Hello, and welcome to the Globus Medical Fourth Quarter and Full Year 2021 Earnings Call. I will now turn the call over to Brian Kearns, Senior Vice President of Business Development and Investor Relations. Mr. Kearns, please go ahead.

Thank you, Chris, and thank you, everyone, for joining us today. Joining today's call from Globus Medical will be Dave Demski, President and CEO; Dan Scavilla, Executive Vice President and President of Ortho; and Keith Pfeil, Senior Vice President and Chief Financial Officer. This review is being made available via webcast accessible through the Investor Relations section of the Globus Medical website at www.globusmedical.com. Before we begin, let me remind you that some of the statements made during this review are or may be considered forward-looking statements. Our Form 10-K for the 2021 fiscal year and our subsequent filings with the Securities and Exchange Commission identify certain factors that could cause our actual results to differ materially from those projected in any forward-looking statements made today. Our SEC filings, including the 10-K, are available on our website. We do not undertake to update any forward-looking statements as a result of new information or future events or developments. Our discussion today will also include certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We believe these non-GAAP financial measures provide additional information pertinent to our business performance. These non-GAAP financial measures should not be considered replacements for and should be read together with the most directly comparable GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are available on the schedules accompanying the press release and on the Investor Relations section of the Globus Medical website. With that, I will now turn the call over to Dave Demski, our President and CEO.

Well, thank you, Brian, and good afternoon, everyone. Globus finished an outstanding 2021 with a strong fourth quarter performance. Revenue for the year was a record $958 million, an increase of 21% over 2020 or $169 million in growth. To put that in perspective, our growth dollars alone would have ranked us in the top 10 spine companies in the world. Revenue in 2021 was 22% higher than 2019, an outstanding performance in itself, given the disruption caused by COVID, but magnified further by a recent independent research report showing that each of the other top 6 spine companies actually had sales declines over that same time period. We achieved record sales and growth while maintaining industry-leading profitability, generating a record $2.04 in non-GAAP EPS, a 42% increase over 2020, and adjusted EBITDA of 34.6% even as we invested heavily in INR, Trauma, and competitive recruiting. Revenue for the quarter was $250 million, up 7% over Q4 '20 as COVID-related headwinds remained strong throughout the quarter. Non-GAAP EPS was $0.49 per share, a 16% decrease compared to the artificially high Q4 '20. Not only were business travel and surgeon education activities severely curtailed last year, but several other nonoperational factors, as Keith will expound upon in his remarks, also impacted the decline. Adjusted EBITDA in the fourth quarter was a strong 34%. Enabling Technology continues to gain momentum, producing a record $25 million in revenue for Q4, an increase of 40% over Q4 '20. For the full year, Enabling Technology revenue was $81 million, an outstanding 100% increase over 2020. The clinical superiority of ExcelsiusGPS is the primary factor driving this growing momentum. Robotic utilization, which is the number of cases performed per installed robot, was at an all-time high in 2021. And nearly 30,000 procedures have been completed using ExcelsiusGPS technology since launch. Our spinal implant business continues to experience the flywheel effect of an increasing number of robots being sold combined with increasing utilization of each robot. Our U.S. Spine business grew by 3% in Q4 as COVID-related shutdowns had a significant impact throughout the quarter. We saw this trend continue into January, but all signs point to a rebound commencing late in Q1. For the full year, the U.S. Spine business grew by 18% as we continued to take significant market share. Robotics pull-through, coupled with contributions from recent product introductions and competitive recruiting, were all factors driving growth. Our International Spine implant business grew by 9% in the quarter, a remarkable result in light of COVID impacts and an ongoing drag from Japan. Due to the impact of strategic moves we made in Japan last year, we expect to see continued declines there through the first half of 2022 with growth to follow off a reset baseline. This should result in accelerated overall international growth in the second half of this year. Trauma revenue was up 32% in the fourth quarter and 39% for the full year. Competitive recruiting and new product launches are driving growth. The ANTHEM Mini Frag System was launched on a limited basis in Q4 with excellent feedback from surgeon users. We are proceeding to full launch in Q1 and have a series of impactful product launches planned for the first half of 2022. The clients have launched the Excelsius 3D imaging system on a limited basis later this quarter with a full launch following in late Q2 or early Q3. There is tremendous anticipation and excitement about this technology among surgeons, and we already have double-digit orders signed. The Excelsius ecosystem, Globus Medical's unique combination of robotics, imaging, and freehand navigation that provides a seamless, scalable, and unmatched clinical experience for surgeons is about to become a reality. I'm extremely proud of our team's performance in 2021, record growth and profitability, exciting, clinically impactful new technology introductions, and an unmatched focus on providing value to surgeons and their patients. Thank you for a great year. I will now turn the call over to Keith.

