Welcome to
the 4th Quarter 2020 Stryker Earnings Call. My name is David, and I will be your operator for today's call. At this time, all participants are in a listen only mode. Following the conference, we will conduct a question and answer session. During that time, participants will have the opportunity to ask one question and one follow-up question.
This conference call is being recorded for replay purposes. Before we begin, I would like to remind you that the discussions during this conference Call will include forward looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings with the SEC. Also, the discussions will include certain non GAAP financial measures. Reconciliations to the most directly comparable GAAP Financial measures can be found in today's press release that is an exhibit to Stryker's current report on Form 8 ks filed today with the SEC.
I will now turn the
call over to Mr. Kevin Lobo, Chairman and Chief Executive Officer. You may proceed, sir.
Welcome to Stryker's 4th quarter earnings call. Joining me today are Glenn Boehnlein, Stryker's CFO And Preston Wells, Vice President of Investor Relations. For today's call, I'll provide opening comments, followed by Preston with an update on the current environment and our most recent acquisitions. Glenn will then provide additional details regarding our quarterly results Before opening the call to Q and A, I would like to start my comments by expressing my appreciation for the perseverance shown by our employees as they work through the many challenges that we faced during 2020. Throughout the year, we maintained high employee engagement, While continuing to support surgeons and caregivers around the world, our 4th quarter organic sales declined roughly 1%, reflecting the impact of a resurgence of COVID-nineteen infections, offset by a continuation of emergent procedures And strong performance by our large capital products.
We are also excited about closing the Wright Medical deal during the quarter and the category leadership that we gain in the fastest growing segment within the orthopedics market. Preston will provide some additional updates on the integration shortly. Throughout the quarter, we The financial discipline instituted at the beginning of the pandemic, which combined with a favorable tax rate led to an adjusted Earnings per share of $2.81 in the quarter, up approximately 13% versus 2019. And we delivered impressive cash flow from operations, which exceeded $3,000,000,000 for the full year. In addition to closing the Wright Medical acquisition, we also made progress in many areas that will provide future growth opportunities.
We have established a structure focused on digital, robotics and enabling technology, where we see a significant to create a company wide unified digital ecosystem, including Mako. We maintained our commitment to drive innovation Across our various business units, including neurovascular, where we gained new product approvals across aspiration, Stent retrievers and floater burning stents and in our MedSurg segment where we continue product introductions with a focus on safety and prevention. Finally, we successfully launched our ASC sales model, which leverages the Stryker portfolio to provide end to end solutions to meet the growing demand and shift to the outpatient setting. Our continued support for our customers and our committed to innovation Our people and culture of execution remain strong, which will allow us to deliver on our commitment to make healthcare better And to resume our customary strong organic sales growth and leverage earnings. With that, I will now turn the call over to Preston.
Thanks, Kevin. My comments today will provide an update on the current environment, Trends related to the latest COVID-nineteen impacts and updates on our most recent acquisitions of Wright Medical and OrthoSensor. During the Q4, elective procedures were negatively pressured in those regions globally as localized infection And hospitalization rates surged through the month of December. As a result, growth was uneven and correlated to the state of the pandemic in each region. The areas impacted the most include the U.
S. And many of the countries in Western Europe, most notably the United Kingdom, driven by a countrywide lockdown. Even with the procedural variability, we saw growth in emerging markets, including China, which grew double digits over prior year quarter. Looking forward, hospitals are better equipped to handle this resurgence and they are working to bring back the procedures that have been delayed. But we expect that the variability of elective procedures will continue through the Q1 until infection rates begin to decline and the distribution of the vaccines become more prevalent.
This slowdown in elective procedures had a negative impact on our more deferrable businesses, which make up approximately 40% to 50% of our total sales. However, the slowdown this quarter was not as impactful as the decline in the Q2 as hospitals were better equipped to manage COVID patients while maintaining some level of elective surgeries. Despite the overall slowdown, we experienced continued growth in our neurovascular, medical, naco and upper extremities businesses. Specifically, demand for Medical's large capital products continued in the 4th quarter, driven by the focus on expanding bed capacity, The need for our emergency care products like Power COTS and the Lucas device and the availability of some remaining CARES Act funding in the U. S.
In addition, the early trends on the launch of our new procurity bed are positive and expected to continue into 2021. During the year, our Mako installed base grew by 33% and exceeded another milestone with over 100 robots Sold and installed in the Q4. This growth continues to highlight the demand for our differentiated Mako Robotic Technology As well as our ongoing success selling and installing robots in major teaching institutions, ASCs and competitive accounts. We are also excited about our recent approval for Mako TKA in China, Russia and Brazil, which all provide Opportunities for growth as these markets continue to embrace robotic, digital and enabling technologies. Turning to U.
S. Knee procedures. In the Q4, approximately 44% of our total knees were Mako Knee procedures, a trend that continues to increase. The shift towards cementless knees also continued. And in the Q4, cementless knees made up 42% of our U.
S. Knee procedures. During the pandemic, feedback from surgeons has pointed to limited trialing of competitive products in businesses like joint replacement As surgeons work to perform procedures restricted by cancellations and deferrals. However, as the pandemic subsides and we return to a more normal environment, We expect to continue to outpace the market driven by our Mako installations throughout the year and our strong order book heading into 2021. We are also enthusiastic about the Wright Medical acquisition and the category leadership we gain in both upper extremities That enhances our customers' ability to address patient needs across the more than $3,000,000,000 extremities market.
The integration has been progressing well over the last few months. The long period from sign to close was used to ensure that the appropriate integration plans were in place, leveraging our years of deal experience. To date, the teams have been focused on moving quickly to align the new combined organization. Considerable progress has been made including the creation of specialized business units and sales forces for trauma, upper extremities and foot and ankle, which is a key part of our overall decentralized strategy that allows us to remain close to the customer. The U.
S. Sales leadership organizational structure for these 3 specialized business units has been announced and the rollout and full alignment of territories will be finalized during the Q1 as planned. Outside the U. S, the leadership team is working to align the sales forces throughout the year. Our teams are the sales integration while continuing to drive day to day business and during the quarter there was minimal disruption caused by the closing and integration activities.
