Thank you for being here. My name is Jay, and I will be your conference operator today. I would like to welcome everyone to the Orthofix Q1 2024 Earnings Call. I will now turn the conference over to Louisa Smith. You may begin.

Thank you and good morning, everyone. Welcome to the Orthofix First Quarter 2024 Earnings Call. Joining me on the call today are President and Chief Executive Officer, Massimo Calafiore; and Chief Financial Officer, Julie Andrews. During this call, we will be making forward-looking statements that involve risks and uncertainties. All statements other than those of historical facts are forward-looking statements, including any earnings guidance we provide and any statements about our plans, beliefs, strategies, expectations, goals or objectives. Investors are cautioned not to place undue reliance on such forward-looking statements as there is no assurance that the matter contained in such statements will occur. The forward-looking statements we will make on today's call are based on our beliefs and expectations as of today, May 7, 2024. We do not undertake any obligation to revise or update such forward-looking statements. Some factors that could cause actual results to materially differ from the forward-looking statements made by us on the call include the risk factors disclosed under the heading Risk Factors in our Form 10-Q filed this morning, May 7, 2024, as well as on additional SEC filings we make in the future. In addition, on today's call, we will refer to various non-GAAP financial measures. We believe that in order to properly understand our short-term and long-term financial trends, investors may wish to review these matters as a supplement to the financial measures determined in accordance with U.S. GAAP. Please refer to today's press release announcing our first quarter 2024 results for reconciliations of these non-GAAP financial measures to our U.S. GAAP financial results. At this point, I will turn the call over to Massimo.

