Enovis Corporation (ENOV) Earnings Call Transcript & Summary

Welcome, everybody, and good morning. We're very pleased to have with us Matt Trerotola, currently CEO and President of Colfax and to be CEO of Enovis; and Brady Shirley, CEO of DJO and to be COO of Enovis. So the plan is, I'm going to turn it over to Matt and Brady to walk us through the Enovis story. And then we'll have some time for question and answers at the end. Matt, Brady, over to you.

Great. Thanks, Bernhard. It's great to be here. Thanks, everybody, for joining. I'll kick things off just talking a little bit about our company and let Brady talk in more depth about our MedTech businesses. Our company, Colfax, was founded by Mitch and Steve Rales about 10 years after they founded the incredibly successful Danaher Corporation. And as a company, we've been on a path of compounded growth in the industrial space. And then more recently, really working through a transformation of our company with a significant entry into the MedTech space through the acquisition of DJO in orthopaedics. And now the announced separation into 2 great focused companies. Mike, you can turn over to Page 3. I'll start out with just a quick update on the separation. Looks like we may have a little trouble getting the slides going. There we go. You can read the disclaimer later. So I'll start with a quick update on that separation into 2 companies that we announced earlier this year, and we announced that we were targeting the first quarter of next year for that separation. The headline is we're right on track. We're right on track for a tax-free spin of ESAB on the targeted time line. We've talked about how we intend to have capital structures that are aligned with the respective strategies of the 2 companies and the ESAB's capital structure will start in the 2.5 to 3x EBITDA range. We expect a leverage EBITDA range. We have announced that the leader of ESAB and the team there will be Shyam Kambeyanda and the team that he's been leading for a number of years. And we've made terrific progress building out the corporate infrastructure, some of which will come from existing Colfax, but a number of key leaders we had to hire in as a leader of different corporate functions there. And we've made a lot of progress on shaping 2 terrific boards with a little bit of healthy overlap, but also each of the boards having a different and relevant set of skills, experiences and diversity for each of these great companies that we're creating. And we've also announced that while ESAB will be named ESAB, the powerful global brand that it is, we've announced that Colfax will be renamed Enovis as we go through the separation, a name that really indicates the innovation and vision and continuous improvement that we intend to bring to the MedTech space. Next page. So this page just introduces these two great companies. On the left, a leader in fabrication technology. This is a company that has -- is going to be really well positioned. Shyam and the team have driven tremendous improvements over time with our business system and compounding value creation strategy. And you can see that in the growth outperformance. You can see it in the strong margin improvement over time, and there's still room to go in terms of continuing to outperform on growth and expand margins. It will be a strong cash generator with balanced capital allocation. We're really not going to focus on FabTech, but if you want to take a look at our Investor Day, you can see a lot about the strategy of that business and where it's headed. The other company, Enovis, will be a specialty MedTech innovator, a company where we're focused on building to high single-digits organic growth. We'll have strong gross margins and a clear path to get to mid-20s EBITDA margins on a segment level. And this also will be a company with strong cash flow, a real focus on investing for growth. And you can see from the slide, we got a clear path to get to about $2 billion of revenue pretty quickly, mostly through organic growth, some bolt-ons and then plenty of avenues to grow from there to $3 billion and beyond. Next page. Just a quick tee up, and then I'll pass it off to Brady. Really 2 great franchises today in the company that will become Enovis here, a fast-growing recon business that is very strong, has been a strong double-digit grower, and we expect to be able to continue to be a double-digit grower and outperform the recon markets. And then a very strong P&R platform with leadership positions in attractive industries in orthopedics and a very important strategic link between these 2, along the continuum of care. So we've got a clear path for how to drive continuous improvement in these businesses and drive growing outperformance. I'll pass it to Brady to talk some more about our MedTech businesses and plans.