Finally, I want to restate our ongoing commitment to M and A, which was most recently demonstrated by our acquisition of OrthoSensor, a leader in the digital evolution of musculoskeletal care and sensor technology for joint replacement. Smart devices and implants will play an important role in the future of And the addition of OrthoSensor will allow us to continue to innovate and advance smart sensor technology, including interoperative sensors, Wearables and ultimately smart implants. As it relates to 2021 guidance, Glenn will provide an update on our full year guidance for sales, Operating margin and EPS. Updates to this annual guidance will be made each quarter as necessary throughout the year. With that, I'll now turn the call over to Glenn.
Thanks, Preston. Today, I will focus my comments on our Q4 financial results and the related drivers. Our detailed financial results have been provided in today's press release. Our organic sales decline was 1.1% in the quarter. As a reminder, this quarter included the same number of selling days as Q4 2019.
Pricing in the quarter was unfavorable 0.8% from the prior year, While foreign currency had a favorable 1.2% impact on sales, early in the quarter, there was continued momentum from Q3. However, during November, the impact of the resurgence of COVID-nineteen and the related cancellations of procedures, primarily in the U. S. And Europe, Significantly impacted our sales momentum. However, we did see demand for certain capital products continue as we had strong results in our Mako, Medical beds and emergency care products.
For the quarter, U. S. Organic sales declined 1.5%, the slowdown in elective procedures as a result of the pandemic, somewhat offset by strong demand for Mako, medical products and neurovascular products. International organic sales were flat, impacted by the resurgence of the COVID-nineteen pandemic, primarily in Europe, which was mostly by growth in Canada, China and Brazil. Organic sales decline for the year was 4.8% With a U.
S. Decline of 5.8 percent and an international decline of 2.1%. 2020 had one additional selling day compared to 2019 and for the year price had an unfavorable 0.7% impact on sales. Our adjusted quarterly EPS of $2.81 increased 12.9% from the prior year, Reflecting strong financial discipline, good operating expense control and a favorable operational tax rate. Our 4th quarter EPS was positively impacted by $0.03 from foreign currency.
Our full year EPS was $7.43 which is a decline of 10%, reflecting the impact of lower sales, especially in Q2, As well as the impact of idling certain manufacturing facilities during the year, offset by strong expense discipline throughout the year. Now I will provide some highlights around our segment performance. Orthopedics had constant currency sales growth 2.8% and an organic sales decline of 5.8%, including an organic decline of 5.7% in the U. S. This reflects a slowdown in elective procedures related to COVID-nineteen and a very strong prior year comparable as Q4 2019 U.
S. Organic growth was 7.2%. Other ortho grew 12.3% in the U. S, primarily reflecting strong demand for our Mako robotic platform, partially offset by declines in bone cement. The trauma and extremities business also delivered positive growth, led by our core trauma and shoulder products.
Internationally, orthopedics declined 6% organically, which It also reflects the COVID-nineteen related procedural slowdown, especially in Europe. This was somewhat offset by stronger performances in Australia and Canada. During the quarter, the Wright Medical acquisition was successfully closed. For the quarter, Wright delivered flat growth on a comparable basis. This included positive performances in U.
S. Shoulder, double digit growth in U. S. Ankle As well as strong international growth led by Australia. On a comparable basis for the full year, Wright had a 10.3% decline, mainly driven by the COVID-nineteen related slowdown in the Q2.
In the quarter, MedSurg had constant currency growth of 1.5% and organic growth of 1.3%, which included 2.2% Growth in the U. S. Instruments had U. S. Organic sales growth of 4.5%.
In the quarter, sales growth was driven by gains in its power tool, Waste Management and Smoke Evacuation Products and its Service Business. Endoscopy had a U. S. Organic Sales decline of 7% primarily impacted by the slowdown in the capital businesses, offset by gains in the sports medicine business, which grew over 9% in the quarter. The Medical division had U.
S. Organic growth of 9.7%, reflecting solid Performances in Patient Care, Emergency Care and its Sage businesses. Internationally, MedSurg had an organic sales decline of 2.4%, reflecting a general slowdown in instruments and endoscopy businesses and strong comparables across most geographies. Neurotechnology and Spine had constant currency and organic growth of 2.1%. This growth reflects many strong performances within our Neurotech Product line, including neuro powered drills, SonaPet and neurovascular, offset by the impact of procedural deferrals, especially in the Our U.
S. Neurotech business posted an organic decline of 1.2% as procedural deferrals impacted sales in the quarter. Internationally, Neurotechnology and Spine had organic growth of 13.5%. This performance was driven by Strong demand in Australia, Japan and China. Now I will focus on operating highlights in the 4th quarter.
Our adjusted gross margin of 65.1 percent was unfavorable approximately 120 basis points from the prior year quarter. Compared to the prior year quarter, gross margin dilution was impacted by price, business mix and unabsorbed fixed costs as production was brought in line with reduced demand This was primarily offset by acquisitions and foreign exchange. Adjusted R and D spending was 5.5 percent of sales. Our adjusted SG and A was 30.3 percent of sales, which was favorable to the prior year quarter by 200 basis points. This reflects the continued focus on disciplined operating expense controls, which have been in place since the Q2.
These cover most of our discretionary spending, including curtailments in hiring, travel, meetings and consultants. In summary, for the quarter, our adjusted operating margin was 29.2 percent of sales, which is a 90 basis improvement over the prior year quarter and reflects the impact of the spending discipline previously discussed. Related to other income and expense as compared to the prior year quarter, we saw a decline in investment income earned on deposits and interest expense increases related to increases in our debt outstanding related to the funding of the Wright Medical acquisition. Our 4th quarter had an adjusted effective tax rate of 8%. Our full year effective tax rate was 12.6%.
These rates reflect one time operational fluctuations that arose due to the pandemic, with a mix of foreign Related to lower foreign manufacturing activity combined with reduced U. S. Sourced income that resulted from the sharp drop in sales at the end of the year. For 2021, we do not anticipate these circumstances arising as we expect to return to normalized operations during the year. And we expect our full year effective tax rate to be in the range of 15.5% to 16.5%.
Focusing on the balance sheet, we ended the year with $3,000,000,000 of cash and marketable securities and total debt of $14,000,000,000 During the quarter, we executed the Wright Medical acquisition, which resulted in the disbursement of $5,600,000,000 inclusive of the retirement of Wright's convertible debt. Turning to cash flow. Our year to date cash from operations was approximately $3,300,000,000 This historically strong performance resulted From the disciplined working capital management somewhat offset by lower earnings. Turning to cash flow for 2021, We will not be repurchasing any shares and we anticipate that capital expenditures will be approximately 650,000,000 Anticipating a more normalized year in 2021 and a ramping of investment in our businesses, we expect a free cash flow conversion rate as a And we will be conducting a 1st quarter of adjusted net earnings, excluding the one time impacts from the Wright Medical integration 70% to 80%. And now I will provide 2021 guidance on a standalone legacy basis And further guidance, including Wright Medical.
