Ed Joyce - Director, IR David Paul - Chairman and CEO Dave Demski - President and COO Dan Scavilla - SVP and CFO.

David Roman - Goldman Sachs Bob Hopkins - Bank of America William Plovanic - Canaccord Genuity Rich Newitter - Leerink Swan Jason Wittes - Brean Capital Dave Turkaly - JMP Securities Steven Lichtman - Oppenheimer & Company Matthew O’Brien - Piper Jaffray.

Welcome to Globus Medical’s Second Quarter Earnings Call. At this time, all lines will be on mute, and a Q&A session will be held after the prepared remarks. I will now turn the call over to Ed Joyce, Investor Relations Director..

Thank you for being with us today. Joining today’s call from Globus Medical will be David Paul, Chairman and CEO; Dave Demski, President and COO; and Dan Scavilla, Senior Vice President and CFO. This review is being available via webcast accessible through the Investor Relation section of the Global Medical website 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 2014 fiscal year and our subsequent filings with the Securities and Exchange Commission identified 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 website.

We 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 schedule accompanying the press release and on the Investor Relations section of the Global Medical website. I will now turn the call over to Dave Demski, our President and Chief Operating Officer..

Thank you Ed and welcome to everyone on the call. We had an outstanding second quarter, sales are a record 133.6 million, earnings per share were $0.25, and adjusted EBITDA margins were 35%. We also introduced five new products in the quarter and sales force recruiting was very strong.

We have made consistent steady progress on the development of our robotics platform and we are pleased with the integration efforts of TTOT and Branch Medical. In short, we are very pleased with our 2Q results and overall execution for the first half of 2015.

Sales for the second quarter increased 19.1% on a constant currency basis over the same quarter last year. This marks the fourth straight quarter of record sales and accelerating sales growth, reflecting tremendous strength in our business. US sales grew by 19.5% for the quarter and International sales increased by 15.4% on a constant currency basis.

Sales in the US was driven by strong sales of several key products including CREO, ALTERA, KINEX, SIGNIFY and RISE-L. We also had a very strong first half on the recruiting front, which positions us well for the future. While the international operating environment remains challenging, there were some encouraging signs during the second quarter.

We achieved sequential growth from Q1 to Q2, and we have addressed management issues in two key markets. Net income for the second quarter was 24.1 million, an increase of 16.5% from the second quarter of 2014 in line with our sales growth.

Fully diluted earnings per share were $0.25 in the second quarter of 2015 compared to $0.22 in the second quarter of last year. Adjusted EBITDA for the second quarter of 2015 remains strong at 35.0% compared to 35.4% in the second quarter of 2014.

Our second quarter performance highlights the fact that we have consistently maintain profitability metrics in line with much larger companies while growing much faster than any of our large spine competitors.

As we move in to the second half of 2015 and in to 2016, we plan to make increasing investments in robotics, biologics and in-house manufacturing. Overtime, we expect these investments to result in operating the leverage gains in the US and International businesses, along with improved gross margins from the Branch acquisition.

We ended the quarter with 281.2 million in cash, cash equivalents and marketable securities. Free cash flow for the quarter was a negative 3.4 million. During the second quarter, we made significant capital expenditures associated with our recent acquisitions that Dan will cover in more depth in his remarks.

US pricing pressure remained in the mid-single digits in the second quarter. Procedure of growth remains healthy. There were no significant developments regarding PODs during the second quarter. Based on our strong first half results, we are increasing full year guidance for both sales and EPS to 524 million and $1.04 per share respectively.

In closing, we are pleased with the strong start to 2015. We are executing well on our strategy to introduce a broad spectrum of innovative technology, grow ourselves footprint in the US and abroad, and make focused tuck-in acquisitions.

This has enabled us for year-to-date constant currency growth of 18%, while maintaining our industry leading profitability and cash flow metrics. I will now turn the call over to Dan Scavilla, our Chief Financial Officer for additional comments on our financial results. .

