Envista (NVST) 13 May 202020 Q1 Earnings call transcript

Hello. My name is Erica and I will be your conference operator today. At this time, I would like to welcome everyone to the Envista Holdings Corporation First Quarter 2020 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Mr. John Bedford, Vice President of Investor Relations. Mr. your begin may you conference. Bedford,

Yu, thanks Hello, call. Chief us Officer. Howard the joining us everyone Executive today and and and With President are on our Financial for Amir Chief our Officer Aghdaei,

audio today The call Presentations, be heading of the I www.envistaco.com. the to slide supplementing of until this other any website, measures portion of the call replay our will information A archived non-GAAP would earnings and this archived by available. of section Investors SEC our reconciliations will during Investors and our presentation like financial that Events call. today’s be next point our call and remain to Regulation on on release, the under the required call, section will are website quarterly and available out later the G provided also relating

also and the certain which approvals first and all may decreases in will During only and otherwise metrics remarks that The materials financial references year-over-year relate products XXXX, performance. or factors pending submitted in financial the of for impacted metrics available quarter certain have year-over-year. to are and presentation, We to performance. period-to-period significant describe that applications we the in increases more company-specific these impacted all factors references devices year-over-year materials describe supplemental are supplemental markets. to some of additional or describe regulatory noted, Unless certain

number occur required results those statements and any we will obligation future. only risks are laws, including SEC any as or developments forward-looking our and set differ we believe in by statements made, they statements, call, that of securities or may to that uncertainties, are forward-looking including will of subject we do forth filings, from forward-looking actual These the any to During events not make as speak federal the update the or the law. a statements in anticipate that make These regarding today. date materially of forward-looking within meaning statements the and except forward-looking statements might we assume

turn like to I’d to that, Amir. With call the over

Envista’s Thanks, call. safe everyone QX XXXX everyone well, joining John and and today us hope healthy. is welcome I to earnings

like affected who ensure On in do. thank Envista, and our families, tirelessly many on continue by dental appreciation you’re commitment, to safeguard working diligently our selflessly globe engagement to their want have employees are those for all fellow care. worked have health who to includes This in global thoughts. to us those that for I behalf care are to who you our the pandemic, for their you of employees safe. in and the the customers, around I partners keeping For and all. field patients access communities express our Thank their would professionals to focus the constant

handing are we our what who position and walk Envista We our call we in world how will unique will given new seeing COVID-XX the see address nature are before quarterly of to through going results, you approach the I then I change the you to circumstances. by share today walking cadence will to and start it Howard, normal. of these the through today off the for

our feel When the of good during progress with months we the quarter, year, first on we expectations. the made X reflect exceeding first about we the revenue

new adjust impact our X significant our global today. experienced business the the to caused This adverse face in and of weeks we to a of emergence focus us health pandemic, With realities the pivot last March.

supporting our and Our of important, approach communities our partners health the safety to preserving what’s and employees, crisis is the strength. current focused financial on our customers,

disinfection assembled driven by very foremost, of early employees. protect move that was our our safety The efficiently who team and first their employees task priority actions remotely to can and to work the health acted those and to number in homes quarter. are protocols This of First force equipment the the technology Envista quickly is a including increased safety frequent protective implemented the with to We for ability regular and other remote and employees, the processes. virtual on staggered enable shifts, to collaboration. social provide measures, use a basis leadership more our and employees distancing team communicate personal

strategy of we Most all these importantly, employees. the frequency our In XX,XXX halls immediate weekly the CEO we with to any open question. opportunity ask increased the the actions, cross-company to share and communication offer sessions, leadership town

opportunity hundreds business have of learning improving to online held We Kaizens and visual the provide practices. continue employees which events, training

plan together work we’ve to to more to the activities tools connectivity new customers returning have resources environment. using These office never employees before. to as more us by and protect back knowledgeable, enter Finally, and a back-to-work become productive and visual like utilizing put they begin prepared

partners our customers, the our employees, After is supporting focus serve. and on communities we

through Now customers this crisis. us to them more partner than for ever, our support are and looking

with far the customer content of This companies. than grow workflow substantially their operating online the in first quarter, these patient resulted and and increased to our supported peers leads. new during prior expanding remote and expectations. best for virtually participants the frequency Symposium XX,XXX Last significantly is learn virtual difficult and programs. we Many Global collaborated than greater XXX,XXX the Nobel and education our of The and of have training Biocare education. we exceeded to a of from them clinicians had from interactions record across we by innovative base. response this and month, the availability customers ways is about and period their implant One education plus first period support, solutions registered the time any practices had and Envista’s trainings In held strength more demonstrates