We are providing our guidance in comparison to 2019 as it is a more normal baseline given the variability throughout 2020. As Preston indicated, we will be providing annual guidance on organic sales growth and earnings, and we'll update this throughout the year as part of our regular earnings calls. As we assess the current operating environment, we believe that the Recovery ramp of elected procedures will continue to be variable based on region and geography and will continue into the Q2 of 2021. Given this variability, we expect organic sales growth to be in the range of 8% to 10% for the full year 2021 when compared to 2019. As a reference, our organic sales growth excludes Wright Medical.
There are the same number of selling days in 2021 compared to 2019 and one less when comparing to 2020. Consistent with the pricing environment experienced In both 2019 2020, we would expect continued unfavorable price reductions of approximately 1%. Additionally, as we are comparing growth to 2019, our 2021 organic sales growth guidance includes 2 years of price reductions. If foreign exchange rates hold near current levels, we anticipate sales and EPS will be modestly We do anticipate expansion of 30 to 50 basis points of operating margin in 2021 for our legacy Stryker business compared to 2019. This includes anticipated increases in hiring, discretionary expenses and other costs that We expect adjusted net earnings per diluted share to be in the range of $8.80 to $9.20 for the full year.
This includes the previously announced $0.10 solution driven by the addition of the Wright Medical business for the full year. While Wright Medical is dilutive in 2021, we expect it to be accretive starting in 2022. As it relates to other aspects of Wright Medical, We expect comparable growth for Trauma and Extremities to be in the low to mid single digits in 2021 when compared to 2019. This includes the integration of Strike's legacy extremity business with Wright Medical, which will all be part of our trauma and This growth is impacted by the recovery from COVID-nineteen, partially offset by the synergies from the integration activities in 2021. We also reiterate our previous guidance on cost saving synergies from the deal of approximately $100,000,000 to $125,000,000 over the next 3 years.
And now, I will open up the call for Q and A.
Thank you. We will now begin the question and answer As a reminder, callers will be limited to one question and one follow-up question. Your first question comes from the line of Vijay Kumar with Evercore. You may proceed.
Hey, guys. Congrats on the cube here. And I guess maybe a high level Start off on the guidance question here. 8 to 9 organic for the base business, What are we assuming for Wright Medical here for growth for fiscal 'twenty one?
Hello? Yes. Hi, Vijay. Sorry, I was on mute. Yes, our organic guidance is 8% 10%.
And the guidance that we provided related to Wright Medical, you have to understand that it's being integrated into our trauma extremities businesses. So we will be combining in our legacy Extremities business with Wright Medical and running that combined group as Part of our trauma and extremities division. So when you mix all that together and you really look at what will trauma and extremities growth be In 2021 as compared to 2019, we do think it will be low to mid single digits. But keep in mind that also takes into account Sales dis synergies for Wright Medical that we fully expect will happen in 2021.
Understood. And Glenn, maybe if
I could add just one quick
one on margins for cash. I mean, Q4 was really impressive, the margin on the OpEx side. And if I look at the guidance here, perhaps it seems a little conservative. And I look at the EPS guidance range, It's coming in
a little bit wider versus the typical Stryker guidance range, if
you will. Workgroup costs, That's almost a 100 basis point swing within the low end and the high end. Perhaps talk about what goes in at the low end and the high end?
Yes. It's Vijay, I would tell you that based on what happened this year and the variability that we saw in our operations, We fully expect to continue to experience some variability on into Q2. And so our guidance range really reflects How that ramp comes back? On the low end, it could be all the way through Q2. On the better end, we start to see much more improvement beginning of Q2.
And it really is going to be variable depending on that. I mean, we have tasked our legacy Stryker business on the op margin front With 30 to 50 basis points improvement. But keep in mind, as you look at Q4 or if you can even go back and look at Q3, It really reflected pretty draconian expense control in terms of hiring, travel, Meetings, consultants, you name it, discretionary expenses, and we put the lid on that. So that's Not sustainable, especially if you think about our aspirations to grow at the high end of med device. And so we will start seeing that spending pick up As we continue to supplement and hire our sales forces, as we meet with customers, as we add to our prototypes And loaner pools, all those things will start to add to our expenses.
And so that's really what's underlying the guidance.
Your next question comes from the line of Bob Hopkins with Bank of America. You may proceed.
Thanks and good afternoon. So just two quick things. Glenn, just to clarify that guidance on the revenue side, appreciate that you're guiding to organic growth. But it sounds like Rite Medical was flat in the quarter, which is actually pretty impressive. So
I come out
to a little bit over 17,000,000,000 For the year, just based on kind of your guidance of 8% to 10% organic, and then I'm just tacking on $900,000,000 to $1,000,000,000 for Wright Medical and getting to a little over So I was wondering if you thought that was in the ballpark.
Yes, Bob. Again, I just can't reiterate the variability that we're seeing. So Maybe that's sort of adding up the obvious set of numbers, if you will. I think we picked the range 8% to 10% because we do feel like There is going to be some variability that we can't exactly forecast at this point in time and where we're sitting in Q1 and what we're seeing. As far as Wright Medical goes, We were pretty pleased with where their Q4 performance came out, but they're also subject to a lot of the same variability, Which is why we're looking that once we integrate it with Trauma and Extremities, we will have some sales dis synergies that just naturally occur.
We Felt that with K2 and spine and we will fill that with Right Medical. So taking into account that variability, you're really looking at 8% to 10% for the
Okay, fair enough. And then, Kevin, just quickly for you. Just curious to get your kind of macro perspective What you're seeing out there as far as the current state of the business right now, hospitals' willingness to buy capital, kind of where we are in terms of Procedure growth, just would love an update given the environment is so volatile on what you're seeing right now. I think that
would be helpful. Thank you.
Yes. Thanks, Bob. I would say, certainly, the end of the year, really did we got that second wave spiking. And certainly, you saw that in the discretionary procedures, a pretty big slowdown after a pretty good month of October. It really started to kill off November, December.
On the large capital front, we're actually very excited. So what we experienced through Q2, Q3 and Q4 from an order book standpoint is continuing to be very strong. So That is really good news. It's good news for Mako. It's good news for medical.
