Envista (NVST) 4 Aug 222022 Q2 Earnings call transcript

My name is Chelsea, and I will be your conference call facilitator this afternoon. At this time, I would like to welcome everyone to Envista Holdings Corporation’s Second Quarter 2022 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] I will now turn the call over to Mr. of of President Holdings. Vice Keller, Investor Envista Relations Stephen Mr. your Keller, begin call. you may conference

during for G on provided release, reconciliations Chief www.envistaco.com. required joining the are us to quarterly next thanks of out and Financial and remain Hello, any our us the to want measures relating presentation today Amir Howard the our SEC section on point website, our financial on by call. website available supplementing our this archived under Officer. and call will Investors archived I of today our the heading information Aghdaei, President slide The call until Officer; and the and Investors be earnings non-GAAP all other portion Executive section Events that Yu, Regulation our the later Chief It call and the are of With will call. audio today’s Presentations.

As Unit closed announced on January of Instrument and KaVo have divestiture the business. X, XXXX, we Treatment

these and accepted Envista’s relate references accompanying All in earnings, the of for XXXX, cash revenues except and business accounting second to generally discontinue to as the continuing by in business other this our and principles. quarters expected operations are required XXXX and presentation results of of financial metrics the financial of year company-specific statements remarks only operations full For flow first to measures.

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

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

and employees to welcome, in disruptions, successfully IOS accelerating integrated XXXX delivering our business. Thank delivered scanner China, adjusted core team you, call. by want our earnings inflation Stephen, severe EBITDA acquired margins everyone for thanking call today’s newly COVID-related our despite quarter supply QX solid digit our growth to mid-single a another intra-oral expanded Envista’s lockdown chain and start I and

execution. strategic resilient is to Our a our differentiation proven our performance of track record and . testament

and of is margins of demarketizing to strategic to our operating At to priorities our expanding our reiterate conditions to current by Envista, I discuss provide with life a long-term detail, and digitizing, quality patients’ transforming results growth, on want quick our improve our on quarter more care. portfolio. Howard toward Before second to accelerating oral market professionals in over focus I vision, offer turn update insight dental some partner progress our personalizing it and

I recently road the the returned U.S. across further their over in where the from community trip market, spending amount needs. We’re met by businesses, to time the professionals I XXX significant committed a understand their of and dental meeting their to with dental customers a workflows just

to clinician’s including industry an traffic the looking and their improving of in opening digitizing staff specialty look is dental are prospects committed their in and of mind limited group for and chain currently While months. remain in X enhance their practices of patient their capacity heavily It’s treatments on invest for out clear private XX inflation robust, DSOs also professionals the talk over continue supply to economic is ways to It and that as are long-term is in no businesses. the potential they opportunity by of to but the offices, predictability remains dental Doctors new the offices. treatments. lack and the and and and workflows their constraints efficiency that doubt months offices. weighing remain there next expand slowdown to capabilities, their confident

there dental market expect to long-term. the grow additional ample has in market that the over we may continue is uncertainties the believe be to we While and room resilient short-term,

Turning progress with to portfolio. positioned uniquely our QX a

business orthodontic deliver Our continues strong results. to

more moved result bracket a as core business continues control precise finishing and Our faster which wire our share. orthodontist innovative a by teeth. system, Damon Ultima This low-single and the to of premium orthodontists, improving solution solution. digits The grew for gain provides Damon way commands more new differentiated price

other the took clinic proud rovnátek of for Spark strength to it growth the that achieve is Aligner the months, is with over orthodontic Spark year-over-year In bracken position. aligner clinic validates an top to responsible we were in based While globally. leader long-term Svět with This more the partnership additional partner QX, further in we in delivering therapy to business new proud In casters have expect long-term six starts. world. global us the and a orthodontic further aligner our is the our our momentum Svět a of cases, an and clinics the Republic. continues last of sign than solution. clear clinic rovnátek to and XX,XXX Aligner of we clear with leading rapidly, Spark Czech professionals we any orthodontic agreement strength we years XXX,XXX as core solution accelerate The expand gaining is are business, three XXX%. It started and case again wire Spark initially

for in Our mid-single grew digits replacement implant-based solutions the quarter. tooth

continue premium growth and implants see We to regenerative robust solutions. in our

of important to dental to further we agreements our In and strong dental care. democratize signed personalize to also addition mission partnering digitize, our commercial with two professionals execution,

opportunity million, Biocare also our replacement from a per dentalcorp’s highest partner products next this that month, further GSDM. hundreds latest Boston trained that using the will Nobel placers quality will entered of we University than kind ability dentalcorp, and dentalcorp America’s we and decade. have This and Biocare XXX Medicine, generation North Through DSO. train a GSDM University agreement to First, in of solutions the leader in North agreement as implants of in educational in an help provide America. restore in Henry strengthen and M. traded into patients. publicly for Canada, Together, Nobel implants offices Dental network and placement this at to $X to announced partnership of philanthropic the Nobel residents place this in grant. have implant a is next Students the grant dentalcorp has School will to and year in provide $XXX,XXX Goldman and partnership, clinicians Boston its only partnership will initiatives us Biocare. care offers created a Earlier Based more Canada. Nobel extends with long-term the This of Biocare tooth the