Thank you, Dave, and good afternoon to everyone joining us for today's call. Globus capped off a record 2021 with a robust Q4 performance despite ongoing COVID-related disruptions and shutdowns. For the full year, 2021 revenue was $958.1 million, growing 21.4% as reported. On a day-adjusted basis, sales grew by 22.1%, with 2 fewer selling days in the U.S. and international. Net income was $149.2 million, resulting in fully diluted earnings per share of $1.44. Non-GAAP net income was $211.4 million, generating a record $2.04 of fully diluted non-GAAP earnings per share. Adjusted EBITDA was 34.6% for the year, and we generated a record $219.4 million of free cash flow for the full year. Q4 '21 revenue was $250 million, growing 7.1% as reported and 8.5% on a day-adjusted basis with 1 less selling day in the U.S. and international compared to the prior year quarter. Net income was $15.1 million, and non-GAAP net income was $51.1 million. Our Q4 fully diluted earnings per share was $0.14, while our fully diluted non-GAAP earnings per share was $0.49. Adjusted EBITDA was 34.1%, and we generated $59.2 million of free cash flow for the quarter. Taking a deeper dive into sales, Q4 U.S. revenue was $213 million, 7.2% higher compared to Q4 of 2020 driven by our INR and U.S. Spine businesses. International revenue for Q4 was $37.1 million, growing 6.8% over the prior year quarter led by growth in spinal implants despite lingering COVID impacts and the impact of our strategic changes in Japan as Dave mentioned earlier. On a constant currency basis, international revenue grew by 8.7%. Q4 gross profit was 75.3% versus 73.9% in the prior year quarter. The 140 basis point improvement was driven primarily by nonrepeating inventory reserves in the prior year quarter and was consistent with our expectations noted in our Q4 2020 earnings commentary. Full year 2021 gross profit was 75% compared to 72.4% in the prior year. The increase in full year gross profit is primarily the result of lower inventory reserves and operational and supply chain efficiencies, partially offset by sales mix. Looking ahead to 2022, we project a mid-70s gross profit rate. Research and development expenses in Q4 were $51 million, or 20.4% of sales compared to $15.2 million, or 6.5% of sales in the prior year quarter. The increased spending is primarily reflective of in-process research and development acquired during the quarter. Adjusting for these costs, Q4 2021 research and development expense was $16.7 million or 6.7% of revenue, in line with the prior year quarter as a percentage of sales, but $1.5 million higher driven by incremental investments in headcount across our Spine, INR, and Trauma businesses. Our full year 2021 research and development expenses were $97.3 million or 10.2% of sales compared to $84.5 million or 10.7% of sales in the prior year. Adjusting for the acquisitions made in both periods, research and development expenses were $63 million or 6.6% of sales in 2021 compared to $60.1 million or 7.6% of sales in 2020. The increase in spending is reflective of our continued investment in research and development to foster future growth and is consistent with comments made earlier in the year. We expect our R&D expenses to be approximately 7% of sales in 2022. SG&A expenses in the fourth quarter were $106.6 million or 42.6% of sales compared to $92 million or 39.4% of sales in the prior year quarter. The resulting increase is reflective of higher sales compensation