Conmed Corp (CNMD) 2024 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to CONMED’s second quarter Fiscal 2024 Earnings conference call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. (Operator Instructions) Please be advised that today’s conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 CONMED 2024 財年第二季財報電話會議。此時，所有參與者都處於只聽模式。演講者演講結束後，將進行問答環節。（操作員說明）請注意，今天的會議正在錄製中。

Before the conference call begins, let me remind you that during the call, management will be making comments and statements regarding its financial outlook, its plans and objectives. These statements represent the forward-looking statements that involve risks and uncertainties as those terms are defined under the federal securities laws. Investors are cautioned that any such forward-looking statements are not guarantees of future events, performance or results.

在電話會議開始之前，請允許我提醒您，在電話會議期間，管理層將就其財務前景、計劃和目標發表評論和聲明。這些陳述代表前瞻性陳述，涉及風險和不確定性，這些術語是根據聯邦證券法定義的。投資者請注意，任何此類前瞻性陳述均不能保證未來事件、績效或結果。

The company’s actual results may differ materially from its current expectations. Please refer to the risks and other uncertainties disclosed under the forward-looking information in today’s press release as well as the company’s SEC filings for more details on the risks and uncertainties that may cause actual results to differ materially. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call, except as may be required by applicable law.

公司的實際結果可能與其目前預期有重大差異。請參閱今天新聞稿中前瞻性資訊中揭露的風險和其他不確定性以及該公司向 SEC 提交的文件，以了解可能導致實際結果出現重大差異的風險和不確定性的更多詳細資訊。除適用法律要求外，本公司不承擔更新本次電話會議期間可能討論的任何前瞻性陳述的義務。

You'll also hear management refer to non-GAAP or adjusted measurements during this discussion. While these figures are not a substitute for GAAP measurements, management uses these figures to aid and monitoring the company’s ongoing financial performance from quarter-to-quarter and year-to-year on a regular basis, and for benchmarking against other medical technology companies.

在這次討論中，您還將聽到管理階層提到非公認會計準則或調整後的衡量標準。雖然這些數字不能取代 GAAP 衡量標準，但管理層使用這些數字來幫助和定期監控公司每季和每年的持續財務業績，並與其他醫療數據進行基準比較科技公司。

Adjusted net income and adjusted earnings per share measures the income of the company, excluding credits or charges that are considered by the company to be special or outside of its normal ongoing operations. These adjusted items are specified in the reconciliation supporting the company’s earnings releases posted on the company’s website.

調整後淨利和調整後每股盈餘衡量公司的收入，不包括公司認為特殊或正常持續營運以外的信貸或費用。這些調整後的項目在支援公司網站上發布的收益發布的調節中指定。

With these required announcements completed, I will turn the call over to Curt Hartman, CONMED’s Chair of the Board, President and Chief Executive Officer, for opening remarks. Mr. Hartman?

完成這些必要的公告後，我將把電話轉給 CONMED 董事會主席、總裁兼首席執行官科特·哈特曼 (Curt Hartman) 致開幕詞。哈特曼先生？

Thank you, Amy. Good afternoon and thank you for joining us for CONMED’s second quarter 2024 earnings call. With me on the call is Todd Garner, Executive Vice President and Chief Financial Officer; and Pat Beyer, our Chief Operating Officer. Today, we will share with you our second quarter results and the overall outlook for our business. We will then open the call to your questions.

謝謝你，艾米。下午好，感謝您參加 CONMED 2024 年第二季財報電話會議。與我一起參加電話會議的是執行副總裁兼財務長 Todd Garner；以及我們的營運長 Pat Beyer。今天，我們將與您分享我們第二季的業績以及我們業務的整體前景。然後我們將開始電話詢問您的問題。

I’ll start by reviewing our second quarter results. Total sales for the quarter were $332 million, representing a year-over-year increase of 4.5% as reported and 5.2% in constant currency. This performance delivered a record high quarterly sales result and was within our range of expectations.

我首先回顧我們第二季的業績。該季度總銷售額為 3.32 億美元，按報告數據年增 4.5%，以固定匯率計算年增 5.2%。這項業績創造了創紀錄的季度銷售業績，並且在我們的預期範圍內。

From an earnings perspective, during the second quarter, our GAAP net income totaled $30 million. This compares to net income of $13.7 million in the second quarter of 2023. Excluding special items that affected comparability, our adjusted net income of $30.6 million increased 17.2% year-over-year, and our adjusted diluted net earnings per share of $0.98 increased 18.1% year-over-year.

從獲利角度來看，第二季我們的 GAAP 淨利潤總計 3,000 萬美元。相比之下，2023 年第二季的淨利潤為 1,370 萬美元。排除影響可比性的特殊項目，我們的調整後淨利潤為 3,060 萬美元，年增 17.2%，調整後攤薄每股淨利潤為 0.98 美元，年增 18.1%。

Overall, we had several areas of strong financial performance in the quarter to include gross margin, adjusted EPS and our leverage ratio, which Todd will cover.

總體而言，本季我們在幾個領域的財務業績表現強勁，包括毛利率、調整後每股盈餘和槓桿率，托德將涵蓋這些領域。

Jumping into the key product categories, on the Orthopedic side of the business, we did not clear the supply constraints to the level we had expected. While the absolute dollar level of back order is back to normal, the current mix is far more weighted to our core single use disposables in implant categories, and this by nature creates inefficiencies for our sales teams. Those missed opportunities resulted in lost sales as customers have alternatives in many of these categories.

進入關鍵產品類別，在骨科業務方面，我們沒有將供應限制清除到我們預期的水平。雖然延期交貨的絕對美元水準恢復正常，但目前的組合對我們植入物類別中的核心一次性一次性用品的權重要大得多，這本質上會導致我們的銷售團隊效率低下。這些錯失的機會導致了銷售損失，因為客戶在許多此類類別中都有其他選擇。

Further, this slows our team’s ability to be fully on offense going after new customers. This leaves us behind our initial plan entering Q3 and requires us to lower guidance for the remainder of the year. We understand this performance is frustrating for both our customers and our investors.

此外，這也降低了我們團隊全力進攻新客戶的能力。這使得我們落後於進入第三季的最初計劃，並要求我們降低今年剩餘時間的指導。我們知道這種表現讓我們的客戶和投資者都感到沮喪。

On the general surgery side of the business, demand remained healthy across the portfolio. Regarding AirSeal, while it is still very early in the rollout of the new surgical robot, I wanted to provide you with some insight into what we are seeing after its first full quarter in the market. First, in the quarter, our US AirSeal capital unit sales grew faster than they did in the prior year quarter. We are seeing no sales slowdown on AirSeal capital. Second, we understand that the first locations to receive the new robot were likely a targeted list of key customers. We also understand these locations are expected to commit to a certain number of procedures using the full feature set of the robot before they make any adjustments based on their preference.