Thanks, Matt. Good morning, everyone, and thanks again, Bernhard, for only giving me 12 minutes, but I'll move along. Next slide. All right. We'll start out, as Matt said, we've got 2 exciting segments, great segments. The first to talk about is recon. You can see on the left-hand side, it's about a $20 billion portion of the $53 billion, $54 billion orthopedic market when you just think of joint reconstruction. For us, that's shaped. And as you can see in the gray and the red on the left side, very similar when you play it into our shaking with the exception that we're actually heavier in extremities. We're about 50% in extremities and 50% in the larger adult reconstruction hip and knee segments. For a significant number of years. We've been growing rapidly in the shoulder. We're #1 today in reverse shoulder and have a strong position literally across that upper extremity platform. And you can also see the note that we've grown 5x for multiple years, 7 plus now in the hip and knee -- the larger hip and knee space, which is about $16 billion of that $20 billion that I'm talking about. We've really done it through a proven playbook. People ask me all the time what it is. And I'll be simple about it by saying it's underpinned. It's all about superior clinical outcomes. And to have the sustained growth that we've had in the shoulder and really the #1 position in the shoulder has been led by just fantastic outcomes over 12 to 14 years now. And then on the hip and knee side, we certainly had an opportunity to launch a great knee here. Seeing where the market has been for a long time but taken some great intellectual property and really expanding and changing the platform of how knees are done. And that's why we win. And I would tell you, we have fantastic KOL teams, best-in-industry as well as a really great medical education platform that's driving it. Next slide. Where we're headed is a $1 billion platform in recon, and we've talked about that since more than a year ago. And I would tell you that sitting behind that, it's really about this heavy extremity mix, which gives us this fast underlying addressable market that's in that 7% to 8% growth range. Fantastic organic growth off of the innovation that we really fit in this business, our recon platform historically has had 30% plus vitality, and we expect to keep that going long term as we expand in the other segments as well. And then a global footprint, and you heard us talk about the acquisition of Mathys in July, and that's really what the backdrop was. They're a fantastic company with great products, but it also created this platform to allow us to move what has predominantly been a U.S. business for us to a global recon business. Next slide. From a P&R perspective -- from a PNR perspective, as we step into this position, this is the largest segment of our business. It's actually a smaller component of the market, it's about $5 billion of the market. As you can see, we're #1 in bracing, #1 in rehab. And we've had that position in those for a long time. The bracing piece is really the driver historically in our prevention and recovery. And today, we serve about 3,000 of the 6,000 orthopedic clinic locations in the U.S. by managing their DME, and we do that with our MotionMD platform, which is a workflow solution that sits across us. It's also what underpins what Matt talked about earlier with the orthopedic continuum that gives us that digital component that plays across that journey. A lot of times, people ask me about that, and I'll mildly mention it here. And then it looks like, Mike, you skipped ahead on one slide, but we'll go back to the other one in a moment. But I'll just say this. From our positioning's perspective, when I talk about recon, and you'll probably ask me more questions about it later, I often point back to P&R. And the reason I do is the platform that we have, the relationships that we have with orthopedic surgeons across all the specialties as well as the hospital breadth that we have in P&R has created the opportunity for us to step into the right segments in recon and grow really rapidly off this fantastic historical base plus with the shift that's going on from inpatient to outpatient, it really changes the dynamic. Next slide, Mike, and if you can go to #9, there we go. There's a continuum. So from a -- usually, in these segments, I'm asked a lot about the continuum. Let me be simple here. There's 3 segments. One is prevention. The other is surgical intervention, and you can see we call out repair. And the third is recovery. Does this really matter? Well, what I would tell you is, historically, the patient journey was captured in an inpatient environment. And therefore, the patient just moved in a non-virtual way or in a non-digital way from each of these -- from one of these segments to the other. Well, today, with the shift to outpatient into ambulatory surgery, the patient journey still has to take place the same way that it did, but connecting that is the critical opportunity. For us, where we're fortunate is being the largest player on prevention, the largest player on recovery and a rapid growing player in the middle in surgical intervention, has really positioned us to have the right digital solutions to keep the patient connected with the caregiver all the way across. And it's given us the opportunity, particularly in the ASC, to grow more rapidly than the marketplace. Next slide. We outlined last March, our strategy, it was really around 2 aspects. One was high single-digit growth and the other was margin expansion. And I won't represent the slide. I'll simply say this way. Our focus on high single-digit growth has really been a simple playbook. It's driving the right amount, really accelerating our innovation in the key segments. We've had that in our recon surgical segment for a long time. We're really focused across the business to grow rapidly organically in the key segments where we have. We also understand the importance and the shift that's going on to the ASC. And so not only in our recon business, but also in our P&R businesses, we've really positioned to help that patient journey and to help the caregiver across that. We focus to lead in digital. Our motion of knee platform is the most widely used workflow solution in the orthopedic segment today. And we're confident that the work that we're doing around cost will be imported there as well as we go forward. We've expanded into foot and ankle. We have a strong footprint in other rapid growth areas like sports medicine. And so there are a number of opportunities as we think about expanding from an M&A perspective. On the margin side, certainly, you can see the bullets, so I don't need to read them all for you, but I would simply say it this way, we need to win the COVID recovery. And we've won during COVID. Every quarter, we've done well across all of our segments against our competitors. But we also see a great opportunity as the recovery takes place for us to win and even expand our leads. Number two, continue to focus on expanding recon. Certainly, use CBS to drive leverage, growing -- it's much easier to gain leverage while you're growing than it is while you're not. But for us to have CBS tools, lay that on top of rapid growth, it really gives us an opportunity for leverage. And then finally, really, as we've talked about, we're very focused on expanding the business, and there will be unique opportunities for kind of getting balance of expanding our margin from both the organic side as well as acquisitions. Next slide. And then just a quick touch on the acquisitions. One of the fun things for me since Colfax has acquired us, it has been really an opportunity to open up this part of the playbook and look at areas where we can expand and really strengthen our business. You can see we -- on the right-hand side of the chart, we've really -- our view are there are 3 types for us to go after. One is just extending our current business or strengthening; two is expanding further in orthopedics using that P&R platform of relationships and bandwidth to step into other areas that are more along the surgical intervention line as well as an opportunity to use adjacencies that are here to move into the larger $450 billion MedTech space. We've done some of numbers 1 and 2 so far. You can see on the left with Mathys, that's certainly extending our geographical reach in recon with -- you can see 4 different logos. Three of our logos, they are on the foot and ankle side and they're certainly expanding into -- further into orthopedics and into a rapid growth segment. The LiteCure acquisition has been fantastic for our recovery sciences business, just a neat opportunity, fast grow modality and really changed that footprint for us and has helped us to really position where rehab is going tomorrow, once again, in this different environment that's more outpatient based. And then finally, you've heard us talk about cost. So I'm sure we'll answer questions about that today, but we've made a solid investment in an AR platform that we think will be a big part of how the future is done in surgery. Next slide, and I'll hand it back to Matt. Your on mute.