and benefit costs as well as increased travel and training expenses driven by the resumption of normalized travel levels following the COVID-19 impacts experienced in the prior year. Full year SG&A expenses were $408.1 million or 42.6% of sales compared to $354.8 million or 45% of sales in the prior year. The resulting decrease as a percentage of sales is reflective of leverage on fixed costs as a result of the higher volumes when comparing against the COVID impact in 2020. The income tax rate for the quarter was 23.8% compared to 14.9% in Q4 of 2020 with the resulting increase driven primarily by lower tax benefits associated with stock option exercises. Our full year 2021 income tax rate was 17.3%, slightly lower than the 18.8% in 2020 driven primarily by the nonrecurring tax treatment related to a 2020 acquisition, partially offset by lower tax benefits associated with stock option exercises. Looking ahead to 2022, we expect our effective tax rate to be approximately 20% for the full year, which assumes no significant changes in the current U.S. tax policy. Fourth quarter net income was $15.1 million, and non-GAAP net income was $51.1 million. Q4 diluted earnings per share was $0.14, and non-GAAP diluted earnings per share were $0.49 compared to $0.58 in the prior year quarter. The quarter-over-quarter decrease is driven by more normalized levels of travel, training, and meetings noted above or noted earlier as well as nonoperational items, primarily a higher tax rate as previously mentioned, higher stock compensation expense, and lower interest income. Looking ahead to 2022, we are expecting a mid-30s adjusted EBITDA rate. Full year diluted earnings per share were $1.44, and non-GAAP diluted earnings per share were $2.04, reflecting a 42.2% increase over 2020 primarily related to higher sales volumes following the 2020 impact of COVID-19, partially offset by approximately $0.09 of nonoperating headwinds related to a higher share count and lower interest income. Q4 adjusted EBITDA was 34.1% compared to 36.2% in the prior year quarter. Full year 2021 adjusted EBITDA was 34.6% compared to 29.4% in 2020. Net cash provided by operating activities was $76.3 million for the fourth quarter and a record $276.3 million for the full year 2021. Free cash flow was $59.2 million for the fourth quarter and a record $219.4 million for the full year 2021. The company remains debt-free. At this time, the company is establishing full year 2022 guidance. We are projecting full year 2022 sales guidance of $1.025 billion, representing 7% growth versus 2021. We are guiding to a full year fully diluted non-GAAP earnings per share of $2.10, representing 3% growth versus 2021. I note that the 2022 guidance includes approximately $0.10 of nonoperating headwinds, including higher shares worth $0.04, a higher tax rate worth $0.03, and higher stock compensation expense worth $0.03. Adjusting for these nonoperational factors, our 2022 guidance would have been $2.20 or 7.8% higher than 2021. Overall, we view this guidance as appropriately conservative and reflective of the current operating environment around COVID and inflation-related impacts. Our 2021 results represent our teamwork, our commitment, and our focus on execution. We continue to differentiate ourselves in the marketplace. And it is a testament to the hard work and dedication of each of our Globus employees. We remain excited for the future as we continue on our mission of improving patient care.

