NVST - Earnings call transcript Q2 2021

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Operator

Good day, everyone. My name is Ryland, and I will be your conference facilitator this afternoon. At this time, I would like to welcome everyone to Envista Holdings Corporation's Second Quarter 2021 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. And after the speakers’ remarks, there will be a question-and-answer session [Operator Instructions] I will now turn the call over to Mr. Moten. John Mr. begin may conference. your you Moten,

John Moten

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

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

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

Amir Aghdaei

and and earnings Thanks, I our passion show thanking want welcome to quarter. our quarter and and Envista's second dedication John for everyone our begin call. by an confidence for customers XXXX in to employees driven drives quarter, inspires execution The another services. continued the outstanding employees products the strong recovery first portfolio. delivered After start innovation market by it continued and dental in -- by quarter all in our solid our a record across

the was second compared core second quarter to XXXX. quarter, XXX% growth of revenue COVID-impacted the For

XXXX second same performance. compared increasing in drive and on accelerating short-term growth, core long-term impact The More an continues expanding organic our the quarter have three focus our pre-pandemic revenue XXXX. was to growth growth margins both above X.X% a levels and stronger -- to strategic and importantly, building our our portfolio core long-term period of operating priorities

detail on more these second wanted and this areas. segment I discuss it Before our our to performance, provide in I take progress financial to over opportunity turn our quarter to Howard results to

sustainable business drive the helping to system continuous performance. improvement us and Envista on focus are long-term Our

Our on smart accelerate customers. business continues we focus orthodontic our to supporting as

and onboarding enhanced we turnaround the This customers service of new quarter, and times. improved

compared over invest this quarter The continue sequential to year continues and future by of smart XXXX. to Spark to of growth for adoption XX% we expand revenue capacity first the over Our XX% increased with growth. Spark,

for while a of is leveraging providing Ultima to starts commercial ensuring approach Our our best bracket clear core system. the and execution, strong focused and can our for including above they wire orthodontic and portfolio on option with and wire provide market. an bracket customers. that innovations, patients' Case resonates double-digits be core offers the The aligners their outgrowing customers, wires both team orthodontic and strategic the new well bracket differentiating Damon A needs. continue exceptionally business driving performed Ormco

with four the Our the achieved the premium growth consecutive over implant quarters prior and has of second of business core improved quarter XXXX. the quarter XX% over growth sales core period – mid-single-digit performance quarter second sales in from for second

COVID-XX we and execution market XEAL see We investment North drive in solid solutions infection in continue normal. the excited ramp prevention a we launch the opportunity our on universal features increases Nobel Biocare's continue X.X our focus and enhanced protocols performance gain market of while Progress be future efficacy disinfection for product. place continues time, our our as will We're Europe, improved a of remain the our as the contact momentum with medical adoption opportunities up NX range to adoption on in and NX the penetrate two-minute rollout surface virus versus of demand CaviWipes Furthermore, for to quarter. enhancing dental broad position. shows It the new to commercial in about pathogens, to new We further and last see including products. a XX% wide up against TiUltra for America.

demand quarter, implant strong lines. product growth, Our premium bracket double-digit delivering business wire our primarily and by China for had and another driven

care commitment receive Our This China year. employer T+ honored the China in China. health be this choice team to of variable most employer award recognizes [ph] to award prestigious was our

second improvement was the to mindset critical in in grounded EBS Our our profitability quarter. continuous

the and Our XXXX. for second quarter adjusted the the of basis compared XXX year by quarter from was points EBITDA up X,XXX than second margin over more to points, XX%, basis prior

XX annual points Additionally, continue basis of to improvement. XX target to we

and and in integrated are N-X, bracket investing As to long-term products workflow improves, our wire and Spark, profitability we growth solutions drive profitability.