在一般外科業務方面，整個投資組合的需求保持健康。關於 AirSeal，雖然新型手術機器人的推出還處於早期階段，但我想向您提供一些關於我們在市場第一個完整季度後所看到的情況的見解。首先，在本季度，我們的美國 AirSeal 資本單位銷售額成長速度快於去年同期。我們沒有看到 AirSeal 資本的銷售放緩。其次，我們了解到，首批接收新機器人的地點可能是關鍵客戶的目標名單。我們也了解，這些地點在根據自己的偏好進行任何調整之前，預計會使用機器人的完整功能集執行一定數量的程序。

Against that backdrop in this very early window, our initial surveillance shows that the percentage of surgeons that returned to AirSeal after their initial committed number of procedures on the new robot appears to be consistent with the percentage of surgeons that chose AirSeal on the previous generation. This shows that clinical precision insufflation at low pressure remains a user preference.

在此背景下，在這個非常早期的窗口中，我們的初步監測顯示，在新機器人上完成初始手術後返回 AirSeal 的外科醫生比例似乎與在上一代機器人上選擇 AirSeal 的外科醫生比例一致。這表明低壓下的臨床精確吹氣仍然是使用者的偏好。

Third, AirSeal is used in roughly 1/3 of robotic surgical procedures today, and those [ph] surgeries are concentrated in the longer, more complex procedures such as prostatectomy, nephrectomy, hysterectomy and bariatric surgery.

第三，現今約 1/3 的機器人外科手術使用了 AirSeal，這些手術集中在較長、較複雜的手術中，例如前列腺切除術、腎切除術、子宮切除術和減肥手術。

These procedures typically stress standard insufflation due to leaks, smoke evacuation, suction requirements and large cavity volume demand. We believeThank you, Curt. All sales growth numbers I reference today will be given in constant currency. The reconciliation to GAAP numbers is included in our press release. As usual, we have included an investor deck on our website that summarizes the results of the quarter and our updated guidance.

由於洩漏、排煙、抽吸要求和大空腔體積需求，這些程序通常強調標準充氣。我們相信謝謝你，柯特。我今天引用的所有銷售成長數字都將以固定匯率給出。我們的新聞稿中包含了與 GAAP 數據的對帳。像往常一樣，我們在網站上提供了投資者資料，總結了本季的業績和我們更新的指導。

For the second quarter of 2024, our total sales increased 5.2%. For Q2, our sales in the U.S. increased 6.1% versus the prior year quarter and our international sales grew 4.0%. Worldwide orthopedics declined 0.1% in the second quarter.

2024 年第二季度，我們的總銷售額成長了 5.2%。第二季度，我們在美國的銷售額比去年同期成長了 6.1%，國際銷售額成長了 4.0%。第二季全球骨科業務下降 ​​0.1%。

In the U.S., orthopedic sales declined 0.4% and internationally orthopedic sales grew 0.1%. We’ve talked about our supply chain issues in our sports medicine and foot and ankle businesses, and we expected Q2 to be a transition back to offense.

在美國，骨科銷售額下降 0.4%，國際骨科銷售額成長 0.1%。我們已經討論了運動醫學以及足部和腳踝業務的供應鏈問題，我們預計第二季將過渡到進攻狀態。

As Curt said, that transition is taking longer than we expected.

正如柯特所說，這種轉變所花費的時間比我們預期的要長。

Total worldwide general surgery revenue increased 9.4% in the quarter. U.S. general surgery revenue grew 8.9% while internationally general surgery revenue increased 10.5%. So the general surgery side of the business continues to be healthy and perform in line with historical trends. Consistent with the data that Curt provided on AirSeal, we continue to see very good global growth in that product line.

本季全球普外科總收入成長 9.4%。美國一般外科收入成長 8.9%，而國際普外科收入成長 10.5%。因此，一般外科業務持續健康發展，並符合歷史趨勢。與 Curt 提供的 AirSeal 數據一致，我們繼續看到該產品線的全球成長非常良好。

Now let's move to the expense side of the income statement. We will discuss expenses and profitability in the second quarter, excluding special items, which include charges for acquisitions and contingent consideration, termination of distributor agreements, legal matters, software implementation costs, amortization of intangible assets and amortization of deferred financing fees net of tax. Adjusted gross margin for the second quarter was 55.3%, an increase of 90 basis points compared to the prior year quarter.

現在讓我們轉到損益表的費用部分。我們將討論第二季度的費用和盈利能力，不包括特殊項目，其中包括收購費用和或有對價、經銷商協議終止、法律事務、軟體實施成本、無形資產攤銷和遞延融資費用攤銷（稅後）。第二季調整後毛利率為55.3%，較去年同期成長90個基點。

Research and development expense for the second quarter was 4.2% of sales, 10 basis points lower than the prior year quarter. Second quarter adjusted SG&A expenses were 36.9% of sales, 50 basis points lower than the prior year quarter. On an adjusted basis, interest expense was $8.2 million in the second quarter. The adjusted effective tax rate in Q2 was 24.0%. Second quarter GAAP net income was $30.0 million. This compares to GAAP net income of $13.7 million in Q2 of 2023. GAAP earnings per diluted share were $0.96 this quarter compared to $0.43 a year ago.

第二季研發費用佔銷售額的4.2%，比去年同期下降10個基點。第二季調整後的銷售、管理及行政費用佔銷售額的 36.9%，比去年同期下降 50 個基點。經調整後，第二季利息支出為 820 萬美元。第二季調整後的有效稅率為24.0%。第二季 GAAP 淨利為 3,000 萬美元。相比之下，2023 年第二季 GAAP 淨利潤為 1,370 萬美元。本季 GAAP 攤薄每股收益為 0.96 美元，去年同期為 0.43 美元。

Excluding the impact of special items discussed earlier in the second quarter, we reported adjusted net income of $30.6 million, an increase of 17.2% compared to the second quarter of 2023. Our Q2 adjusted diluted net earnings per share were $0.98, an increase of 18.1% compared to the prior year quarter.

排除第二季早些時候討論的特殊項目的影響，我們公佈的調整後淨利潤為 3060 萬美元，較 2023 年第二季度增長 17.2%。第二季調整後攤薄每股淨利為 0.98 美元，比去年同期成長 18.1%。

Turning to the balance sheet, our cash balance at the end of the quarter was $28.9 million compared to $33.9 million as of March 31. Accounts receivable days as of June 30 were 65, compared to 70 at the end of March and 65 a year ago. Inventory days at quarter end were 196, compared to 207 in March and 200 a year ago.