On the small capital side, we've always said that that tends to lag a little bit, the recovery in discretionary procedures. And you certainly saw that within certainly the endoscopy that And you certainly saw that within certainly the endoscopy that is in the instruments division where I would say that those orders are maybe going to take a little longer to really come back In the same way, but overall, I mean, we have enough confidence now with the hospitals being ready to do these As soon as the pandemic starts to subside, as soon as vaccines start to become more prevalent, that they'll turn it on pretty quickly And they'll be pretty agile. And that's why we feel pretty confident of being able to give, I think, a healthy guide, certainly going back off of 'nineteen 8% to 10% organic. So it will spike throughout the year, starting with obviously a slower Q1. And the good news is we have the whole year.
So even if the discretionary procedures drag a little bit, we saw in Q3 a pretty big spike once So over the course of the year, we're hoping that and believe that the guidance will be able To sustain even if it's maybe a little softer in Q2 and a little stronger maybe in Q3.
Your next question comes from the line of David Lewis with Morgan Stanley. You may proceed.
Good afternoon, and thanks for taking the question. Just two quick ones for me. Kevin, I was sort of comparing the revenue guide to the earnings guide and your earnings guide is kind of interesting to me in that it's basically 12% earnings growth, which you Guys, we're doing kind of the last couple of years minus Wright Medical, but the revenue growth is a little higher, right? The 8% to 10% over 'nineteen is a little better than the earnings growth guidance. So So it's above your structural growth rate, but I think some would argue probably should be just given in light of the recovery.
So how should we interpret that 8% to 10% number, Kevin, relative To the structural growth rate and what are some of the key factors underpinning that? Or how do you think about the structural growth rate of Stryker here as we come out of COVID-nineteen and a quick follow-up.
Sure, David. I mean without getting into every single division, what I would just give you as a macro comment is We feel that we have the right offense to continue to win in the market and to continue strong growth. You saw for 7 straight years, we accelerated our organic growth And 2019 culminated with over 8% organic growth. And I think that muscle that we developed, the structure that we have with our business units, the new product pipeline that we have That's positioned us to be an above market grower, and we fully expect that that will continue into 2021. There are obviously differences by divisions, but we feel like we're in a very healthy position overall, and that's what gives us confidence in the guide.
Clearly, Wright Medical is a big acquisition. There are dis synergies that we've assumed. It was highly dilutive to the normal operation of our business. We'll see how that unfolds over the course of the year. The early signs of the integration are very positive, But we have put in some prudence there just based on what we've experienced with our K2M acquisition and what frankly all other Implants companies have experienced with their integration.
Okay, very helpful. And then just lastly, just on ortho Kevin, I know the environment is very, very invisible. All we have is sort of 1 competitor results that go after here. Any reason to believe that your momentum has changed at all? I mean, your robotic And you kind of went from 30% knees and cementless robotic to 40% pretty darn quickly during COVID.
But any reason to believe that your The positioning of relative share momentum versus other peers in 'twenty one is going to look a lot different?
Yes. No, we remain very bullish about our joint Business as well as Mako. And you saw just the increase in Mako is pretty remarkable to have almost 1 out of 2 is being done on Mako, and it's not been that many years since we launched the system. So unlike navigation in the past, which obviously never had this type of an uptake, We continue to have strong, not only installations of robots, but utilization and even hips. We're seeing that continue to increase as well.
And The new HIF software was installed in about 400 accounts in Q4. So we had the approval, obviously, earlier in the year, but because of the pandemic, it's taken us time To actually be able to go in and do the upgrades, but that will pick up steam again into 2021. So again, looking at 1 quarter, whether it's a positive or a negative in Pandemic world is not something I'm too concerned about. It's just based on where your regional strength is. If you happen to be In a state or locality that's doing procedures, then you got benefit.
And if you didn't, then you got hurt. So it's a little bit random during the pandemic, but structurally, I think we're in great
Your next question comes from the line of Larry Biegelsen with Wells Fargo. You may proceed.
Thank you so much. This is Shagun in for Larry. I wanted to touch on the acquisition of OrthoSensor. Kevin, the acquisition Really marks your entry into the sensor technology, remote patient monitoring and smart implant space in a much more meaningful way. And I was wondering if you could comment on the timing here.
Why now, given that you've had a relationship with them for several years for soft tissue balancing? And And then how are you thinking about timelines for integration and launch with MAKO? And then also the launch of smart implants, any timing you could share? And also, if I could squeeze in one more, how are you thinking about the application of sensor technology beyond knees And shoulders and hips, anything on timings would be great. Thank you.
Yes. Chaudhry, this is Preston. Just in terms of the timing of the deal itself, I mean, again, we are constantly looking at different opportunities and it was just the right time with the team to make this acquisition in terms So I think just the timing of it just happened to work out the way that it did, and we typically do look at our targets for a long period of time. In terms of other timelines about when we're going to be bringing some of the different things to market, at this point, we're not ready to disclose those timelines. Just know that the teams are getting to work to develop pretty robust time excuse me, robust pipeline around that sensor technology.
And as we have more Information, we'll certainly be bringing that to you guys.
Your next question comes from the line of Robbie Marcus with JPMorgan. You may proceed.
Hi. Thanks for taking the question. Kevin, I was hoping you could comment on, as you're thinking about later this year and into next There were a lot of patients that didn't end up getting procedures in 2020 and probably the first half of twenty twenty one. How should we think about the Potential for a bolus of patients. I realize there's limitations to what the system can do, but there's still a lot of patients that need to be So how are you thinking about that as an organization?
Hey, Robbie,
it's Preston. I'll take that one. In terms of that Patient backlog, certainly we saw some of that being worked down in the 3rd quarter as we saw the recovery starting to happen And certainly as then we saw more deferrals happening in 4th quarter, you saw more people being added back to that backlog. And as Kevin and Glenn both articulated, as we see the recovery Happening in 2021, we would expect to see some of that recovery include the backlog of patients that have been deferring now for Anywhere from 3 to 6 months or so. And so we would expect to see some of that flowing back into the numbers through 2021.
I think the one caveat I would give you You won't necessarily see a dramatic spike in those numbers just given certain aspects around capacity and things like that. So You'll still see surgeons and hospitals working to fit additional surgeries in and things same things that we saw in the Q3, but you certainly won't see A significant dramatic spike at any one point in time as a result of the backlog.