We're of represents we intently In on focused XX versus we This achieved In a addition impacts for investing in Business countermeasure helps to EBS, the EBITDA of XXXX, basis differentiation to as macro we to execution. operations of customer margin adjusted The invest date done throughout our our discipline and focus and structure and and actions of focused achieving operating proud we companies quarter, pricing. provide basis expanding the inflation to while QX flexibility on used challenges regional to challenging sustainable our greater our work of ability optimize the points that effectively ensure our managing chain QX and delayered long-term drive margins. It priorities improve our and us organizational continuous move and our an continue and optimizing can XX.X%. in offset point have than growth. further us driving supporting pricing, margin System, growth XXXX. invest strategic remain improvement the to its while a to we and in we improvement the strategic deal margins. our additional In net we more organization on We environment. year. expanding and to remain experience streamline initiatives, Further, supply drives our EBS inflation our to Envista took XXX

into and platform Envista, rooted priorities. in further and our integrated issues has acquisition geopolitical EBS DEXIS concerns, improvement continuous expect to XXXX The us confident name. beyond, under that the results culture integrate portfolio our Carestream Dental's business and of impact we of intend persistent implant iOS workflows. to invest to inflation DEXIS and been the continues. relaunched specialty we successfully into short-term brand scanner to deliver in The chain will have our supply and While our allow our DTX auto challenges optimize We long-term transformation and related we're the simplify product

in second to quarter, the we During the our in period the revenue $X.X in million ability own limited scanners. we lockdown despite that this source that business Shanghai achieved the

as of to dental replacement and care. a digitize the company with respected the is our solutions. and to professionals closed providing to with its Red distribution our portfolio June a clinicians. and us second shareholders. our that the U.S. This not interest growth recognized early and year. but design. attractive iOS The regarded scanner, well bulk, With to see solution DEXIS only robust and out we very drive significant business offerings is tooth history providing and is will the our create dental half us performance and acquisition democratize of called convenient clinicians since in received value growth minimal leader a pipeline, with that iOS a position is partner segments we to dental strategy and to the in further in of XXXX our consistent accelerate strong in scanner balance opened leading well also jury elegance solutions. The factory of pleasure brand, channel. Design is implant-based expect complementary point. On Dot the clinicians being ties significant of attractive BioMedical, manufacturers to X, acquisition patients, XXXX a market Osteogenics' solution is R&D This are specifically the scanner symmetry of and is built innovation fastest-growing and The wireless operate. With Osteogenics for above-market we this with complete our positioned implant personalized a effective high with best Award We provides DEXIS opportunity workforce now July a price from on lightweight, recently and and the our clinicians its solid regenerative focusing and practical, enable

pipeline While EBS capital disciplined opportunities Howard to and portfolio. to investment We I we about have robust the are pursuing details turn the that strategic partnership more go we're we approach made and excited We're deployment. through driven improve utilize committed our quarter to will new now of financials over segment provide our a today, opportunities. inorganic second our moves on actively further a see performance. approach call M&A to manage and cultivating to our to

Amir. Thanks,

due the Sales X.X%, quarter compared quarter growth of X.X% Before like XXXX. and foreign to you On growth Core Unit second the reported quarter to on reflecting were Instrument a second currency to KaVo discontinued against reported as negatively our I results we prepared basis, sales begin, would exchange sales. sales based increased in to to second impacted, X.X% are X% was Treatment quarter our contributed the sale rates operations. continuing prior of million. business and that acquisitions operations, year remind $XXX.X

our offset Our and solid and performance year-over-year segment by core weakness growth sales reflects segment. Technology our in consumables in equipment Specialty Products

destocking our by in On Our modest growth Western channel. was and America by and to while infection wire bracket weighed and a our higher and X.X%. North implants businesses core core X.X%, geographic Specialty North Spark aligner outstanding increased performance America delivered clear driven segment down core sales of our its delivered solid business. XX%, growth in in basis, prevention of distributor performance Europe by exposure