of in solutions, specialty differentiated innovating more transforming we portfolio. is Our investing the and well By most segments company. Envista profitable as to as dental to digital faster and workflow our of consumerable a focus on transformation continued are in growing, market key attractive growing the the our our businesses be

our but long-term to addition initiatives, in see workflow as and to capital growth taking segments, remain our digital and regenerative software deployment. accelerate solutions, including aligners, we We transformation investing approach opportunities inorganic to through materials disciplined attractive growth an interested AI. such orthodontics, in and are In implant, active

foundational This driver designed to to our quarter. and a past are sustainability to the of this and strategic of our sustainability, aligns report test corporate and growth-oriented initiatives. sustainable a our Governance building where with success. inaugural were business shares blueprint for We by happy is to launch on which We report Environmental, Operational element customers company, approach last our excellence valued grow. focus key time, a employees driven for a feel Envista's our Social innovation, encouraged and

improve Our IPOs enhanced we success. We believe that in and area sustainability business. EBS At are Envista, dedicated each we mindset are diversity efforts to of our embrace innovation and inclusion our by to business our drive the is thoughts programs and of to To these when and visibility diverse our we table. have created accelerated support employee talent. launched to groups we development brought initiatives, the capabilities enhance resource and employee

result and of a respect. gender achieved of I'm value diversity XX% a have significant the -- to embodiment This that in equality share our milestone we is proud As efforts, journey pay in inclusion our US. equity of our cycle and

we promote our our to vision ESG dental shared Finally, report access to increased in quality care.

in need We Envista performance professionals Section project volunteers Envista communities education. health to it care communities oral and foundation access this announce were in detail. project collaborate through employee we The health the disadvantaged improve will health process dental to smiles over nonprofit of to products, and segment donate initiative status. I a XXX(c)(X) the oral we go with Smile health and more supporting oral now new the increased currently Howard applying quarter, oral This of around to in and for to world. created financials by oral treatment and education to our turn to proud

Howard Yu

Amir. Thanks,

X% $XXX to exchange million. XXXX. to quarter up to period and discontinued sales foreign quarter impacted Second was negatively X.X% due same growth by over increased second sales were XXXX compared in impacted products. from positively and X.X% Core the rates XXX.X% Sales XXX.X%

sales recovery across more conditions from Amir of dental XXX% demand in in a growth our market the our Europe the and As as portfolio. North business QX year-over-year execution solid rebounded Western XXXX. grew discussed, lows strong pandemic across and Geographically, America than reflects

XXXX. States. Overall, volumes mindful the infections in variant levels to in continue pre-pandemic Specialty for inconsistent from we markets, Products United we are major China in Europe to including emerging geographic remain with Technologies spikes pandemic-related the a improved but In recovery see strength patient risks markets, areas, optimistic COVID-XX our and several Western grew have segment. double-digits continued rollouts of While of of by the balance our parts & vaccines of throughout and the

pleased are We in in our continue we orthodontics. to with making progress business and growth in are premium China the implant durable see

public demand rollouts. cautious to vaccine to budget spread markets sector variance. return of is slower we the of Outside other low but lows China, the levels COVID-XX pace the from emerging However, pandemic rates of remain vaccination pre-pandemic to and continued due due and fiscal rebounded the in restrictions

points gross initiatives. mix quarter increased the margin second product by Our point volume, to pandemic due productivity of XX% and from basis X,XXX low higher favorable

XX%, EBITDA mix, increased Profitability the was prior compared better of adjusted savings significantly with million. an structural Our and driven $XXX.X product by a adjusted spending. margin temporarily year, primarily reduced EBITDA to cost

to the a adjusted quarter in $X.XX second Our year. was compared diluted EPS $X.XX prior loss

two business our to now Turning segments.

