Good evening. My name is Christina and I will be your conference operator today. At this time, I would like to welcome everyone to the Globus Medical Fourth Quarter and Full Year 2016 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Brian Kearns, Vice President of Business Development. You may begin your conference.

Thank you, Christina, and thank you, everyone for joining us today. Joining today’s call from Globus Medical will be David Paul, Chairman and CEO; Dan Scavilla, Senior Vice President and CFO; Anthony Williams, President; and Dave Demski, Group President of Emerging Technologies. This review is being made available via webcast, accessible through the Investor Relations section of the Globus Medical Web site at www.globusmedical.com. Before we begin, let me remind you that some of the statements made during this review are or may be considered forward-looking statements. Our Form 10-K for the 2015 fiscal year and our subsequent filings with the Securities and Exchange Commission identify certain factors that could cause our actual results to differ materially from those projected in any forward-looking statements made today. Our SEC filings, including the 10-K, are available on our Web site. We do not undertake to update any forward-looking statements as a result of new information or future events or developments. Our discussion today will also include certain financial measures that are not calculated in accordance with Generally Accepted Accounting Principles or GAAP. We believe these non-GAAP financial measures provide additional information pertinent to our business performance. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most directly comparable GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are available in the schedules accompanying the press release and on the Investor Relations section of the Globus Medical Web site. With that, I’ll now turn the call over to David Paul, our Chairman and CEO.

Thank you, Brian and good evening, everyone. 2016 sales grew by 3.5% as reported, reaching $564 million and full year adjusted EBITDA came in at a healthy 37.4% of sales with non-GAAP diluted earnings per share of a $19. Sales for the fourth quarter grew by 6.3% as reported, reaching $151.6 million and adjusted EBITDA was 37.7% of sales and non-GAAP earnings per share was $0.31. In many respects 2016 was a great year for Globus, at the same time it was one of the most challenging periods in our company's history. I'm proud to say that our company has responded to that challenge and we exit 2016 with a strong foundation to accomplish the goal's we’ve set out for ourselves. On the positive side, we've launched 17 new spine products, made important progress on our trauma and robotics initiatives, significantly expanded our in-house manufacturing, acquired and comments a successful integration of the Alphatec international business, and last but not least continued to run and extremely efficient organization with adjusted EBITDA margins of 37.4% including the significant investments we are making in emerging technologies. For the first time in our history we saw sluggish sales growth not associated with a significant distributor loss. As we've discussed throughout the year, we had somewhat lost our focus on recruiting and experienced turnover among productive sales reps at a level not seen in the past. We have taken many steps to address both of these issues, which I’ll discuss in more detail below and I believe our business hit an inflection point in the fourth quarter that we will use to build on throughout 2017. With these issues under control the impending launches of robotics and trauma products and the easier comps we will face. We're very excited about 2017 and putting 2016…

Thanks, David, and good evening, everyone. Full year 2016 sales were $564 million growing at 3.5% as reported to 3.8% in constant currency with GAAP net income of $104.3 million a non-GAAP net income of $114.5 million delivering a $1.19 fully diluted non-GAAP earnings per share and the 37.4% EBITDA. Q4 sales were $151.6 million going 6.3% as reported or 6.5% in constant currency against our toughest quarterly comp of the year. In addition Q4 contained one less shipping day versus Q4 ’15 and two less shipping day versus Q3 ’16. Q4 GAAP net income was $24.3 million and non-GAAP net income was $30.2 million with fully diluted non-GAAP earnings per share of $0.31 and 37.7% EBITDA. Full year and Q4 EPS were impacted by approximately one penny for non-cash accounting adjustments and depreciation in inventory reserves. This change will not impact future period earnings. Focusing on sales, the performance was driven by two main factors. First, international sales for the quarter were $24.1 million growing a 109% as reported or 111.8% in constant currency driven by the acquired Alphatec assets, which contributed $13.8 million for the quarter. Our integration plan for market rationalization and distributor integration began late in Q4 and will progress through 2017, based on this plan, we anticipate a $40 million full year net contribution from the Alphatec assets. Second, U.S. sales for the quarter were $127.5 million or negative 2.7%, adjusting Q4 for the extra day shows an operational growth rate of negative 1.2%. While this result falls below our long-term expectations, we saw some very encouraging signs in the fourth quarter, that lead us to believe we have seen an inflection point. One we address certain internal policies and processes enhancing a significant reduction in turnover from productive sales reps in the second half…

[Operator Instructions] Your first question comes from Matt O'Brien from Piper Jaffray. You may begin.