companies of in and employees our donated to first the around of local hundreds China, professionals. the We professionals. Through their and care products disinfection and our donate infection of the were our one donated In communities protection Wuhan are to our Envista business products serve customers prevention equipment to health we tirelessly role of the used during personal health medical-grade infection worked to proud ensure eye our protecting the health protective team by masks care shipment other we thousands prevention of to government, worldwide. metrics, globe. of of crisis continuity communities business the Orascoptic

execution. environment core accelerating us financial a are Financially, effectively strength requires to in we optimization are an long-term we that to our This operate and changed ensure the success. requires now refining preserve confronting, acknowledgment our of and portfolio relentless priorities, realities

Our first to ensure focus tested our plans continuity keep assessed We chain our continuity. factories can and business is producing. supply our

customers’ to have businesses levels our inventory appropriate hand needs. stock increased also the on ensure to We meet

to high levels any experienced have supply our maintained service customers. to manufacturing issues date We and or significant not of have

After actions a arrangements provide turned to covenant securing our need liquidity of us structure. our to quarters. with to revolver first our aggressive These on provide are to coming existing business, the through our take debt to quarter leverage lenders new million actions XXXX. to debt suspension in Operating the renegotiated also intended We environment. requires of to flexibility $XXX acknowledge we then drew and additional this us uncertain over align this cost more the provide reality in our

pay of adjust preserve this million, cuts, capital capital by quarter. we to been operating expenses to anticipate in management the executing term actions short and expenditures. and executive by help has more spend most than much the in reduce these Collectively, $XXX discretionary will furloughs second approach and foregoing our Our

for these modulate visibility the will recovery further trajectory. year of we on We balance gain the actions the as

normal. a to are to new We change structure what actions financial additional become portfolio also adjust our the will long-term of taking the business and

achieved basis on As EPS-driven the recall, reduction $XXX productivity forward of by with of to over gains, In increased $XX you may and our a than portfolio this next to savings structural more our years. annualized X rationalization. global reduction reduction reduce cost program an through an we to new now environment, be plan previous committed targeted more expenses workforce XX% are million in than million moving targeted

With regards existing rationalization, units. be emerge like the impacted others to as of business in there capital-intensive the we will from particularly treatment than crisis, are more that the areas portfolio areas

equipment. exit Crane, businesses this are approximately a be & to Pelton cost intention the and in revenue announced operating accelerate work actions additional the quarter and in of and we at completed capital anticipate the For X% actions by reduce began have breakeven of process to to These reason, end to XXXX. the taking exposure XXXX our to our were margin. remaining We first operate of our

advantage, We the including strategic are Spark diagnostics also focusing adjusting competitive Aligners, infection align will and with increased organic to growth software. while prevention Clear priorities system our areas workflow enhance and implant NX that globally needs on

clinical of approximately focus less care for than to the Accordingly, capacity investment current when of we helping months our has is the community opportunity area by become XX% in globally, of and going quickly this prevention expand end payoff by augment health forward. we patients. The further broader this their have growth June. capital capacity investment improve look increased of will can area this to an expand quality to we customers further and X infection Given on care

and Turning expansion current interest practitioners. the showcase benefits to clinicians the Spark, at XXX phase to the our more aligners of expressed users these next product clear of signed Spark clinical February’s Many Forum, in Ormco key of in participate plan. up to than

that results the planning Nobel patients second portfolio track the that during move in complete Spark Biocare patients. to a two XXXX. is as beyond. made first the sales OsseoShaper, major workflow, the team and a during current patented It contributor less speed we progress delivery. supports launch. available pandemic The the discomfort plans for treatment a and easier-to-use to lower allows like is implant launch pursue through by for on of anticipate structured from protocol be the phase receiving ultimately treat which and NX instruments, NX new implant the make prosthetic a submitting techniques to CE clinicians system we As product past, includes of we The growth significant team half on shared to limited to in XXXX for marking system with

to DTX from based workflow particularly one architecture in Dental software well North Studio platform surgery Midwinter for we laboratories and looking a Meeting the multiple an multi-office settings, February, standardized oral integrates workflow disciplines, Finally, diagnostics that leverages and imaging our workflow. including digital is America. and and implantology, system. in cloud dental Society at tools DSOs implement product, suited launched DTX open the is DTX Chicago flagship Clinic, into

we a office. system methodology in When a a priorities, course first the While brought quarter, our is agility, set what apart in There bumps high-performing process recognize to discipline one organization our as and continuous we road we was be clear prepared early the the our of Envista needed. started having And ahead. in sets to with our will progress track and business groups EBS have we toolset. and of culture of navigate we are improvement crisis management first correct them