Our X.X% down business versus to the Shanghai. in China year prior due extended was in lockdowns

to China XXXX. decline driven QX in digit very declined late QX Russia, In strong the of the grow at in quarter Ukraine. China, pandemic a as ramped conflict buying lows, versus Shanghai in of QX continue emerging activity and mid-single expected, forward the of Russia of we off XXXX. As quickly This versus by XX% approximately markets up followed Outside start nicely up reopened.

adjusted due to basis basis which QX XX.X%, the The is line XX in material and gross our to the prior margin adjusted than partially by volume was approximately and increasing quarter sequentially. by of was mix and higher of costs. XX.X%, second offset points Our margin year points higher EBITDA compared inflation XXXX impact favorable XX

to As in-person long-term previously while on discussed, customer-facing our in QX, increasing activities. invest we spend continued travel innovation in and

to the effectively business. towards iOS adjusted the QX, the iOS while expand long-term costs expected ensure took Our from in was margins to both divestiture actions costs redeployed onetime available by also investing In our slightly investment business. lower and The investments continue EBITDA overall organization that DEXIS also in further stranded our we eliminate our remaining as we we streamline to can related to newly growth. KaVo negatively than acquired was resulting resources impacted

of period quarter the year. second $X.XX $X.XX was the prior comparable to adjusted Our EPS compared in

XXXX core capitalize by bracket both business the implants X.X% by orthodontic has invest to and and second versus businesses are the Despite accelerate. combined toughening on along the wired of growing low to macro and year Products Our potential that to quarter And growth increased to compared over from opportunity. with impressive continues Spark. segment growth Spark solid while Spark & bracket remain order quarter, revenue in revenue second businesses this we core prior we with our continued Specialty immense and single confident drive In XX% driven grew to core our continuing wires in digits, environment, Technologies the growth long term. our our

XXXX QX of prior QX the grew growth Our growth digits modest by Russia strong in excluding reported developed mid markets, in markets. two, single three emerging all year driven with placement the versus more in implant business base

to business to In addition regenerative continues our core the growth and implants, accelerate.

& quarter. long-term the XX to XXXX, operating investments we XXXX margin to of profit segment of QX in long-term activities points This significant drove finished participated due – growth, in Products XXX the QX basis growth Specialty the Sequentially, is increase Technologies quarter. Our XX.X% segment. at as to down well of basis adjusted in this points drive from primarily versus increase the as facing customer in we in improvement second

XXXX. quarter of consumable sales compared to Our by QX equipment core X.X% decreased second and segment

volumes growth emerging and While From both compared across positively restorative sales price sales by down impacts core the of in infection XXXX. lower a imaging, approximately geographic drop quarter our saw businesses to X% perspective, was prevention and developed second markets.

modest declined mid the and offset Shanghai inflation Our impacted Europe's China quarter. Russia-Ukraine to We in by traditional digits while lockdown. both growth decline the imaging very North environment a weakness by America business meaningfully uncertain is in China. complicated saw in single was by meaningful attributed macro the Europe conflict, and

in Clinicians improve $X.X As IOS very are interested pleased Amir in the mentioned, the with remain very and million of IOS new overall we delivered business workflow. our business. this outlook help to investing quarter, solutions in their

to the in declined related China and & America in the in lockdown. Endodontics quarter, COVID business by Restorative driven North Our distributor weakness destocking primarily

was the Our other markets and emerging in business quarter. modestly in up performed Western well Europe

digits. This of of solutions from by year, pandemic continued versus should of mid trends decline term, XX.X% prevention to distribution sell elevated share in our the balanced our the increase gaining we XXXX in saw this of XXXX. to Consumables margin continue are QX XX.X% quarter operating that our versus XXXX. partners dental reported grow this belief was prior Equipment XXXX. sequential the & second versus infection in single our revenue Despite revenue Further, out half a supports and return of that demand. expect in adjusted decline business expected, over indicate QX and sales our in more market that inventory of XX% QX to in we in business As we sell to core market. second sellout growth profit Long

related Free move in on to increases infection we Dental the closing $XXX incentive will cash flow In of due costs, of and These inflationary sheet in quarter offset timing us the that by business and and in related acquisition. ended early Solid prior Equipment QX. our receivables margin of in lowered improvement the forward. increases materials and year. strong pressure the and IOS transactional of the million our more and & and free that more and commodities than acquisition the acquisition our timing quarter, in the our business IOS increased million Overall, cash with second IOS was we and in the as businesses. after cash payments Carestream were price acquisitions, costs restorative gives to supported by grow have ample of solutions Overall, after profitable costs customer versus Consumables is imaging, material accounts impacted certain improvements we inclusion the QX prevention Osteogenics flow be the payment $XX.X related confidence was cash even generated order faster partially restructuring to to our liquidity closing very compensation QX patterns. balance business

to opportunities have available. assets flexibility when We additional growth the right the inorganic pursue become

turn over Now, the our balance the provide comments. call closing I’ll outlook of and Amir for to to the year discuss

Thanks, Howard.