轉向資產負債表，本季末我們的現金餘額為 2,890 萬美元，而截至 3 月 31 日的現金餘額為 3,390 萬美元。截至 6 月 30 日，應收帳款天數為 65 天，而 3 月底為 70 天，一年前為 65 天。季末庫存天數為 196 天，而 3 月為 207 天，一年前為 200 天。

Long term debt at the end of the quarter was $965.2 million versus $990.1 million as of March 31. Our leverage ratio on June 30th was 3.8 times, which was better than we expected. So all balance sheet metrics moved in the right direction in the quarter and were improving in our working capital controls. Cash flow provided from operations in the quarter was $43.3 million, compared to $26.7 million in the second quarter of 2023. Capital expenditures in the second quarter were $3.6 million, compared to $4.5 million a year ago.

本季末的長期債務為 9.652 億美元，而截至 3 月 31 日的長期債務為 9.901 億美元。6月30日我們的槓桿率為3.8倍，優於我們的預期。因此，本季所有資產負債表指標都朝著正確的方向發展，我們的營運資本控制有所改善。本季營運提供的現金流為 4,330 萬美元，而 2023 年第二季為 2,670 萬美元。

Now let's turn to financial guidance. The revenue in the first half of the year is very close to what we expected at the beginning of the year. However, we expected to have better improvement in our global orthopedics business at this point. We knew we had supply challenges to work through early in the year and we expected our teams to be fully back on offense by July 1st. While we have made significant improvements with the supply chain and our backorder is back to pre-pandemic levels, we remain hand to mouth on too many items, which is impeding our ability to be fully back on offense. Of course, this is a central focus for us and we believe that we should be in a much stronger position by the end of the year.

現在讓我們轉向財務指引。上半年的收入與我們年初的預期非常接近。然而，我們預計目前我們的全球骨科業務將會有更好的改善。我們知道今年年初我們面臨供應方面的挑戰，我們預計我們的球隊將在 7 月 1 日之前完全恢復進攻。雖然我們在供應鏈方面取得了重大改進，並且我們的缺貨訂單已恢復到大流行前的水平，但我們在太多商品上仍然勉強維持，這阻礙了我們完全恢復進攻的能力。當然，這是我們的核心關注點，我們相信到今年年底我們應該處於更有利的地位。

In Q1 we grew 5.9% and in Q2 we grew 5.2%, both against the strong growth rates we saw throughout 2023. So we've grown between 5% and 6% constant currency in the first half of the year. We think it's prudent to expect that same level of growth in the second half of the year, with Q3 on the lower part of that range. We project about 50 basis points of currency headwind in the third quarter and immaterial FX in Q4. That would put our full year reported revenue guidance between $1.305 billion and $1.315 billion.

第一季我們成長了5.9%，第二季我們成長了5.2%，這兩個季度都與我們在2023 年全年看到的強勁成長率形成鮮明對比。半年的成長在5% 到6% 之間。我們認為，謹慎地預計下半年將出現同樣的成長水平，而第三季則處於該範圍的較低水平。我們預期第三季的貨幣逆風約為 50 個基點，第四季的外匯影響不大。這將使我們報告的全年收入指引在 13.05 億美元至 13.15 億美元之間。

Our focus will be to strengthen our operational foundation over the next six months, increase the confidence of our sales forces, particularly in orthopedics, and be back to full offense by the start of 2025. With orthopedics being slower in the back half of the year than we expected, that has an impact on gross margins. For the first six months of 2024, we improved gross margins by 130 basis points compared to 2023, consistent with our initial guidance for the year of improvement between 100 and 150 basis points, and we continue to project improving margins sequentially.

我們的重點將是在未來六個月內加強我們的營運基礎，增強我們銷售人員的信心，特別是在骨科領域，並在 2025 年初恢復全面進攻。的預期，這對毛利率產生了影響。與2023 年相比，2024 年前6 個月，我們的毛利率提高了130 個基點，這與我們對當年毛利率提高100 至150 個基點的初步指導一致，並且我們繼續預計利潤率將繼續提高。

We expect Q3 to be in the mid-56% range and Q4 to be around 57%. That would put us around 100 basis point improvement on the year with the mix engine still very positive and driving us northward. Again our focus over the next six months will be to improve our internal operations and we believe that will allow us to continue to improve margins at a higher pace than the vast majority of MedTech. We've included in our IR deck how this revised guidance impacts our original 2024 guidance for SG&A, interest expense and the tax rate.

我們預計第三季將在 56% 的中間範圍內，第四季將在 57% 左右。這將使我們比今年提高約 100 個基點，混合引擎仍然非常積極並推動我們向北前進。同樣，我們未來六個月的重點將是改善我們的內部運營，我們相信這將使我們能夠繼續以比絕大多數醫療科技公司更高的速度提高利潤率。我們已在 IR 資料中介紹了修訂後的指導意見如何影響我們最初的 2024 年銷售管理、行政管理、利息支出和稅率指導意見。

We will continue to invest in the business to improve our revenue growth, but grow expenses slower than revenue. We project EPS growth to be between 9% and 11% in Q3 and between 13% and 18% in Q4. That would put our new full year guidance for adjusted EPS between $3.95 and $4.02, representing growth between 14.5% and 16.5%, still much better than the vast majority of MedTech.

我們將繼續投資該業務以提高收入成長，但支出成長速度慢於收入成長。我們預計第三季每股收益成長率將在 9% 至 11% 之間，第四季將在 13% 至 18% 之間。這將使我們調整後每股收益的新全年指引在 3.95 美元至 4.02 美元之間，成長在 14.5% 至 16.5% 之間，仍然比絕大多數醫療科技公司好得多。

While we're disappointed by the need to reset our guidance lower than our initial expectations on the year, we believe these numbers are responsible and demonstrate a healthy growth company on the top and bottom lines with upside in the future. We are focused on executing and winning in the marketplace with our improving engine.

雖然我們對需要將今年的指引重新設定為低於我們最初的預期感到失望，但我們相信這些數字是負責任的，並表明公司在營收和利潤上都健康成長，未來還有上升空間。我們專注於透過不斷改進的引擎來執行並贏得市場。

And with that we'd like to open the call to your questions and turn it back to Amy., and our early surveillance confirms that based on patient outcomes and numerous published clinical studies that the procedures are most likely to use AirSeal today will be the same procedures that use AirSeal with the new robot.

因此，我們希望針對您的問題打開電話，並將其轉回給艾米。機器人上使用AirSeal 的程式相同。

I will now turn the call over to Todd, who will provide a more detailed analysis of our Q2 financial performance and take you through our updated full year guidance. Todd?

我現在將把電話轉給托德，他將對我們第二季度的財務業績進行更詳細的分析，並帶您了解我們更新的全年指導。托德？

Thank you, Kurt. All sales growth numbers I reference today will be given in constant currency. The reconciliation to GAAP numbers is included in our press release. As usual, we have included an investor deck on our website that summarizes the results of the quarter and our updated guidance.