Thank you, Louisa, and thank you, everyone, for joining us this morning for our first quarter earnings call. I'll spend some time providing insight into our higher-level strategy as well as updates on some key priorities and initiatives, before I turn it over to Julie for further details on our quarterly performance and financial results. I'm pleased to report another strong quarter for Orthofix, driven by healthy business fundamentals and exceptional operating performance of our teams. We continue to gain momentum and leverage strategic initiatives to grow Orthofix across all our business segments. Net revenue for the first quarter was $189 million, representing a 7.5% year-over-year increase in constant currency, led primarily by 10% growth across our U.S. businesses. The strength in U.S. performance was driven by 10% growth in BGT, 16% growth in spine fixation and 23% growth in Orthopedics. We are clearly outpacing market growth in all of these segments. We are delivering innovative products and outstanding service while executing to plan and taking advantage of emerging opportunities. I remain very confident in our future and the prospects to deliver value moving forward. To reiterate some of the 2024 priorities that we laid out in our fourth quarter call, we are diligently focused on: one, profitable growth; two, emphasizing a synergistic and balanced approach to our portfolio platforms; and three, strategic innovation. We remain committed to delivering across all 3 in the near term and are already seeing pull-through in our results. Our first priority is to grow the business and grow profitably. Julie will discuss the specific metrics later, but I'm happy to report that in the first quarter, we saw an improvement of more than 200 basis points in our adjusted EBITDA margin as a result of strong top line growth and the realization of synergies. We will sustain this momentum by expanding existing customers and distributor relationships, optimizing our product portfolio and improving our working capital management. In the first quarter, revenues benefited from continued BGT cross-selling within the spine channel. In U.S.A. Spine Fixation, we saw increases in average price per procedure as we broadened the use of interbody and thoracolumbar products across our surgeon customer base, as well as through significant contribution from new distributor partnerships. We are penetrating deeper into existing accounts with our procedural solutions while expanding our distribution network. In addition, we are maximizing the robust portfolio of the combined company by focusing on our higher-margin products and rationalizing any overlap. This product lifecycle management will not only reduce costs by simplifying our supply chain but enable us to direct resources and investment towards the expansion of new and innovative product lines. Furthermore, this strategy improves our working capital by lowering the number of products and SKUs we carry. We are efficiently allocating the recent investment in spinal implant instrument sets to our larger, more dedicated distributors, which will improve inventory and instrument utilization. And finally, we see further opportunities to improve cash flow by focusing on the DSO efficiencies and accelerating cash collection. As a result of these initiatives, we expect to be cash flow positive in the fourth quarter of 2024. Moving now to our second priority, which is to leverage our technologies and sales channels across all product segments. Our products work together to create a best-in-class offering, each improving the performance of the other and enabling growth through cross-selling opportunities. We are seeing traction across our commercial infrastructure with increasing interest in what we are building, allowing us the opportunity to be selective in our choice of distribution partners. Additionally, the team is aligned on driving pull-through revenue across spine, orthopedics, biologics and BGT. We are seeing market share gains in complementary areas of the portfolio where our offerings are able to support the outcome of the more complex product lines in orthopedics and spine. For example, we just completed the 100,000th implementation of our Strand family of demineralized bone fibers. These Strand fibers are designed to enable maximum bond-forming capacity and fusion potential. The alignment of BGT, Enabling Technologies, Biologics cross-selling opportunities highlights the complementary nature of our offering