by driven and growth focus XXXX, & execution and our results. implant X% margin Spark. QX grew Technologies In premium Technologies' to strong operating Technologies bracket XX% was XX.X% and low business core North of we Products & business from QX implants, over Products XXXX Specialty China. Specialty X.X%. than up XXXX. significantly increased our was is Compared in our rapid had XXX.X%, higher of America, XXXX than pandemic core Products adjusted profit & wire segment in revenue accelerated, the premium Specialty growth as on our in Growth delivering Europe and at improving growth from growth Our QX, core our more commercial results

drove structural Our implants mix and increased drive of Spark, strong savings accelerate we Through adoption long-term growth. balance to expect our and growth, and premium XXXX, profitability. to investments up in the favorable product NX cost ramp

equipment sales X.X% we Discontinued had increased Our favorable XX.X% impact. segment products sales core and year-over-year. currency a impacted growth X% by consumables adversely and

remained solid, continued consumables the for demand a full saw developed infection markets XXXX. delivering in year-over-year expect XX.X% prevention and our rebound traditional solutions business markets. growth from continued emerging growth The year Our we for and improvement

increase our rates slow prevention infection pandemic. As significant in start we from the to the will saw previously discussed, start expect we of growth in the demand that year-over-year at

safety growth protocols for will expect the remain will and over term. business the we that However, long drive enhanced mid-single-digit

with combined in X.X% the clinicians, prior The interest perform to to dental to compared XX% well increased rates in demand. and equipment government second from the and continued Our optimism XXXX. business support enabled significant year lower delivering compared growth market, the over to quarter, growth recovery us unlock targeted

We and growth and the growth for higher expect business XXXX, profitability. second loss gains adjusted operating XX.X% in optimize XXXX, a profit XXXX. consumables drive continued margin in versus of we as was quarter and the in Equipment share

levels, cost business. remain sustain benefit margins XXXX exit to of improved of the realizing by our while our expect at driven We the improvements, current as mix equipment structural we an lower-margin

Amir we continued providing growth $XXX it cash and leverage as million to in I'll quarter, generated quarter pursue than thoughts. to ratio, have to with million, ended delivering second they turn more opportunities the For become We final now more XXXX. $XXX our $XXX over some available. inorganic QX of flows million flexibility the improve for of us free cash

Amir Aghdaei

Howard. Thanks,

remain future the We industry about of in and performance the its are pleased and second optimistic the from dental quarter pandemic. with recovery our the

variance, of are reopening rates COVID-XX to we While day, that vaccination of to worldwide every economies monitor mindful continue vaccination different stages. risk rollout increasing the and are at acknowledge related

that believe levels, enhanced to patient sanitation industry's sustain we at measures. will due However, the pre-pandemic demand

of on expanding our our priorities accelerating and organic portfolio. growth, customers, We have operating our margins a Envista, and business to focus better our optimizing continued strategic our We're shareholders. for building employees three

future the industry. continuous our of leadership improvement circle, respect, their create to solutions enables allow makes the to We're be us more and our values patients. and more on based centricity, and that customer innovation, of culture us and competitive designing more predictable outcomes products productive customer, dental shape Our for

more customers, this and democratization care accomplish dental those their management A personalization, digitization efficient will dentistry through move preventative helped to a Digitally diagnostic of around allow and solutions. in of focus more care workflow-oriented for role and treatment practice. practice our future digitally-enabled care the more from pain ultimately, will predictive patients We world. the has to oral planning to through integrated execution access

And range. expect growth We core EBITDA to in adjusted expect margins for in sales be high-teens deliver the mid-XX to XXXX.

of the to industry dental needs for are future. meet We well-positioned evolving the the

winning meet to and journey progress customers' complete a look focus of our forward a a to growth needs brands in culture in our and the have higher portfolio improvement to We proud and drive beyond. We're designed profitability. EBS a And and XXXX our with team of continuous in grounded to portfolio growth our continued quarter.