Hi guys, this is Matt in for Matt today, how you guys doing So with the guidance that you guys just reiterate there. Are you guys expecting to sort of return to organic growth in the first quarter and how should we think about growth progressing throughout the year?

So we don’t tend to give out quarterly guidance, but I would tell you that the way we look now we think we're going to move into a more flattish to slightly positive as we go in the first quarter and I would anticipate that on a sequential quarter of having improvement until we excited strong or higher single digit growth at the end of the year.

Okay, great. And I think it was also recently communicated that you guys are sort of pulling back on the M&A strategy in terms of building out sort of more of the basic trauma bag. As a result of that has that pushed back sort of your internal revenue targets for 2017 and 2018 for trauma revenue?

No not really, what we are saying out there was we had looked long in hard for the potential of a trauma acquisition to accelerate us into that field, but with the strength of our in-house capabilities were developing a basic bag now that we feel is better than what we would have acquired. So the move is not as critical as it would have been maybe 12-months ago although we will still continue that for size and scale and getting into markets with the right reps. But the bag that we are developing internally is probably stronger than anything else we had seen as we are looking at the market.

Great, thank you.

Your next question comes from Matt Miksic from UBS. Your line is open.

I wanted to get a sense if could Dan or David, about maybe the components of growth in the fourth quarter they pertain to your underlying growth as the rest of your business excluding some of the impact you are still suffering from the loss of these reps last year in the end of 2015. And then I had you -- it'll be very helpful I think for folks to understand maybe what the core growth of this rest of this business is as we turning to the year and then I have a follow-up.

So, Matt I think when I was pulling out with this couple of things. I think Alphatec acquisition delivered stronger performance and that was mainly due to us delaying some of the rationalization that we had planned to do, and certainly a welcomed item. What we see is an improvement in the U.S. more through just the programs we put in place and discussed on the call and like I said when you adjust what you see an inflection point that's growing out there. International business is progressing, but certainly right now the benefit of Alphatec is probably the bigger part of the international. Does that answer your question?

Well I was actually a bit more focused on the U.S. I think we understand the add of the Alphatec business or U.S. but in the U.S. it strikes me that even though you've done some work to improve retention and improve your hiring, but you are still you still lost a fair amount of revenue from the folks who left and are still kind of comping that at this moment as you talk about your growth in the first half and that improving in the second half. And I think last year you have said something about, the rest of the business, the core business ex the losses was kind of growing at a mid-single digit range of something like that, love to get the sense of what your sort of not territories we can haven’t a change per say are growing?

So one of the things we are talking about throughout the year of 2016 was, we had some larger areas the part as Q4 and the Q1 and that impact had taken us through Q2 to Q3. When you exclude that and look for more of the people who remained, that would certainly be into the teams growth as normal and so we didn’t see anything unusual with those territories and their continued growth there, it was just over shadowed by those larger impacts that we saw early on. Really I would think that by going in and changing some of the programs and creating a better retention level, we really saw that turn in Q4 and so in addition to the continued growth of the stable areas who were doing those mid-teens. I would say you start not only anniversaring, but seeing the improvements of the effects of the retention. And like you said, what we saw and not necessarily contributing in Q4, but we definitely finally a movement in those competitive areas that we wanted, which I think sets the stage up more for 2017 second half than anything. So we're excited about that inflection point going from Q3 to Q4 feels positive with the momentum that we've seen so far.

Okay, and the other question that I'm getting here from folks is, maybe looking for a little bit more color and explanation around the prior period adjustment that you talked about. If you could maybe put this into context, when and if you've seen this before, it’s a little bit more color would be helpful?

Yeah, so let me first say these are absolutely non-material, no matter when you look at them and so the thought was very simple as we did our SAB 108 announcements just to take them on now and get them there. It really just relates to the fact that the way we were doing set depreciation was just slightly off and over a couple of years that accumulated up and that's something that was worth adjusting to make a balance sheet accurate and it reflects through. So nothing do we concern about, nothing big, but just the right thing to do to get us cleaned up as we were doing and how to fine tune in.