As day-to-day priorities. on. will detail pursuit we training helps have we later helped internal principles The actions track now better developed commitments in our one a of the help our our virtual is by of work. external to and have mindset and capabilities, which needed quantify where around basis. relentless And to tools our and project we meet of and go as daily Likewise, course education our us and standard stand plan, expectations. scenario build these more have correct ramp assess exceed and critical progress this We personnel I installing and a standard management work to cost management and efforts planning into our EBS expense reduction visibility established involvement on weekly same structure, and applied process,

now quarter. the details will turn will I further it who Howard to provide on over

Amir. Thanks,

the X.X% the demand we declined a negative of from including sales foreign first revenue of were by from of impacted we mid-single-digit the core X.X% quarter, the and above pandemic, sales XX.X% impacted million. revenue which primarily achieved health Through COVID-XX forecast, impact Sales our XX%. as discontinued $XXX.X growth and to months estimate result China. decreased X quarter to in were lower XX.X%, currency. First Core global due products adversely

ended quarter declined XX% in X the However, last the revenue X. weeks April more than of

at growing first developed impacted the Canada major low-teens we America, which by saw a practices the end the most procedures. guidance slowdown by of Geographically, encouraged from made suspend Europe, our We at North as a and many high temporarily closed was elective single-digit customers with quarter quarter. developed in issued at U.S. were the rate in DSO towards markets were decreased the customers our XX Western led continued top the in pandemic. region states traction a the by those revenue In to rate

Gross Spark Adjusted above basis by points savings public decline operating more businesses capacity declined to led specialty margins building than which down XX.X% costs, unfavorable Clear temporary largely XX%, to XXX by China, permanent larger mix XX%. due a primarily Emerging of decreased the approximately factors as a offset increased market in our programs. declined to sales for result profit due by XXX were higher-margin and basis reduction Aligners. margin points partially and from incremental our X.X%, company and to spending

Our $X.XX. first quarter diluted was adjusted EPS,

suspension our our through flow million, agreement the amendments. free and of payouts our largely and working cash factory provide covenant benefit strong our inventory incentive quarter, of capital After cash lenders and allow of among $XX in of end, collections for obtained in We from negative the timing the closures quarter million, an XXXX, our performance the approximately QX management continuity. operating good year leverage During lower with $XX was payables. flow had to from of due million increase compensation existing was to earnings, debt prior and $XXX we an negative business other

our $XXX the Finally, was provides increased end balance manage us to million the cost existing business. cash waiver, quarter. combined the our the with with Obtaining and cash, of actions covenant the flexibility at

are Amir maintain and monitoring positioning we mentioned earlier, actively our structure ensure both programs cost to liquidity. modulate will and we As sufficient our capital

France the Technologies to Italy, with to and higher while more pandemic our the Products declined were segment ortho and XX%. China, segments, by Specialty Spain have & approximately Both of XX.X% two COVID-XX were XX.X%, heavily in quarter. the implant that now including down Turning impact core exposure earlier impacted our a regions, business sales revenue

to We are contributed the Envista progress has growth which team with encouraged overall made in Ormco by the product, points to quarter. clear first XX aligner the Spark, their basis approximately

Nobel effectiveness. our both prior during in their the The making changes Europe In EU to for business, notified one from to the do is team and rate This and products. mid-single-digit shows to obtained North demonstrates progress, at effective to portfolio in America ahead in with for milestone of to solutions has of XXXX they the team COVID-XX patients commercial products on Nobel tremendous quarter growing outbreak new Implant as remain operational is has and available Management further Quality track effect Biocare of also help go date, fourth achieve Biocare Regulation Certification we industry Device so. and MDR right premium customers business made full ensure The implant Nobel Biocare organization an these body This previously first to geographies. commitment the the to Medical the these their of into and their discussed improve System the dental that certification regulations the XXXX. our in that important are

offset received strategic which savings. by profit due operating and Specialty largely system, Products partially implant declined Mark adjusted X.X%, NX revenue & only Technologies’ and which investment to continued in margins lower Spark, Europe, were the including initiatives, in CE

revenue In in our history. the Despite result the management positioned levels recent with from revenue, a distributors our impact are at XX%. Equipment over is in Inventory U.S. in distribution the at X.X%, & put place we decline levels now major as few lowest decreased last well the Consumables COVID-XX approximately business processes segment, years. of core

amongst infection our Our than Within in led and was declined robust. equipment consumables dental as decline digits, by double XX% mid-teens institutions prevention treatment consumables, while units, mid-single more grew business digits. declined low medical business demand

