GLOBUS MEDICAL INC

Previous wording

During the three months ended March 31, 2024, international net sales accounted for approximately 20.4% of our total net sales. We have sold our products and services in approximately 61 countries other than the United States through a combination of sales representatives employed by us and exclusive international distributors. We believe there are significant opportunities for us to increase our presence in both existing and new international markets through the continued expansion of our direct and distributor sales forces and through the commercialization of additional products.

Current wording

During the six months ended June 30, 2024, international net sales accounted for approximately 20.5% of our total net sales. We have sold our products and services in approximately 64 countries other than the United States through a combination of sales representatives employed by us and exclusive international distributors. We believe there are significant opportunities for us to increase our presence in both existing and new international markets through the continued expansion of our direct and distributor sales forces and through the commercialization of additional products.

Previous wording

In the United States, the increase in net sales of $248.8 million for the three month period ended March 31, 2024 was due primarily to the addition of NuVasive, as well as increased spine product sales, including robotic spine instruments, resulting from penetration in existing territories and an increase in sales volume of enabling technologies.

Current wording

In the United States, the increase in net sales of $254.0 million for the three month period ended June 30, 2024 was due primarily to the addition of NuVasive, as well as increased spine product sales, including robotic spine instruments, resulting from penetration in existing territories and an increase in sales volume of enabling technologies.

Previous wording

International net sales increased by $81.2 million for the three month period ended March 31, 2024 due to the addition of NuVasive and increased spine product sales resulting from penetration in existing territories.

Current wording

International net sales increased by $84.1 million for the three month period ended June 30, 2024 due to the addition of NuVasive and increased spine product sales resulting from penetration in existing territories.

Previous wording

The $170.7 million increase in cost of sales is due to the addition of NuVasive, amortization of inventory fair value step-up, and increased volume and product mix.

Current wording

The $183.6 million increase in cost of sales was due to the addition of NuVasive, amortization of inventory fair value step-up, and increased volume and product mix.

Previous wording

The $126.3 million increase in selling, general and administrative expenses was due to the addition of NuVasive, and an increase in personnel related expenses resulting primarily from higher product sales, and meeting expenses.

Current wording

The $118.1 million increase in selling, general and administrative expenses was due to the addition of NuVasive, and an increase in personnel related expenses resulting primarily from higher product sales, and meeting expenses.

Previous wording

Amortization of intangibles increased for the three month period ended March 31, 2024 compared to the three month period ended March 31, 2023, due to the impact of the acquired intangibles from NuVasive.

Current wording

Amortization of intangibles increased for the three month period ended June 30, 2024 compared to the three month period ended June 30, 2023, due to the impact of the intangibles acquired from NuVasive.

Previous wording

The increase in acquisition-related costs is due primarily to unfavorable change in the fair value of business acquisition liabilities, driven by changes in contract terms, market conditions and the achievement of certain performance conditions.

Current wording

The increase in acquisition-related costs was due primarily to charges recorded to the fair value of business acquisition liabilities resulting from changes in contract terms, market conditions and the achievement of certain performance conditions.

Previous wording

The decrease in other income/(expense), is due primarily to foreign currency losses and interest expense from a lower average marketable securities portfolio size in the current period.

Current wording

The decrease in other income/(expense), was due primarily to foreign currency losses, lower interest income from a lower average marketable securities portfolio size in the current period and interest expense from amortization of the fair value adjustment on the 2025 Notes from acquisition accounting.

Previous wording

The decrease in the effective tax rate is due primarily to lower pretax earnings over the comparative period, and one-time tax adjustments as a percentage of pretax earnings.

Current wording

The increase in the effective tax rate was due primarily to lower pretax earnings over the comparative period, and one-time tax adjustments as a percentage of pretax earnings.

Previous wording

The $36.2 million increase in research and development expenses was due primarily to the addition of NuVasive, acquired IPR&D and an increase in personnel related expenses due to our continued investment in product development.

Current wording

The $52.5 million increase in research and development expenses was due primarily to the addition of NuVasive, acquired IPR&D and an increase in personnel related expenses due to our continued investment in product development.

Previous wording

The restructuring costs for the three months ended March 31, 2024 is due to costs associated with the 2024 Synergy Plan. These costs were primarily related toemployee termination benefits.