Thanks Dave and good morning everyone. As Dave mentioned Q2 sales were strong achieving $133.6 million or 17.6% growth on an as reported basis. On a constant currency basis, Q2 sales grew 19.1% versus prior year Q2. US sales increased 19.5%, driven by market penetration and strong new product sales.

International revenues increased 1.2% as reported or 15.4% on a constant currency basis, showing positive momentum gains versus Q1. International had an additional headwind in Q2, with a government mandated price reduction in Belgium affective in April.

This impact is reflected in our results and had a negative impact of approximately 250 basis points on the international sales growth versus Q2 2014. Innovative fusion sales increased this quarter to 71.6 million or 8.7% driven by CREO our newest pedicle screw platform.

The disruptive technology sales increased 62 million or 29.9% from Q3 2014, driven by continued strength in our expandable technology and biologics. Turning to the rest of the P&L; Q2 gross profit was 75.6% compared to 76.6% in second quarter 2014.

As we stated in our Q1 earnings release, the change is attributable to a shift in mix associated with biologics which typically has a lower margin and other implants, an increase in royalty expenses, and an impact in foreign currency rates on our international sales.

Research and development expenses for the second quarter were 9.1 million or 6.8% as compared to 7.7 million or 6.8% for the same period 2014. The planned increase is spending supports new initiatives such as robotics, expansion of our product development capabilities, and continued investment in research.

SG&A expenses are in line with second quarter 2014 coming in at 40.8% compared to 40.9% of sales last year. Second quarter net income was 24.1 million, an increase of 16.5% over Q2 2014. Fully diluted earnings per share were $0.25 compared to $0.22 in the second quarter of last year.

Adjusted EBITDA for the second quarter was 35% compared to 35.4% in Q2 2014. We ended the quarter with 281.2 million of cash, cash equivalents and marketable securities. Free cash flow for the second quarter was negative 3.4 million. Q2 cash flow is typically lower than other quarters of the year, driven by two planned tax payments.

We made $31.9 million in tax payments in Q2. In addition this quarter, we made $8.4 million of investments in PP&A for expanding branch manufacturing capabilities and the purchase of a building for our robotics business. On the auditor front, in Q2 we selected and [appointed] our new independent auditor, Grant Thornton.

I want to thank them for their tremendous effort and partnership in coming up to speed in Q2. The progress so far has been positive and we look forward to working with Grant Thornton moving forward.

As I complete my first quarter as CFO and set my sights moving forward as part of the Globus leadership team, I am setting a strategic focus to drive value added growth with leadership over the next few years through driving international growth strategies to increase share capture and improve the overall size as a percentage of our portfolio.

Implementing a tax strategy to improve our effective tax rate around the globe and supporting the ongoing in-house manufacturing investments to drive efficiencies in scale. In addition, while we have delivered mid-30s EBITDA since 2009, we will continue to seek opportunities and efficiencies that will drive this profitable in to the future.

I look forward to being part of the team and a company with strong potential and long term impact. I will now turn the call over to David Paul, Chairman and CEO. .

Thank you Dan and good evening everyone. The second quarter of 2015 was an outstanding period for Globus. We grew our sales by 17.6% as reported or 19.1% on a constant currency basis reaching 133.6 million, while maintaining our strong profitability profile with adjusted EBITDA of 35%.

We launched five new products this quarter, bringing our total for the year so far to nine, and continue to have a full product development pipeline for the second half of the year. On the sale force front, we had a strong recruiting class and continue to work on our process of recruitment and onboarding of new sales people.

We see strong evidence in our current crop of recruits and pipeline that Globus remains the destination of choice for the best sales talent in the industry.

Our continued strong performance this quarter was a result of consistent, sustained execution of our strategy of combining robust product innovation and sales force expansion with disciplined expense control.