Consumables online to points As capacity the this end traction X.X%, team’s margin business of new will previously, June. XXX further to and to largely portfolio and by Equipment a reducing on increased the we continued negative refining production basis operating are profit Amir our due structural mentioned in business & costs. adjusted XX% investing anticipate be increase

operating will back walk I through now you turn who some it to current details will Amir the of environment.

Howard. Thanks,

While guidance formal uncertainty pandemic, we providing we commentary. to additional with given by want you market are some the provide not created the

assess will and we you set ensuring our will are taking We we business of we steps give how and to we crisis. of term for the perform the understanding emerge impact share from short how a thrive this better business the are hope also as will to We COVID-XX. plan up the

saw in to of a volumes. and quarter, continuing recovery pre-COVID-XX over effectively the modest patient April, were we the were start saw locked Let experience March, open, the me XX% approximately we China. just of early mid-March of patient From country was of minimal our with as the in end XX% through February volume through Beginning end levels. down. most By clinics but volumes the

volume in gradual commercial of are The on continue the a and we last the by anticipate mandates. to through return the Over progression while performance regionally infection our traffic, seeing patient of varies government local weeks, and based the see improvement remainder quarter. teams we few country

Germany in than were recover, is along operating showing activity have April of Scandinavia European now estimate of the and have regions as level lower many of offices their a have areas experience open of recovery through about dental Australia continent. the Asia-Pacific offices to first is is some relatively of patient signs We one-third they with month other than further remained started to impact. low an rest to are at despite had of traffic. open. Japan restock. impact offices beginning improving the as encouraging much Similarly,

anticipate the recover. of of as activity On Southern France this orders they be will to the European stay-at-home other spectrum, more stringent still We and some have have end last the countries little very imposed.

prior so followed In recovery experience second But to In offices by do very we than cases, the global through the all set operate half encouraging provide the opened signs population us early year. April, more improvement into the than states in a and volume. visibility. days. first, this the the of have lifting the anticipate we business gradual but with as environment, restrictions U.S., We XX% process, declined seeing in representing in framework we half from we started importantly, stabilization of nearly sales are gradual near-term dynamic more return May. of through and move created in to more a still To in with to patient year. are coming April Finally, recovery the

of we a openings to We several usage including operate office as quickly and imaging clinicians by monitoring to tracking scenarios the several needs modeling environment data financial globally react framework back work. actions. quarters. a next liquidity leading respect to actions come cost the to to ensure ensure process This our have informed can we way prepared we the indicators, over We’re withstand the decision-making and set with changed our

our will and workflow, forward. NX markets Furthermore, gain impact to the we in by As a across than quality navigate as is sustainable control business market office to positioned environment. the by and consumables, caused of office business positively our prevention DTX medical XX% recessionary believe of improve orders to total globe, emerging is system stay-at-home million business. patient care procedures. portfolio we including and the growth, Over differentiation the competitive in our implant move well innovations, disinfection anticipate infection diagnostics dental provide our intermediate required and can margin Aligners closure be accelerate infection including Spark based influence to our move Clear We impacted the $XXX more in we share through changes and will position and

dental business not $X,XXX do our and priced perform dental third-party $XXX equipment any equipment replacement it purchases anticipate purchases. driven of under is x-ray is are than office demand of devices and fewer require be as composed postponed. higher-priced $XX,XXX on forward that treatment capital This other offices portable built largely most by intraoral remaining more moving equipment installation. business necessary average, imaging half to sensors handpieces, generally Approximately nearly impacted large centers are makes above new that’s to procedure, transactional million equipment We equipment and which the

of exiting capital this XX% As business. our we are exposed earlier, I segment mentioned more of over

long-term safety and dependent clear our and stronger achieve strategic business goal margin EBS our of community; also portfolio and to priorities the aligners and enhancing transform near-term customers growth strength. cost priorities investments, create markets, including improved our the operating to reduction, is our these customers, and expanding our summarize, our aligned These foundation. of To leadership create The employees, our actions and financial team implant, employees; with are to our Envista. our our through relationship our portfolio a partners, preserving supporting partners emerging directly value strategic of on the and mix Envista objectives and ability strength continuing with to are