Great. And maybe just one more question on neurovascular. I remember in 2019, back in the old days before COVID, You were hoping to at least accelerate that business in 2020. You had some new product launches. I was hoping you could just give us the update on where You're going to have new product launches in 2021 and how you're thinking about that business?
Thanks.
Yes. Thanks, Robbie. First of all, Double digit growth in the 4th quarter, extremely exciting portfolio of products, new product introductions Obviously, with Aspiration, we have the vector 74 catheter out, we have the pump. They're doing very well. We have this Florida VERT stent, the 2nd generation polar vertic stent approved in the United States has surpassed EVOLVE.
We have the 1st generation polar vertic stent approved in China. Our ATLAS stent, which is used in the hemorrhagic segment, adjunctive stent is doing extremely well In China, so we really have a great portfolio. We have the NXT, the next generation stent retriever as well recently launched. So a lot of new launches. This management team is truly outstanding.
They've been in place since frankly we acquired the business. They have a very healthy pipeline Other products coming as well. So I'm very, very bullish on the neurovascular business. They ended the year with great momentum, and I
Your next question comes from the line of Pito Curry with Deutsche Bank, you may proceed.
Good afternoon, guys. Thanks for taking my questions. One quick guidance question for you. And I understand you're not providing quarterly guidance at But normally you get about 23% of your annual EPS in the Q1 and because you're still seeing pressures in deferrable procedures in January. Is there any chance that there's some color that they can give us on the cadence of the Q1 earnings versus your normal run rate?
Yes, Pito, I would just
tell you, this is we're not in a normal run rate period, right? I mean, I think we're still coming out of some pretty variable Trends that we saw in the Q4 and continuing certainly into the Q1, a lot of it's going to depend on the localized hospitalization And really how those decline over time and how the vaccine is out there and more prevalent. So I think that's what I would continue to look at as we think about what that recovery trend is going to be. At this point, it would be too hard really to give you Too much guide on how that's going to exactly happen and that's why we see the wider guidance that we provided. Okay.
Fair enough. And also for follow-up, as more procedures Moving into the ASCs due to COVID to free up OR space and its capacity in its systems. Have you seen hospitals change their purchasing habits to buy either cheaper, you know, bigger No, not at this time. We've not seen any significant changes In that in those habits and all.
Your next question comes from the line of Joanne Wuensch with Citi. You may proceed.
Yes. Hi. This is Matt Henriksen in for Joanne. First question we have is just around Mako and the robotic knee You guys had a great quarter, great momentum ending the year. But J and J is coming out with their They received FDA approval and also Zimmer is kind of in full swing with their launch.
So just kind of putting the 2 together, is there any change in your Commercial plans as you now have more technology out in the market.
Yes. So this is Kevin. I'll take that. First thing I would tell you is the introduction of competitive systems has not slowed down our makeup momentum whatsoever, And we don't expect that to change with one more system on the market. If anything, it just proves to further validate that robotics is here to stay And we really believe we have the best solution on the market, as evidenced by the uptake in the And we disclosed the Q4, almost one out of 2 knees in the United States being used with Mako.
So Surgeons absolutely love our system and are using it at very, very high rates. There also is a synergy with the way that Our system ensures an absolutely perfect cut and with haptics, which we're the only ones to have, That is very complementary with cementless, and you see both of those adoption rates moving in the same direction. So We love our chances of competing side by side with anybody, and we think this provides a further tailwind in the adoption of robotics and orthopedics.
That's some good color. Thanks for that. And then for a follow-up, just going to the Wright Medical Before they were acquired, they had always talked about their enabling technology, their preoperative planning software being Kind of their main driver to capture share and to expand the market. Has that strategy changed at all now that you Are we going to
integrate with them or are you going to continue kind of with that strategy
of focusing with enabling technology first? And thanks
for your question. Yes. What I would tell you is that Certainly, we've always been believers of enabling technologies as evidenced by some of the different businesses that we've acquired with some of the different products that we've launched and really with a focus on improving patient outcomes. And we believe that a lot of the technologies, including the Blueprint technology that Wright I previously invested in, are complementary really to some of the platforms that we have. And as part of the integration with the right organization, the R and D portfolio And technology teams, they're all working together really to build out what those long term pipeline plans are going to be and really leveraging all of the different Unique products and capabilities from both sides, so we will continue to see investments in those areas.
Your next question comes from the line of Kayla Crum with Truist, you may proceed.
Great. Hi, guys. Thanks for taking our questions. So appreciate the guidance that For 2021, can you just speak to how you think each segment of the business will grow relative to the Total organic range you provided. And I guess I'm most curious just looking at MedSurg and Orthopaedics.
I mean, are you assuming some of medical, The demand slows down in the coming quarters and the backlog picks up in order, just any more detail on that would be super helpful.
Yes, okay. We don't typically provide any of that segment breakdown in terms of our guide. But I think if you Take a look at what we're expecting to happen in the marketplace and what's really been happening through 2020 and as we go into 2021. Certainly, those businesses that we have that are affected are more affected by elective procedures should see the benefit of elective procedures returning throughout the year. Other thing I would just say, as Kevin had mentioned too, our smaller capital products, really those products that are facilitating many of those elective And then as it pertains to really the large capital segment, we've continued to see strong demand in those areas and would
And then just a follow-up, I guess, to Tito's Question earlier, is it fair to say that, I mean, Q1 will be sort of the softest of the year, Q2 will have the highest growth, Kind of often easier comp in the 2nd part of this year should feel a little bit more normal?
I think it's certainly fair to say The variability that we experienced in the Q4, we expect that to continue into the Q1, and then we should see benefits Happening as we progress throughout the remainder of the year.
Your next question comes from the line of Steven Lichtman with Oppenheimer. You may proceed. Thank you. Hi, guys. At first, I was wondering if you could provide some additional color around AFC sales model that you're rolling out, any details you could provide on what the model looks like and any early feedback from the field would be great?
Yes. So I'm not going to get into too much detail just for competitive reasons, but I would say that I'm delighted With the ASC offense that we put in place, it involves people from different parts of Stryker that basically quarterback the deal And bring in multiple divisions based on the unique needs of every ASC. Every ASC is unique. Every deal is a customized deal, but the way we've navigated this enables incredible collaboration Across our divisions, we've put just absolutely fantastic people in charge. And really, we have the breadth of our portfolio with Capital equipment, disposables and implants and really for the first time as a company, we're really leveraging that in the United States.