John Moten

Operator, ready questions. for we're now Session Question-and-Answer

Operator

We Rich ahead. at from [Operator go Nathan Instructions] take will first Please Sachs. question our Goldman

open. line Your is

Nathan Rich

guidance and for the afternoon much. starting so half guidance, Howard thanks pretty Thanks imply to for Amir Howard, if the Good a range seems of I the and maybe about with the year think question, wide back margins.

first the guys XX% in you half just did about the think I of year.

back. of be the cadence year? investment But the going expecting you that of cost balance you're to I in think $XX about, maybe back need some help half just the could savings made over the be think still to and us temporary of margins, the of there's that's around million

Howard Yu

Sure. a that's we talked our the mean, I XX% growth Sure good starting than the about baseline we Nate. EBITDA from had more a evaluate points of question. that margin to And XXX Yeah, to Thanks XXX a, implies reminder, I basis expansion guidance. in points is think somewhere for EBITDA XXXX basis What profitability. our as point. improved as mean, and high-teens

So this our -- is continue we to while growth and initiatives. all fund

some contemplates we've invest million, right business consistent about operating And we be operating growth well. in customer-facing. there's and higher that include largely pandemic. that's specialty during the would as the during implants discussed And the expect -- $XX as going our as we technology a So our travel NX with that on previously, you're expenses half, of what as were held premium Nate which marketing we pandemic think of also initiatives. the largely and to down the well second of return that This we Spark, fueling in the some of postponed side expenses around

good we that that so EBITDA And anticipate puts overall and with -- high-teens consistent place a in think the or mid what we here. us

Nathan Rich

to seeing more did as And the And that great. missed I NX mentioned if quarter? the the you little of Could and it on where then, accelerating call, had the Okay, you in you I adoption contributed revenue Europe. uptake Spark I just give and NX Amir, a on you what earlier apologize growth but detail maybe what think for bit product? in go see you're into opportunity the

Amir Aghdaei

Nate. totally requires Of we a course. talked Thanks The as is a NX have this and about procedure that different process. hands-on training ramp continues. It's completely new But face-to-face before, implementation.

the trained their have itself, coming very those So we to completely. but to up change only been need seen not quickly. But they workflow that have speed doctor

repeat them we point step going repeat the and expand followed we we when small cohort did Spark we a then can them, If speed ramp-up, you trained A the out similar and they forward. we to and got of recall number people, the procedure. it a up add that up we started, got to --

from we We that. continue We repeat as coming and we part our think an after to orders trajectory be is existing and go XXXX to going have train educate more seen important this customers of forward. growth in and dentists

single-digit And implant. Our get the digit to over been current have growth to single us that get us mid new growth premium we that after will hopefully commercial on execution should time. innovation high

Nathan Rich

Howard contribution Great. two the the for you did products? And for those quarter have

Howard Yu

point the range it's basis think points basis to I XXX XXX XXX -- in Nate.

Nathan Rich

much. very you Thank Okay.

Howard Yu

welcome. You're

Operator

ahead. next our Blair. Kreger at question will John go from William And come Please

line open. Your is

John Kreger

are happening heard quarter, sounds very getting you which with you migration at above, to a a you are take Thanks. growth the still this I'm Could was just point or say you bit premium accelerating seeing market? think of premium little the and of thanks And market is guess maybe sense the you share? I And like the growing kind market that stabilized? from the great. what step a feel is I giving your What still do up you're Hi, in us implant at in -- I give or back Amir, that value, much. implant about there? growth has

Amir Aghdaei

John. Thanks Yeah.

are encouraged sequentially we really XXXX. and seeing are also with We year-over-year what versus

we made changes strategy As of recall, amount our geography. geography significant a have go-to-market you in by

We are than are confident better and Europe. performing we that in pretty in market China

Our various performance there the out model lot that of in quarter every we see moving have place, the has performance geographies. to North there due a in the have in innovations premium places, is have indicates that that demonstrate as investment various to that we commercial of performance in intimacy put America And have are we has and our whole accelerated. we as seen the improved And quarter introduced every done able we proxies forward customer players. well and that execution, that