public our decade been have tenure. we than and management a industry months, a for of X leadership less While has company

executing future. challenging through stronger times and We’re managing our investor in and the committed to are to ability build for confident a

comments. Erica, Amir. concludes ready for questions. are we formal Thanks, now That our

in question first Your Johnson Jeff Instructions] from Baird. [Operator queue comes with

the need maybe okay. an way on additional X additional with keep you evening liquidity? million of a or to you with the in wondering obviously, and raises facilities will to Good how flow I think you know the you balance your million balance have yesterday, months, I continue be are was perspective, comfortable in trend $XXX capital give you. X cash just Thank month. update there here, on documents me the months guys. the expecting Howard, Hopefully from you access liquidity sheet. Do to filed if us you hear over to could from to of $XXX sheet starting from If you revenues kind each thoughts over current next are here? liquidity

Jeff. Sure,

feel So yes, I we mean, good.

executed. step was getting first amendments covenant this The

behind with on ahead continue now so that And we to and to costs. focus here actions us, go the save

be an temporary million. the $XX we in come had talked in structural cost both past about X-years. much excess Amir in in, of second to the over $XXX would takeout additional a costs or million, well changes And quarter as $XXX mentioned, that as, at that of as million looking We’re

through cash XXXX actions do to looking time we those that weather a environment this on crisis. way between to us work We think and well that, that the the exit lot positions our hand this of and We’re accelerate by here. that that,

and on focusing we that priorities, we liquidity have making we’re cash. management daily sure of focused throughout, of and on terms cash our also are In

that’s so payables. $XXX that and we at positive collection work the I mentioned flow had our collections And side as of done well. comments that on million associated cash with looking we’ve earlier our in

plan And on continuing to we do so efforts very those much well. as

liquidity we options. to We’ll Certainly, look monitor it. that. other will and In continue at of terms

We have interest dilution such as facility. can stakeholders, options about at concerns we conscientious our facilities, well. and as short-term going look our about think equity that XXX-day limit liquidity even of instruments equity convertible value We dilution as some the and our as can Clearly, we’d be forward well. very we

That’s over one recovery how first, maybe brackets business. not back are relative But orthodontics Alright. off recovery Any quarters, recovery? phase. implant you, or of and second, having recover on kind thoughts you. third could our of especially of implant couple orthodontics, that a unique the a in higher-level just Amir, helpful. to thinking you next for And have maybe and are going how Thank We sizable both about what’s could that come question and in expectations clear opinions you the to on position all dental of aligners play versus wires? in a

survey. perspective you, on for you your your Yes. been That has market. to helpful really Thank Jeff. weekly get Thank the

and but unknowns because down to purely and consumable specialty of this and shut in come we a you – lot That’s their As On at has point, first. because do back will of the and equipment back are From of of and to there by our higher some sorry, to come consumer back that May increases lower gradual can going and perspective, think endo, next, the action business divest emergency I we purely important factors, to first, nature the am we why June to believe This of will procedures imagine, demand. procedure modeling capital handpieces. treatment are took of The expectation speed and think are the item centers. that followed it, start a be likely recovery, confidence, We ortho and government come perspective. offices by require a guidelines geography. play with practices reopening. as large speed do degree, opening an macro will

consumer factors: We progression, disease office are monitoring opening several confidence.

others. DSOs We are talking to interviewing of and hundreds dentists,

We on really that are what feeling have at information here. a good looking taking have handle through of interviews, they our devices. the is place imaging in we And

Australia from not beginning have seeing in, back has of cases, the that the come of ramping the New the Spark start some Zealand; us in moving but some in we started and given production European, some are only to in can U.S., capabilities forward. also We requests coming confidence our

are daily adjusting and forward. basis we a as and go that We monitoring on weekly

Jeff. you, Thank

operator. Next question

Peterson Our next question Tycho JPMorgan. is from with

maybe less given bit can talk think the Amir, you or about about make Thanks. you U.S., there as the recovery a example, that prevention the opportunity? And lag little a relevant? between about would market, EU tailwind. think between mentioned China And are dental structural China then you talk you purchases? Can offices just here reopening how differences of and just if more the infection the there that resumption how do you

almost more a we China, indicative is the read-through were think started government perfect In good you, a we that were control. activities. no XX% to Thank April, From course. recovery match strong March, really was Tycho. in open. necessarily a to Of saw it virtually, to It about activities. expected. January, and March, better much of recovery. it’s there is the XX% patient a to volume is about we about XX%, saw X-weeks recovery to is office improvement the in once steady of end early From end office the of At in a we other there than results individuals New March, the geographies, We But and seen given and Lunar not Year off gradual – it gradual have improving. a