I am proud of the performance of our team this quarter and I am confident in our ability to product profitable growth for the remainder of 2015 and beyond, even as we make significant investments in R&D initiatives, TTOT expansion and in-house manufacturing.

We have continued to execute on our strategy of robust product innovation by launching several new products this year. Another increasingly important component is making Bolton acquisitions of which TTOT is a prime example.

When we acquired TTOT last fall, we said that we plan to market existing TTOT products through the Globus sales force and that we would be co-developing several new products. I would now like to comment on two specific new product introductions that are the result of the acquisition.

First, we began rolling out the ViaShield system early in the quarter, marking the first product introduction from the TTOT acquisition. ViaShield is a dual layer, amnion patch developed by TTOT that can be used as an adhesion barrier to reduce scarring and inflammation in various procedures.

We have been pleased with the feedback we have received on its performance, and expect it to strengthen and build our regenerative biologics portfolio. Second, COALITION AGX, a minimally invasive ACDF system consisting of low profile plates combined with either PEEK or allograft spaces.

The system is cleared for standalone use; the plates are used with a spacer. Allograft spaces remain the preferred choice for a significant portion of spine surgeons for use in the cervical spine and this device now offers them the option of having a standalone low profile device with an allograft spacer.

The allograft spacer was designed at Globus and processed at our TTOT facility and marks the second product introduction from the acquisition. Early roll-out began in the end of the quarter, and initial feedback from early users have been extremely positive.

Further product introductions from TTOT are being worked on and slated for the second half of 2015. In summary, we continue to execute on our long term growth strategy of rapid new product introductions and US and International sales force expansion, while maintaining a continued focus on profitability and cash flow.

This marks the12th quarter of Globus being a public company, characterized by high sales growth rates and sustained industry leading profitability. We remain excited about our prospects in 2015 as we continue to execute on our disciplined strategy of profitable growth. We’re now happy to take any questions. .

[Operator Instructions]. And our first question is from the line of David Roman - Goldman Sachs..

I want to start with just one question on the P &L and then follow-up with a question on the business, and Dan may be you can help me out with this. As I’m looking at the incremental profitability that’s reflected in your guidance raise, as well as what you’re generating.

The incremental dollar that you are dropping through the bottom line is it a lower profitability rate than what your absolute profitability is? And I would have thought that given the fixed cost nature of the business, you would see greater additional leverage from every new dollar of sales.

So can you just walk me through any dynamics that may be influencing them?.

I think the main driver of that’s going to be what we’ve been stating along, as this is an investment year. And as you look at what we are doing with our ramp-ups in robotics and other areas, you are going to see a spending that’s higher than we would have seen historically to go and do that.

I would think of all of the things that are out there, that’s the main driver of the difference you would see. .

And then on the business, I clearly based on the numbers you are putting up in disruptive technologies; your new products are continuing to gain quite a bit of traction.

Can you maybe give us some flavor as to any specific products that are leading the charge in any way to sort of quantify, the sustainability or the positive impact they are having whether its RISE-L or anything else in that line item..

David this is Dave Demski. I commented on them in my remarks, so CREO and ALTERA are clearly leading the charge and then we have our synthetic biologics and KINEX and SIGNIFY and then RISE-L has just recently launched, but we are very happy with the progress we are making there and the potential for our lateral business..

Our next question is from the line of Bob Hopkins with Bank of America. .

First off on the revenue side, obviously a very strong first half for you guys, a terrific revenue growth. My question is really on the back half revenue growth guidance. It seems to suggest quite a slowdown from what you’ve seen in the first half. Is that conservatism or is there something unique going on with the back half that I am not aware of. .

Consistent through with what we’ve been saying and doing this year, we are just trying to be conservative where half way through the year there’s nothing in front of us that we see that is going to cause us to have any concerns about the business. .

Okay, perfect. That’s what I anticipated. And then two other quick things, one on the margin and balance sheet, and may be you could just talk a little bit about in light of some of the investments you are making and your industry high margins.