We have had success With such models, sometimes in other countries around the world, but in the U. S, this ASC model has been truly fantastic, exceeded my expectations, And I'm bullish that they'll be able to continue to have great success in the ASCs. And frankly, Mako is often part of that formula in the ASC, Not always. We obviously had a presence before with sports, but that business fortunately has really started to grow. As you even heard in the Q4, in spite of the pandemic, it grew Over 9%.
And so having a strong sports business plus all of our other businesses and now with the rights, having extremities Category leading position, we just have a fantastic portfolio to serve the needs of the ASC and now a commercial Offense again, not getting too specific, but let's just say we make it easy for the ASE and we provide customized solutions.
Got it. Thanks, Kevin. And then just a follow-up on the Q4. How did your spine franchise specifically hold up during The recent spike in COVID cases and any thoughts on that business overall looking into 2021? Thanks.
Yes, I would
say that the spine business held up a little bit better. We saw spine procedures in general holding up a little better than some of the other elective procedures, Particularly for our spine business outside the United States performed well and I think it's just a function of the successful integration that we've had with the K2M business And combining that with some of the enabling technologies like those that we acquired through Mobius, and again, we saw some continued performance in some of the markets outside the U. S. That had more stability in spine related procedures like Japan and Canada as well. So I think all in all, it held up a little bit better.
We definitely expect that business to continue to perform well as we go into 2021 and really harnessing the power across K2M, our legacy spine business, as well as
Your next question comes from the line of Matt Taylor with UBS. You may proceed.
Thank you for taking the question. So I thought the disclosures on Mako were really interesting and bullish. And Just had two follow ups on that. One is, where do you think you can push Mako penetration and cementless penetration in the U. S.
Over time? And We'd love to hear your thoughts, OUS, both on that question and just on the opportunity given you just had all these approvals
Yes, thanks. Certainly, I'm delighted with the progress, both with the mettle adoption as well as cementless. I don't think cementless will ever get to where it is with hips just because of bone stability. It's a weight bearing joint. But clearly, we now see it's going to be Significantly higher than 50%, which I think 5 years ago, nobody would have believed if we had said that.
So that's pretty remarkable. In terms of the actual use of Mako, as you saw, we have a lot of robots installed this year. So I would expect that that looking at the percentage of Having these done with nickel, we'll continue to increase same with hips. Outside the United States, it's taking a little longer, obviously, because of the approvals, but we're Really excited about getting the totally approved in China, Brazil and Russia. And certainly, Japan and China are going to be very, very good markets for us.
Japan, we've made some progress already. The approvals took a little longer there as well. But The new hip software, of course, is also very important. As you know, there's a lot more hip procedures done in that part of the world. It's almost about the same as knees, Unlike the United States, so we love the fact that we have multiple applications all approved in those markets.
And we would expect you're going to see a similar The growth that you saw in the United States, it may not be quite as quick. You've seen that frankly with Intuitive in soft tissue robotics. The update is a little slower outside the United States, but we expect the same kind of runway longer term and are very bullish about the prospects, especially In China, Japan, Brazil for sure are going to be terrific markets for Mexico.
Okay. Great. Maybe just a quick follow-up on that. Right in house now, could you give us updated thoughts on the timing on a robotic solution for shoulders and for spine?
We're not really ready to get time lines. We have to get a lot closer to launch before we're going to be specific about time lines. I would say that I'm extremely I think I've said that in the past. It's a very difficult procedure to do. There are enabling technologies that have been right that our teams are working on with our Mako chains.
And we'd be very excited to be able to bring that to the market with their market leading implants, but not yet We have 2 options for spine. 1 is the robotic program that was being developed by Mobius Prior to the acquisition as well as Mako's, we have work going on in both areas, but just not ready to get timelines. Robotics is complicated, and
Your next question comes from the line of Ryan Zimmerman with BTIG. You may proceed.
Great. Thanks for taking the questions. Just first for me, Kevin, Ron, the capital equipment demand, I was just wondering if you could talk about kind of the dynamics in play in 2021. You've Been very real strong with that. And you hadn't said much about any booms and lights.
And so, is this a story of kind of the first half, second half And how to think about that composition of capital equipment moving from the first half to the second half and what that may entail in terms of your portfolio?
Yes. So, Bloom's and Light certainly haven't been as positive as Mako and the beds and stretchers And certainly, the defibrillators, because the medical capital really did sort of have the right a bit of a pandemic Tailwind, if you will. And Booties and Light's large construction sort of slowed down a little bit. That should pick up starting next year. And that's Part of the drag that you see within the endoscopy division is the booms and lights portion.
But certainly in ASCs, they're busy. But certainly the large Capital spend projects were delayed a little bit. They're starting to pick back up again. So that's obviously a smaller business within the overall Stryker. But medical, we continue to feel bullish.
So we did get a bit of pandemic benefit, but this new bed that we've launched is Really fantastic product, getting great customer feedback. Sage has also picked up, so that was really hit hard And the Q2, Q3 had a nice pickup in Q4, and that business will resume its high growth as the So the diversity of our portfolio is really what gives us the optimism We're going to continue to see strong growth in medical. And it wasn't just sort of a pandemic bump and then we'll suddenly drop because of the innovation in our portfolio And frankly, just really, really strong commercial execution.
Okay, understood. And then just a follow-up for me, another business that doesn't get a lot of attention And I'm just wondering if there's been any change in practice due to COVID and demand for that business And kind of that the whole reprocessing market itself with hospitals and how to think about that over time as we potentially normalize and the strength of what that can or can't do. Again, I'm appreciating that it's small.
Yes, sure. No, I would
just say that it's those products are used in discretionary or elective procedures. So they were directly hit in the same way that You saw our other deferrable procedures being hit. And so because of the nature of those products, as the pandemic subsides, that growth will pick up. So There's nothing more to read into with the NADA. Our hospital behaviors didn't really change either positively or negatively.
If you can do the procedures, they'd use the products. If those procedures were sort of shut down, then those products weren't being used and then they weren't being purchased. So I would expect it to follow a similar pattern just based on other elective procedures.
Your next question comes from the line of Matt O'Brien with Piper Sandler. You may proceed.
Hi, guys. This is Drew on for Matt. Thanks for taking the questions. I just wanted to start off briefly on Wright. Maybe you guys could help Plus, by comparing and contrasting the right integration process to the one you went through with K2, what stage of the process have you already completed So far considering the longer deal close timeline.
