions. Seasonality is always a factor. We would love for the fourth quarter of the previous year to be the starting point and for everything to continuously improve, but that’s not how seasonality and margins operate. When comparing the first quarter to the first quarter, we are currently guiding towards an improvement of 100 basis points. I'm not sure how many companies are providing that guidance. However, you are right that this is lower than our expectations from a year ago. We had anticipated a 150 basis point improvement for 2024, but this afternoon we are looking at an improvement of 100 to 150 basis points. We expect improvement as the year progresses, despite the challenges we face in the Ortho business. The Ortho sector contributes positively to the company’s margins, especially the Foot and Ankle segment, which sees margins in the 80s. We had hoped our operations and manufacturing would improve more in 2023 than they did, but there is still more work ahead. While our outlook for 2024 has softened somewhat from what we projected a year ago, we remain within a reasonable range. If our fourth quarter shows a 150 basis point improvement, that would bring us to a margin of 58%. While we may not reach 60% by the end of 2025, we should be very close and can achieve that in subsequent quarters. So, you are right that we’ve adjusted our expectations slightly, but the change is not significant.

Understood. Thank you.

Thank you. One moment for our next question. And our next question comes from the line of Kristen Stewart from CL King. Your question, please.

Hi, thanks for taking the question. I just wanted to go back to AirSeal, not to beat a dead horse, but just to get a little bit better understanding of the exposure there to the business. How much of your AirSeal business today is tied to Intuitive Surgical? And what was the conversion rate that I guess you were tracking at today? And what gives you confidence that you're modeling a worst-case scenario going forward?

Thank you, Kristen. AirSeal is certainly not a finished topic, and the narrative surrounding this competitive threat is still relevant. In the past, we have disclosed that approximately 60% of our AirSeal revenue is linked to Intuitive Surgical procedures. Currently, that figure remains around 60%. To clarify, this does not imply we are assuming a 30% or a 50% reduction. Instead, we are referring to our historical trend of new conversions associated with the robot, which is what we are considering halving. We are not revealing that specific rate today, but we mentioned the 50% reduction to convey that we take this matter seriously and have not been dismissive of it. In fact, I believe our approach is highly conservative and it seems unlikely that there would be significant disruption with those new systems. However, the market is understandably concerned, and we felt it was neither wise nor helpful to provide guidance that overlooked this issue. Therefore, we have aimed to be as reasonable as possible and have factored that uncertainty into our projections. However, that's all I can disclose regarding the details of our model.

Okay. And I guess getting back to the gross margin of going close to 60% for 2025, is that also under the assumption of a worst-case scenario of a 50% reduction as well?

Yes.

Or do you think you can achieve that with 50%?

We are not providing guidance for 2025 at this time, but the story of margin improvement is quite compelling and outweighs the current issue. I can share more insight into our model. We anticipate that the initial impact could be quite disruptive, depending on how the situation evolves in the market. Additionally, we recognize that non-robotic procedures significantly outnumber robotic ones. Therefore, if the expected scenario unfolds, we would shift our energy resources from robotic to non-robotic procedures. This transition takes time, as it involves a longer sales cycle. Consequently, the disruption anticipated in our model is more pronounced in the early stages than later on. The longer we have to adapt and shift our sales strategy, the less disruptive it becomes for the overall business. Thus, I am more concerned about the immediate future than the later years from this standpoint.

Thank you. One moment for our next question. And our next question comes from the line of Vik Chopra from Wells Fargo. Your question, please.

Hey, good afternoon, and thanks for taking the question. So, thanks for providing all the color on the guidance, I'm just wondering if you could share what's assumed in your guidance for the rest of the higher-growth businesses. And then, I have a follow-up, please.

Yeah, no change. Vik, we continue to expect all of our high-growth businesses to perform as they have been. So again, just to make everybody feel comfortable that's over 20% for AirSeal and Buffalo. Twice the market for Foot and Ankle side of the business, and obviously, Biorez is a geometric type of growth engine. So, no change to how we view those growth drivers.

Yeah. I would just add on to that point to the conference at the beginning year where we put up slides that talked about the percentage of portfolio that was growing double digits, growing single-digits, or declining. And if you just look at that mix, it's a pretty healthy portfolio. So that in and of itself underlies history of the business and our portfolio was only getting stronger with new product introductions. So, I feel really good about our portfolio, not only the ones we've identified as high growth, but the rest of the portfolio and our outlook.

Got it. Thanks. And then just a follow-up I had on BioBrace, maybe just talk about your view on how quickly the product can grow in 2024. And any thoughts you can share with respect to your approach to the market and competitive strategy? Thank you.