While we dental confident our are today our with of long-term pleased the the and resilience market. about here performance

challenges. macro environment the We’re mindful related of short-term and

of issues, supply additional risk XXXX. of and severe inflation, China geopolitical COVID lockdowns impacting increased Continued are in risk, the the the of chain prospects second persistent half

grow this full Given XXXX. for guidance are of year mid core to digit the increased single and our balance background expect now to risk XXXX. demand, the downside We for our we updating sales

of XX% expected Osteogenics between deliver remain including XXXX EBITDA of for and to Our year. million. margin We the both Carestream full newly businesses, sales $XX to acquired committed million and IOS $XX to Dental's adjusted are achieving

remain priorities the same. Our

transform capital active our and operating portfolio our and accelerate margins deployment. to We will our and further expand growth discipline

leader tooth and based to in implant both positioned in replacement. well be the orthodontics We’re

complete offerings, them solutions Our imaging while and professionals, our improve will treatments of each predictable for the to workflow provide including productivity patient. diagnostic and empowering personalized dental

continuous and allow heritage on will results consistently while focus improvement investing deliver competitive EBS Our advantage. us to build to sustainable

to – dental and democratizing improve is dental care. professionalized life digitizing, professionals patients’ purpose partner to Our personalizing, by with

We’re focused on shareholders. our customers, delivering long-term and for employees, our value patients, our

concludes formal That Amir. comments. Thanks, our

We questions. ready now for are

with question from come Elizabeth [Operator our first Instructions] And Anderson ISI. will Evercore

open. Your is line

in first question. segments Hi, the guys. the on much my thanks the quarter. the the so product all color guess different of drivers I for areas Thanks for question, and

the of one can the market go key I we QX, of in sort of wrapping different there back areas maybe about think, we’ve out into in you and you QX sort terms of et as is, half were macro orthodontics, you with environment through volumes of see thinking the how uncertain questions been up of year? the sort cetera implants the and and

and Yes. do customers mentioned, outlook that are large what we is are And have our of is you. seeing Elizabeth. we been as positive. us. not buying from talking very we What currently that, Happy I to they’re seeing, customers and and a Thank to traveling overall number

with fact, XXX oral latest visits were surgeons. a In

telling up them that October. are of to patients have Some about us we booked

a as to of we see really see the this implant continue norm confident are are mind what that same and than the we look growth continuation forward. are meet And thing that’s different on offering So orthodontists. challenge really continuation have is keep patient We're what like. we The been ramp in On go we of specialist we the what to seen. going what that requirements. you And a to of flow. have we a placement, offering

they solutions. patient We by that’s a all of small before are They – start they any treatment before getting are we CBCT they number type very – their a focused anatomy understanding orthodontists of offer that the offer do. on

are you QX and on we moving at see that forward have in to that a demonstrated momentum continued as well. If segment, as we look starts

in the saw We beginning capital three On end of run. a rate QX, hand, of is inventories really the heavily events the between that’s XX% in the risk. forward. to increased increased of rates reduction in investment on weighing equipment QX. And long to of are in Top XX% other inflation, somewhere change guidance is macro impacting the QX channel between why – moving list

as one well equipment, energy with So in and European reduction. the economy supply risk Right vacation inventory past. industry. going see after important we just to in is this in clear in European seen now to the what we factor really on as capital and here, weigh think that’s September associated expected see have are what the as as as heavily forecast, We the is not

this for but ends a severe We’re lockdowns. additional dust last recovery China is and not up. least, risk waiting to of settle, slower see it’s in where And there to

We all of seeing North our a DSO, is of ahead not sure to this America of China about up. both is we’re specialist. order growth, as in we well of together XX%, where business us. exactly end So on a Russia the put to European going and XX% as a continuation In what unpredictable, a got challenges are

this managing situation macro We’re to of we the we make we all can that investment in are that margin, and little balance That’s run, that long we that we segment trying and to perspective in as the opportunities place view priorities. have and our and with of how make stronger XXXX. the continue a these bit all come various sure the we in much sure market make on out see a did growth a of investment, and land as deliver

And Howard for helpful. well. super or or one That’s you as could maybe answer

like in sort you with over? happened more You that be to and of to quarter. you what of destocking on of expect sort mentioned little how the distributor the last color Could also and stocking bit then sort long a the the there, come give us

I can as that, Yes, answer Elizabeth well.

an About it. any overall are directly. $XX,XXX. about of place normally to They mentioned provide color call chip we it equipment not equipment consumables. portfolio I about So Those do our to what XX% of let Only XX% but $X,XXX reduction distributor some me We XX% stocking. into about order. XX% deliver