driven ortho, but the standards other guidance. are I general As government purely cases, by said first recover, hygiene, emergency to cleaning, some before, procedures and

good as limitation we markets. proxy, use has replicate in understand other to the but a developed we are to China trying So China that that in order had

away have go-back-to-work and had here. important able expand Our offices. in a walked ramp to a at series its in China, been and with of business, recovery due business been at XX% has and different to In of prevention Australia the look Zealand. New donated we hygiene disinfect factor business, some end really of our business. order how geographies, to APAC, order government Japan, significant QX in Wuhan And segments. to program, have normally We put past infection to the look really at is in three we

remaining America, I of quickly. in North the our seeing along recovering of Nordic, next further open of Western and and curve recovery rest are think APAC business Europe offices South and majority are are are now. the China XX% impact The on about XX% significant and in geographies that we the those world. very and group those

South see and Nordic encouraging some Category but are beginning in that X, sign. Europe, Western recovery. Major down under to now. seen North And some America, offices starting are are largely through locked open to April,

As geography. was we a from I beginning improvement we that the a step-by-step in see then bottom. said, by to April, think decline, XX% are and we saw And on,

environment premium? toward that does shift follow-up early your if the ask could I value all? one for on days does your at does outlook on for implants. change in a NX skew more environment current We’re value? It’s mix And recessionary then but change the versus And NX, view

any And that phase that we anticipated. make think be specific drills, patient we doctor we make problem infrastructure information do than the to that But maybe new or It’s all improves approval was the group We as same versus early go for built start, X the says create to about on, procedure all was talked We It good the and This what seen so to for about, really as faster excited before forward. honest, train easier are thoughtful DSOs, first are onboarding. are an recover we in overtime. solution intend successful clinically, given milestone. ahead largest onboarding June, for we sure major here it covers We’d in provided, are get dentists. indication. that of we sure X next to we and the total time. thing correctly, And to will time, start implant that is value got. premium. NX had Spark Europe, specifically be Well, we want of as this. pandemic, an end-to-end a we growing make treatment sure procedures a use X expanding as fear, to with And truly haven’t easier program to to that to

month We trough in are the the between all we the are now of any carefully. calls, specific indications, we of don’t through and information this and and in talk that April, watching point. share, – and that that about have can ramping seeing saw March visits but I premium things number up, three number other that What slowly that being balance we at value of last weeks very

Okay, thank you.

Your next Elizabeth question is from with Evercore. Anderson

question. have the Hi, for I commentary Thanks a guys.

focused areas on? the few terms what are In you terms you regarding you progressing see of understand in cost really how the course the a provide over details cutting? cutting. cutting, cost cost I you are And of that the what the more year? But Like Thanks. XQ saying do could longer-term of

when low-growth, And will talk that some of company in also challenged question. – think there businesses, structurally are we a about about This exit revenue that Elizabeth. talked smaller potentially some is is low-margin into we nature, that have million in. less Howard. we product likely would lines the our the be that $XXX that fall percent the capital the differentiated, for are more Crane about in Amir North class. a America. Sure, we at that we – Yes, Yes. structural looking Thanks

footprint by We’re complexity savings really I as well. at target on XX% to workforce And the we of more think something Span mean, of ahead look the several – go would organization. reducing facilities, as workforce than would that overall I restructuring looking those be side, shuttering then of well. ahead. control get structural we’d reducing and go at our

go Sorry, ahead.

accelerated $XXX seen those going I million and about in cost on I relates an savings, additional to be will structural these year-over-year as to XX%. discretionary savings likely more will and of take that as the significant cost we And that, the it Those here was the as No, some events. well in just that quarter, of a be be temporary talked ones mostly compensation just will that things in we that around say in lot QX, say that between the acceleration seeing those activities talked reductions, will hold spend travel down about. we in April, both have we’re of temporary April then the furloughs,

Got it. helpful. very That’s

cost-cutting any – work about to thought thinking of distributors? of because you or thinking changes your of will have made these how some with given you in changes you guys part As your or this, sort

have intend by and distributors support the We manage have provides some forward. we the what and the that noticed, this. the value is, we have seen QX, inventories to partnership at we an work go the to that that thing Elizabeth, what they the seen dentists, started opportunity that we our recovery them think relationship on from we available, to a we due have. been gives That tracking think not to provide opportunity done. as we’ve than We ever that of in we process. to One challenges continue with that all. have relationship data changed lowest lot have better aspect us value being providing We

that. for have work the the be with at As we past simple But all dependent every continue and to several to work continue to we of know, and them, been have is, it intention you we with answer years.