It’s okay. Thanks for the color.

Your next question comes from Jonathan Demchick from Morgan Stanley. Your line is open.

Had a quick question for Dan, just kind of following-up on the 10-K filing. You mentioned that on the call, but just wanted to make sure we fully kind of understood, what the delay really kind of involved, because this type of thing sometimes investors. So I mean it sounds like the commentary, it’s really just the size of the business and the scope is I guess larger than you all anticipated. I mean is there something missing there, I guess, I’m trying to figure out, what was different this year versus prior years?

You know, I appreciate the question, Jonathan and quite frankly just would make sure that everybody kind of goes out and make sure they can put this out in an accurate fashion, as you will see when we do our proxy that this audit is if size that we have not seen before. Going into areas that were previously out of scope, some of the international areas and yet have many things that occur with us internally just working through and fine tuning things and quite frankly, the timing of the audit just didn’t work out with us completing all of that checking in time with our independent auditors. So we stepped back a few weeks ago, decided the best thing do was to continue in full force, get this done late, but make sure we -- we let the public know we're just going to be behind in getting in this out there.

Understood, very clear. Thanks for the help. And just a quick follow-up on margins, really just kind of a spending ramp that you’re going to have this year, obviously, there is a lot of moving parts, you guys gave pretty clear guidance on where you expect the R&D numbers, kind of move that as we think about through the year and the progression of the ramp of hiring for sales people in both Trauma and Robotic. How should we think about the incremental costs and where move this year?

So, I would say two things, we have a fairly full robotic sales force ready to go now, we had stepped it up into Q3 and we’ve carried that through Q4, so that’s reflected in the numbers that you’re seeing now. We’ve really just begun putting some of the lead commercial folks in for Trauma and you’ll see that continue through Q1 and Q2. I don’t anticipating seeing any significant believes or anything that would really pull you off doing our mid-30s EBITDA number or coming out with the guidance for the bottom line and we’ve committed to. My thought would be that you’re going to see a little bit heavier in Q2, Q3 and in as we get more revenues that would be offset in Q4.

Okay. And just quick follow-up on the Trauma side and I think you guys mentioned the launch in 2017, could you guys give anything a little more specific on that, I mean should we expecting this more of a second half ’17, late year, what should we be thinking about on the launch there?

Yeah, Jonathan, this is Dave Demski, like it have is what we are projecting at this point for Trauma commercialization.

Thank you very much.

Your next question comes from Rich Newitter from Leerink Partners. Your line is open

Hi, excuse me -- hi thanks for taking the questions. I was hoping -- how you guys doing? Just wanted to follow up on the -- thanks for the color on the expense cadence, but just you Dan you made a couple of comments few weeks ago at our conference about EBITDA margin, where my understanding was you guys were kind of saying at a mid or kind of 35% EBITDA margin even in an investment year, which 2017 is, is kind of the right way to think about your of kind of your trough EBITDA margin, again even during spending period something north of 35% was a kind of flex pay-off year. One, did I hear you correctly and is that the right way to kind of think about floor for your profitability.

Rich the way we're looking now, we do think that 2017 would be more of that mid-30s, keep in mind you're going to see with an approval some revenues coming out from robotics, and that's going to help certainly pay for the infrastructure and the commercials that we put in place, so that can actually get up to a neutralization which will allow you to further continue to do investments on the trauma teams. So I think that's good, keep in mind too, remember you've got the med device tax repeal, you've the continued growth in branch, both of those are powerhouses when it comes to the DP. So, I really think it's the combination of those two and the eventual revenue of robotics that allows you to deliver that mid-30s.

So, we should still think of kind of low-30 EBITDA margin as -- during period of investment as a possibility?

Yes, definitely, so you keep my word, we're not going to go quarter-by-quarter, right. And we'll take any quarter, do the right investments and again if that dips down, to the low range we're okay with that. I think our commitment is probably landing 2017 within a 34, to 35 range with the investments that we see in front of us, so that's what we're striving to do.

And would you comment a little bit, you said your kind of robotic sales force is more or less build out and ready to go, can you just give us a sense as to numbers or at least capital reps?