What is your real long term guidance on the margin, if you just give us an update there? If that’s the kind of key, the EBITDA margin that you are experiencing right now are flat or all the investments put a downward trend on that or can they go higher; just an update on the long term margin outlook.

And then if you wouldn’t mind commenting on inventory levels this quarter and where you expect that to go going forward. .

Bob its Dan Scavilla. So I would start with your first question, which is, we will still lean into saying that mid-30s EBITDA is really the focus of what we want to do going forward.

And what I’ve said out on the road with folks is that mid-range is between 33 to 37, it will certainly flex there in quarters depending on the right investments who want to do for the long term. But even as we grow the business, we see the ability to leveraging gain and stay within that mid-30s EBITDA range for the longer term. .

And then on the inventories. .

What was your question on that?.

I just wanted to ask about inventory level this quarter, where it crept up a little bit and where you expect those to go going forward. Just what are some of the factors impacting inventory right now. .

I think it’s primarily more of the new product launches as we are going out there with these and putting the different types of items in to the field, we are going to see the right investments. So if you also look at our portfolio, our products don’t tend to die and phase out, so we keep those going and they have a longer life.

So what we are seeing through this quite frankly is just as we launch new products, we are building new perfect inventories. Keep in mind also you are going to see the roll in of some of the branch inventories that we’ve done and see a lift like that as we go through. .

Our next question is from the line of Dave Turkaly from JMP Securities. Dave your line is open. Sir we’ll move on to the next question from the line of William Plovanic from Canaccord Genuity.

Looking at this, I think people have asked a question, but I may go straight in. I think as we go we saw with the upside in the revenue you’d see more to the bottom line.

Just clear, as we think about this going forward, if you continue to beat on the top line will you continue to reinvest that beat, and if so outside robotics and the money is going in to manufacturing and robotics, and that’s my first question.

Do you just plan to keep reinvesting that beat?.

Hey Bill its Dan. I would think a couple of things there, as you are right. We have those investments and we’ll stay with them. And when you look at our guidance for the year, you should see when you do the math, a slight lift in the second half of the year as well.

So I wouldn’t say every dollar of sales we are going to drop down of those investments, but we are looking to do that for the next several quarters. But I think like I said if you look at second half profitability, you’ll see a lift in that based on what we are calculating..

Okay. On these investments, the Excelsius, you are putting a lot in to robotics surgery today. I don’t think whether you look at total joints or even spine if that’s been super successful. And I am curious, as what do you see in that that wants to make you put so much investment in to robotic surgery..

I think the way we are looking at robotics is a little different from some of the nascent products that are out there right now.

We are looking at it very holistically on how to improve the total procedure from soup to nuts, and we think what we have as a product offering is a significant benefit to surgeons and patients to then what is out there in the market now.

So we are pretty bullish about where we see the applications for the product platform, and even as we rollout the first product, we are already beginning to see other areas and other procedures that we can begin to implement as technology in, and that’s why we are investing pretty heavily in this space..

There isn’t a lot out there on that, and I’d just like to ask, as you work at it, is it cost saving, will it be time saving, because obviously you are going to improve outcomes. But just the other two questions, do you expect the robotics to be cost and/or time saving..

We absolutely expect some time saving from the procedure and then cost saving because of the time saving. At the same time, if you’re improving your accuracy of pedicle screw placement and interbody placement, you are going to bring down your reoperation rates and therefore help again with bringing down cost per patient.

Sometimes the 30-day and 90-day reopoerates are pretty high and when you look at misplaced pedicle screws, many times patients come back for those and we are hoping to really eliminate if not minimize those type of reoperations. .

And if I could as one more margin story, which is, I think I believe your US EBIT runs somewhere near 40% and correct me if I am right or wrong, where is your OUS today and how long do you think it will take OUS to get up to you or whatever gap you think it’s going to max out at. Thank you..