as a whole. A key part of Orthofix's success and our strong performance to date are the committed employees and leadership team that we have in place. Since beginning my role at the company, we have made a few changes to certain roles, expanded others and finalized some key hires that will set us up for the future, with an eye towards efficiently managing our product portfolios. For example, I would like to highlight the recent promotion of Dr. Beau Standish to Chief Enabling Technologies Officer. In this expanded role, Beau will oversee strategy development, the implementation of software and corresponding hardware across our product portfolio, reinforcing our commitment to drive synergies throughout the business. Enabling Technologies has been a key differentiator for Orthofix. Our investments in the 7D FLASH Navigation have established Orthofix as the partner of choice for surgeons seeking innovative, better-driven intraoperative solutions with improved workflow. With this new role, we will leverage our combined intellectual capital, a comprehensive suite of software and hardware products to support both the spine and orthopedic surgeons throughout the continuum of care. This begins with preoperative planning using our strategic planning platform, OrthoNext, continues with real-time operating room navigation and guidance through 7D FLASH Navigation, and extends to post-operative care with our bone growth stimulator devices, our award-winning patient engagement app, STIM onTrack, to post-patient compliance and throughout patient-reported outcome. By expanding the capabilities of our existing technology platforms across all our businesses, we will accelerate growth in high-value procedures and drive significant gains in market share. This investment in Enabling Technologies is also consistent with our third priority, a commitment to Orthofix's Innovation engine. We have several promising products in development and a robust pipeline of upcoming launches. We are investing in markets with a higher return potential, especially where Orthofix has the opportunity to establish itself as a leading player, where there remain significant needs. For example, we are just beginning to expand into the U.S. orthopedics market, which presents incredible growth opportunities given our unique and innovative product lines. Our focus in orthopedics, providing highly specialized solutions for underserved markets, is underscored by 2 recent 510(k) clearances, for the RODEO telescopic intramedullary nail and for the FITBONE bone transport and lengthening nail. It is the only commercially available nail capable of both transport and lengthening, and the only bone transport nail available in the U.S. We will be launching both of these products through limited U.S. same market releases in the coming months. These achievements demonstrate our ability to deliver innovative products in the United States orthopedics market and reflect our current focus on strategic innovation across complex limb reconstruction and deformity correction. In our Spine portfolio, we are continuing to validate our MIS anterior and lateral portfolio integrating novel access solutions with our differentiated hardware and biologics. This is just one of many procedural integrations in the works to advance patient care and improve the surgeon experience with state-of-the-art enabling technology in 7D. Our goal is to be the trusted partner for surgeons in spine and orthopedics, providing solutions for the most complex cases through our unique complementary product platform. All in all, I'm very pleased with our performance during my first quarter on the job. I remain encouraged by the prospects for Orthofix and inspired by a team that is embracing a relentless focus on execution and innovation. As a result of that confidence, we are narrowing our full year 2024 revenue guidance and raising the bottom end of the range by $5 million. We now expect 2024 revenues to be between $790 million to $795 million as compared to the prior guidance of $785 million to $795 million and 5% to 7% growth. The merger thesis and the fundamental strategy across Spine, Orthopedics, Biologics, and BGT remains compelling. We are growing the company in a major and strategic manner to reach profitability, and we are creating value for our customers, patients, and shareholders. I truly believe the best is yet to come. With that, I'll now turn the call over to Julie to review our first quarter financial results.