謝謝你，庫爾特。我今天引用的所有銷售成長數字都將以固定匯率給出。我們的新聞稿中包含了與 GAAP 數據的對帳。像往常一樣，我們在網站上提供了投資者資料，總結了本季的業績和我們更新的指導。

For the second quarter of 2024 our total sales increased 5.2%. For Q2, our sales in the US increased 6.1% versus the prior year quarter and our international sales grew 4.0%. Worldwide Orthopedics declined 0.1% in the second quarter. In the US, orthopaedic sales declined 0.4% and internationally, orthopedic sales grew 0.1%.

2024 年第二季度，我們的總銷售額成長了 5.2%。第二季度，我們在美國的銷售額比去年同期成長了 6.1%，國際銷售額成長了 4.0%。第二季全球骨科業務下降 ​​0.1%。在美國，骨科銷售額下降 0.4%，在國際上，骨科銷售額成長 0.1%。

We've talked about our supply chain issues in our sports medicine and foot and ankle businesses, and we expected Q2 to be a transition back to offense. As Kurt said, that transition is taking longer than we expected. Total worldwide general surgery revenue increased 9.4% in the quarter. US general surgery revenue grew 8.9%, while internationally general surgery revenue increased 10.5%. So the general surgery side of the business continues to be healthy and perform in line with historical trends consistent with the data that Kurt provided on AirSeal, we continue to see very good global growth in that product line.

我們已經討論了運動醫學以及足部和腳踝業務的供應鏈問題，我們預計第二季將過渡到進攻。正如庫爾特所說，這種轉變所花費的時間比我們預期的要長。本季全球普外科總收入成長 9.4%。美國一般外科收入成長8.9%，而國際普外科收入成長10.5%。因此，一般外科業務持續保持健康發展，並符合歷史趨勢，與 Kurt 提供的 AirSeal 數據一致，我們繼續看到該產品線的全球成長非常好。

Now let's move to the expense side of the income statement, we will discuss expenses and profitability in the second quarter, excluding special items, which include charges for acquisitions and contingent consideration, termination of distributor agreements, legal matters, software implementation costs, amortization of intangible assets and amortization of deferred financing fees net of tax.

現在讓我們轉向損益表的費用部分，我們將討論第二季度的費用和盈利能力，不包括特殊項目，其中包括收購費用和或有代價、終止分銷商協議、法律事務、軟體實施成本、攤銷無形資產及遞延融資費用的稅後攤提。

Adjusted gross margin for the second quarter was 55.3%, an increase of 90 basis points compared to the prior year quarter. Research and development expense for the second quarter was 4.2% of sales, 10 basis points lower than the prior year quarter. Second quarter adjusted SG&A expenses were 36.9% of sales, 50 basis points lower than the prior year quarter.

第二季調整後毛利率為55.3%，較去年同期成長90個基點。第二季研發費用佔銷售額的4.2%，比去年同期下降10個基點。第二季調整後的銷售、管理及行政費用佔銷售額的 36.9%，比去年同期下降 50 個基點。

On an adjusted basis, interest expense was $8.2 million in the second quarter and the adjusted effective tax rate in Q2 was 24.0%. Second quarter GAAP net income was $30.0 million. This compares to GAAP net income of $13.7 million in Q2 of 2023. Gaap earnings per diluted share were $0.96 this quarter compared to $0.43 a year ago.

經調整後，第二季利息支出為 820 萬美元，第二季調整後有效稅率為 24.0%。第二季 GAAP 淨利為 3,000 萬美元。相比之下，2023 年第二季的 GAAP 淨利潤為 1,370 萬美元。

Excluding the impact of special items discussed earlier in the second quarter, we reported adjusted net income of $30.6 million, an increase of 17.2% compared to the second quarter of 2023. Our Q2 adjusted diluted net earnings per share were $0.98, an increase of 18.1% compared to the prior year quarter.

排除第二季早些時候討論的特殊項目的影響，我們公佈的調整後淨利潤為3060 萬美元，較2023 年第二季度增長17.2%。成長18.1%與去年同期相比的百分比。

Turning to the balance sheet. Our cash balance at the end of the quarter was $28.9 million compared to $33.9 million as of March 31st. Accounts receivable days as of June 30th were 65 compared to 70 at the end of March and 65 a year ago. Inventory days at quarter end were 196 compared to 207 in March and 200 a year ago. Long-term debt at the end of the quarter was $965.2 million versus $990.1 million as of March 31st.

轉向資產負債表。截至 3 月 31 日，我們的現金餘額為 3,390 萬美元，而本季末的現金餘額為 2,890 萬美元。截至 6 月 30 日，應收帳款天數為 65 天，而 3 月底為 70 天，一年前為 65 天。季末庫存天數為 196 天，而 3 月為 207 天，去年同期為 200 天。本季末的長期債務為 9.652 億美元，而截至 3 月 31 日的長期債務為 9.901 億美元。

Our leverage ratio on June 30th was 3.8 times, which was better than we expected. So all balance sheet metrics moved in the right direction in the quarter, and we're improving in our working capital controls. Cash flow provided from operations in the quarter was $43.3 million compared to $26.7 million in the second quarter of 2023. Capital expenditures in the second quarter were $3.6 million compared to $4.5 million a year ago.

6月30日我們的槓桿率為3.8倍，優於我們的預期。因此，本季所有資產負債表指標都朝著正確的方向發展，我們正在改善營運資本控制。本季營運提供的現金流為 4,330 萬美元，而 2023 年第二季為 2,670 萬美元。第二季的資本支出為 360 萬美元，而去年同期為 450 萬美元。

Now let's turn to financial guidance, the revenue in the first half of the year is very close to what we expected at the beginning of the year. However, we expected to have better improvement in our global orthopedics business at this point. We knew that we had supply challenges to work through early in the year, and we expected our teams to be fully back on offense by July first, while we have made significant improvements with the supply chain and our backorder is back to pre-pandemic levels, we remain hand-to-mouth on too many items, which is impeding our ability to be fully back on offense. Of course, this is a central focus for us and we believe that we should be in a much stronger position by the end of the year.

現在我們轉向財務指引，上半年的收入非常接近我們年初的預期。然而，我們預計目前我們的全球骨科業務將會有更好的改善。我們知道我們在今年年初面臨供應挑戰，我們預計我們的團隊將在7 月1 日之前完全恢復進攻，同時我們在供應鏈方面取得了重大改進，我們的缺貨訂單也恢復到了大流行前的水平，我們在太多的項目上仍然勉強糊口，這阻礙了我們完全恢復進攻的能力。當然，這是我們的核心關注點，我們相信到今年年底我們應該處於更有利的地位。

In Q1, we grew 5.9%, and in Q2 we grew 5.2%, both against the strong growth rates we saw throughout 2023. So we've grown between 5% and 6% constant currency in the first half of the year. We think it's prudent to expect that same level of growth in the second half of the year with Q3 on the lower part of that range. We project about 50 basis points of currency headwind in the third quarter and immaterial effects in Q4 that would put our full year reported revenue guidance between $1.305 billion and $1.315 billion.