So We're now premium? that. to to value the question of transition not of seeing

radical of premium. to -- the We are value. not market values seeing taking value premium the to think We a outperform continues the shift

We business geographies, years we carefully been not maybe has expected have various many that a watching have we've for many, years that and the seen very change radical seen as in ago. but premium many that been originally

last part your Now to question. the of

our do here. on But the is which we the keeping to have value exited We smaller work some to think geographies. side, are We side, have We portfolio, much a track. do. we premium portion on of still work in

the commercial get perform have US some implant within quarter coming We minimum have we additional over and the gaining years. to inorganic overall In disciplined through potentially core in perform market opportunities business our execution essentially and the to a above market, our at we're scaled down. momentum, market but and time activities

John Kreger

just maybe follow-up. quick And Thanks. helpful. one Very

digits just is that Can dig think a more? developing what little a and you I developed double bit the we into growing. more of said driver way growing you above behind Thanks. that brackets wire it? market or think is market Is

Amir Aghdaei

Yes. Happy it, John. to do

and at take look XXXX, our overall compared orthodontic business. that grew business QX, a just let's to take back XX%. step So, a In

So, the as clear bracket the as of well and aligner. wire combination

for of the been market going and bracket same they has who Our decades. on position. puts customers. the segment then, of solution is good market really with combination that a the We are focus team dealing a we to and wire And same company, We're differentiated. on that in the have focused the with us

and to wire years growing let bracket many, take used shown been our One low-single-digit years pre-pandemic has the proven driver behind answer Now, last the many, growing areas, and digits sorry, double-digit. that we that is to We for I'm That perform many In quarter mid-single-digit. me behind driver for many question. performance: And mid-single been share. market business business and continue that innovation. three the focus is ever has that the have

at the of the but training our finish, the different to orthodontists in And have, emerging to and we that they the Orthodontists, people industry, mentors the We that we the diversified the are that it across that in continue that we care the a business that outside the in giving they're are at this better continue of we not space. and past of people last follow committed and And world. in offer, In performed they us to of best others, innovate finish, and capabilities a But see touches Ultima best really diversified end not network developed continue only this States. what patient system. that really lot them have a business than that bank market. our is to better has least, practices a six capable they network patient The but United known past to taken significant performance States who coach momentum QX solution. fact XX% quarter, helps taking market. their geographies have and demonstrate better Education have. the is we system teach possible months the in business the to in business. United the introduced market fortunate well that momentum as use well as as the in the see the follow they

clear us top and come reality got add Now think sustainable for for differentiated double-digit capabilities it, I aligner that product makes growth to of format. in a we've in on years in a here

John Kreger

Excellent. Thanks the detail. for all

Amir Aghdaei

course. Of

Operator

question go Please Jeff next come from Baird. our will And ahead. from Johnson

Your line is open.

Jeff Johnson

clarifying guidance Thank afternoon, then equipment question. question and on you. Good a guys. Maybe an

guys adjusted EBITDA. window, and first short have million the you now in know typically XX% back Howard $XXX EBITDA a half. XXXX, I half that's it's is about go So, in first through least -- And about at and but done if of XXXX I

travel you to the I over up well talking million $XXX back. really $XX that investments I million know gross marketing So, $XXX that costs or million you're $XXX coming million. if incremental plus in way in -- $XX But get million, other the down about spend I EBITDA. can and all

there Thanks. flex were that in you point? you quarter little think quarter, a last last talking were I at is this about or million about talking that $XXX

Howard Yu

Yes. Sure, Jeff.