Our first question comes from Matt Miksic of Credit Suisse.

Great. Congratulations on a really strong finish to a pretty amazing year, given the circumstances. I wanted to follow up on some of the comments around EPS guidance, in particular. As you pointed out, there are some items that exclude those items, up 7% to 8%. Can you talk a little bit about where in your guidance you're contemplating things that some of the other companies in this space have talked about like rising input costs, staffing challenges, labor costs, freight, et cetera, things that generally are driving operating costs up a little bit? Maybe give us a sense of how those figure into your guidance? And I have one quick follow-up.

Thanks. This is Keith speaking. So we projected our guidance at $2.10. And as we look at the year, we see inflation as a market event. Everyone is experiencing it, and we have it baked into our numbers. But when you step back and look at the $2.04 to the $2.10, I commented on the $0.10 of the nonoperating headwinds. But the other things that are impacting the business as we think about getting back to more normalized levels of spend are really the travel and the training that go along with the surgeons and the training that we provide. That's worth going into the next year likely an $0.08 headwind. And then one of the things that we commented on earlier in the year was our continued investment into R&D. As you look into next year, we're seeing roughly, I would say, call it, $0.04 of additional investment in R&D. When you look at those things together, coupled with the inflation, we're landing at about $2.10.

Okay. And can you just maybe elaborate a little bit on the spend or R&D and sort of the expectations for returns in terms of growth or programs that you're investing in?

So we're continuing to invest heavily in our Spine business as well as our robotic businesses. We talked about that in Q1 of our earnings call earlier in the year, and really all signs point to us continuing to do that. Dave talked earlier about some of the benefits that we're seeing from robotic technologies. We continue to invest in that and really grow for the future.

Okay. And then just one quick follow-up I had was on the environment for robots and spending in capital and equipment in general. Some of the other, again, companies in the space have talked about a fairly strong year for equipment, a strong year for robots. Any sense of whether this is something that needs to sort of take a breather or catch up here in 2022? Or whether orders and demand and pipeline for new deals would indicate just continued strength into 2022?

Yes, Matt, this is Dave. No, it's very strong. I don't see anything slowing down. In our case, in particular, it's been accelerating. I think the demand for Excelsius has been strong, and it's becoming more and more common. The narrative has changed from why robotics to which robot. And I think we're clearly establishing our lead there. And then as I mentioned, there's a lot of enthusiasm over our Excelsius 3D system, which is going to launch later this quarter. We've had every surgeon we show that to seems like they want one. So I don't see it backing off at all.

Congrats.

Our next question comes from Matt Taylor of UBS.

So I wanted to ask the first one about margins longer term. Maybe just talk about the difference between what you're doing this year with some of the investments and obviously, headwinds year-over-year from spending back to normal and inflation, and how we should think about margins longer term? Would you start to get more leverage at some point? And what would the inflection point for that be?

Thanks for the question. It's a good question. But as I look at where we're at and where we're going, our goal is to always maintain a mid-70s gross profit rate. But as we look longer term and look at our EBITDA rates, we're always looking to be in that mid-30s range. We could toggle our investments in various parts of our business to really achieve that, but we're investing now to drive growth for the future. And as we get that growth, that's going to create more fixed cost leverage in our P&L. So I think by doing that, investing for growth today helps project the margins going forward. I feel that we're going to work to try to stay in that range.

Yes, I can add a little bit maybe to that, Matt. In the Spine business, I don't think you'll see much greater improvement in our margins there, but we have a lot of operating leverage in front of us in the orthopedic side of the business and the capital side. Those are both fairly nascent businesses for us, and we're funding it with Spine. But once we start to hit some volume numbers there, I think those businesses will definitely expand.

Great. Can I ask a follow-up on the robotics strength? I mean, you talked in the past about getting pull-through on these placements, and obviously had a great year in 2021 with Enabling Tech. I guess are you still seeing the same kind of trends? And could that bode well for pull-through implants in '22?

Yes, it does. We're seeing that generally the same kinds of trends. And as a company, we're focusing on really going back to that installed base and seeing if we can get more users to utilize the technology once it's placed in the hospital. And that's a big focus for us in 2022.

And next, we have Shagun Singh of RBC.

I guess my first one is on the Excelsius 3D imaging system. Can you talk to us about the delay? Why is there a delay in the launch? And then just elaborate on your go-to-market strategy? Are you targeting the replacement opportunity or greenfield? You're obviously going after a major competitor. So just any color there would be helpful. And then on the recon robotics, do you still plan to launch that in the second half? And then I have a quick follow-up.

Well, thank you, Shagun. I'll try to answer those one by one. In terms of the delay, it's just taking longer than we thought. It's nothing significant in terms of the technology hurdle to get over. There's just a lot to do to get that over the line. So I wish we were a bit earlier, but I am very confident we can get it done this quarter. Go-to-market. I think initially, we're going to be targeting our installed base of Excelsius users. There’s high demand among them. It's going to make those procedures much more efficient and much easier for them to do. And then from there, we'll be branching out to target more of that free-hand navigation market that you alluded to earlier. And then I apologize, I forgot the last part of your question.

I was just wondering if you plan to launch the recon robotics platform in the second half of '22 like you had previously indicated?

No, that's been delayed as well. We're going to be targeting early '23 for that.