Bill, our OUS is profitable, we haven’t shared specific numbers, but we are in the black there. It’s been a challenging year with the currency impacts that drops right to the bottom line. So, not making any predictions on when they might be equal.

We are making progress there, there’s a lot more leveraged opportunities there, given the fact that we are in a bunch of smaller entities. As we grow sales there the percentage is all improved dramatically. But this year has been tough given the currency. .

Our next question is from the line of Rich Newitter from Leerink..

Congrats on the topline, very strong performance. I was hoping, I think David Demski, you had mentioned what is some of the trends outside the US. You saw a little bit of a pick up this quarter versus previously.

Can you just remind, I might have missed some of them, where you are on the leadership changes and turnaround there to get that growing again. Should we think of this as a multi-quarter reacceleration or could we be reaccelerated back to levels you were at in 2014 by the end of the year, and then I have a follow-up..

It’s hard to predict when it will be back. I think we’ve got our management issues solved in the markets where we have them. Seeing some clear signs in one of our top five, the other has been more recent, so we are still waiting to see those improvements. But as everyone is saying, it’s a tough environment and difficult to predict the growth.

And then Dan comments today about what occurred in Belgium which was kind of across the board, about 30% price cut, and there’s hardly any private pay there, so it’s all government business. So that was ahead to one of our top five markets. It’s fully absorbed in 2Q, but it’s going to take a while to get back to those ’14 levels.

Could happen this year or it will definitely happen by next year. .

Got it. That’s helpful color. Thanks.

Can you just remind us where you are with respect to the distributor loss or the sale that you’ve been recouping over the past several quarters? How far along are you to getting back up to full competitiveness in that region?.

I’m very proud of the efforts our team down there has made as well as the support they’ve received here from product development and customer services.

It’s really been a team effort, but we are back and we are actually - if you compare the sales in the second quarter of this year with the first quarter of ’14 which was the last full quarter of business from our old distributor down there, we are actually at about 116%. So we are all the way back and we are still growing. .

Okay, got it. So that should be a pretty meaningful tailwind for you as you approach the second half.

Am I thinking about that correctly?.

Yes. I think the business is very strong overall. .

Our next question is from the line of Jason Wittes from Brean Capital..

Sort of follow-up to that question, I appreciate your commentary about being very successful in recruiting on sales people this quarter.

Is there any quantitative numbers you can put around that in terms of where the sales force is now and how much you’ve added recently?.

No, we really don’t give those specific numbers Jason, but we are in line for the - ’13 I think was our best year of recruiting and we are marrying that year right now, if that helps..

Okay, that’s fair. And then on the robotics platform, I know that you’ve been sort of hinting at it, but our understanding was that sort of next year is sort of the major unveiling of that product of the robotics platform.

Is that the right way to think of about it? And I guess the other assumption that most of us have is that given it’s a capital equivalent type sale or it’s probably going to be 2016 may be the launch year, but it would probably be the outer years beyond that when you’d really see the impact.

Are we thinking about that the right way?.

Jason, this is David. I think you are thinking about it the right way. As we’ve said from the beginning when we made the acquisition that we are looking at a launch year of 2016. We are well on track to achieve that. But as you said, capital equipment sales tend to have a longer sales cycle.

So we expect to see something meaningful only in ’17 and beyond. .

Okay, that’s helpful. And then just one final robotic question, there’s obviously been a lot of talk about alignment. My also understanding was that the robotics platform would sort of address alignment in a bigger way than you are doing at the moment.

Is that also sort of what we should be thinking in terms of what’s involved with the robotics launch?.

I think the robotics platform will help in all of the above. It will help placement, the accuracy of the placement of the hardware, which absolutely helps with the alignment, and you place your hardware and your spaces in the correct orientation then you are going to have much better sizeable balance.

So in that way indirectly it helps with sizeable balance and alignment of the spine. .