Thanks a lot for that heads up, Brady. Thanks. Just to wrap up, we're right on track to create 2 great companies in the first quarter of next year as we targeted. We've got a MedTech platform that's got a clear path to high single-digit organic growth that's really going to be driven by that double-digit recon platform and innovation in all parts of the business. And we've also got a great start and great runway ahead in terms of creating continuous improvement within these MedTech businesses and not only using that to accelerate the growth, but also to drive strong margin performance over time and have already shown the great acquisition opportunities in the space, and there's more to come. Thanks. Thanks a lot, Bernhard. Let's go ahead to Q&A.

Well, thank you, Brady and Matt. Great to see the trajectory you've put in always on. Let me start by asking, what is the least well understood part of the Colfax/Enovis story by investment community? And how would you explain it?

Yes. I'll jump in there with a couple of thoughts. I think that the sort of organic growth trajectory and opportunity is kind of underappreciated. We came into the front end of COVID, really kind of settling into that mid-single or mid-single plus organic growth range based on double-digit growth in surgical and again the P&R business up into kind of industry level growth or above. And that's something that we demonstrated before COVID. We've continued to demonstrate that above industry organic growth albeit in a tough industry environment for the past couple of years. And so we talk about coming out the other side of COVID at mid-single-digit plus organic growth with a clear path to high single-digit organic growth. But I think that's underappreciated and that it's not something we have to figure out how to do. It's something that we've already demonstrated on the surgical side consistently, and we've done the work required to be able to do it on the P&R side and have sort of definitely demonstrated as well but in a tougher environment. So I think that organic growth in opportunity is underappreciated. It's something we're looking forward to being able to demonstrate in a more normal environment here in the quarters to come.

Great. And Matt, you did a great job at ESAB implementing operational improvements. And what lessons do you think can be learned from that, that you can apply to Enovis going forward?