XX% as other XX% also Europe, proxy deal I that the about geographies down to is distributors preparing as quarter. traditional are play Howard as prevention. The as in talked consumable areas cash, they’re during U.S. they prevention. have at to there infection with are natural environment, mentioned, other keep inventory preserving uncertain but well Obviously, The come infection a

expectation now position have the all along selling with out sell is match. known Our and the we that

that forward. visibility a are on it, but have go those QX We we delta dealing some with, a distribution we We managing term we with [indiscernible] go norm challenges in in horizon. as really coming with the are little think good the is at of we’re a until managing inventory is bit there of as dealing this tightly short [ph] to this clarity over the long-term

it. Got Thank you.

Thank you.

Johnson come question next will Our from Baird. Jeff with

Can Good guys. okay? you, Thank afternoon. me you hear

Yes, we Jeff. can hear you, ahead. Go

All Great, a Howard, right. I’m you. in Yes. car. thank

wanted just to I sure. make So

So here. just a couple questions

at look over I when like going of at guiding to growth you’re guidance, the That’s second half. you’re exactly updated forward in digit delivered laid out concerned quarter that in Amir, what single half. it more company a you little almost core very kind mid, about. or the similar level looks wide So your and four the a things Obviously, three first you just

as seems the updated do seems be in simple this as how that de-stocking year those half of comes stable China that up kind concerns. the you to off, Is to some help kind it pretty growth implied comps So mid offset against as digit what be single your of your of comes back as that? of guidance is other keep for that back,

correct. absolutely You are

at of look second the businesses. we versus a And our it bit little uptick is for a reason see take half to the in expect We first.

to are up. of the and that We The Spark. that are as number confident business doctors forward. we are go on going that get continue a to momentum better think ortho active we We ramping progress is seen

growth We years building come, growth acceleration are ongoing up Spark capacity, that is That only to expecting second an signing doctors that are are not continues half. to new something be to capacity. something of for we build just and is we

the in If was first got more assuming no to the to happens, about two that deal IPS negatively is impacted due by by and core had then inventory was prevention, half. to also we with or Infection second China, impacted correction. the lockdown basis it expect We comes. as in point that half, XXX negatively it And elements. see – Prevention was growth the we first One half there are infection

positive second thing placement that in half. implant rest our that’s progress. seeing are continues to The So business another we make of

are would We as move why of are relevant we to that where kind stand fairly this said, forward. knowing given is trying this, as think manage single we some And uncertainty. exactly of we confident you digit today. really mid That’s

This other Jeff. Hey, one is addition Howard. there. Maybe

we’re that pricing by in traction that well. we’re think I of seeing some as the encouraged

we’re the half. the each of that pricing so over will greater also on some last that And continue and quarters, we two in anticipate seeing and traction the front here second

that the compare think versus one. April of another Howard follow-up Howard this how that plus Yes, that’s in quarter, segued into pricing helpful both. round But XQ? I I right increases does Amir was and on my you question that wanted took X% ask to

or plus you. year? was the And X% that what staying XQ this year, quarter. rest just plus in do X% the higher you does So tick see throughout at Thank that versus the this

Yes.

an see even up step pricing – we well. we seen saw We up our incremental of in So in saw the second traction the year actually thanks, We’ve step quarter. quarter, first from the did as what last in second Jeff. half in

opcos or the with the market So inflationary in the growing market we’re than that better as place in are systematic each factors some each we good of realizing taking those ensuring well and feel of be a the areas. the as considered of that to process is approach,

a bit even a I half, that well. think pricing you the had a think and second the into little increases we’re for Jeff. indicated, traction We've hold of going we step see of to will second different up as half to those that probably continue and as couple

All you. right, that's great. Thank

Sure.

you. Thank

Stifel. Our next Jon question with comes Block from

open. is Your line

Good afternoon.

Hey, Jon.

have you for quarter. just that us if then might sort to XQ catch then played had and the attack out of Omicron your some We're wave some this. But Maybe on Amir, would getting love have like talk progressed? trends how may on just the and have sorry touched that hit And June. on there But April Howard. thoughts of might second Hey, question, from throughout first Howard a traction to on just in how was that.

Just anything and of digit mean, the for or be on top about sort was number line cadence the think for just in the that year, mid-single obviously, I XH. Should XQ? it XQ there then a And is of being linear back year? of adjust we growth I’ve XXXX? for got throughout XQ, the XQ fluctuation just between part Or as sort models any the follow-up.