Got it. And then just as a follow-up, I was wondering if you could talk about trends that you're seeing on the procedure volume side in Q1, so in January and February. And spine typically has a high pain burden, so procedures come back pretty quickly. So do you expect the recovery to come in Q1? Or do you expect a longer tail given staffing shortages?

Sure. Yes, January was really bad, but we've already started to see it turning in February. The last 3 weeks have all been progressively higher. Not back to where we want it to be, but definitely, I think we've hit bottom. We're going in the right direction. And I'm not going to try to predict what's going to happen with COVID though. That's proven to be frivolous for everyone, but it's encouraging where we are right now.

And next, we have Matthew O'Brien of Piper Sandler.

I guess, Dave, just for starters on the top line guidance. This time last year, you guided about $35 million below The Street. We end up doing well above what you initially guided and actually what The Street was modeling. And this time, you're guiding about $25 million below The Street. I know January was soft, and maybe Excelsius 3D has pushed a little bit in terms of the contribution. But are there other factors that we should be thinking about? I don't know if it's a rep hiring perspective or a robot perspective that gives you a little bit more caution versus kind of where The Street was modeling things?

Thanks, Matt. I'm sorry we don't pay that much attention to The Street. We look internally to our own forecast, and we always want to be appropriately conservative going into a year. I feel really confident in the business. The U.S. Spine business has been just cranking away. The robotic momentum is there. We're going to have 3D out this year. Japan is going to turn around in the second half. So I feel really good about the business. We just have taken a very conservative approach over the years when we give guidance, and we're doing that again.

Okay. Fair enough. And then the follow-up is on acquisitions. Sorry if I cut somebody off there, but there's been some talk about you guys doing a scale acquisition. I'm curious if you have any thoughts about the need for scale in Spine. And then if not, there's some pretty interesting assets still in the spine space, but more on the pain management side of things. Are those higher on the list in terms of things that you potentially are looking at from an acquisition perspective?

No, it's actually a bit different. We're more active in terms of growing the business through business development and on the orthopedic side of the business. I think we're really strong in spine, and there's really nothing in spine that's of interest to us at the moment. We're more focused on growing the other piece of our business, which is smaller. There's nothing, I would say, transformative in our sights right now. But we are looking at several modest-sized deals as been our history in the past. Did that answer your question?

Next, we have David Saxon of Needham.

Yes. Maybe one on Enabling Tech. I mean, it doubled this year, and you've really built out the Enabling Tech platform with hub and 3D, et cetera. How should we think about those launches kind of starting to ramp? And could '22 be another double?

Yes, as I mentioned, we plan to release a few units this quarter with a soft launch, and we expect the full launch to begin around the end of Q2. It may extend into Q3 and then be strong in the second half of this year. I won't go into detail about the double. We don't typically break down the components of our business. However, I can share that we are very excited about the progress we are seeing with our technology, both in terms of current adoption and upcoming developments.

Okay. Got it. And then maybe on Trauma, kind of how close are you to having a full portfolio there? And then in terms of growth, 32% in the quarter. Is that sustainable in '22?

Sure. We're working on Trauma, by the second half of this year, I think full is kind of an interesting term. We're going to have enough in our bag to be a full-line player and be able to compete with the major companies by the end of this year. And is that growth rate sustainable? Yes, I think that's certainly achievable in 2022.

Next, we have Craig Bijou of Bank of America.

Maybe a follow-up on top-line guidance and to the extent that you guys are willing to share. I mean, how do we think about the contributions from each of the businesses? I know generally, you've been reluctant to share that info. But in terms of the composition of the guidance, how do we think about that incremental revenue coming in? Where is it coming from and to what extent?

Thanks for the question. As Dave said earlier, we're not going to get a ton into the parts and pieces. But what I will say is if you look at the business, whether by musculoskeletal and INR or you look U.S. versus international, the parts and pieces of our business we continue to feel extremely positive about as we look into 2022 and beyond. We're investing in our business. We're driving investment for the future, and we feel that we'll see that turn out to us taking share and driving sales growth. I alluded to my earlier prepared comments that our guidance is appropriately conservative, but there's nothing that I sit here and feel that we have kind of an ongoing issue that I would be concerned about our ability to grow across our business, like I said, whether it's U.S., international or musculoskeletal versus INR.