Before I begin, I'd like to remind you to please refer to our press release published earlier today for information regarding our non-GAAP results, including a reconciliation of these results to our GAAP results. Additionally, all revenue percentage changes discussed will be on a constant currency year-over-year basis. As of this quarter, we have annualized the impact of the merger and will no longer be referring to pro forma growth. In addition, all results of operations that I referred to in my prepared comments will be on a non-GAAP adjusted basis. As Massimo noted, Orthofix had a strong first quarter, delivering 7.5% constant currency top line growth and EBITDA margin expansion of approximately 220 basis points. For my commentary, I'll go through each of our business units and review financial results for the quarter as well as provide an update to our guidance for the full year 2024. Total company net sales were $188.6 million for the first quarter of 2024, up 7.5% over the prior year. Bone Growth Therapies revenue grew 10% to $52.5 million in Q1 and marks the fifth consecutive quarter of double-digit growth for the BGT franchise. This growth was driven by above-market performance in both the spine and fracture channels. In the spine market, where we hold the #1 market share position, we continue to gain share with more than 50% of the growth coming from new customer acquisitions. In addition, investments in the fracture market sales channel drove 16.8% growth in fracture, with AccelStim continuing to outperform the market. As a reminder, the fracture market represents an opportunity of more than $200 million, and we are just beginning to scratch the surface of our potential in that market. Global Spinal Implants, Biologics and Enabling Technologies first quarter revenue was $108.8 million, with year-over-year growth of 7.2%. U.S. Spine Fixation revenue grew 16.1% well above market growth rates, driven by contributions from new distributor partners where we saw revenue nearly double from Q4 2023, and deeper penetration of existing accounts with increases in average revenue per procedure. Additionally, in the Biologics business, we saw a positive impact of new distributor partnerships as well as cross-selling initiatives, which drove growth in line with the overall market. The Global Orthopedics business grew 3.8% in the first quarter, led by 22.9% growth in the U.S. as a result of strong performance across our portfolio as well as distributor expansion and sales channel investments. The international business declined 2.7% versus prior year due to timing of orders from our stocking distributors. Due to the nature of this business, we expect to see variability from quarter-to-quarter in the growth rate. Moving on to some detail below the sales line. Starting with our Q1 non-GAAP adjusted gross margin, we achieved a 70.3% rate for the quarter, a decrease of approximately 40 basis points compared to Q1 2023. This reduction is primarily due to an overlap in vendors as we phase out a legacy partner and moved to a new vendor, which will result in cost savings starting in Q2. Non-GAAP sales and marketing expenses were 51.8% of net sales for the first quarter compared to 52.3% of net sales for Q1 2023. The decrease as a percent of sales was primarily driven by the realization of cost synergies and a lower effective commission rate due to product mix. Non-GAAP general and administrative expenses were 13.7% of net sales for Q1 2024, down from 17.8% in the same quarter the prior year. The decrease as a percent of sales was primarily driven by the impact of cost synergies and a reduction in stock-based compensation. Non-GAAP R&D expenses were 10.2% for the quarter compared to 10.5% for the prior year quarter. The decrease as a percent of sales was driven by a reduction in product development spending due to project rationalization, partially offset by increased clinical spending related to EU MDR costs, which are no longer adjusted from operating results and the M6 2-level study. Below the operating income line, interest expense and other was $4.5 million for the quarter. Altogether, this resulted in non-GAAP adjusted EBITDA of $7.7 million or 4.1% of net sales for the quarter, a 220 basis point expansion over Q1 2023 due to the capture of merger-related synergies and driving leverage on sales growth. This represents a 34% drop-through on incremental revenue dollars. We remain encouraged by these results as we are seeing the impact of merger-related synergies and our ability to drive leverage on sales growth materialize. From a cash standpoint, our total cash balance, including restricted cash at the end of Q1, was approximately $29 million. During the first quarter of 2024, we exercised our borrowing right under our 4-year $150 million financing arrangement to the delayed draw term loan of $25 million, which has an end of March 2024 expiration date, and repaid the outstanding revolver of $15 million. This brings the total borrowings to $125 million. Our free cash flow usage was $29 million in the quarter, primarily as a result of an annual incentive and one-time merger-related retention payments. Q1 will be the highest quarter of cash burn for the year. As Massimo mentioned, we are focusing on improving our working capital management, specifically our inventory and instrument utilization, and DSO efficiency. With these efforts, as well as continued execution of merger-related cost synergies, we expect to be cash flow positive in Q4 2024. Overall, we are pleased with our first quarter results and we continue to be confident in our ability to drive profitable revenue growth moving forward. Moving on to 2024 full year guidance. As Massimo stated, we are narrowing our guidance for full year net sales to range between $790 million and $795 million, representing implied growth of 6% to 7% year-over-year on a constant currency basis. This is in comparison to the guidance issued during our fourth quarter call of $785 million to $795 million or 5% to 7% growth. Please note, our expectations are based on current foreign exchange rates and do not account for rate changes that may occur throughout 2024. Our outlook for full year 2024 non-GAAP adjusted EBITDA remains at $62 million to $67 million. And finally, we expect to be cash flow positive in the fourth quarter of 2024. While we do not provide quarterly guidance, I will give some directional commentary on the expected cadence of our business to assist you in modeling our quarterly performance. These comments remain in line with the directional remarks provided on our fourth quarter call in March. We expect Q2 revenue to be slightly below our full year growth guidance range due to the timing of stocking orders in 2023. Additionally, we expect Q3 to reflect the highest year-over-year growth due to the disruption in the prior year as we closed the quarter and the impact of 1 additional selling day in 2024 versus 2023. This extra day results in approximately 1.5% of additional growth for the quarter. For gross margin, we continue to expect 2024 full year gross margins to be in the 71% range, in line with 2023. We also expect operating expenses to decrease approximately 200 to 300 basis points through leverage on incremental sales and additional cost synergies. To assist you with modeling EBITDA, we reiterate our outlook for depreciation expense, which, for the full year 2024, is in the range of approximately $36 million to $37 million as compared to $33 million in 2023. Stock-based compensation expense is expected to be in the range of $30 million to $32 million. Below the operating income line, our expectation for interest and other is approximately $5 million per quarter. We expect adjusted EBITDA margin improvement of 200 basis points for the full year to be fairly consistent over the course of the year, with margin expansion in the first half of the year to be slightly higher over the prior year as we annualize synergies. And finally, for cash, we still anticipate an improvement in net cash outflows in Q2 relative to Q1 due to the payment of the annual bonus and merger-related costs that occurred in the first quarter. The second half of the year will progress towards breakeven, with positive cash flow for the fourth quarter as we ramp up revenue, leverage our fixed expense base and improve inventory and DSO efficiencies.