Okay.

me QX Let the thing. answer

open. did did China open – early until not not Shanghai lockdown China So June.

most April, and very quarter. of March, we end toward business of April the May, March, basically had limited So

at it all. So we linear not was – our It orders hand. in had was

We waiting. three able their hat. weeks equipment four that in of to an are really sure those not and catch have the up have in And people we canceled, quarter, last appointments customers quarter, make the of hand were weeks tools

business the of consumable in or continuation. part see on and well or talking the other major saw on challenges the A part QX in conservatism a as bracket simply clear such as well think on as and the resources, – a the it on forward wire. little down And bit Spark this, But quarter. inventory, not throughout step need. bit equipment but and investment little even a a of sorry, see the any we’re and opening stronger I we not about specifically. as they of and bit start a ramp, changes did of the we consumable The started as and a Areas And was slower novos, ortho, went in a continuation traditional Spark a the market. we capacity consumable little getting de I’m the start of on equipment becoming we new traditional that did yes, or building – a getting change slower as the aligner some news sellout on

it of So throughout by the right those not had to we at see to did simple countermeasure become as it but that looking quarter. And geography. that answering by and we QX, we varies linearity it manage varies going accustomed segment, started kind

the for the Now of rest year...

Yes.

of QX our quarter. phasing period do here quarter. quarter, are that half would than the of bit We the also from I growth in the it that EBITDA second grow we digits true profit during a in that – in a standpoint that in mid-single adjusted the as And holidays lighter our quarters with volumes quarter stronger in heavier will our the be little the substantially the will just because third taken larger will profile. in much EBITDA to be probably as But just think Jon, So little typically the bit well. a Europe fourth say margins that fourth see fourth phasing third, that in slightly relates

today. And our point so that’s view of

Very phasing. IOS helpful year-end. around it. back, just the step maybe on just Got to business, the just your deal a thoughts on And a announced talk then I love us, Amir, taking you

market. and arguably the specifically April in later. seven closed I we the or whatever, IOS world then on it eight past think I are gone world months think over here A even lot’s months, in three and months the the

you What going of today? the maybe chop do and you stand early this long-term you terms the integration? on how to your do have wanted forward the where feel deal with business? the you goals in you that think with about and when guys And rates So growth achieved

Jon. Thanks, Yes.

that hypothesis We growing and We all penetrated have was segments. XX% regard. it $X at not been that various market that penetrated. validated about various than a The has is And less in changed knew geographies, on it’s double-digit. billion, has

segments, that really integrated, obvious aligner there example, For file also environment. I other differentiation. But IOS point that referring close and been penetrated. what that solution have from is And to knew others, it I’m file them, is others system one. a versus those that really to And not do working versus this solution clear majority price know they significant a they many of versus receiving in open sending how do co-system complete is we’re cylinder. We environment fully just

The started we to after did It we thing support, channel. said to, is it’s they product it we close, needed we things. product, entered expanding selected less lot number knew U.S. three whoever like a we before the the do XX% wanted exactly the market lot geographies over And worldwide Carestream EBITDA that we that. So in validated. and of the knew just When IOS we of an XX% was for really due We specific talk infrastructure diligence we a was the in market. has margin, there, The to do one good. than of share. was awesome expansion not

we least it. take So our step to will it putting first want the a in to as to we model people by hybrid auto implant channel, who knew going like buy as making that at available well putting in of part our business

seen And so uptake. far, have we good

though a taken capabilities, The has gross of lockdown we but now reputation, ability, improvement. wanted imagine, this operational capabilities have the support But reliability. limited built really And the it Even it. was you step. second service first the improve we can part around our strong operational has to really as we margin, have here, about improve a

not we to everywhere of we’re is that looking make to it. And to going that better are can to good as better and make channel on product an quickly performance that and it itself, us it in We’ve in happen we’ve to this, think workflows, grow are as help price a by great run. sure is we IOS to they portfolio and integrate are demos to in need it but our has up This Last the and lot and It only think to that a is possible. integrate something the hallmark And work going do a productivity part We that businesses working the we today, for. but job It is EBS going this software in a speed. hardware. R&D a robust market, a hand has with awesome at sure up a got on stand we back to exist into we what really date DTX, with here. good better the it long in in specialty continue need we enable to our the about is I our got R&D. into now software

with we great far time what pleased really and over outcome are as and in here integration. have this done expect of acquisition so We growth

I quickly if ask Amir, question. just a clarification And can

had you quarter, the of last IOS million for $XX to rest million year. contributing $XX think the I

correct? said million any And $XX now million. you both change I down to to Thanks, up that businesses, IOS underlying believe, including think in Osteo I One, $XX way? two, the is or is guys.