第一季的成長率為 5.9%，第二季的成長率為 5.2%，兩者都與 2023 年全年的強勁成長率形成鮮明對比。因此，今年上半年我們的固定匯率成長了 5% 到 6%。我們認為，謹慎地預計今年下半年將出現同樣的成長水平，而第三季將處於該範圍的較低水平。我們預計第三季的貨幣逆風約為 50 個基點，而第四季的影響並不重大，這將使我們報告的全年營收指引在 13.05 億美元至 13.15 億美元之間。

Our focus will be to strengthen our operational foundation over the next six months, increased the confidence of our sales forces, particularly in orthopedics and be back to full offense by the start of 2025 With orthopedics being slower in the back half of the year than we expected that has an impact on gross margins. For the first six months of 2024. We improved gross margins by 130 basis points compared to 2023, consistent with our initial guidance for the year of improvement between 100 basis points and 150 basis points, and we continue to project improving margins. Sequentially, we expect Q3 to be in the mid 56% range and Q4 to be around 57%. That would put us around 100 basis point improvement on a year with the mix engine still very positive and driving us northward.

我們的重點將是在未來六個月內加強我們的營運基礎，增強我們銷售人員的信心，特別是在骨科領域，並在2025 年初恢復全面進攻，因為骨科領域在今年下半年的發展速度比我們要慢預計這會對毛利率產生影響。2024 年前六個月。與 2023 年相比，我們的毛利率提高了 130 個基點，這與我們對當年提高 100 到 150 個基點之間的初步指導一致，並且我們繼續預計利潤率將提高。接下來，我們預計第三季將在 56% 左右，第四季將在 57% 左右。這將使我們在一年內提高約 100 個基點，同時混合引擎仍然非常積極並推動我們向北前進。

Again, our focus over the next six months will be to improve our internal operations, and we believe that will allow us to continue to improve margins at a higher pace and the vast majority of medtech. We've included in our IR deck how this revised guidance impacts our original 2024 guidance for SG&A, interest expense and the tax rate.

同樣，我們未來六個月的重點將是改善我們的內部運營，我們相信這將使我們能夠繼續以更快的速度提高絕大多數醫療技術的利潤率。我們已將修訂後的指南如何影響我們原來的 2024 年 SG&A、利息支出和稅率指南納入我們的投資者關係報告中。

We will continue to invest in the business to improve our revenue growth, but grow expenses slower than revenue. We project EPS growth to be between 9% and 11% in Q3 and between 13% and 18% in Q4. That would put our new full year guidance for adjusted EPS between $3.95 and $4.2, representing growth between 14.5% and 16.5% still much better than the vast majority of medtech.

我們將繼續投資該業務以提高收入成長，但支出成長速度慢於收入成長。我們預計第三季每股收益成長率將在 9% 至 11% 之間，第四季將在 13% 至 18% 之間。這將使我們調整後每股收益的新全年指引在 3.95 美元至 4.2 美元之間，即 14.5% 至 16.5% 之間的增長，仍然比絕大多數醫療技術公司好得多。

While, we're disappointed by the need to reset our guidance lower than our initial expectations on the year, we believe these numbers are responsible and demonstrate a healthy growth company on the top and bottom lines with upside in the future. We are focused on executing and winning in the marketplace with our improving engine and with that, we'd like to open the call to your questions and turn it back to Amy.

雖然我們對需要將今年的指引重新設定為低於我們最初的預期感到失望，但我們相信這些數字是負責任的，並表明公司在營收和利潤上都健康成長，未來還有上升空間。我們專注於透過我們不斷改進的引擎來執行和贏得市場，因此，我們希望打開您提出的問題的電話並將其轉回給艾米。

Thank you. (Operator Instructions). Rick Wise, Stifel.

謝謝。（操作員說明）。瑞克懷斯，史蒂菲爾。

Good afternoon to you both. First, I appreciate the good things about the quarter and the first half frustrating to hear about the second half. But can you help us better understand exactly what's happening with the supply chain, what specifically has not ramped, which specific products, and help us, just in as concrete terms as possible, understand what you can do, what you are doing to get it back on track and what's taking so long, frankly?

你們倆下午好。首先，我很欣賞本季的好消息，而上半年的情況讓我對下半年的情況感到沮喪。但是，您能否幫助我們更好地了解供應鏈中發生的情況，具體哪些內容尚未增加，哪些特定產品，並幫助我們盡可能具體地了解您可以做什麼，您正在做什麼來獲得它回到正軌，坦白說，什麼花了這麼長時間？

Yes. Rick, a lot to unpackage in that question. There's a number of things. Let me start with the products as we said in the script, key implantables and orthopedics and that includes not only sports medicine, key markets of knee and shoulder, but also in the foot and ankle business. Now, I would say with that comment, foot and ankle exit the midpoint of the year in much better shape than the knee and shoulder implant categories. That's where we're still struggling to catch up. Part of the challenge is variability and surprise in our supplier base.

是的。里克，這個問題有很多東西要解開。有很多事情。讓我從我們在腳本中所說的產品開始，關鍵的植入物和骨科，這不僅包括運動醫學、膝蓋和肩部的主要市場，還包括足部和腳踝業務。現在，我想說的是，腳和腳踝在今年中期退出時的形狀比膝蓋和肩部植入物類別要好得多。這就是我們仍在努力追趕的地方。部分挑戰是我們供應商群體的變化和意外。

As an example, we've had seven suppliers unexpectedly close their doors on us this year. And not just us, but everybody they were serving. And this is not a business where you can just rapidly pick up things and start producing tomorrow night after they close tonight. It takes time and validation and qualification, and it only takes one component to put a product on a supply constraint. And so those are the type of things we're dealing with. We've had other individualized issues, machine downtimes that that crimp supply.

舉個例子，今年有七家供應商意外地對我們關門了。不只是我們，還有他們所服務的每個人。這不是一個你可以快速拿起東西並在今晚關門後明天晚上開始生產的行業。這需要時間、驗證和鑑定，並且只需要一個組件就可以使產品受到供應限制。這些就是我們正在處理的事情類型。我們也遇到其他個別問題，例如機器停機導致供應不足。

We've had material availability issues. So it's not one thing I would point to that is slowing everything down. It's been a host of issues. And, the teams in our manufacturing sites are very dedicated and focused and working diligently to find alternate suppliers, to qualify those alternate suppliers, to get a product availability in stock to really focus on the key items that our sales teams and customers are asking for. And everybody's frustrated. I think we understand that clearly.