Our next question is from the line of [Craig Higo] with Wells Fargo. .

Dan, I wanted to touch on something you mentioned in your prepared remarks about reducing tax and I wasn’t sure if you actually have a plan to do that, and if you could give us a little color on your thoughts there. .

Sure Craig, I will be honest with you, what we are going to do, as you look at our tax rate now, that’s about 35% or north of 35%.

And really my thought is, as we explore current structures that we have in place and as we look at the opportunities both in domestic and international, we are going to work through a couple of plans both domestic and international to enhance those.

To be honest with you, I am really working right now with three different groups to sort through what these opportunities can be and should be, and being at better position really towards the end of Q3 to have probably more of a working plan..

Okay, thanks. With regard to 2013 rep hires, I wanted to see, is there, I think if I think about recent calls, I think there is still some room for those reps going up the productivity curve if you will. And I think that will continue throughout the rest of 2015.

So I wanted to see if that’s a fair statement and then if there is any benefit that you would potentially see in early ’16..

Craig I think our strategy is to continually add reps and then to develop them, so increase their productivity. So I don’t see that as finite opportunity, I think it’s going to be continuous. I think we are continuing to recruit actively, and I expect to do that for the foreseeable future as we grow the business.

There are certainly potential in the reps we have now to be more productive, but we are not going to stop when they get productive, we are going to continue to recruit and grow..

If I could just squeeze one more in, with regard to TTOT and the TTOT products that you guys were selling, the 12 million that you had added to 2015 guidance, just wanted to see if that’s still a good number if there’s any reason to think that that is different. .

We are happy with that number. We are beating it about that, but we are still in the integration process and we put the number out there knowing that there is possibility that we could lose some business through this synergies if you will, but we are happy with it so far.

Have we any other calls on the queue?.

We have a question from the line of Ben Andrew..

This is Kayla in for Ben. Just assuming that we are out of and in your run rate of about 12 million with TTOT, when we back that sort of contribution out on a quarterly basis, we are coming up with about 15% organic sales growth for the quarter.

So first up, am I right with that math, and second, how do you think about the organic business going forward, just given that momentum.

Do you anticipate that the core business would grow in that lower to mid-double digit range sustainably for the next couple of years?.

I think your assumptions are very close, I would use those as you said from the organic side and I would say you are in the range of what we are looking at for that.

I want to make sure I am understanding your question; are you saying do you see that organic growth going forward at least for several years, is that what you are asking?.

Yes. In the low to the mid-double digit range. .

That’s our aspiration, but going back to our guidance, our official position is, we are about 25 or about 24 for this year. But every day is a fight and we are trying to get as much as we can and aspirationally mid-teens is what we’ve always said about the company..

Okay, and just to follow-up on the recruiting question. Can you just give us the sense from where those reps are coming from? Would say that you are benefiting at all from the ongoing consolidation in this space or management change as to our competitors.

And then can we assume that the majority of these reps are coming over with [non-competes] and likely to contribute more to an acceleration in 2016. .

I would say most of our growth is not from competitors. We hire both reps - we hire reps from competitive companies as well as reps from outside the industry and develop them. The higher numbers of reps come without industry experience. Those who do come from industry typically have at least a12 non-compete sometimes 18 months.

And then to your question about where they are coming from, it pretty much mirrors the market share of other companies; it’s not materially different from that. So we get more reps from the larger companies when they are competitive. .

Our next question is from the line of Dave Turkaly from JMP Securities..

A lot of questions have been answered, but just quickly realizing that this Annual MERC Symposium is coming up here soon, I was wondering if there’s anything you’d highlight there, whether it be biologics or other products that you think that will be of focus, and then I guess so if there’s any color you’d give in terms of attendance may be even where its historically..

We are not really focusing on any specific product line Dave. This is more of a research symposium. We have invested a lot in in-house research capabilities and a lot of basic science and applied research has been conducted over the last several years.