I'll close today's call by emphasizing my confidence in the business and reiterating my enthusiasm to be part of the Orthofix team. We have solid fundamentals, exceptional employees, and a best-in-class portfolio that is driving above-market performance. Throughout 2024, we will keep delivering on our commitments to patients, customers, and shareholders, driving the company to new heights. Before we send off, I would also like to thank all of our employees worldwide for their dedication to Orthofix and its mission. I'm very excited for the next chapter ahead of us. At this point, we will open the line for questions.

Your first question comes from Mathew Blackman of Stifel.

Can you hear me okay?

Yes.

Maybe the first question is about the guidance for the year, which has increased by about $2 million to $3 million at the midpoint compared to the $4 million to $5 million in Q1. I understand it's early in the year and there may be some conservatism, but I want to ensure you’re not observing anything different in Q2 that might affect your momentum.

Yes, we are not seeing anything that would slow down our momentum. It's early in the year, and we want to have the new management team in place. We are confident in what we are delivering, and there is nothing that is dampening our enthusiasm.

Great. That's what I thought. I have a housekeeping question. Did you have one fewer selling day in the first quarter compared to 2023? Some of your peers have mentioned this, so I’m curious about your calendar.

No, we did not.

No, okay. Okay. And then I guess my last question is regarding the metric you mentioned about 8% of sales being from new distributors in the fourth quarter. Is there any chance you can provide an updated number, whether it's similar to last quarter or higher? I understand you might not have this information readily available, but is there any way to share a same-store sales growth figure for your accounts? I'll leave it at that.

Okay. I'll say in the revenue from new distributors, I said in the prepared remarks that it nearly doubled. So you can interpret that from the 8% to nearly doubling. And then I don't have same-store sales at the ready in front of me, but we'll think about releasing that or not. Thank you.

Your next question comes from the line of Ryan Zimmerman of BTIG.

This is Izzy on for Ryan. So just first off on the gross margins, it looks like you guys came in in line with our estimates this quarter. We were just wondering what you could see that could drive them higher over time?

So yes, this year we expect our margins to be 71%, consistent with last year. Looking ahead, while we haven't provided long-term guidance, we see potential for improvement in gross margins. We believe there are synergies to be realized through supplier rationalization and optimizing our operations.

Great. And then next, on the bone stim, it looks like you guys are seeing some pretty strong growth here. Just wondering what you can do to maintain this growth in a market that's maybe growing not as fast?

Yes, that’s a very good question. We see significant potential for the foreseeable future. Based on our previous comments, we are currently leveraging the new surgeons from the SeaSpine acquisition as much as possible. While the overall market grows at typical rates, we believe that within our specific area, there is strong potential for the upcoming quarters. We will strive to maximize this potential to the best of our ability.

Your next question comes from the line of Jason Wittes of ROTH MKM.

Just on the growth rates we saw this quarter, I mean, you kind of mentioned for Global Orthopedics, it's going to vary. The Spine growth has been pretty nice, is that something that we expect to continue for the rest of the year? Or could you comment on sort of what the trends are for the remaining other businesses?

We feel confident about our current growth rate. We have identified a few key growth drivers. There is significant interest from new distributors and surgeons, leading to a remarkable number of inbound calls. This allows us to select the right partners, as we are focused on profitable growth. With our investment in innovation, we are also seeing increased utilization of our products, contributing to a healthy rise in revenue per case. Overall, we see strong business fundamentals for the foreseeable future.

Okay. And then you mentioned you should go cash flow positive in Q4. I assume that's sustainable. And going forward, the quarters will be cash flow positive from there on? Or will seasonality impact that? Or sort of what's the outlook for the cash flow generation?

Yes. We'll issue formal guidance on that for 2025, and we'll do so later this year. But, yes.

Your next question comes from the line of Jeff Cohen of Ladenburg Thalmann.

So I wondered if you could talk about AccelStim a bit in fresh fractures, and talk a little bit about some of the channels. And I did hear you call out the fracture market in some of those channels, some of those docs, and are you still focused on surgeons? Is there some focus that's on pain docs as well?

Right now, I think that we are keeping leveraging our network on the surgeon side. So at the end, we have 2 products that are helping us to address the continuum of care in fracture, fresh fracture, and malunion. So we keep driving our product portfolio using existing distributors, plus trying to find synergies with the distributor that are working on the orthopedic side. So our market is defined right now on the surgeon piece.

Okay. Got it. And then could you talk a little bit about the larger, more dedicated distributors as far as aggregate numbers you anticipate over the balance this year, that the actual number of distributors will decrease? And then if you could give us a sense of feet on the ground.

Yes. While we don't provide specific details regarding our distributors, I can share that our top distributors are increasingly loyal to us. Currently, we are noticing that, due to the depth of our portfolio, particularly in Spine, many of our top distributors are becoming exclusive partners. This trend is expected to enhance compliance and focus on our products in the future. Although we don't disclose exact figures, I can say that the quality of revenue we are experiencing right now is quite strong.

That concludes our Q&A session, and this concludes today's conference call. You may now disconnect.