No, we don't tend to release anything with size just for competitive reasons.

And is it safe to assume that when you say your robotic sales force is build out, that those are capital reps?

They are capital reps. And, just keep in mind, you and I've a group of hunters that don't need to be as large as our current sales force, we're going to utilize and leverage partnership with the current sales force, having these really focus on covering a larger part of the country.

And then maybe just two more, how should we think about lead times for developing a robot sale? And then just secondly as we think about and refine our 2018 models, what, and back half '17 models, what we should think of the margin impact particularly on the gross margin line for a robot sale?

Let me take on you your question, to add to what Dan said about our robotics sales force; it's a highly-experienced sales force in terms of capital. A lot of folks from -- with intuitive MAKO, some electronic folks in stealth and on team, so we're really excited about their capabilities and the sale of capital is much different as you know, can take up to a year in the process. We have plans to trying to get outside the budget cycle and accelerate those purchase decisions once we're into the market. So, again we're pointing for more significant revenue in the last half of this year. And in terms of our margins, I don't think we're going to get into granular kind of margins between our product lines and divisions at this point.

Your next question comes from Matt Taylor. Your line is open.

I just want to circle back on some of your revenue targets for the new products and I think before you had talked about potential target of around $10 million for this year for robotics and trauma combined, is that something you're still willing to sign up for or can you give us any kind of color on the magnitude of the two components?

A couple of things, keep in mind these products are certainly not approved yet by the FDA. So we just felt we'd put a placeholder in, really just for combination of all emerging tech, just to say we anticipate some revenues later on. Obviously we're waiting for approvals, it's out of our hands, and so that was kind of the placeholder that we think should that come out, again for us to have sales in Q4, it's achievable, and quite frankly if we find that there's a reason why that may not be realized to emerging tech, we would think we could find those abilities to offset that in the core business given this growth or the Alphatec acquisition. So it's a number that we feel we can cover in total, and while it's just a representative until we get approval and find out we've more information to share.

And just so I understand on Alphatec, because you certainly had some outperformance in the fourth quarter relative to your initial kind of commentary, are you talking about 40 million for '17, could there be upside to that based on what's happened already or are you now, having rationalized that business back to a point where 40 million is a realistic number.

Yes I do think 40 is a realistic number. I don't think it’s about just taking you know 10 million and spreading it or anything like that. I think we come into the year a little bit stronger because we just began in December market rationalization and some contract terminations, there's even last time buys and things like that the kind of things like that, the kind of lift up the number. So I think we'll see that settle down throughout the year and get back to where we believe is 40 million and that's probably more as you walk through each quarter and see it step down to a normalized level, most likely as we exit Q3 into Q4.

Great, thank you.

Your next question comes from Kaila Krum from William Blair, your line is open.

The first, as it relates to Alfatech, can you just remind us of your multiyear plans there. I think at this point you're still selling Alfatech products, so when do you expect to transition to Globus branded products and what should we expect when that takes place? And then in terms of competition outside of the U.S., I mean you guys have done a great job at maintaining those Alfatech revenues to date, but would love an update as to what you expect or what you're seeing competitively, particularly in Japan.

Kaila, thank you for your questions, as far as contractually we have several years to transition from Alfatech to Globus Products, but we're working hard to making sure that we can transition that in less than two years and that's our initial plan. We're trying to accelerate that tremendously in Japan and we want to be almost fully transitioned by the end of the year. But in other countries we're hoping that within two years we'll have all the products completely transitioned. That's the first part of your question, and can you remind me of your second question?

Sure, and just in terms of competition outside of the U.S. and specifically within Japan, again you guys have done a good job of maintaining revenues to date, but I just would like to hear sort of what you're expecting what you're seeing initially in Japan and other areas.

Okay, to Dan's earlier point, we've done more than we expected to do with Alfatech so far, but that's before we've gone into market rationalization and changing over some contracts. So we think that there'll be some drop off, but then we also think that there's a tremendous opportunity to grow in Japan. We feel that business has been underinvested in and as we're investing now in almost doubling the salesforce there, and with investments in sets and inventory we think that there's upside to growth in Japan. We're not able to really quantify that, our first step this year is getting all the products through the PMDA and getting approved and then we'll have more color on that towards the end of the year.