我們遇到了材料可用性問題。所以我要指出的並不是一件事會減慢一切。這是一系列問題。而且，我們製造工廠的團隊非常敬業、專注，並努力尋找替代供應商，驗證這些替代供應商的資格，獲得庫存產品，真正專注於我們的銷售團隊和客戶要求的關鍵產品。每個人都很沮喪。我想我們很清楚這一點。

Right. And just to follow up, you gave some very detailed very clear guidance, Todd, and just thinking, just, I feel like if I get the third quarter right, I'm going to be able to get to the fourth quarter in the year. Just you're implying operating margins step up, I think, 70 bps or so sequentially. But my rough initial math here, and maybe I'm just way off, you'll help me, is third quarter sales maybe in the, whatever, 319 , 320 kind of area, and EPS at $0.99 based on just my rough back of the envelope hearing your comments. Does that sound like the place that you'd hope people would be?

正確的。為了跟進，托德，你給了一些非常詳細、非常明確的指導，我只是想，如果我第三季做得好，我將能夠進入今年第四季。我認為，您只是在暗示營業利潤率將連續上升 70 個基點左右。但我在這裡粗略地初步計算，也許我還差得很遠，你會幫助我，第三季的銷售額可能在 319 、 320 之類的區域，每股收益為 0.99 美元，基於我的粗略數據聽取您意見的信封。這聽起來像您希望人們待的地方嗎？

Yes. I'm going to stick to my disclosure, Rick, if you don't mind. Low 5% growth constant currency with 50 basis points of FX headwind in Q3, and then we said 9% to 11% growth in EPS.

是的。瑞克，如果你不介意的話，我會堅持我的披露。匯率不變，成長率低至 5%，第三季外匯逆風有 50 個基點，然後我們表示每股收益成長 9% 至 11%。

Robbie Marcus, JPMorgan.

羅比馬庫斯，摩根大通。

Okay. Thanks for taking the questions. Appreciate it. Two for me. First, Todd, when we came in, I remember we met at the J.P. Morgan conference in January this year, and at that point the elevated margin expansion targets for 2024 and 2025 were still on the table. You've clearly had supply issues this year. Are those margin targets gone at this point? Are they still feasible to get back to at some point in the future, or have there been more permanent ships in the business that take away that type of expansion?

好的。感謝您提出問題。欣賞它。給我兩個。首先，托德，當我們進來時，我記得我們在今年 1 月的摩根大通會議上會面，當時 2024 年和 2025 年提高的利潤率擴張目標仍在討論中。今年顯然遇到了供應問題。這些利潤目標現在已經消失了嗎？它們在未來的某個時候是否仍然可行，或者業務中是否有更永久的船隻會消除這種類型的擴張？

Great question, Robbie. Yes, we're definitely on the same track right, as far as improvements, but this is a speed bump that's going to delay us getting there. So back in the fall of 2022, we put a three-year kind of long range plan out there that would get us around 60%, we said at the end of 2025.

好問題，羅比。是的，就改進而言，我們肯定處於同一條軌道上，但這是一個減速帶，會延遲我們到達那裡。因此，早在 2022 年秋天，我們就制定了一項為期三年的長期計劃，我們在 2025 年底表示，該計劃將使我們的目標實現 60% 左右。

So now what I just said was we're going to be around 57% at the end of 2014. So in order to get to 60, I'd have to improve 300 basis points in that 12-month period, while that's not impossible, I don't think that's likely, right.

所以我剛才說的是，到 2014 年底我們將達到 57% 左右。因此，為了達到 60，我必須在 12 個月內提高 300 個基點，雖然這並非不可能，但我認為這不太可能，對吧。

So I think we're likely going to be short of what we said in the fall of 2022 for the end of 2025. But we still are enjoying about 100 basis points of tailwind from mixed. And, so we still see that mix tailwind and so it's just a matter of when we get there and it's going to be take a little longer than we thought a couple of years ago. But the margin improvement story I still think is one of the best in MedTech and it does continue here.

因此，我認為到 2025 年底，我們很可能達不到 2022 年秋季所說的目標。但我們仍然享受著混合動力帶來的大約 100 個基點的推動力。而且，我們仍然看到混合順風，所以這只是我們何時到達那裡的問題，而且它需要的時間比我們幾年前想像的要長一些。但我仍然認為利潤率改善的故事是醫療科技領域最好的故事之一，而且它確實在這裡繼續存在。

Got it. Okay. Then, maybe just to follow up on Rick's question, last year was the warehouse software issue. This year has been supply issues. Before that, I believe there, a couple of years ago it was a sales force expansion. At what point, do you need to maybe broaden the controls at the company and review and overhaul some of the quality issues and processes in place here. For a company your size, I'm surprised there are so many disruptive issues that happen. Just wondering if you think about that and how we should think about any maybe layered expenses moving forward to implement better quality controls? Thanks.

知道了。好的。然後，也許只是為了跟進 Rick 的問題，去年是倉庫軟體問題。今年一直是供應問題。在此之前，我相信幾年前是銷售團隊的擴張。在什麼時候，您是否需要擴大公司的控制範圍，並審查和檢修這裡的一些品質問題和流程。對於像您這樣規模的公司，我很驚訝會發生如此多的破壞性問題。只是想知道您是否考慮過這一點以及我們應該如何考慮任何可能的分層費用以實施更好的品質控制？謝謝。

It's a good question, Robbie. And I think as you walk through those topics, in 2021, we did a sales force expansion because the markets were recovering from COVID and as it turned out, there were two other iterations of COVID that kicked in after that sales force expansion. So it made it look as though our sales force expansion was mistimed. And I think nobody at that point in time could predict the variance of COVID and when they were going to or not hit. Warehouse issue was fourth quarter, 2022. That was an absolute execution issue on our part.

這是個好問題，羅比。我認為，當您瀏覽這些主題時，我們在 2021 年進行了銷售隊伍擴張，因為市場正在從新冠疫情中復蘇，而事實證明，在銷售隊伍擴張之後，又出現了另外兩次新冠疫情迭代。因此，這讓人覺得我們的銷售團隊擴張時機不合時宜。我認為當時沒有人能夠預測新冠病毒的變化以及何時會發生或不會發生它們。倉庫問題是 2022 年第四季。對我們來說，這絕對是一個執行問題。

Proud of the team, the way we remediated it, but nonetheless, it was a disruption, disruption to customers, disruption to our financial performance. And we have been dealing since the third quarter of last year with supply chain challenges from our supply base and from our internal issues. As companies scale, you do put more systems, more expense, more infrastructure in place, people, both people and systems around that and controls. I think we've been doing that appropriately as we look at areas that we believe need investment. I think we've been diligent with doing that.