Yes. I think there have been a lot of lessons, and it's great that we've had a lot of opportunities for the 2 teams to learn from each other in the past years here and the benchmark and have some talent flow and things that are helping to jump-start the CBS journey within our MedTech businesses. Really, the journey at ESAB was all driven from strategy and really having a clear strategy of how we're going to build a winning global business and how we're going to strengthen and improve it consistently over time. And then it really -- it was about getting the supply chain right, customer service first and then drive up the margin ladder once we've got that strong customer service, it was about getting the innovation and commercial engine right and being ready to invest and bring a lot of products through and the vitality that comes with it. It was about sort of proactively working on things that streamline and scale the cost structure to gate -- create room for that margin expansion. And then having the acquisitions and innovations that came through, driven from strategy, accelerate the growth of the business and strengthen and shape the business. That was the ESAB formula, and it's still very much being done. And it's really going to be the same playbook. I think there was a good head start. Brady's leadership already had some really good things going on. The surgical business has got great innovation, great commercial processes. There was already a good start on getting the innovation going within the bracing business. I think some of the foundations in the supply chain have been late. So I think we had a good start to work with there, and we've already here in the first 2.5 years, been able to make good progress on the initial parts of that journey of getting service levels to a better place and laying that foundation for margin expansion. Surgical has continued to outperform on growth and the vitality coming up in the bracing business itself. So lots to learn and apply and a great start, we think.

Great. And digging into last comment a little bit, maybe, Brady, this one for you. Can you talk a little bit about what has driven the significant above-market growth, specifically in recon? Are you driving the outperformance by building out the bag to existing surgeons? Are you gaining new surgeons as well? And if you can also give a bit of color around the different areas, sort of shoulder and hip and knee.

Sure. Thanks, Bernhard. So a couple of things. Probably the most asked question and how often -- how long can you sustain it. And I would say forever. But there's definitely a balance between gaining new surgeons or surgeon conversion, which is what we would call it as well as expanding the bag and getting more same-store from our existing surgeons. If you look at where we are today, we're somewhere in the high 70s to 80% coverage now with our products. And so -- but what I would tell you, Bernhard, and to everyone listening, we've been at 65% plus now for about 3 years. And so when you think of the bag expansion, there are pieces that we pick up by doing that. And certainly, that's part of our growth. But the real driver behind it has been conversions. And you asked for some detail, I'd simply put it this way. When I said clinical outcomes, superior clinical outcomes earlier, that's truly what I meant. If you look in the shoulder, great surgeon [ Mark Frankl ] really changed the shoulder environment in the U.S. But us and him together, you might say, it was really about outcomes because total shoulders are one of the most difficult procedures has been in all of medicine, actually, believe it or not, and certainly in orthopedics from a recovery perspective. And the more lateralized reverse that had the right [indiscernible] alone, it really changes what happens to a patient, postoperatively in shoulder. And from that change that started a little more than 12 years ago, the market has seen a shift from 75-25 anatomic to reverse. And now it's really shifted to 50-50 plus on the reverse side. And that's really been by design and about outcomes. And what was unique to me when I came to the company several years ago was I could see an opportunity and the need to do the same thing because the knee is the most difficult area in adult reconstruction between hip and knee and only 80% of the patients are satisfied postoperatively. They just only 80% do great, the other 20%, it's still a challenge. And we had an interesting design that had just one of the fantastic leaders of kinematics that have put this together, again, in Scott banks. And we put the right KOL team together that could really lead this, develop it forward. We've had great outcomes. I mean we've improved that 80% in the low 90s, 92% plus and just continue to grow this need very rapidly. Once again, not doing anything fun or special related to bringing enabling technologies in. It's just been about how the patients do postoperatively. And if you look at our bracing business, it's been built the same way. And I've been in orthopedics for almost 30 years, and I see a lot of technologies come and go in my career. And the one thing that sticks and that drives sustainable growth and is meaningful over time is outcomes. And so I think we're a good [indiscernible]. We grow by converting surgeons. We do it the simple way, which is we show them great data and provide opportunities and train them on how to use it, and then we've grown the market that way. Not that I'm against enabling technologies. We have some fantastic PSI and preoperative planning for the shoulder, and you'll see us do things in other areas as we go forward as well.

Great. Thanks, Brady. And sticking with recon for a second. Are you at all concerned about the robotic offerings from some of your larger competitors? Would that be impacting your growth? And are you thinking about or planning to develop anything in that space?