Okay, that's helpful and then just on the 10-K extension just as a follow up, it sounds like this is a smaller issue, but can you just confirm, I mean, we're not going to see any surprises as it relates to historical revenue or margins when the 10-K ultimately does come out. And then just what preventative measures you guys have taken to ensure that we don't run into something like this again, thanks.

I don't think there's going to be any surprises when the 10-K is filed, and like Dan mentioned before these were some larger scope issues from this year compared to years passed, I don't see this issue continuing on, we're looking at all our internal controls and processes and we don't expect this to be an issue going forward.

Kaila we're not finding anything of concern, I just really think what it is, is quite frankly few things going on towards the end of the year, larger scope than anticipated, probably misjudged the amount of effort needed to get it done and you know we need to just kind of work the hours at night and get this across the finish line.

Well, thank you guys.

Your next question comes from Bob Hopkins from Bank of America, your line is open.

Just a couple of quick fill in the blank questions here, on the Alfatech side it’s at a run rate of roughly 55 million going to 40 and you talked a lot about it already. I am just curious is that decline entirely rationalization or are you still also forecasting some core underlying declines in the business.

No, it's really about rationalization Bob, you know we saw the 13.8 million contribution in Q4 and it was certainly stronger than we initially thought, but then we also thought we would have started that rationalization back in October and we really took that into December. As we look at this we think Japan will grow, we have direct markets which we need to work on to see what they will do, and we're making the assumption that a fair amount of the distribution business will probably transition away, just based on what we've seen with other's spine acquisitions and distributor channels in the past. And we think that projection is conservative given what we've realized and seen out there with other companies. So nothing really with the core so much at the distributor impacts. One thing I will point out or highlight though kind to your question is, as we do make decisions as to where we go, what we're doing, it's not always Globus wins versus Alphatec. So there are some key countries where we decide to select the Alphatec distributors or other ways to go. And there will be point honestly, specially to get into Q1, where it will get harder for us on tangle the core international from Alphatec, we'll need to make a decision what we can do with that. So that growth on 40 million could have a slight down on the core a little bit strength in the Alphatec and still made out in total to the 40 million.

Okay, I see that was just my confusion, so this is really all just your conservative assumption on sort of the cost of integrating these two businesses. You're not actually shutting down business in any particular geography and in from a rationalization prospective, this is just so that cost of integrating these businesses and the decision that you need to make.

Well I just said Bob, and sorry just one thing, there are definite markets, that have been identified that we will exit that we feel like, A are not profitable, B may have a risk profile that we fell does not suite us. We will absolutely walk away from some markets, we will rationalize others and where we can certainly invest and growing in the remaining.

Okay, can you quantify exactly the revenue amount of the businesses that you just think are profitable and you're going to close?

Now we really have and I think you know again, if you would look through when we did the acquisition, it probably had an annual run rate of close to 55 million, we're throwing 40 out there. So you figure out, it's really probably that difference is what we're thinking we would rationalize walk away from profitability or risk point of view.

Okay and I'm sorry if I missed this on the rollout, but I heard you on the 10 million placeholder but, since you've got a sales force build out now, you still think Q2 is the right time frame for approval. There is been any issues back in fourth in terms of question from the agency, or do you expect Q2 approval?

And Bob we still hope that will have that approval, we've have not heard back yet from the agency, so it's still hard to handicap, what the questions might be and how quickly we could respond.

Your next question comes from Craig Bijou from Wells Fargo. Your line is open.

David I want to start with you on the progress that you been making on the competitive hires on the sales force. I appreciate the comments of you being more aggressive. I did want to see, if you could provide may be a little more color in the environment that you're seeing, if we talk to your competitors most of them are saying that they are net adders of reps and they are adding quality reps. So any color you can provide on the overall market environment for these reps and your sustainability for Globus specifically to continue to bring them on.