Got it. Keith, that's helpful. And then, Dave, I think you alluded to it, but I wanted to ask more specifically how to think about some of the new product rollouts? Obviously, you have 3D coming out and launching this year. But from a new product perspective, do you have a number of launches coming this year on the Spine side? Do you have a number coming on the INR side? Just maybe a little bit more perspective of what to expect during the year.

Sure. Thanks, Craig. We've been quite clear that we're expecting significant developments with our 3D product followed by our hub offering. In the Spine area, our target for 2022 is typically 10 to 12 launches a year. Trauma is looking particularly promising, as several products we've been developing for some time are set to launch early this year and throughout the year. Additionally, our orthopedics division has some launches planned. This reflects who we are and our vision moving forward. The primary focus of the company is to drive excellent technology.

Next, we have Ryan Zimmerman of BTIG.

All right. Congrats on a great year. Just want to follow up on a couple of questions. Dave, when we think about U.S. Spine performance kind of relative to the market, you look at some of the larger players, they were down a bit in the fourth quarter. Some of the smaller players we saw were up double digits. Obviously, a few major players still yet to report next week. But I guess I'm kind of curious if you can kind of talk about the U.S. performance, that growth this fourth quarter relative to the market and kind of where you think you're tracking relative to that level? And if you could kind of give us color on what you think that level was just given the dynamics in the fourth quarter through the quarter would be helpful.

Thanks, Ryan. It's quite difficult to assess our current situation due to COVID. Based on initial feedback from some companies that have reported, we are capturing significant market share. I can't comment on how the smaller companies' results affect us or my insights on the overall market. It appears to have been heavily influenced by COVID, likely resulting in a decline compared to last year. However, that's just an estimation based on our earlier trends. Our business remains robust. I can confidently say that we haven't lost major contracts in the U.S., and we are experiencing growth from our recent product launches. We are continuing to sell robots and generating additional revenue from those sales. Overall, our performance is solid. I just wish I had a clearer picture of the overall market, as the current COVID situation complicates matters.

I have two follow-up questions. First, we've noticed that some large capital equipment companies have mentioned that the availability of chips is impacting sales or demand in 2022. Are there any concerns regarding chips for the Excelsius platform or for 3D that might affect sales? Additionally, I'd like to ask about the situation with the Japan distributor. What kind of improvement should we anticipate in the international business once that situation is resolved in the second half of 2022?

Sure. I would extend that to the entire supply chain. It's not just chips; all components have been challenging. It hasn't impacted our revenue yet, but it's definitely something we're aware of and finding difficult. So it's a risk we face in 2022. I'll let Keith address the international question.

Regarding Japan and the distributor situation, looking ahead after finishing 2021, I believe international growth was about 11%. Historically, we've stated that we expect the international business to grow in the mid- to high teens. I anticipate that we can return to that growth rate on an annual basis. Therefore, you can expect the second half of the year to see an acceleration towards that target, potentially reaching around 15% by the end of this year.

Next, we have Kyle Rose of Canaccord.

I wanted to start on Enabling. I mean, look, you put up a good quarter in Enabling. I guess, a tough backdrop, particularly without the imaging platform. Maybe just help us understand kind of where that stands from a utilization perspective into your customer base. You're talking about the really good utilization there is continuing to see strong pull-through. Can you just kind of level set maybe how many of your customers might have it or on a percentage basis or on an absolute basis? Just trying to really understand where we are in the uptake and the adoption within the historical core Globus customer base.

Yes, Kyle. To be honest, I don't feel comfortable sharing that information from a competitive standpoint.

Totally fair. I had to try. I also wanted to touch on the orthopedic side of the business. I mean, it's been a couple of years since you acquired the StelKast business. I think earlier in the call, you talked about the fact that the recon robot is going to come in '23. Where do you stand just from an implant perspective? Do you have the right implants there? Do you need to make different investments from an M&A perspective, technologies, distribution? Just help us understand what you need to do on that total joints business before the recon robot comes next year.