I'm greatly concerned about it, Bernhard, because they cost a lot in an inventory surgery environment. I'm not sure it's going to work that well for it. All kidding aside, though, look, we've been growing, as I said, 5x, while in this market for an extended period of time, while robotics and other things have been there. But as I said, we also launched a really great platform, preoperative planning and PSI platform for the shoulder back in 2015. So we've been playing in this space for almost 7 years in the shoulder. And it's actually used today across a lot of our -- not the majority yet, but a very high percentage, 30% plus of our shoulder procedures. Our view has been really 2 things on just the enabling technologies, whether it be robotics or AR or otherwise. Number one is that it's different by med to take one technology and say, this is what we're going to use, and we're going to play it across. Someone has been with peace for a long time, any time talking to surgeons. They certainly understand that it's different and how you address these anatomies are different. So I don't think there's one solution that fits all, but I think there's a solution that has this linkage that can play across them all, but different parts of it would be used in different anatomies. And then number two is the ASC. I mean we -- I've seen this coming for a long time, and we've seen it coming within the industry for a long time, and COVID really, really helped speed it up the ambulatory surgery environment. And that's a different platform, cost matters, space matters and time matters. And so to me, I think, there have been some great innovations with the robotics and other things in our space. And I think those are here to stay and will continue to do well. But I think the future will be shaped a little differently than what you see today from a footprint perspective, a cost perspective and how they're delivered across the anatomies in an outpatient environment.

And you mentioned the Mathys deal. So let's talk about that for a minute. It looks like it's a really good fit with the recon business that was previously mostly U.S., and can you talk about what made is a great fit for you, apart from the geographic fit, of course? And how confident are you in increasing growth rates and overall margin profiles that, that business has?

Yes. This is what I've been excited about for a little while. I -- COVID slowed us down a bit as for as the timing, quite frankly, but I can remember even before Colfax, the acquisition was finished and I had a conversation about Mathys and because I have talked about the opportunity to expand our business, our recom business really outside the U.S. And I certainly know that there are a number of players that were there, there were opportunities. And this is the one that made the most sense. And the reason it did was, number one, I felt like their direct feel the organization was in the right key markets today and that they were leaning into the others that really made sense. They have a fantastic share in Switzerland, which is one of the better markets in Europe. They have a really nice footprint in Germany and France as well as growing in the right key areas in Asia Pacific, like Australia and Japan. But what was unique about Mathys with DJO was their strengths were really on the anatomic side of the shoulder, and they have a fantastic greater than 30% share in the stimula shoulder, for instance, in Europe. But they were not really a player in the reversal. They have an offering there, but they're not a player, and that's a rapid growing segment in Europe. At the same time, they have a phenomenal hip. I mean if you look at their hip growth, they've really had outsized hip growth for a long period of time. Whereas at the same time, their knee was not really that modern. It's a good knee, like a lot of the knees you see in the marketplace today, 15, 17, 20-year-old knees that are good, but they're not as modern as they could be and addressing the right kinematics and really changing the patient satisfaction. So in my view and in our collective view, Mathys was unique. It had a great brand, a trusted brand that was very focused on innovation for all the right reasons, the Robert Mathys platform, which is a phenomenal acetabular cup platform that now is playing into other anatomies was a unique technology. But in my view, there were technologies that we had like the altivate reverse and the empower knee that could play into that platform globally and really beef up the growth from that mid-single-digit growth where they were to move it to the type of growth platform we wanted. At the same time, it could really help expand, add poor gas on the growth that they already had in some of the really key markets like Australia that are higher margin in Japan. And so just a combination of products without really much cannibalization made sense, where most of the others that I looked at along the way, I felt like there'd be more cannibalization and just, quite frankly, not as much of an advantage.

Great. And Matt, maybe one for you in keeping with the M&A theme here. Overall, in health care, what are the most exciting areas in that space for you? Where do you see Enovis expanding? I know you showed that slide of greatly expansion. Where do you see Mathys going beyond orthopedics over time?

Yes, sure. I mean one of the things we really liked about DJO was the optionality that we saw all kinds of possibilities within the $50 billion worth of orthopedics space that's very attractive. And then we also saw logical opportunities adjacent to that space. And I think what you've seen us do so far is start -- shows the kind of options that we have, and we continue to have others like the ones that we've pursued. And I think the path from here to $2 billion or so is likely to be about organic growth. And more things like what we've been doing for the last couple of years, global expansions, bringing in high-growth product lines, stepping into attractive adjacencies within orthopedics that are logical for us to move into. But then if you think about how we get from $2 billion-plus to $3 billion-plus and how we keep shaping the gross margin profile and the organic growth profile of the business upwards, there are certainly other attractive opportunities to think about. There's larger pieces of orthopedics that we're not in that we could consider something like sports medicine, as an example. There's also logical adjacencies outside of sports medicine, taking our great surgical capabilities, moving them into other high-growth areas of surgery outside of orthopedics as a logical expansion. Or we've got a nice growing position in energy through the LiteCure acquisition and other things we were doing before that. There are certainly attractive energy markets inside of orthopedics. So plenty of possibilities to consider. But in the short to medium term, we've got a great opportunity, organic growth front. We've got a great opportunity to drive our margins up to that 25% segment level, and we've got a great opportunity to do attractive bolt-ons and adjacencies within orthopedics.