year. Yes. No, in you’re about the absolutely right, correct. million million rest million we it. $XX Those is a about QX for think absolutely of that numbers since to Osteogenics $XX $XX IOS, We million owned the $X.X are

format, run, about our point in IOS itself million the business by the So almost the really being XX a margin. biomaterial. growth Obviously, in to long core as are business. part considered they point we $XX in of is changing up the until after are million add basis a of of take core $XX basis growth them XX The of part year But growth core about to a when is our our XX, forward. growth a of the going acquisition mixture at of versus we going our look size growth, about not Osteogenics definitely acquisition. they add

rebuild of ratio every price, little of about of they that membrane. a biomaterial. need normally is the a every XX% implant, if is the bit of of X:X you or placed, XX%, XX% dollar look you them, you for every give for either a to And it for $X a feel at XX% bond Just implant implant a to sell

in that under-indexed so been have We area.

even Osteogenics. – are and we than have we Now XX%, with less

about an acquisitions as and to million different these ramp Now we up. implant in a forward. go $XXX really two to in got business us $X very biomaterial presence of small combination billion that of a place we opportunity puts We really worth have

Good. Thanks for the color.

Jon. Thank you,

you. Thank

Our Michael America. next with question Bank of Cherny will come from

Michael. Hey,

you thank basis, color to think XX or little afternoon, call so want more months. maybe XX bit on the I Good a months a far. or medium-term for and so thanks it for – hey,

play coming end asking clearly is, Envista’s I’m As in end all of market R&D the have reason been, you Dexis different both into and for terms pieces you of of you’ve market uncertainty this end themes that’s you be How level about areas relative the to to right trade the as feel the you demand. call on as of there’s IOS both all what There’s now high economy. various in products strength time? you that had the over think position think and able low do also especially regarding efforts, of do bifurcation continually a about you have markets integration in. pipeline And the your as in if different examples, have bifurcate given the down Spark how what come potential uncertainty this of of current up the to in the end

Danaher completely to distribution, going before that and not X% to I’m a moved past we Michael. years, business two higher-margin past direct at more going we’re & first business, place. our We Unit Instrument to Treatment we in to heavy KaVo our about put the in the couple about being Consumables the two question. more us three XX% to took what in Thanks, equipment. Equipment shifted out different other We have we years the we to look lot ourselves portfolio. more basically I And lot of XXXX, saw put continue exposed that’s specialty, started answer a point put lot very coming doing. market, has if of ourselves, We of it. from A away you million exposure and a a $XXX and a business. acquisition In

both well question we worldwide. from going combo Spark in bracket the as Okay, provides well upon wire that, and at a saying quality of we that aligner think has XX not that differentiation combination unique provide, as as have a changed the as treatment exposure that, well we long-term have, all. finish of network months? next the as as pricing We what that the the to provider Our the are what of we ortho leading clear is, becoming do view with

So investments. those in any of backing all at we’re off not

placement make We’re prudent part, and the lot space. being to is long-term we a term at significant short a that going huge XEAL, in there, our have one look commercial on versus a run. difference premium and progress difference very When it and execution. the is has surfaces side. been obviously the long due have huge we implant to And of TiUltra made made in

that DSOs, equipment on R&D entire regardless, on open buy productivity practices, you and products, integration, been we very we’re implant putting we solution. energy as things traditional Execution, But forward. or an group and to an well an to to we other product. do, offices, ramp so at doing an to new on doing of universities. of of predictability want architecture of the thoughtful much And lot R&D improve the companies’ really EBS are have here up going offer We and change that an I core want become people to of what our opportunity not important equipment allows the to whole in really of So not be but things From use to perspective, shifted the dental be That’s we segment optimize provider, a go mentioned, as counting have build value our model we us as because come forward. we we have if growth organically as workflow. our overall platform. inorganically we want part why part what to we end-to-end software prefer still to

a going and do past much long we differentiated to think have us the to So with growth we’re practitioners taken become truly the for on a short invest, several to XXXX, the manage better long how to and these. think years toward partner where that XXXX. with a clear being And perspective we in run. help in is approach that from I to have company want business the we thoughtful XXXX, But eye run, answer margin

one Thank And you, follow-up. more quick just then Amir.

changes the I Any about to lot this, answer out the whatsoever, a but back talked you laid April you short-term variability. long-term I obviously, of targets in the Investor know Day? think at

perspective. – be said high think We within much think single-digit of be position very term to we is reach, growth XX not moves No, has growth, commitment and we in to double-digit basis that all. in our other short single-digit that EBITDA wanted the don’t XX anything growth. XX%. our point long-term at get that years, high that XXXX, XX.X%, have We changed plus

Great. Thank you much. so

Of course.