Thank you for your question Craig, if you just look at the size of the Medtronic and the depute Johnson and Johnson sales forces and their market share. Just between those two companies itself as so much of room for us to recruit their folks and so could be true that many of the smaller players are gaining from at the loss of those two larger players. We've seen very strong comparative hires in Q4 and even into the first quarter of 2017, high caliber reps and we continue to see a pipeline that is full of comparative reps that we're looking to bring on board this year. So, I think somewhat it’s a lack of focus on our part last year and two quarters the year before, but I feel like we're well on track to getting back our mojo on comparative recruiting. The second piece that may be is not as appreciated is late last year, middle of last year we started the non-comparative rep program, where we're hiring reps without experience, junior military officers and others that we're putting into our program and developing them. And that has also seen a significant uptake in investment and in numbers of territories, that the folks that we've brought on, with the ultimate plan of seeding them into territories in the near future. So both those categories make us feel confident about what 2017 is going to look like.

Okay, thanks for the color and maybe Dan for you on branch you guys had when you did the acquisition and subsequently you guys had laid out a plan for the improvement, some metrics, some dollar amount, I think was 9 million in 2017, 15 million in 2018 of gross profit improvements. So just wanted to get a sense, are those still the right numbers to be thinking about and I think you also mentioned that you are going to be 50% in house manufacturing by 2018? So is that still the goal and is that still achievable?

Yes, Craig. You got your spot on. So, we probably did just shy of 6 million of a benefit for this year as I said 2.9 million in Q4. We continue to invest and in that investment we were able to expand production. I think we're probably up closer to 35% to 40% now, and as we commissioned machines and get it through 2017, we think we will be doing that production as you said at about 50% of our purchases in 2018 and so at a steady state like that we ought to see in the neighborhood of $15 million a year benefitting in the GP. And as we've said before, I think that's through wise investment that will allow us to counterattack the single digit pricing pressure that we see combined with biologic growth and international mix all of those combined allow you to say in that mid-70s GP.

Great, thanks for taking the question.

Your next question comes from Jason Wittes from Aegis Capital. Your line is open.

Just wanted to understand the sales force changes as you mentioned. Is this a change in the way of the commission base or is this a complete change in the way this helps people to compensate it?

Jason, thank you for the question. No, the sales force is always commissioned base, I was just referring to the sales management team and in prior years we had at a mix of salary and commission and bonuses and we try to make most of the bonuses and commissions into growth bonuses. So we try to really focus them on growth on the sales management side not on the territory level.

Got it, okay that's helpful. And then I wonder if you could comment on some of the thoughts out there in terms of the changing market place and how Globus is positioning itself. And I think there is at least two trends emerging. The first one being that a lot of your competitors are becoming a little less [indiscernible] on the product development front and accelerating your both of their investment and their pace of launches number one. And number two there seems to be a consolidation of vendors at the hospital level. So how has Globus reacted to those changes or do you have comments in terms of what you think about those changes?

Thank you. Again on the product development side as I mentioned in my prepared remarks we launched 17 new products this year, our best year ever. We continued to strengthen our product development team and we think that we're expecting to none when it comes to not only ability but also the pace of product introductions that we can bring year-after-year. That being said a larger piece of our overall strategy is to diversify more into more muscular skeletal, so we can improve our footprint among hospitals and institutions. As far as consolidation within hospitals and accounts we still feel like we have a very good shot at getting into any hospital based on our differentiated technology and as long as we are price takers when it comes to Medtronic and J&J depot we have always been managed to get into those accounts.

Okay, and then just one last quick question. I think you mentioned -- you comment on the robot, in terms of the potential contribution from trauma. Is there any baked into guidance and related to that, what revenue level do you are you going to need within trauma to actually derive some profitability from it because well Andrew [ph] is saying that this is a fair amount of tools that's required to be put out in the field before it really starts to generating good profits?

Jason its Dan. So couple of things, we think there will be some modest potential for our revenues this year. Again I think if we look towards a mid-year approval and as we continue to fill out the bag and then certainly build up the sales force, we would hope to see something, but nothing that we are banking on that we would take us off of our guidance right now.

Fair enough.

And I think what you are saying makes sense to I think this is a longer play where you make incremental gains year-on-year and get through there. Certainly need to invest insets to get them in hospitals and so our cash balance and our cash flow strength allow us to make those conversions and investments to get out there. And so I think our plan would be to develop sets going to approved, set up a basic level of reps, get successful, invest in building concentric circles from there very similar to how we build the spine business.