Sure. We do not have the implant portfolio we need to really make a strong outing. So we are working on that, have been working on that and expect to roll some products out this year. I don't see us filling the gaps in our product portfolio with acquisitions in terms of hips and knees in particular. I do think there's opportunity for scale there. So that's not off the table because we are very small right now. And then the extremities is an interesting segment for us as well. It's a fast-growing segment. So that's an area where we've taken a look at a few things. Does that help with your question?

And next, we have Samuel Brodovsky of Truist.

Just a first quick one on U.S. Spine. Just would be curious to hear about the portion of growth in the U.S. coming from robotic-specific instrumentation versus where you're seeing potential share gain with other parts of the portfolio?

Thanks for the question. In terms of breaking it out, we typically don't break out the parts and pieces of where the growth is coming from. What I would say is that as you look at our U.S. Spine business, it's really a combination of what we always talked about: new product innovation, our competitive recruiting, and the pull-through from implants. Those three continue to propel the business from a growth perspective, and we see that continuing as we enter 2022.

Great. That's helpful. And then when thinking about 3D and going to customers with it, in terms of any competitive trialing, are you seeing it being trialed against other more novel imaging technologies on the market? Or is it typically being compared to the large competitor out there?

That's an interesting question. We don't really conduct trials against it, but we do have customers interested in our technology. Their interest likely aligns with the market share of other imaging systems, especially those more commonly used in spine applications. I believe some of the more innovative options are being considered, but we don't receive much feedback about them. So, it may not be a disproportionate situation.

Our next question comes from Steven Lichtman of Oppenheimer.

I wanted to ask you first on Trauma. Where do you think you stand now in terms of coverage of procedures in terms of your product portfolio? And also from a sales force perspective, I'd just love to get an update on where you feel you are overall in terms of being able to go to market.

Steve, it's Dan Scavilla. So again, it's always the evolving and expanding story. We have about 14 family products out there now. I think with that, we're saying we would cover 50% to 60% of the market. Certainly plan, as David said, to launch several more this year to cover that further. I believe that through what I'm seeing so far in the first quarter of 2022 that, that will continue.

Great. Keith, just a follow-up on gross margin. I apologize if you mentioned this, but just relative to 2021, given the inflation commentary, should we assume gross margin down? Or are there some offsets that can keep it relatively flat to maybe or even up in '22?

Thanks for the question. We project the mid-70s gross profit rate. I think it's fair to assume that we are seeing inflation just like everybody else, but we're also growing. It's obviously getting us some leverage in our cost structure. So as I think about 2022, mid-70s is kind of where I see it. I wouldn't project upside.

And we now have Jason Wittes of Loop Capital.

I have a couple of follow-ups, one regarding guidance and the other concerning Trauma. First, your guidance seems to indicate a strong second half compared to the first half, particularly in relation to product launches. In that context, are we to assume that, while we can't predict COVID, it tends to impact throughout the year? Secondly, regarding your comment that January was quite weak but then rebounded, how should we interpret that? Should we expect a normalized performance in the first quarter, or is it likely to be somewhat weaker compared to last year due to the COVID effects and product launches?

Thanks for the question. Dave commented that January was weak, but we were starting to see some bounce back in February. Will it all bounce back in the same quarter versus having some bleed through into Q2? We don't necessarily know. But I think your earlier comment about some of the launches and a strong second half, I think that's directionally correct.

Okay. I don't know if you can address this, but you mentioned that this year has seen a record number of sales force hires. In the past, you've provided insights on how much you've expanded your sales force in percentage terms. Can you share any information about what it looked like in 2021? Also, it seems you're hopeful that 2022 will see a similar growth rate.

Yes. '21 was not a record year for us. I think we had one really strong quarter, but we've had years that were better. That's a renewed emphasis on it. I can tell you the pipeline right now is extremely strong. So we're coming out of the gate strong. But last year was a good year. It just wasn't our best.

With no further questions, that concludes the Globus Medical Fourth Quarter and Full Year 2021 Earnings Call. Thank you all for joining us for the call, and have a nice evening.