為我們的團隊和我們修復問題的方式感到自豪，但儘管如此，這仍然是一種破壞，對客戶的破壞，對我們財務表現的破壞。自去年第三季以來，我們一直在應對來自供應基地和內部問題的供應鏈挑戰。隨著公司規模的擴大，你確實會投入更多的系統、更多的費用、更多的基礎設施、人員，以及圍繞這些系統和控制的人員和系統。我認為，當我們研究我們認為需要投資的領域時，我們一直在適當地這樣做。我認為我們一直在努力做到這一點。

Certainly worse, frustrated by these hiccups, by these missteps as anybody is. Our teams are frustrated and we frustrated, as I said in my script, customers and investors. And that that's very, very challenging to deal with. And we are all committed to solving and remediating and getting these things behind us. Is there something systemic we need to do? We challenge ourselves every day with those questions, and I think we're doing the right things.

當然更糟的是，就像任何人一樣，因為這些小問題、這些失誤而感到沮喪。正如我在劇本中所說，我們的團隊和我們的客戶和投資者都感到沮喪。這是非常非常具有挑戰性的。我們都致力於解決和補救並將這些問題拋在腦後。我們需要做一些系統性的事情嗎？我們每天都用這些問題挑戰自己，我認為我們正在做正確的事。

Vik Chopra, Wells Fargo

維克喬普拉，富國銀行

Hello, this is Dino Weinstock on for Vik Chopra. One question, I guess, further on the supply chain challenges. What kind of confidence do you have that this won't bleed into 2025? And do you have any expected timeline when you expect to fully recover? Thank you.

大家好，我是維克喬普拉 (Vik Chopra) 的 Dino Weinstock。我想，有一個問題進一步涉及供應鏈挑戰。您有什麼信心相信這種情況不會持續到 2025 年？您預計完全康復的時間表是什麼？謝謝。

Yes. Good question. We probably a little bit hesitant. We had thought at this point in the year, we would have most of this behind us. And we’ve had some surprises that have popped up that were not on our radar screen. We have a very detailed plan as we look at the third quarter. As I noted earlier, we feel like we’re on the other side of things as it relates to our foot and ankle business back in solid supply there. It is really the implant categories in the shoulder and the knee where we’re kind of hand to mouth and struggling. We just cleared a key category with our arthroscopic enabling devices, getting back into full stock, getting our sales teams back on full offense there.

是的。好問題。我們可能有點猶豫。我們原以為今年的這個時候，我們會把大部分事情拋在腦後。我們還發現了一些雷達螢幕上沒有的驚喜。展望第三季度，我們有一個非常詳細的計劃。正如我之前指出的，我們感覺自己處於事情的另一面，因為這與我們的足部和腳踝業務恢復穩定供應有關。實際上，我們在肩部和膝蓋的植入物類別上舉步維艱。我們剛剛透過關節鏡使能設備清理了一個關鍵類別，恢復了充足的庫存，讓我們的銷售團隊重新全面進攻。

The implant categories are the two remaining challenges, and we think as we, as Todd talked about in his commentary, we thought the guide for the second half would be a little slower in Q3 and closer to the higher end in Q4. So that implies that we think we’ll be working through a lot of it in Q3 and be in better shape as we get into Q4. But we’re trying to give ourselves a little extra time given what we’ve gone through here in the first six months.

植入物類別是剩下的兩個挑戰，正如托德在評論中談到的那樣，我們認為下半年的指南在第三季度會稍慢一些，在第四季度更接近高端。因此，這意味著我們認為我們將在第三季完成很多工作，並在進入第四季時處於更好的狀態。但考慮到前六個月我們所經歷的一切，我們正在努力給自己多一點時間。

Got it. Thank you for the answer. Another question, I guess, on the F&A side, what trends are you seeing in the lower extremities market during Q2, and are you expecting second half growth to get back on track?

知道了。謝謝你的回答。我想，在財務和會計方面，您認為第二季下肢市場的趨勢是什麼，您預計下半年的成長會回到正軌嗎？

The trend question is relative to CONMED or the market in general?

趨勢問題是相對於 CONMED 還是整個市場而言的？

The market.

市場。

I think we still believe the foot and ankle market is a great market, a growth market, and a market we want to be in, and a market that we have a great asset to participate. Obviously, we’ve struggled because of our supply chain challenges, and we think now that we have the majority of that behind us, that we should be getting back on offense here.

我認為我們仍然相信足部和腳踝市場是一個偉大的市場，一個成長的市場，一個我們想要進入的市場，一個我們擁有大量資產可以參與的市場。顯然，我們由於供應鏈挑戰而陷入困境，我們認為現在我們已經解決了大部分問題，我們應該在這裡重新進攻。

Further, we’ve added, I think we noted on the last call that we have moved some of the sports medicine related foot and ankle products into the foot and ankle business to further support that offering, as well as have done an initial rollout and launch of BioBrace, which BioBrace brings along more implantations of lower extremity foot and ankle products that our portfolio has. So, we think we’ve got the right offense and it’s just getting them back on, or we think we’ve got the right portfolio just getting them back on offense with product availability, which I think that is the one part of orthopedics that we do believe, we exited the mid-year point where we thought we would.

此外，我們補充說，我想我們在上次電話會議中註意到，我們已將一些與運動醫學相關的足部和腳踝產品轉移到足部和腳踝業務中，以進一步支持該產品，並且已經進行了初步推出並推出 BioBrace，BioBrace 帶來了我們產品組合中更多的下肢足部和腳踝植入產品。因此，我們認為我們已經有了正確的進攻，並且只是讓他們重新開始，或者我們認為我們已經有了正確的產品組合，只是讓他們通過產品可用性重新進攻，我認為這就是我們確實相信骨科的一部分，我們已經退出了我們認為會的年中點。

Travis Steed, BofA.

特拉維斯·斯蒂德，美國銀行。

Hey, I kind of wanted to follow up on Robbie’s margin question on the revenue side. I think you’ve always kind of talked about achieving kind of double-digit growth this year. It’s kind of 5% to 6%. Is this 5% to 6% and maybe a little bit better 6% to 7% kind of the right place to be longer term?

嘿，我有點想跟進羅比關於收入方面的利潤問題。我認為您一直在談論今年實現兩位數的增長。大約是 5% 到 6%。從長遠來看，5% 到 6%，或更好一點的 6% 到 7% 是合適的地方嗎？

No, we still think we’re capable of much better than that, Travis. We still that same 30% plus of our portfolio that should be very healthy double digits we think under normal circumstances should be there. So, if that 30%, that ought to be able to deliver close to 6% growth just on its own. And so the rest of the 70% was mid single digits, then you’re in those high single digits just with kind of that being normal.

不，我們仍然認為我們有能力做得更好，特拉維斯。我們的投資組合中仍然有 30% 以上，我們認為在正常情況下應該是非常健康的兩位數。因此，如果是 30%，那麼僅憑這一點就應該能夠實現近 6% 的成長。所以剩下的 70% 是中等個位數，那麼你就處於那些高個位數，這很正常。

So, we don’t think this is normal. And our expectations are certainly to be a faster grower than this. But 5% to 6% growth while disappointing to us, I think, is still probably above average in medtech. And certainly our EPS growth is above average for medtech. So even at these disappointing levels, it is a healthy, growing, profitable business, but not growing as fast and not as profitable as we expected at the beginning of the year, granted.