second think that in quarter I we the and well. that here to yes, -- as we outperform continue saw

we in in so, be you high-teens. contemplating margins properly pretty we investments ensure out the to that our we're did growth have that that that sustainable anticipate will And second growth some have long-term. here And substantial half we call the EBITDA

and more the Amir has broadly. be well of bear we Europe marketing of the training the seasonality a the of something talked and mind going little it are in And more bit of parts as lot a the on about, to in certainly do go US as activities whether customer-facing then, sessions see increase activities that to third also as quarter We holidays. education

the in quarter of a little EBITDA robust and typically softer bit we'll highest have EBITDA of one we the revenues quarter. fourth And so, associated and sales the do back in up of it'll And third then, step margin. where see here quarter

to good basis to Again, good we -- we and are we here feel points consistently. that reminder in ceiling ahead and and this we're on is Amir a we efficiencies XXXX, EBITDA, to Jeff And about feel any drive progress basis as the XX that, well so going XXX-plus points looking we were we're about thing. XX basis from positioning. year-over continue as a greater our as We'll to so to And go not look making. put drive profitability where on indicated,

Jeff Johnson

you. a bigger for maybe Thank Understood. question And Amir Yes. you. picture

we've from couple On over last some don't was a reps or we not today, that's to even all. side, heard constraints some equipment. checks in had some the if mainly mix picked equipment and of the had on quarter obviously, maybe or checks at a call know basic so we've saying shortfalls couple their a talked mixed inventory supply it's up We Schein of that's distributor or KaVo I maybe imaging lines. shortage shortage chip on

might you could who address constraints. imaging unit are wanted supply if there be to So, dentists to And another there? KaVo those loyal they anything if can

we maybe about of Thank you. anything think would the couple be So, should next helpful? quarters over

Amir Aghdaei

seen Yes. to. people referred Thanks Jeff. Simple answer we the have haven't shortages that

supply is solid. fairly Our chain

around going And significant we made use again what taking our be as to have lean to fact, in continues promised. we EBS, delivery solid system. waste and progress to specifically exactly of Our modification cell

outstanding diversifying supply Our a procurement chain. has just our team done job

it. seen haven't We

We haven't seen it.

visibility in manage ourselves we possible and what's several We and place and the our are distributors we we to and in get on talked position we matches, past quarters, best it the inventory sell-in for have that Inventories that to Jeff in that through we are proper and good work make you inventory, the have that And have going been in seen mentioned those sure sell-out products they real committed delivering going far in the channel. have period want with continue and a about able long of time. on to better the a customers have forward. of

well distribution from as chain as So, a supply that's a perspective.

are equipment challenging as but honestly as can thought described Howard have by performed maintain the Our we had is we going has we seen that not second this far XX months that that go been And a business, to better case as ago, segment, be has here. growth we that half. good in expected. through the we optimistic each we Only

Jeff Johnson

you That’s great to hear. Thank

Operator

come open. from Stifel. Jon your Our from Instructions] is line will [Operator ahead, Please go next question Block

Jon Block

afternoon Thank. Good Great. guys.

specifically on just maybe is don't just a one approval heard current timeline for ramp with US curious the first And does the you that the an were to? US? the component for that environment in you would that In this needed I considering words, alluded follow-up. you approved, other talk then come to to I guys is if product intact? about The this just And to hands-on if but guys NX, selling get and environment a got ramp late then product hands-on still that know XXXX when I allow environment you I'm allow enable

Amir Aghdaei

Yes, course. Thank you, Jon. of

So, midst This going FDA discussion it way. through as with answering completely and of we're in question the our different is protocol a process comes that procedure and as mentioned. I

so. training. of that that that We through product in But answer may But different XXXX, record. we to beginning assumed we approval We the get be available past going forward. optimistic sooner. a we and us going are done we the question of about since have now good the this set various to end that expectation now XXXX longer enough When have is track the or that months categories, have and in training we a a of product six going take is would we Europe remain to talk that in lot have gotten products of of this completely

protocol mentor familiar the these have and were and really it, the as they small of the group individuals the Spark, the team process They training that again, as teach process them going need And We come they well and very about XX been correctly. about of all extended. and people similar to we is We to can At a point, group five they're and coach then coach them with teach of small that places, places going somebody it, And a a all are teach the a they part some product, them can our for -- group it. process, informed through people. to stay you with five and forward. they have I'll up that sure became development of of people we some of continue who did make remind walk about and of XX we we it cohort with group overseas then in we people. started XX, and part that the