Well, I mean it's still early days for BioBrace in the marketplace and for CONMED. And we had said, this year it would be high-single-digits and we exceeded that, and we feel very good. And part of my script was talking about sales channel expansion. And that means, geographic expansion as registrations and approvals come through, which we've been working on since day one. But it also means leveraging our Foot and Ankle sales force. We have a sales force that we didn't have really until right before we acquired BioBrace, and there is a clinical need in Foot and Ankle for a product like BioBrace. And that sales team is being ramped up, educated, trained, and we feel very optimistic that that is a great channel for that product as well. So there's a lot of growth drivers here in our core Sports Medicine channel for knee and shoulder and candidly other applications come by the booth on Wednesday at Academy. And you'll see a lot of surgeon presentations related to BioBrace. Our outlook, and this is really exciting because it's clinically differentiated. It is second-generation technology; it is game-changing for patients and clinicians, and I've said many times, it's the single most contacted product that I have surgeons reaching out to me expressing their pleasure with the product and how it's changed patient outcomes. So, we're very optimistic about BioBrace.

Thank you. One moment for our next question. And our next question comes from the line of Mike Matson from Needham & Company. Your question, please.

Thank you. I would like to gain a clearer understanding of the recent situation regarding the tissue in the Orthopedics business. It seems there has been a significant impact from the shortage, and I am curious about the extent to which Orthopedics sales are directly affected by this issue. Additionally, I'm interested to know if there has been any spillover effect, meaning if the lack of these products has resulted in lost procedures or a decrease in sales of other products related to those cases.

I believe what we mentioned last quarter is still relevant. The supply disruption in the MTF portfolio, although a smaller part of our business, had a significant impact on margins due to its margin profile. In Q3, we noted that while things improved, they didn't meet our expectations due to general supplier challenges affecting our Sports Medicine and Foot and Ankle business. The Foot and Ankle segment is somewhat different as it involves more supplier integration, while the Sports Medicine side faced more delays and disruptions that unexpectedly affected our operations. We had previously thought we were managing well, but we experienced some disruptions as we progressed. In our business, if a product isn’t available for a procedure, substitutes can be made or alternatives sourced from competitors, which leads to missed cases and a larger impact for the quarter. However, we saw improvements as we ended the year and continued into the first quarter. By Q2, we expect to be fully proactive in Orthopedics. It's important not to overly focus on the MTF segment since, as Todd mentioned, the margin hit was more significant there, while the revenue impact mainly stemmed from lost cases due to supply disruptions in Sports Medicine.

Okay, I understand now. I initially confused the supply issues with the MTF situation. Can you confirm that there are no other competitive challenges in that area? I noticed Stryker is releasing new cameras and power tools, and they seem to be performing well. I realize that's about capital, but are there any other product launches from competitors that are negatively impacting you?

Well, I mean, obviously, Sports Medicine is one of the most competitive markets out there and it is a game of new product innovation. And I look at our portfolio and we've got new products in the knee to shoulder. We've got BioBrace that is a platform technology that just candidly makes everything else look better in the portfolio. So, our team is on offense with new product introduction as much as anybody. And that's just been part of our planning approach. So, I think the supply disruptions are a bigger issue right now because when you have supply disruption, it keeps you from being on offense. You got to take care of your existing customers, let alone, go after new customers.

Thank you. One moment for our next question. And our next question comes from the line of Young Li from Jefferies. Your question, please.

All right. Great. Thanks for taking the questions. I guess, appreciate you taking a more conservative approach to guidance ahead of the potential competitive launch. I guess if you were to pivot the US reps selling focus, wondering how long would that process take and what would the reps be doing differently?

It's a theoretical question, Young, but the short answer is that if I'm a sales professional accustomed to selling AirSeal alongside an Intuitive Surgical robot and I don't have that opportunity, I still have a quota that determines my pay. If I realize that I need to switch over to the general laparoscopy room to convert more customers, I know that this will lead to a longer sales cycle, and it quickly becomes evident in their paycheck. They understand this quickly. CONMED has been promoting this opportunity for a long time, and we see success in markets outside the US, where there are fewer robots. The US market has a greater number of robots, which provides a quicker path that our team has adapted to since SurgiQuest began in 2008. I want to acknowledge our strong sales team in Advanced Surgical, which had a record year and is likely to achieve another record this year. They are selling the entire portfolio, including Buffalo Filter, AirSeal, anchor tissue retrieval bags, manual instruments, and energy and argon platforms, all targeting core customers in General Surgery. We provided conservative guidance, and I asked our sales force how they feel about their position with AirSeal compared to competitors, and none of them are backing down. Thus, our guidance remains conservative, but internally, the team is motivated and my expectations are very high for this business.

