Executive Summary

Q4 revenue rose 13.5% year over year to $153.6M, with double‑digit growth in Pain Treatments and Surgical Solutions; gross margin expanded 310 bps and adjusted gross margin expanded 230 bps .
Adjusted EBITDA increased 28% to $28.3M, and non‑GAAP EPS was $0.15 versus $0.07 a year ago; GAAP loss from continuing operations narrowed to $0.3M .
FY2025 guidance introduced: net sales $560–$570M, adjusted EBITDA $112–$116M, and non‑GAAP EPS $0.64–$0.68, implying above‑market growth and ~100 bps EBITDA margin expansion at the low end; guidance cadence: weakest Q1, strongest Q4 .
Liquidity improved: operating cash flow was $19.3M (up 86%), long‑term debt fell $48.3M in Q4; net leverage ended “slightly above 3x,” with management targeting <2.5x by year‑end 2025 .

What Went Well and What Went Wrong

What Went Well
- Pain Treatments outpaced market with DUROLANE‑led, volume‑driven share gains; management expects price to be “fairly stable” in 2025 and growth driven by volume .
- Ultrasonics posted >20% growth for the second straight quarter, with customers calling the technology “revolutionary” across spine, neuro, and general surgery; spine remains near‑term priority .
- Exogen turnaround: grew in Q4 and +7% FY2024 after five years of declines; focus on execution, medical education, and resources supports sustainable low‑ to mid‑single‑digit growth .
What Went Wrong
- BGS saw transitory supply challenges earlier in 2024; onboarding of new distributors was slowed and is ramping back up; management expects BGS to re‑attain double‑digit growth in 2H 2025 .
- Q4 HA sales benefited by up to ~$2M of year‑end distributor orders, a timing pull‑forward that will be a headwind to Q1 2025 growth as inventories normalize .
- International shipments in Ultrasonics were delayed earlier in the year; recovery contributed to Q4, but mix normalization can modestly dampen margins versus 1H levels .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$151.2	$139.0	$153.6
GAAP Diluted EPS – Continuing Ops ($)	$(0.37)	$(0.07)	$— (zero)
Non‑GAAP EPS – Continuing Ops ($)	$0.19	$0.06	$0.15
Gross Margin (%)	68.5%	67.3%	66.8%
Adjusted Gross Margin (%)	75.8%	74.7%	73.7%
Adjusted EBITDA ($USD Millions)	$34.5	$23.6	$28.3
Adjusted EBITDA Margin (%)	20.5%	15.0%	17.0%

Segment breakdown (by business and geography)

Segment	Q3 2024 U.S. ($000s)	Q3 2024 Intl. ($000s)	Q4 2024 U.S. ($000s)	Q4 2024 Intl. ($000s)
Pain Treatments	$56,306	$5,274	$62,799	$6,414
Surgical Solutions (reclass incl. SonicOne)	$41,155	$4,745	$46,431	$7,293
Restorative Therapies	$25,448	$4,489	$25,980	$4,725
Total Net Sales	$122,909	$16,055	$135,210	$18,432

KPIs and balance sheet

KPI	Q3 2024	Q4 2024
Operating Cash Flow – Continuing Ops ($USD Millions)	$10.3	$19.3
Cash and Equivalents ($USD Millions)	$43.1	$41.6
Long‑Term Debt (less current) ($USD Millions)	$345.0	$308.3
Net Leverage Ratio (Net Debt/Adj. EBITDA)	~3.5x (company disclosure)	Slightly >3.0x (company disclosure)

Notes: SonicOne revenue was reclassified to Surgical Solutions prospectively/retrospectively in 2024; see footnotes in exhibits .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($M)	FY2024	$557–$567	$562–$567 (updated in Q3)	Raised (midpoint +$2.5M)
Adjusted EBITDA ($M)	FY2024	$104–$107	$104–$107	Maintained
Non‑GAAP EPS ($)	FY2024	$0.36–$0.42	$0.40–$0.42	Raised (midpoint +$0.02)
Net Sales ($M)	FY2025	N/A	$560–$570	Introduced
Adjusted EBITDA ($M)	FY2025	N/A	$112–$116	Introduced
Non‑GAAP EPS ($)	FY2025	N/A	$0.64–$0.68	Introduced