And then I guess really what I'm trying to get at is about a year into the K2 process, you ran into a couple additional challenges. Do you feel you
have a good head start
with that for Rice and what gives you confidence in the contribution you baked into guidance?
Yes. So certainly, as I think about those 2 acquisitions, there are some similarities and then there are some pretty big differences. The similarities may be by in And the foot and ankle side where there is more of a true integration that's happening between the Stryker business and the Wright business. But for the upper extremity side, it's much more of a just bringing them into Stryker and continuing on with the growth But they've had. So it's a little bit different from that perspective as we think about bringing on the acquisition of Wright versus K2.
Just like with any in all of our previous acquisitions, we've learned along the way and we do business earnings as we plan for additional or new acquisitions that The same is true with Wright. And so we utilized really that year long period between sign and close to ensure that we're focused on getting the Correct integration plans in place so that we can hit the ground running and to date that's what the team has done. They have executed to the plan And as I mentioned in my prepared remarks, we've really done a lot of focus on ensuring that the sales organizations are being integrated in a timely fashion. And so that's where we are at this point, and certainly we'll continue to provide some updates as we continue with the integration throughout the year.
Okay. That's super helpful. And then I appreciate the commentary on Mako and ASCs. It Sounds like your placement mix continued
to shift a little bit to
the ASC here in Q4. So I guess the question is, as we look out a year in a COVID environment, do you see the interest from ASCs, tapering down any or do you think it continues to ramp in over the long term? Thank you.
Yes. I think the trends of the ASC is it was already accelerating prior to the pandemic. It's going to continue without a doubt, especially for Hip and knee procedures, foot and ankle procedures, even some basic spine procedures. So I think this is a permanent trend. It And obviously now we have reimbursement coverage for hips as well as knees through Medicare.
So this is a trend for the future. And I actually think it's not going to stop in the United States. There's already countries like the UK and even Canada looking at moving to lower Cost sites of care, it's a good thing for healthcare overall. And you see surgery centers make good money. They're very profitable.
They don't have the burden of the cost Large inpatient hospital. So you can debate the actual pace of the curve, but there's no doubt in my mind This is a trend that's going to continue to accelerate.
Your next comes from the line of Richard Newitter with SVB Leerink. You may proceed.
Hi, thank you. A couple of quick ones on OrthoSensor and then a follow-up. On OrthoSensor, can you just remind us what you plan on doing With the intraoperative, the VeriSend capability, I know that some of your competitors currently use that Use that system. Are you going to continue to sell that as an open architecture? And then second on OrthoSensor is just Excuse me.
Should we think of when you do offer your first iteration of a product there, whether it's a wearable, external or whatever it looks like, Is that going to be something that you'll charge separately for or do you think you'll package it in with the procedure?
Yeah, thanks for the question. So on OrthoSensor, obviously, it's new under the belt here a few weeks. And so it's not something that we have Fully developed all of the various plans in terms of how we're going to market for any of the products at this point in time. And so as that happens, we'll certainly be able to come back and give you updates with Regards to how we're going to market and what the impacts might be in terms of what the legacy business was and what we expect it to be in the future. I think the same holds true as we think about the future product launches as well.
As I mentioned before, we haven't defined all those Timelines yet, and so all of the items that you bring up in terms of how it will commercialize, how it will be sold, etcetera, will all be developed and done at that point.
Thanks. And if I could just one more on the M and A front, congrats on getting Bright Medical finally over the finish line there. I guess, Should we think of you as very much out in the market, size of deals, everything's fair game And back to kind of normal Stryker M and A, not just small tuck ins or maybe Anything you would care to comment on or share would affect your view of the M and A outlook? Thanks.
Sure. I think,
Obviously, we took on additional debt when we did the Right Medical acquisition. We've also made Commitments to reduce our debt over the next few years and so that will be something that's ongoing And you'll see that in our financial performance. But because M and A is so important to our growth strategy, And keep in mind that our normal M and A strategy is really just smaller tuck in deals. It's what we do well, it's what we do best and we can So I think just like with OrthoSensor, you'll see us continuing with smaller tuck in acquisitions like we normally do through the year. And I don't anticipate that you'll see sort of a big Acquisition of the size of Wright Medical for a couple of years.
And frankly, if you think back to even when we did Sage and We did Physio. Those were 2 very large acquisitions. We moved into a strategy for a year or 2 of just doing tuck ins, which served us Very well. And so I think it will play out very similar to that.
Your next question comes from the line of Mike Matson with Needham and Company. You may proceed.
Hi, thanks for taking my questions. I guess I wanted to ask about the Procurity bed launch, maybe you can give us an update on where things stand with that. And I was wondering if you could give us an overview of the kind of smart debt capabilities that you're planning for that platform? Sure. So that is out in the market in a limited way in the Q4 and really rolling out for full launch as we think about the first In terms of the features and benefits, really, it's three things I would probably point out to.
I think one, just advanced Fall prevention really focusing on keeping patients safe as well as we think about low height feature, I think the bed drops down to about 11 inches And then also it's the first bed that's really truly wireless. And so really all of those items kind of meet some unmet needs in the marketplace to drive benefits in the bed market. Okay, thanks. And then I know you're not giving specific guidance for the margins for 2021, but Just given there's several moving parts to the gross margin you've got right, which I think is coming in at a higher gross margin, but then you had some fixed cost absorption issues In 2020, that could spill into 2021, can you give us any kind of Insight into where you expect the gross margin to end up and kind of the sequence of that throughout the year?
Yes. Actually, I think you did a
pretty good job summarizing it. Wright will definitely come in And be accretive to our gross margin as those products generally have a higher gross margin than sort of the average of our other business. I also think too, as you look at business mix, that will normalize as the year goes forward. And so we'll also see kind of those higher margin orthopedics products And I think we'll largely come back to sort of what I'll view as sort of normalized margins as you look at 2019. Conversely, though, just as a reminder, moving down to op margin, you are going to see that discretionary Spending hooked up as we support growth, and so that will likely go the other way, and we'll be on a ramp largely as sales ramp throughout the year.
Your next question comes from the line of Josh Jennings with Cowen. You may proceed.
Hi. This is Eric on
for Josh. Thanks for taking the question. Looking at the 4Q performance in HIT for a minute, this is a procedure category that we have been thinking perhaps would be a little more resilient due to any pandemic headwinds in the quarter. I was just wondering if you could share your thoughts on that business, particularly in the U. S, excuse me, and just help us understand what's behind that result?
