Enovis Corporation (NYSE:ENOV) Q1 2023 Results Conference Call May 4, 2023 8:30 AM ET

Company Participants

Derek Leckow - Vice President of Investor Relations

Matt Trerotola - Chief Executive Officer

Ben Berry - Chief Financial Officer

Conference Call Participants

Vik Chopra - Wells Fargo

Kyle Rose - Canaccord Genuity

Jeff Johnson - Baird

Xuyang Li - Jefferies

Brett Fishbin - KeyBanc

Operator

Good day, and welcome to the Enovis First Quarter 2023 Earnings Conference Call [Operator Instructions]. Please note, today's event is being recorded.

I would now like to turn the conference over to Derek Leckow, Vice President of Investor Relations. Please go ahead, sir.

Derek Leckow

Thanks, Bracho. Good morning, everyone. Thank you for joining us today for our first quarter 2023 results conference call. I'm Derek Leckow, Vice President of Investor Relations. Joining me on the call today are Matt Trerotola, Chief Executive Officer; and Ben Berry, Chief Financial Officer.

Our earnings release was issued earlier this morning and is available on the Investors section of our Web site, enovis.com. We'll be using a slide presentation on today's call, which can also be found on our website. Both the audio and the slide presentation of this call will be archived on the website later today.

During this call, we'll make some forward-looking statements about our beliefs and estimates regarding future events and results. Those forward-looking statements are subject to risks and uncertainties, including those set forth in the safe harbor language in today's earnings release and our filings with the SEC. Actual results may differ materially from any forward-looking statements that we may make today. The forward-looking statements speak only as of today, and we do not assume any obligation or intend to update them, except as required by law. With respect to any non-GAAP financial measures referenced in the call today, the accompanying reconciliation information related to those measures can be found in our earnings press release in the appendix of today's slide presentation.

With that, let me turn the call over to Matt who will begin on Slide 3. Matt?

Matt Trerotola

Thanks, Derek. Hello, everyone, and thanks for joining us today. We had a strong first quarter. But before I discuss the results, I want to recognize the efforts of our fantastic global team of dedicated associates who work hard every day to execute our strategies and help our patients live more active and fulfilling lives. It was a great quarter. Let's go to Slide 3 and talk about some of the highlights. We grew organically by over 9% with 19% growth in Recon and 4% growth in P&R. Clearly, there were some tailwinds out there on the Recon side, but the step back view is continued strong outperformance in a strong Recon market and the expected market recovery in P&R. We expanded our adjusted EBITDA margins by 120 basis points, reflecting the mix impact of strong Recon growth, productivity from EGX, price progress and moderation in some areas of inflation. We signed a key strategic acquisition in Foot & Ankle in the quarter and another one in April. And we're seeing strong growth momentum and healthy scaling of the full set of acquisitions we completed in the last few years. Overall, a really great start toward our 2023 objectives. In recap on Slide 4, we had high double-digit growth in the U.S., led by over 20% organic growth in knees and hips. Extremities grew 14% led by shoulder. Outside the U.S., we grew over 20% organically, also led by knee and hip. And we're pleased to see our brand and presence flourishing in a strong European market and a recovery building momentum in Australia. I'm excited about the initial traction we're seeing as we begin to cross-sell our market-leading EMPOWR and Altivate products internationally. And we have a strong pipeline of innovation in the U.S. as we continue the rollout of the EMPOWR Revision Knee and the Altivate Augmented Glenoid.