Management expects above‑market growth with segment cadence: Pain Treatments above market, Surgical double‑digit, Restorative low single digits; quarterly cadence: lowest Q1, highest Q4 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2, Q3)	Current Period (Q4)	Trend
DUROLANE/HA share gains	Volume‑driven double‑digit HA growth; mix benefits lowered private payer rebates	2025 HA growth expected ~2x market, driven by volume; pricing “fairly stable”	Improving
Ultrasonics expansion	Doubled generators YoY; sustained double‑digit growth; targeting spine first	>20% revenue growth for second consecutive quarter; spine priority, neuro/general ramp beyond 2025	Accelerating
BGS supply normalization	Secured capacity; short‑term slowdown from delayed distributor onboarding	Transitory challenges resolved; productivity improving; targeting double‑digit growth 2H 2025	Normalizing
Exogen turnaround	Positive growth; mid‑single‑digit FY outlook	+7% FY growth after 5 years of declines; aiming low‑ to mid‑single‑digits	Improving
Liquidity & leverage	Net leverage heading toward <3x by end of 2025	Slightly >3x at YE2024; target <2.5x by YE2025	Improving
International/OUS	Recovery from delayed ultrasonics shipments	New leadership; targeted OUS expansion with high‑ROI approach	Building
Pricing dynamics	Mix tailwinds Q2; HA growth mainly volume	HA pricing stable; growth volume‑led in 2025	Stable

Management Commentary

“We delivered strong results in the fourth quarter to conclude a very successful and transformational year… driving above‑market revenue growth… while enhancing profitability and accelerating cash flow” — Rob Claypoole, CEO .
“Adjusted EBITDA of $28 million… up over $6 million versus prior year… we paid down nearly $50 million in debt in the fourth quarter… net leverage ratio slightly above 3 turns” — Rob Claypoole .
“Revenue of $154 million increased 14% and adjusted EBITDA of over $28 million grew $6 million… Adjusted gross margin of 74% expanded 230 bps… we ended the quarter with $42 million of cash and $336 million of outstanding debt” — Mark Singleton, CFO .
“We expect net sales to be $560–$570M… adjusted EBITDA $112–$116M… adjusted EPS $0.64–$0.68… lowest in Q1, highest in Q4” — Mark Singleton .

Q&A Highlights

Segment outlook: Pain above market, Surgical double‑digit, Restorative low single digits; confirms guide midpoint (~7%) above market .
HA drivers: Growth led by volume; pricing expected stable across 2025 due to clinical differentiation, commercial focus, and strong private payer contracts .
Capital allocation: Deleveraging continues; increased financial flexibility enables selective portfolio expansion only if aligned with strategy; leverage targeted <2.5x by YE2025 .
BGS supply recovery: Earlier supply challenges resolved; onboarding new distributors resumes, with productivity gains from existing agents .
Exogen: Turnaround confirmed; sustainable low‑ to mid‑single‑digit growth targeted via renewed focus and small strategic investments .
Ultrasonics expansion: Spine remains priority; neuro/general to ramp more meaningfully in 2026+ .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue could not be retrieved due to API limits; values unavailable. When available, we anchor estimate comparisons on S&P Global consensus.
Given FY2025 guidance (non‑GAAP EPS $0.64–$0.68; net sales $560–$570M; adjusted EBITDA $112–$116M), models may need to reflect: Q1 seasonal trough, HA volume normalization from Q4 pull‑forward (~$2M), BGS reacceleration in 2H, and ~100 bps EBITDA margin expansion at the low end .

Metric	Q4 2024 Consensus	Actual
Revenue ($USD Millions)	Unavailable (S&P Global API limit)	$153.6
Primary EPS ($)	Unavailable (S&P Global API limit)	$— GAAP; $0.15 non‑GAAP

Key Takeaways for Investors

Q4 delivered quality growth and margin gains: 13.5% revenue growth; 310 bps gross margin expansion; adjusted EBITDA +28% — sustaining the multi‑quarter trend in Pain and Surgical .
FY2025 guide suggests above‑market organic growth with EBITDA margin expansion; near‑term cadence implies caution in Q1 (HA inventory normalization), stronger 2H (BGS double‑digit re‑acceleration) .
HA thesis intact: DUROLANE advantage, private payer contracts, dedicated commercial infrastructure support share gains; pricing seen stable through 2025 .
Ultrasonics is a multi‑year growth engine: strong disposable trajectory from generator installs; spine first, with neuro/general incremental beyond 2025 .
Balance sheet progressing: operating cash flow up 86% in Q4; LT debt reduced $48.3M; leverage path toward <2.5x by YE2025 improves optionality .
Watch international mix and quarterly seasonality for margin impacts; management preserving peer‑leading gross margin while growing bottom line faster than top line over time .
Trading lens: Q1 may see transitory HA headwind from Q4 distributor pull‑forward; setup improves into 2H with BGS, Ultrasonics, and OUS initiatives; catalysts include execution vs FY2025 margin and cash flow targets .

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