Great, thank very you much.

Rich Sachs. Nathan with question from Goldman is next Your

Hey, Nathan.

feel be just savings, Hi you to good question beyond what I the to on be it’s And or talked of additional on that could are this Crane? where products beneficial afternoon. just categories up cost Maybe does clear, now Elizabeth’s current Howard, rationalization you profitability wanted potentially about a the & kind product million $XXX on there in exit following assume environment? maybe Pelton right with drag

Yes.

So Nathan, sure.

that, the some the structurally, Crane. think & actions, – that recent that Pelton we talked that includes announced about I of including million $XXX

mean making big also that be as think would the scrutinize. The well are where thing capital-intensive, opportunity. America, looking we sure potential would Latin I margins, potentially, areas. I that are analyzing highly look at we at be we is and those have places that that areas looking growth, do I lower think in us some at the other capital lower and that an products area as we’d that for

Makes a seen XQ about you took on the actions great. the could just the of kind talk then, you And performance follow-up in and Okay, of Amir, of sense. implant maybe business, that kind since restructuring from business into what we you forward kind through what that – can that? of we us priorities months the of for as as forward? talk for here, look are And you’ve move kind just X business

you, Thank Nathan. course. Of

Europe, and de-layering So you we organization started closer the getting customers. our to as making know, Western a North sales in some lot changes America

were and months, single-digit X sales first business. our January at Western and Europe premium The in America high North February,

I’m different the put degradation that bit February. long-term saw changes this changes of started of we to we and a in last So traction that started from our we taking late trajectory for a the to And and late December set we a April the as forward. beginning business. think the sorry, weeks go from January us in going We April. business. of January going X the little of seeing us started are These done, really performance of it it’s place, very place feedback – started force. have a had And customers, of this changed this up good We lot in sales momentum as seeing

Let just answer I is the one question growth clarify Western thing. Europe. premium mid-single-digit January, the want back the me on go what to and in on February North priorities. America and just

three have we in So that key business. priorities

priority feedback their customers customer to priority. stands commercial customers, Number number so and execution, they that. make in we NX, surface, best-in-class. years of closer benefit us, investment a an that past specifically the launch providing that the getting two products made are the around it the get are have properly as that the meeting products, our experience. say new getting around expectation, we That’s the the from have lot for We to And better see today our a give expand continued sure that new are to X us product one opportunity really it to generation properly, Nobel X the in of or

the of So as benefit we it a forward. customer see go can

The know, for had portfolio. priority about have – we have third as talked us, we you

complete to not you to NX, have We we around be some make update, commercial in started continue gave value of portfolio can Those regenerative in changed. that QX. far forward. accelerate And part important we the in to crisis gap have to our portfolio portfolio a of gaps. to come sure to a with worldwide. we hopefully, the We that our and and priorities place adding sure meet the activities an status can portfolio innovation QX out management, as, this moving better be requirement of make customers our a our to

Great, thank you.

with Your question Stifel. from next Jon is Block

curious you you’re guys. aerosols conversations seemingly Yes your hear in coming But of the the concerns just regarding good Amir, afternoon hygiene. terms hearing back, I’m trajectory to out in that lagging of that’s the what due of market there.

acts doesn’t resume got of for And into are a a that pocket we the indicator actually hygiene once mean restorative? being road Could usually time so procedures hygiene leading what I’ve the restorative the if What then as down frame fall And follow-up. that does Thanks. hearing? you as sort for get shortly? maybe

as well description, high of the Yes. Thank bone as you, lack are damage a the to that And procedures there replacement. clinical little Jon. there and bit as used risk more why speed risk, a that in could a some have categories, What – lower hearing create ones That’s as be to hygiene, to better that we restorative, a concern. of the have endo. of is additional tissues that more is, transmission well to benefits lower are are a are for there

sterilized, or cases, implant, handpiece it using ultrasonic RPM scaler, lower at X,XXX Normally, that’s high-speed in the existed to surgical you example, advanced other X,XXX normally of is RPM that before any an environment a when XXX,XXX look most in or versus these. example, versus risk for you as an sterilization, procedure resto. really already suits, that speed go drill, lower So used

are that better back, some procedures that. quickly, better up others. categories in really prepared to as lining see at impact very product that, make back those a upon around of lot can comes coming been faster the have saying that busy Jon, trajectory, some that we a of fast looking are a market have sure and those benefit have performance, the think categories we we So than we very we would

Got it.

great. it for mention Okay, growth. to contributed a I question, pivot but then Spark, did XX And the early, know second bps you just it’s revenue

Ormco, Any so Has are they’re you are adult, on brackets where coming if those they feedback teens? underlying growth and on the sales be assume using their incremental can early truly great? those tell the would how from? are intact I it, and orthos. So remained sales wires

Yes, great.

course, Of Jon.