因此，我們認為這是不正常的。我們的期望肯定是比這更快的成長。但我認為 5% 至 6% 的成長雖然令我們失望，但仍可能高於醫療科技的平均值。當然，我們的每股盈餘成長高於醫療技術的平均水準。因此，即使處於這些令人失望的水平，它也是一項健康、成長、盈利的業務，但成長速度和盈利能力沒有我們年初預期的那麼快，這是理所當然的。

Great. Thank you. And another question. And just like when you think about the rest of the markets, I know you had your supply issues. But if you think about the market that there’s been any kind of change in the market just because like you’re not the only company that’s kind of resetting kind of the second half year and having more kind of (inaudible). And so I don’t know if there was just like some sort of moderation in ortho markets or kind of anything you’ve seen on the margin.

偉大的。謝謝。還有一個問題。就像當你考慮其他市場一樣，我知道你遇到了供應問題。但如果你考慮市場，你會發現市場發生了任何變化，因為像你這樣的公司並不是唯一一家在下半年進行重置並有更多變化的公司。（聽不清楚）。因此，我不知道正向市場是否存在某種溫和的情況，或者你在邊緣看到的任何情況。

Travis, I don’t think there’s anything we would point to. I think we believe commercially, our teams, and we just did a big round of international meetings. The only thing we would point to in the markets are the strikes in Korea are continuing longer than anybody had anticipated, and events in China have slowed the overall China market. But those are smaller markets for CONMED.

特拉維斯，我認為我們沒有什麼可以指出的。我認為我們相信商業，我們的團隊，我們剛剛舉行了一輪大型國際會議。我們在市場上唯一要指出的是，韓國的罷工持續時間比任何人預期的都要長，而中國的事件已經減緩了整個中國市場的發展。但對於 CONMED 來說，這些市場規模較小。

They’re growth markets for CONMED, but they’re smaller. But the majority of our big markets, Canada, the US, Western Europe, we see pretty healthy underlying markets. Pat, I don’t know if you want to add anything to that you’ve spent a lot of time.

它們是 CONMED 的成長市場，但規模較小。但在我們大多數的大市場，加拿大、美國、西歐，我們看到了相當健康的基礎市場。帕特，我不知道您是否想為您花費了大量時間的內容添加任何內容。

Curt I would just agree with what you're saying, and would, again, call out Japan market also continuing to grow well from the market standpoint.

簡短地說，我同意你的說法，並再次指出，從市場的角度來看，日本市場也持續保持良好成長。

Mike Matson, Needham.

麥克馬森，李約瑟。

Yes. Thanks for taking my questions. I just want to ask a couple on general surgery. So the growth was obviously good, much better than orthopedics. But it’s probably a little slower than I would have expected, just given that’s where a couple of your bigger growth drivers are. So, what are your thoughts on that business? Is there anything going on there? I understand the supply chain is more on the ortho side,

是的。感謝您回答我的問題。我只是想問一些關於普通外科的問題。所以生長明顯很好，比骨科好很多。但它可能比我預期的要慢一些，因為這是一些更大的成長動力所在。那麼，您對這項業務有何看法？那裡有什麼事嗎？我了解供應鏈更多的是在正交方面，

Yes, I mean, I think that business is pretty close to historical rates there, Mike. AirSeal is definitely good. [Smoke] is a little soft. We had a transitory quality issue that we dealt with and has been remediated. It did affect us a little bit in Q2. So [Smoke] was soft. But we think that’s temporary. And other than that, I think things were pretty normal on general surgery.

是的，我的意思是，我認為那裡的業務非常接近歷史利率，麥克。空氣密封絕對是好的。 [煙]有點軟。我們遇到了一個暫時的品質問題，我們已處理並已修復。它確實對我們第二季產生了一些影響。所以[煙]很軟。但我們認為這只是暫時的。除此之外，我認為普通外科的情況很正常。

Okay. And then just looking into the second half on, I would assume that the kind of the core you expect similar growth overall for the Company. So the two businesses or general surgery and orthopedics, I would assume would be kind of similar to what we saw in the first half as well?

好的。然後，只要看看下半年，我就會假設您期望公司整體成長類似的核心類型。因此，我認為一般外科和骨科這兩家業務也與我們上半年看到的情況類似？

Yes, yes. For our guidance kind of assumes that orthopedics stays challenged a little bit for longer than we thought originally, of course. And so – but the general surgery business, we think will continue to do what it’s been doing.

是的，是的。當然，我們的指導假設骨科面臨挑戰的時間比我們最初想像的要長。因此，我們認為普通外科業務將繼續做它一直在做的事情。

Okay, got it. Thank you.

好的，明白了。謝謝。

Christian Stewart, CL King.

克里斯蒂安·斯圖爾特，CL King。

Hi. Thanks for taking the question. I was just wondering if there’s any risk that we could see some of these supply constraints and supply issues bubbling over into the general surgery business? Or do you still have confidence in that for the balance of the year being unaffected?

你好。感謝您提出問題。我只是想知道是否有任何風險，我們可能會看到其中一些供應限制和供應問題蔓延到普通外科業務？或者您仍然有信心今年剩餘時間不會受到影響？

No. Right now, Kristen, we feel very good about the general surgery side of the business, the product availability, the manufacturing controls. Obviously with a product line like AirSeal, a product line like [Smoke], we very early brought those under our complete manufacturing control and have a lot of redundancy for products like that. Some of the orthopedic categories have multiple generations of products and we don’t control all of those. That is part of our cleanup is to really focus our energy efforts on the key product lines and start transitioning more customers. So we are not anticipating that. And trust us, we are watching those categories very closely.

不。現在，克里斯汀，我們對一般外科業務、產品可用性和製造控制方面感覺非常好。顯然，對於像 AirSeal 這樣的產品線，像 [Smoke] 這樣的產品線，我們很早就將這些產品置於我們完全的製造控制之下，並且對於此類產品有很多冗餘。一些骨科類別擁有多代產品，我們無法控制所有這些產品。我們清理工作的一部分是將我們的精力真正集中在關鍵產品線上，並開始轉移更多的客戶。所以我們並沒有預料到這一點。相信我們，我們正在密切關注這些類別。

Okay. Thanks very much.

好的。非常感謝。

Thank you. And I would now like to turn the conference back to Curt Hartman for closing remarks.

謝謝。現在我想請科特·哈特曼（Curt Hartman）致閉幕詞。

Thank you, Amy. And just wrap up here today and say thank you, everybody, for your time. And we look forward to speaking with you on our next earnings call.

謝謝你，艾米。今天就到這裡結束吧，謝謝大家抽出時間。我們期待在下次財報電話會議上與您交談。

And this concludes today’s conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。