Current wording

The restructuring costs for the six months ended June 30, 2024 were due to costs associated with the 2024 Synergy Plan. These costs were primarily related toemployee termination benefits.

Previous wording

Our principal source of liquidity is cash flow from operating activities as well as our cash and cash equivalents and marketable securities, which we believe will provide sufficient funding for us to meet our liquidity requirements for the foreseeable future. Our principal liquidity requirements are to fund working capital, research and development, including clinical trials, capital expenditures primarily related to investment in surgical sets required to maintain and expand our business, service our 2025 Notes, and potential future business or intellectual property acquisitions. We expect to continue to make investments in surgical sets as we launch new products, increase the size of our U.S. sales force, and expand into international markets. Additionally, we have varying needs for cash in connection with our Senior Convertible Notes, of which $450 million are due March 2025, as well as for certain acquisition-related obligations and contingent consideration achievements. Future litigation or requirements to escrow funds could also materially impact our liquidity and our ability to invest in and operate our business on an ongoing basis. We may, require additional liquidity as we continue to execute our business strategy. To the extent that we require new sources of liquidity, we may consider incurring debt, including borrowing against our existing credit facility, convertible debt instruments, and/or raising additional funds through an equity offering. The sale of additional equity may result in dilution to our stockholders. There is no assurance that we will be able to secure such additional funding on terms acceptable to us, or at all.

Current wording

Our principal source of liquidity is cash flow from operating activities as well as our cash and cash equivalents and marketable securities, which we believe will provide sufficient funding for us to meet our liquidity requirements for the foreseeable future. Our principal liquidity requirements are to fund working capital, research and development, including clinical trials, capital expenditures primarily related to investment in surgical sets required to maintain and expand our business, contingent consideration achievement obligations, potential future business or intellectual property acquisitions, and to service our 2025 Notes. We expect to continue to make investments in surgical sets as we launch new products, increase the size of our U.S. sales force, and expand into international markets. Our Senior Convertible Notes, with a principal balance of $450 million are due March 2025. We anticipate being able to support this need through existing or new sources of liquidity. Future litigation or requirements to escrow funds could also materially impact our liquidity and our ability to invest in and operate our business on an ongoing basis. We may, require additional liquidity as we continue to execute our business strategy. To the extent that we require new sources of liquidity, we may consider incurring debt, including borrowing against our existing credit facility, convertible debt instruments, and/or raising additional funds through an equity offering. The sale of additional equity may result in dilution to our stockholders. There is no assurance that we will be able to secure such additional funding on terms acceptable to us, or at all.

Previous wording

The higher net cash provided by operating activities for the three month period ended March 31, 2024 was primarily the result of higher net income after adjusting out non-cash add-backs and non-cash expenses, such as amortization of purchase accounting related fair value step up, amortization, and stock-based compensation, partially offset by unfavorable changes in accounts receivable and accrued expenses and other liabilities.

Current wording

The higher net cash provided by operating activities for the six month period ended June 30, 2024 was primarily the result of higher net income after adjusting out non-cash add-backs and non-cash expenses, such as amortization of purchase accounting related fair value step up, amortization, and stock-based compensation, partially offset by unfavorable changes in accounts receivable, deferred income taxes, and accrued expenses and other liabilities.

Previous wording

The higher cash used in investing activities for the three month period ended March 31, 2024 was primarily net outflows for acquisition of businesses, net of cash acquired, higher purchases of property and equipment, and net purchases of marketable securities.

Current wording

The higher cash used in investing activities for the six month period ended June 30, 2024 was due primarily to increased net outflows for the acquisition of businesses, net of cash acquired, and increased purchases of property and equipment, less inflows from net maturities of marketable securities.

Previous wording

The higher net cash used in financing activities for thethree month period ended March 31, 2024 was primarily the result of higher repurchases of Class A common stock, payments of business acquisition related liabilities and lower proceeds from exercise of stock options.

Current wording

The higher net cash used in financing activities for thesix month period ended June 30, 2024 was primarily the result of increased repurchases of Class A common stock, and increased payments of business acquisition-related liabilities, partially offset by higher proceeds from the exercise of stock options.