The it and traditional first digit. two done months of same as the past, bracket continued has to format in year, Ormco in the mid-single the wire operate

thing. XXXX, saw same the During exactly we

our traditional X%. mid-single-digit and to continues to growth a market at bracket So while operate business X% is wire the

the of input they us. they they what Spark. pretty in treat they finite. is customers offer We exactly – And combination They’re are. talked we anything providing cases. set that the Europe. early of as Australia U.S. us started alternatives they we and from be and And very to as have customer away bracket training, in our change January to have while good January. – disciplined today, have And number with the phase, in Zealand signed who New to So from, the product, many traditional have continued And Where ramping in wire we customers. both. indications really They they introduced Those different have begin and and approach that us February. are that about of we expected they’re we all sure wire. a it is got as challenges of that in place fact see as expected. we saw business China taken answering They have exactly customers, And either before, had QX traditional ramping hasn’t Spark using said a Spark, are Ormco beginning introduced bracket up. have to told use get they a can have the introduced What make in education, came back. where production, is us. Areas or can done using what almost all that had a Spark exactly we us, are using cases. basically relationship know they The know up despite of our trajectory able to this good to up, processes, see we send then this that March. are introduction support, quickly coming continue through we we we And demand phased, before, similar we to is gone some the in had we we of are received we that what we in that be to cases what next year.

Very Thank helpful. you. Great.

from Jefferies. Couillard with Your next is question Brandon

of what’s back portfolio Mark – the launch. just on CE the NX, distinction Amir, first being you described the

FDA? do there. you line an Just And is distinction what the U.S. have updated the for to submission curious time

Right.

So Brandon. a NX complete is system,

system implant surgical unit, of the itself, that connection the a it, conical it’s the of units, the top goes drill the on packaging. So

through. is by that, All of step by step, step coming

approved. So right been basically that important approved, which was now, the being implant most it has having part,

selling we require – in don’t to been registration. And for start order that us any able additional to going be that building have we’re go So that implant. inventory countries can they to those to

require And the immediately. I think we about process. Europe, that very start a XX is can in to registration registration XX short that countries selling others

to with comes go coming pleased NX we on after that we one it forward. a that, series continue X place. is innovation as of expand what another. So after is really would and Phase taking be

is underway. discussion FDA So

time dialogue getting really as to provide people consultants forward. well back sure along. and advice we that a and industry any place on we who cannot make I know in all go go very line. are good pre-submission from We’re specific forth and the I’ll in

year this any – United don’t approval. in European later FDA in States XXXX. U.S. XXXX, As approval, indicated that I have has ended information share can if point that we the we we about but past, on The additional think bring obviously, in that had the forward, Europe and at this

Howard, the in P&L in business you Can terms maybe to And million manifest? just be parts a question, follow-up force savings. down $XXX where sales certain the cost reduction? in that the the Thanks. might that of impacted of of And from extent will the break structural headcount in for of one terms what

Yes.

changes So don’t feet a structural we the anticipate in Brandon, Nobel sales – the is things about. service as that street to around as announced, and which last will as some some the relates looking facilities, December, structural done sales for it well think as on well. we’ll just well, & spoke footprint manufacturing we the Pelton anticipate force I which year as lot more we the us. don’t organizations shared changes as have Crane, at office in have of impact we’ve back that changes around obviously functions, of those What We do like these piece

P&L, also as G&A or lines of well. So I cost think the have in selling it’s throughout the on we going manufacturing to some components largely the sales and be versus the will the impact component,

Thank good. you. Very

call time back our And turn that ends for remarks. over Management, questions any closing the allotted I’ll for and answers.

today, around the you, for of Thank Thank and We’ll us. everyone, everybody. for be joining you, tomorrow, follow-ups week. Erica, rest

you. Thank

you call. Thank concludes and conference gentlemen, for this today’s participating. Ladies

You may disconnect. now