We want to highlight some of that research, but it’s also forum for researchers outside of Globus to come and present and share their research work. So we have surgeons and researchers and in some instances regulators coming in to share in basic scientific research. So we are not really focused on any specific products.

And the attendance as far as I can tell so far it’s going to better than last year. .

Okay and I just wanted a quick follow-up. I wanted to get your current thoughts the SI joint market and may be how your SI-LOK product is performing, if you could share any of that with us. Thank you..

Our SI-LOK product is performing well this year. We have seen some material increase even as reimbursements have become a little clearer. The harder issue with this whole space is really the algorithm for diagnosis, and then the diagnosis still seems to be a little murky.

So I think it’s going to take a lot more time before things get more clarity about how the specific pain is isolated to the SI joint for it to really take off. .

[Operator Instructions] Our next question is from the line of Steven Lichtman with Oppenheimer & Company..

Dave you mentioned continued stability in PODs which is certainly good.

Do you anticipate PODs can actually turn in to a tailwind at any point, given the push back up to the model we’ve seen like from the OIG?.

Yes, just anxiously waiting for when that may occur. I think the government has been very clear that that model is not a legal model in any form, and that we are starting to see some hospitals forbid in their chains. We’ve actually had some customers come back because of that. But it really hasn’t swept through the industry in any meaningful way.

So we are at an equilibrium now. We are not [pleased] when we are losing customer to them and we are getting a few back.

I think there’s 15% of the market trapped in terms of PODs that eventually should come back as there’s more - hopefully enforcement actions by the government that will convince people to abandon that model and come back for the more legitimate companies..

And then just lastly on international, where are you seeing a positive, you mentioned this. But where are you seeing the biggest opportunities or what are biggest growth opportunities for you guys and any updated thoughts on potential Japan timing. Thanks..

Our growth opportunities given the fairly small size of our penetration today are really where the people on the procedures are. So they are up and Japan is another one. We are starting the process to enter that market. We won’t be in the market for sure this year or next year, but 2017 is a possibility.

We are just in early stages, and that’s a very attractive market, but a very challenging one to enter..

And our next question is from the line of Matthew O’Brien with Piper Jaffray. .

Just was hoping to throw down a little bit on the market Dave that you saw here in Q2. Is there anything demonstrably different from a volume, POD, potentially pricing pressure is easing in this quarter and then have you seen anything competitively in terms of the behavior pattern of folks the way they are taking market share.

Are they getting more aggressive anywhere in terms of the balance sheet for anything or potentially offering pricing concessions?.

Nothing in particular is there what I’d say. It’s a pretty healthy market, and I think procedures are good and have come back from where they were a couple of years ago. From our standpoint, pricing is still an issue; it’s about mid-single digits in the US and has been that way for the last year.

But now it’s a little different, I know as some other folks have said, but that’s what our calculation show, and in terms of discounting of our strategies and aggressiveness, not really, nothing and no. .

And then just a follow-up for Dan on capital deployment, it’s a question that gets asked frequently. But given that you’ve been there now a few months, have you thought a little bit more about how to deploy the sizeable cash position of Globus in the free cash flow that you generate outside of just the traditional tuck-in acquisitions that are done.

And specifically are you and management team that are a little more inclined to potentially put an authorization or a share buyback in place. .

Hey Matt that’s a great question and you are right we do get that said a lot, besides its relative, I think we’ve got a healthy cash position and the balance sheet itself is in great position to look at possibly larger type acquisitions.

There are none that we are currently actively seeking, but our thought would be right now to maintain our position of investment, make sure we’ve got the right capital equipment and expansion of branch and look out in the market and understand what potentials are out there for us to do that. As far as buybacks, certainly never say never.

It’s a consideration for us but currently not on the table or being pursued with the Board at this time. .

And with that ladies and gentlemen, this does conclude today’s Globus Medical’s second quarter earnings call. At this time you may now disconnect..