All right. I appreciate that. Maybe just one more, just on smoke evac legislation headwinds in '24. What are the key states coming online and what are the key ones for 2025 that we should be focusing on also?

I can't provide a breakdown like that. We know who is working on various initiatives. For instance, we expected Texas to be the next state to make an announcement, but they were unable to do so before their legislative session ended. We hope they will revisit this in the next session. Other states that are making progress include Massachusetts, Pennsylvania, West Virginia, Virginia, North Carolina, and Florida, which are all significant. However, I can't specify by quarter or predict which state will act first. It wouldn't surprise us if the states I mentioned announce something in 2024, but it’s also possible that some may push into 2025, as we've seen before. There's still solid activity; since our last call, no new states have announced anything—California was the last to do so. The states that have made announcements comprise 44% of the U.S. population. There’s good momentum with many states preparing to act, but I can't predict the timing.

Thank you. One moment for our next question. And our next question comes from the line of Travis Steed from Bank of America. Your question, please.

Hey, thanks for taking the question. Just curious if Intuitive started talking to their customers, if you guys have learned anything new on the design or if it's still low-pressure. And just curious if you're still sticking with it being standard insufflation and if that's the key thing here.

I've never heard them discuss this with their customers or mention it during their earnings call. We have numerous key opinion leaders in common, so we have a solid understanding of what they are introducing to the market, which we specifically addressed at the end of the second quarter earnings call. We know they discuss it with their sales team during their sales meetings, as has been publicly reported. However, we collaborate very closely with Intuitive regarding AirSeal and their training programs, and I do not believe there is anything in the market, or anything on the horizon, that even comes close to AirSeal. I'll conclude there.

Well, can I not end there, Curt? I just want to be clear for those that are listening: when Curt says that we know they talked about it to their sales force, they talked about their new robot to the sales force. If you listen to what they said public, right, what they're focused on, what solutions this new product is supposed to address, there was no mention from Intuitive about insufflation. So, this is not a new insufflation robot. They're solving many other problems that are focused on. I think it is safe to say that insufflation is not on their top-10 list of features of this robot. The shorts on CONMED has made it about an insufflation robot. Intuitive has never framed it that way. And Travis, I want to correct something you said so that the audience is not confused; you said it's still low-pressure. It has never been low-pressure. There is zero evidence anywhere that it's low-pressure. That is an imagination. So, there is no evidence that it's a low-pressure device. All the evidence would suggest that if they do integrate insufflation, it would indeed be what is referred to as standard insufflation, like everything that exists on the market today. That's what all the evidence points to. There is zero evidence to suggest that this product will compete clinically with AirSeal.

And the electronic world of people centered around images of two insufflators hooked up and that's how they're going to get to low, I've got news for you folks that stuff has been around for a long time. There's nothing in the market that's anywhere near AirSeal and has the volume of patients in the clinical studies behind that AirSeal has. So, there's no one more anxious for the robotic company to get this device in the market so we can demonstrate once and for all. There is no risk here to the AirSeal franchise.

Yeah, and just to add on to that, it isn't like the arrival of this new product comes without consequence for Intuitive, either. Our team continues to work with many surgeons who will assess the new robot and all the available options on the market when they consider adopting it. The large number of clinical data available to support AirSeal's clinical benefits will remain a significant factor in their decision-making process. To that point, AirSeal's already been verified by millions of patients with proven efficacy that characterizes its offerings in conjunction with surgery.

Great. Thanks for that thorough answer. And sorry, Todd, I may have spoken in the question and got it backwards. But the follow-up question I wanted to ask was on the Capital revenue in the quarter, it was a little light versus Street expectations, and I think the businesses you talked about the weakness in Q4 were more recurring revenue and not Capital. So just, was Capital light in your mind in Q4? Just curious if there's any one-time things in the Capital thing to talk about this quarter.

Sitting in my chair, I did not think Capital was light in the quarter.

Capital grew 44% in the quarter, and Single-Use Products grew 29.2%. The Ortho business currently facing challenges is more reliant on Capital than the General Surgery business, with about 30% typically coming from Capital. Overall, our Capital growth outpaced our Ortho growth.

Okay. So, some of the challenges in Q4 were in the Capital side of the business in terms of the Ortho side?

Yeah, it's impacted by, sure.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Curt Hartman for any further remarks.

Thank you, Jonathan. And I just want to say thank you to everybody today for your time and we look forward to speaking with you during our next earnings call. Thank you.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.