Yes. If I can follow-up with Matt, just to touch. I would say, Bernhard, that along with what he said, the unique advantage that we have is that we can take our screens, where we've been and how we've approached it. And we can move into -- we can form for ourselves an addressable market that's very different than just the broader market. And we're large enough to do that. Several orthopedic company in the world today, a lot of opportunity to grow, can step outside of orthopedics as well and to really neat segments. But we can do that by making good strategic choices. [indiscernible] was being encumbered with a lot of legacy components that we would have to grow. And so if you were a start-up doing this, it's kind of hard to get in because the barriers to entry are pretty great. But from the size and scale that we have, we can pick and choose areas that have fantastic growth, fantastic margins and also areas that we are uniquely positioned to serve and really bring something to that market and once again, changed out and have that sustainable growth over time.

Great. Maybe finally, just want to touch on your digital offerings. Specifically, I think, it tells a little bit about your connected health strategy. You've talked about a little bit in your presentation. But what strategic advantages do you have there? How do you see this playing out over time? Just talk a little bit about your connected health offering.

Yes. Bernhard, let me make a quick comment, and then I'm going to ask Brady to get into the details there. One of the things that really excited us about DJO, beyond the things we've already talked about, about the attractive markets and the high-growth surgical, et cetera. The other thing that really excited us and our Board about DJO was the opportunities in workflow and digitization and the opportunities within orthopedics and within the markets where DJO participates and along the continuum of care. And the strategy that Brady and the team were already driving to get after some of those opportunities within the clinics, along the continuum through connected bracing, the opportunity around computer-aided surgery and workflow within surgery, we got really excited that these are markets that are changing and evolving in a way that's going to create opportunities and growth and this is a team and a business that has already got some great momentum and progress there. But Brady, maybe you could talk some more about the specifics.

Yes. What I'd say is, to me, what -- as you think about this, like I said, this kind of fractured journey today where it's not captured in an inpatient environment and it's outpatient will -- that health care provider that the surgeon themselves, as they are owners in the ambulatory surgery environment are a larger player in the outpatient environment. They've always had a responsibility for the patient across the board, but not as much responsibility to really manage and capture that whole journey that's changing. For us, what I saw with our MotionMD platform, which was very specific focus on our bracing business and the orthopedic clinics of all types. It was a simple workflow solution. But for it to work well, we had to have it integrated in the ERP platforms that sit out there in all these orthopedic clinics. Along the way by doing so, there's some of the other changes started to come along. As ASC came in, it became an opportunity for us, just being straightforward about it to add applications to that, and we were positioned to do so. So the OR application, which is a scoring system to determine which patients should be done in an ambulatory outpatient environment versus not, which is, by the way, a very critical decision. It was -- it makes sense for us to drop OR into that. So as we saw that, we started putting together pieces of the journey. Then off of that same backdrop, what we could see is that planning for this patient, it's not just about, "Hey, let's go into the OR and just grab a robot and do a surgery." And that's nothing negative towards that. It's just there are a lot of things that happen preoperatively as well that need to feed into the system. So you're taking -- you're trying to prevent the issues, you're trying to prolong, move out the surgery as much as you possibly can. You've got to manage across that process. Then when it's signed for surgery, you preoperatively plan, you feed that to the right information that's there. And then the bigger challenge that most of our caregiver deal with is postoperatively because that's really moved outside of the inpatient environment as well and having the surgeon, the clinician, the health care provider, have the ability to stay connected with that patient, which is where connected medicine comes from, it's very critical. And what we saw was that we had the ultimate wearable device. So we were already touching the patient across those pieces. And so our ability then to manage each of those 3 parts of the continuum and digitally work with the health care provider to keep them connected to the patient across was right in front of us. And so it's a neat opportunity. We actually will -- as we step into 2022, you'll see us do more there in connected medicine with our bracing and all, and we're excited about where that's going as well as our -- what you'll see us do just in the operative environment that'll be fed by preoperative platforms as well.

Brady and Matt, thank you so much. Thank you for sparing with my questions here. It's a great story. Look forward to talking to you much more in the future, and hope you have a great day at the conference.

Thanks. Exactly, Bernhard.

Thanks, Bernhard.

Thanks, everybody, for joining.

Thank you.