Forward-Looking Statements
In this Report on Form 10-Q, we make forward-looking statements about our financial condition, results of operations and business. Forward-looking statements are statements made by us concerning events that may or may not occur in the future. These statements may be made directly in this document or may be "incorporated by reference" from other documents. Such statements may be identified by the use of words such as "anticipates", "expects", "estimates", "intends" and "believes" and variations thereof and other terms of similar meaning.
Forward-Looking Statements are not Guarantees of Future Performance
Forward-looking statements involve known and unknown risks, uncertainties and
other factors, including those that may cause our actual results, performance or
achievements or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include those identified under "Risk
Factors" in our Annual Report on Form 10-K for the year-ended
•general economic and business conditions; •compliance with and changes in regulatory requirements; •the COVID-19 global pandemic poses significant risks to our business, financial condition and results of operations, which may be heightened as the pandemic, government and hospital responses to it, continue; •the possibility thatUnited States or foreign regulatory and/or administrative agencies may initiate enforcement actions against us or our distributors; •the introduction and acceptance of new products; •the risk of an information security breach, including a cybersecurity breach; •competition; •changes in customer preferences; •changes in technology; •the availability and cost of materials, including inflation and ongoing supply chain challenges; •cyclical customer purchasing patterns due to budgetary and other constraints; •environmental compliance risks, including lack of availability of sterilization with Ethylene Oxide ("EtO") or other compliance costs associated with the use of EtO; •the quality of our management and business abilities and the judgment of our personnel, as well as our ability to attract, motivate and retain employees at all levels of the Company; •the availability, terms and deployment of capital; •future levels of indebtedness and capital spending; •changes in foreign exchange and interest rates; •the ability to evaluate, finance and integrate acquired businesses, products and companies; •changes in business strategy; •the risk of a lack of allograft tissues due to reduced donations of such tissues or due to tissues not meeting the appropriate high standards for screening and/or processing of such tissues; •the ability to defend and enforce intellectual property, including the risks related to theft or compromise of intellectual property in connection with our international operations; •the risk of patent, product and other litigation, as well as the cost associated with such litigation; •trade protection measures, tariffs and other border taxes, and import or export licensing requirements; and •weather related events which may disrupt our operations.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" below and "Risk Factors" and "Business" in our Annual Report on Form
10-K for the year-ended
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Table of Contents Overview
Our product lines consist of orthopedic surgery and general surgery. Orthopedic surgery consists of sports medicine instrumentation and small bone, large bone and specialty powered surgical instruments as well as, imaging systems for use in minimally invasive surgery procedures and service fees related to the promotion and marketing of sports medicine allograft tissue. General surgery consists of a complete line of endo-mechanical instrumentation for minimally invasive laparoscopic and gastrointestinal procedures, smoke evacuation devices, a line of cardiac monitoring products as well as electrosurgical generators and related instruments. These product lines as a percentage of consolidated net sales are as follows:
Three Months Ended March 31, 2022 2021 Orthopedic surgery 44 % 46 % General surgery 56 % 54 % Consolidated net sales 100 % 100 %
A significant amount of our products are used in surgical procedures with
approximately 83% of our revenues derived from the sale of single-use products.
Our capital equipment offerings also facilitate the ongoing sale of related
single-use products and accessories, thus providing us with a recurring revenue
stream. We manufacture substantially all of our products in facilities located
in
Business Environment
Our business continues to be impacted by the COVID-19 pandemic as variants of
the virus, such as omicron, emerge and hospitals and surgery centers reduce the
number of, or postpone, non-urgent surgical procedures in order to minimize the
risk of infection and allow for proper staffing. We continue to restrict access
to our facilities while maintaining production and distribution. We believe we
will continue to experience market variability as a result of the pandemic that
could influence sales, suppliers, patients and customers. There remains
significant uncertainty related to the COVID-19 pandemic, including the duration
and severity of future impacts to the business and we continue to see our
customers and suppliers impacted in a variety of ways such as staffing shortages
in the
During the first quarter of 2022, the world experienced, and continues to
experience, the impact of
Critical Accounting Policies
Preparation of our financial statements requires us to make estimates and
assumptions which affect the reported amounts of assets, liabilities, revenues
and expenses. Note 1 to the Consolidated Financial Statements in our Annual
Report on Form 10-K for the year-ended
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Table of Contents
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