Thank you.
Yes. So I think Kevin outlined it pretty well before. And I think overall just looking at 1 quarter The mix of the pandemic is tough to do because of the variability and really the localized impacts that we were seeing from an elective procedure standpoint. So certainly, you would expect that HIFs might be a little less deferrable than these just given the nature of the disease and degeneration. But At the same time, elective procedures depending on where you are in the world, were being stopped.
And so hips were not immune to that like some of our other elective procedures. As we look forward, certainly with the rollout of all of the installations for Mako that we've done this year, as well as our new hip software, we're really expecting Continued above market growth from our hips and knees as we move forward.
Understood. And then quickly, I was wondering if you're able to share what percent of the right business is levered to outpatient procedures?
No, that's not something that we're sharing.
Your next question comes from the line of Jeff Johnson with Baird. You may proceed.
Thanks, guys. Good afternoon. Most of my questions have been answered, but I guess just one last one. Just it Sounds like China and Latin America held in better in the Q4. Have you seen any change in that trend line over the last few weeks or as we've gone into 1Q here?
Just are those continuing to hold in better than some of the European and U. S. Markets or anything we should be thinking about even in those markets early in the year? Thanks.
Yes. I would tell you, we haven't seen any Significant trend shifts, heading making that transition from Q4 into Q1.
Your next question comes from the line of Kyle Rose with Canaccord. Your line is open.
Great. Thank you for squeezing me in. I just had two questions. And one, Kevin, you mentioned sports being a pocket of strength. Just wondering if you could flesh that out for us.
Really, what's driving that? Is there a new product And then secondarily, you talked a lot about building a connected ecosystem of implants enabling technology. I think we understand the opportunity with Mako pretty well. You've clearly got OrthoSensor that's going to flow in, but maybe just to
understand what that means for the
company longer term. Does Does it bring you close to your customers and prevent share loss or competitive loss? Are there new revenue streams that come in? Just from a big picture perspective, how
should we be thinking about that Okay, sure. So I'll start with the second part. The world is obviously going more and more digital. We have a Stryker Health Cloud. There's all types of data that we're collecting from Mako that we want to be able to mine that data with Thousands and thousands of procedures already being done and really connect out of sensors.
So we really see this as Not just limited to joint replacement, it's going to be across all of our businesses, whether it's trauma, whether it's cranial, maxillofacial, sports. And so this is something we're really excited about and we named Robert Cullen the Head of that business on behalf of all of Stryker. And so we already had initiatives going on in different parts of the company. We're sort of bringing it all together to really create more leverage and really be able to have There's a lot of excellence around different types of technology blocks. And so to us, it's extremely exciting.
Robert knows the company very, very well as I think many of you know Robert, Very well positioned to lead this function for the company. And sorry, can you repeat the first question again? I'm sorry, I didn't catch
Yes, just about the strength that you saw in the sports medicine.
Oh, sports. Yes. So sports has been just a fabulous story for Stryker. But We had a Sports Medicine and Empower business, and we have grown it pretty dramatically since then, primarily through internal innovation, but we've also done Series of very small acquisitions, and one of them was Pivot, you may recall, for hip arthroscopy. More recently, we launched a lateral roll anchor shoulder, which has been, we call it Omega product name, which is a fantastic product.
We picked up through IVR, we picked up another Product as well, which these are all key fundamental products, whether it's a knee, whether it's a hip or whether it's in shoulder. So now we have all 3 of the joints Very well covered in sports and we are just growing at a very, very robust rate and the timing couldn't be better with The shift to the surgery center and being able to use sports combined with our other divisions, again, we really ported on in the last few years in There's a lot of investment internally that we've done, and we have a fabulous new year. That business has run out of Denver, and we're really excited about the progress we've
Your next question comes from the line of Matt Miksic with Credit Suisse. You may proceed.
Hey, thanks so much for taking the questions. So just one on shoulder and Ryan and one on just Follow-up on some of your comments on market share trends. So wondering if you could talk a little bit about your thoughts on the overlap Upright surgeon customers and shoulder with sort of your traditional end markets and what if any opportunity there is there for So cross selling or going through relationships, that sort of thing. And then as I mentioned, just one quick follow-up.
Yes, sure. So clearly, Wright Medical had a much bigger shoulder business than Stryker. And a lot of the Stryker Business, frankly, were the hip and knee surgeons that also did some volume of shoulder. And the teams are obviously working on that through the sales deployment, For being out which surgeons are going to be allocated to which salespeople, they made great progress on that front. And cross selling opportunities will exist.
But As Preston mentioned before, this integration is not going to be as tricky as the integration on foot and ankle, just given that we tended to they tend to be Strong with the, I'll call it, fully dedicated upper extremity surgeons, and we tended to be stronger with those Surgeons that did a smaller number, just as a general statement. So I think this integration is going to be terrific. We were really thrilled to be able to have The leader from Wright Medical take over the combined business of upper extremities, and their Head of Sales is also running the combined Sales organization and they're both outstanding leaders, and we're delighted not only to bring the business and the products of Bright Medical, But being able to bring over some of their key leadership, even the leader of our combined foot and ankle business came from Wright Medical. So not only are we bringing over great technologies, we're bring you over great talent with that acquisition.
That's great. Thank you for that. And then just a follow-up on sort of market trends. I think you mentioned here just in Q and A that you expect to continue to go above the market in joints or in orthopedics or knees Correctly. And I'm just wondering for clarity looking back on Q4, understanding a lot going on in regional differences, etcetera.
But Is it your expectation that your numbers there also represent sort of above end market procedure growth? Or is it just too hard to Talk about that given the variability.
Matt, I would just tell you, at this point, it's very difficult to really talk are being deferred and where they're being deferred and how they're coming back. So I think that really it's difficult to use 1 quarter is certainly difficult in the midst of this pandemic to use 1 quarter. So I think as we look at it, we're looking at as we get to those normalized rates and knowing what we've done From a Mako placement and install Standpoint that we have a lot of runway to go in terms of growing our Gibson lease.
There are no further questions at I will now turn the conference over to Mr. Kevin Lobo for any closing remarks.
So thank you all for joining our call. Like you, I'm very, very pleased to have 2020 behind us and looking forward to a strong year in 2021. We have to get through obviously The remainder of this pandemic, but as you saw from our guide, we are feeling very confident about participating, you may now disconnect.