Okay, is there a revenue number that we should look for as kind of breakeven point for that business?

Hard to say right now. Let’s finish designing the tools, getting them approved and seeing where they are and we’ll figure the rest of that out.

Great. Thank you. I’ll jump back in queue. Thanks for the question.

Your next question comes from Kyle Rose. Your line is open.

Great. Thank you very much for taking the questions. Can you hear me all right?

Yes.

We can hear you, Kyle.

So a lot have been asked. Just two one more detail question and one bigger picture question there, is this just a start when we think about overall sales rep hiring in additions, it sounds like Q4 was a positive improvement there. Just when you think about your net adds year-over-year when we think about ’17. Can you just characterize that relative to where you’re guiding the overall U.S. business and then just taking a step back from a bigger picture perspective, back in the Analyst Day, back in 2015, you guided to five-year revenue CAGR of 13%, slightly faster EPS growth there. I just wanted to think as we reflect on 2016 and then you maybe some of the delays in the emerging technologies that are now going to start launching now, just how do you think about that five-year guidance from a growth standpoint, and just you know kind of the growth assumption that it assumes in 2019 and 2020 and beyond?

I’ll take the first part of your question and then the five year. On terms of the net adds in the U.S., the way we look at it is we're still outnumbered 5:1 by Medtronic in the U.S. and we feel there is a lot of room for us to grow our U.S. sales force. That being said, a rate that we would look to see us grow is roughly the rate of sales growth. So if we grow at 10%, we'd like to see our sales growth -- sales force grow at 10%, and we don’t disclose those numbers and when we measure ourselves, that’s how we are measuring ourselves in having a successful year with sales growth.

Just to your question, Kyle, on the growth from the Investor Day. So there’s a couple of things to think about is, we had always mentioned that the core business should grow at roughly a 10% CAGR for the spine and if you remember, we’re saying that, that means U.S. is probably in that 8% to 9%-ish range and we’re looking, because of our under penetration internationally, to have that closer to 20% for international type growth. So that’s really what you would expect to see. Overall, somewhere between 10% or so in the core businesses as we get out the next few years. That change from that 10% up to the 13% CAGR’s driven by spine -- by Emerging Technologies, with robotics first and trauma second. And that was really the lift that would get you up to the $1 billion market. Based on what we see today, we had talked during the Analyst Day that everything was organic and we had levers to pull if we decide -- if we were coming off track. And as you know, not because of our growth but rather just happened to coincide, we were able to do the Alphatec acquisition and that really covered the gap that we would have anticipated for 2016 and get us on track. So we’re still moving towards the $1 billion 2020. We’ll reevaluate that post approvals and just see how that is later on this year, and just see if that needs a refresh. But right now, nothing we’re aware of to take us off of that goal.

Okay, great. Thank you very much for taking the question.

Your next question comes from Stephen Lichtman from Oppenheimer. Your line is open.

Thanks, hi, guys. Just two questions on trauma. In terms of the sales force build out, I know you’re pretty specific in terms of where you are on the robotics, but I was wondering if where you guys are at in terms of starting to build out the trauma sales force. And then secondly, just in terms of the cadence of the launch, I think in the past, you’ve talked about after getting the initial products approved, you’d still wait to get a broader bag before going sort of full bore in terms of launch. When should we start thinking about you really starting to go in earnest with a full launch in the U.S.? Thanks.

Hi, Steve, this is Dave Demski. Yeah, in terms of the sales force hire, we’re looking at the second half of the year to really ramp that up and going into 2018. And then we have a core bag that we’re in development right now. Some of those products are with the FDA, some will be going to the FDA first quarter, second quarter here. But we’re immediately moving our engineers into the next phase of products, we'll be layering onto that core bag immediately in terms of the development process. Now it takes us 12 months to 18 months to get through that. But we see that as a continuous process, very similar to the way we've approached spine, where we've come out with the basic element and then continue to look for gaps and opportunities to improve patient care with technology.

But you look to start the launch with the products that are at the FDA or soon to get the FDA?

We have them, but we consider our core group of products by the second half of this year.

With no further questions, we will now conclude the Globus Medical fourth quarter 2016 earnings release conference call. Thank you all for joining us, you may now disconnect.