you. Thank

Rich Sachs. Nathan last Goldman will Our from question with come

you taking about a second I on things feel mentioned in Hey, practices. quarter. are the was effects. were sales it out the in there of traction performance, trying impact backdrop, things how the in for that do a large performed time? Russia the think period how strong as especially guess, that the the longer like Howard. the impact quarter really it for destocking pronounced of market tie really quarter persists that more is we And three business software seeing I second guess, that specialty you in and one of three to portfolio about just the demand stood seems to your just into your in on you’ve the group I Thank ability second volumes that Specialty had quarter talked and drive to and the I sales Amir you China, It Amir, good together. then and the afternoon, about lockdowns pull DSO the of think things the that performance of forward, for Thanks in specialists if to had guess a first possible normalized made the segment. quantify continue and the those run items rate question. you.

went take then China, Amir I those the and question, that of indicated, we part say it would second. lockdowns first the had relates longer take I’ll Nate, substantially to than maybe, So Amir as anticipated. as can

relatively quarter double That’s I growth historically flat, a we’ve in the that think grow we and China said business the digits. believe. I slightly down, seen was in that

in conflict here the pull-in the there, at i.e., you about came that it’s and That in overall you substantial there quarter. impact point first it the of And subsided reasonable, Russia, in second probably I the if first buildup quarter. beginning context, the growth if probably to so orders half, quarter. say normalize of think that’s of customer-generated a would a in the that was

reasonable. different there. basis, the factors destocking, probably think I then And so I total that’s And terms there of mean, half, a on are on an that aggregate couple a first of going lastly, in

the gaining some clearly prevention, going it them, share. we feel going that to of and that’s we is to here the talk we’re turn that as we’re about market the as sell-in relates to when destock and confidence continue prevention reason, see in healthy, around though second have actually the growth to One for infection we And infection half.

side and distributors relates a back normal on as rest half been taking that we of it business large the have that to down we bit get well. saw that by in of a should second weak to the think growth as out, our I few see we little as worked well of the inventory

just helpful. how question, generate was doctors answer maybe To you double-digit production demand? In QX, output, and your here look doing. some active added, being close to Spark statistics for ship. to new give cases they at the sequential on about me you XX.X% that almost just just And we doctors be new been growth doctors Let if double-digit keep adding would do what have in

that more adding continue. nothing there are doctors trend in has product more are that cases. seeing us to that There’s to they caused our change category. new keep those on and in views to So that there do And continue we

difference. Ultima a was seen performance have digit. Damon If you traditional bracket similar really making a and our look three mid-single years it prior at And wire, growing to COVID, we that is

continuing are of of overall the make doing that and focused how segment progress, orthodontist’s training and go job the is to and good our education. franchise taking market really we So because a we share to because

they’re of more they they implant way have to place at that that majority look looking back Now on we you. side. same They place for the a more we – DSOs, assets coming customers implant. the have utilizing deal with, to want implant

full they through to group using And more some navigated these of go want digitization is surgery arch. to possible that simulation. using AI, practices, guided You do using

are going way demand after current start protect doing base, expand your and generate is your to So the what they competitors.

demand if current us what on we is see have, So they base want that that the generation continue forward. gives we do in to just going what which confidence to they do, more,

feel what traditional Europe directly other as And now equipment additional reach, as that, is selling geographies. our that and through comfortable as distributors going to with leverage distributors specifically expanded have we signing IOS we various demand have to Combination selling we and of on us that, given generation distributors go expansion consumable how all go to continue of We up forward. the gives that’s well more in

Thanks. sneak Howard. for If helpful. could That’s just I one really quick follow-up in

think, you guys operate On expense the always, I margins, with discipline.

you margin You maybe And mentioned quantify balance quarter. this as cadence to there year took the to you planned margin And XX% the the I we the those anything that for getting from the else commitment guess, about XX% actions? and margin expect streamlining over is year? savings magnitude EBITDA year. in of that actions, the you of some the Could think

Yes.

take So XX%. Despite land actions required that Nate, at ahead committed confidence long-term the deliver we that thing have investments. we’ll and to go this and making

and ensure these fuel to to able continue we that targets talked we growth mentioned, we’re initiatives will achieve As that about earlier. long-term Amir those

mean relates As of them as to take I across well. actions, it areas these some we different

adjusted And we EBITDA that full able XX% we’ll year. be so again, overall, on hit margin for to the believe the the balance,

Thanks, Nate.

much. very Thanks

think out I time I think we’re that’s – of here.

today. So for really Thank so appreciate much. in everyone tuning you

as If well. you and free to out have to happy questions, calls any reach feel to we’re schedule offline us, please other

thank day. great of have so rest and much, the a you So

concludes you, today’s participation. conference Thank and your appreciate and ladies call, gentlemen. This we

time. disconnect at any You may