So able soon do are we now get up approval, be that geared as we to that. as to

We have investment. up, about and signed talked people Howard

in continue format. chip-building XX very rapid us and side, to that the oral think activities only for XX those position commercial And five, on in have to expand another five market get be the We not our sufficient on approach the that of also volume people. capacity to the people quickly. opportunities We speed CapEx very training a would week do placement and be to with this to investment every up but surgeon add able enough or

we As really have We very not will and implant NX have think an impact America. position performance premium single-digit to a on, North to counting on in to us single-digit high good mid our are we eventually in time. said to on approach in XXXX get all performance that put over

Jon Block

months a the for deployment Thanks. That balance guys on you maybe was you Great. different sheet capital the in shifting very XX side. place color. more And is for than great Howard Obviously, maybe Okay. ago.

ask you this And had standalone among just morning scanner. product the out our scanner us by called the as the Schein what in checks far XQ, there? with most identifying the iTero help So huge or keep dentists, sales on environment out the desired like is

be current to broadly structure activity? you area us you're if could speaking could with talk up some have an with that or Thanks You guys. with partnerships, the this bulked more be pleased M&A that

Howard Yu

to kind of sheet over start I'll activity. then of and our turn bit it and to with the talk Amir balance the little strength maybe Jon regards our and M&A sheet balance about Yes, like to targeting potential a

You're right. in position here. really We clearly are strong a

that well debt even changes our well. leverage done some net the Our two as us below times. of to at with down regard we've million the with $XXX certainly, revolver And financing ratio equipped position

hurdles we'll And sense acquisitions look what prudent make making the the as it the get market so to strategic any to be things we us. of that making for means the path the returns term And really beyond being term. that then in us continue the about like said, segment, as that sure double-digits the fit relates we are valuation make process as of well sure and have we'll attractiveness to that near in cash-on-cash activity. at that And a to M&A met and relates in that that to it longer is for

well. And so remain there focused we as

Amir Aghdaei

it categories. by Jon, like answer I'd three addressing to specific

compete our to business years equipment, imaging, to able that core First, Ormco that a make a business. are step core and to $X protect we make needed performs, category. said, ago product-by-product instrument, took of billion we ortho business: we competitive, it's $X.X to a have Yes. billion on businesses implants, sure back sure consumables, few worth that that

recognize if at through categories So that process, we in period million that put us said, we place, that -- almost prudent be speed. core make $XXX for not up adjacent When to it looking a to markets product the not in. as categories we we the good have went start would and not over are time we to is sure are three-year

got the geographies. series As and result couple we we place started and quickly of a as those get took outcome soon that, as of with possible. of signed suppliers, and do second-prong and in offering market that we look the a at seen agreement of we approach we to a That's how sort have you as various that good in

well with do as part. sure we implant can products available. a make It are we relationship are ortho we competing least in XShape on places with to as and various are at dealing that today. approach Those handicapped not offering are And that in it segments have Medit. two-pronged We with

DTX and We are offer with integrating sure to sales force making them in geography. every that our ability has

as the are approaches as want to get essentially product, that to eventually third partnership, Our it product we -- is solutions. have and control part diagnostics of at investment, customer approaches differentiated our own roadmap make is workflow sure product to give portfolio and inorganic to well looking an product we in mentioned portfolio, important Early you our because going is of collaboration, that part our a alternatives. we're and as and approach our we all other

Jon Block

color. the for Thanks

Amir Aghdaei

Thanks Jon.

Operator

Elizabeth will come from Evercore. ahead. Please at Our next question go Anderson

open. Your line is

Elizabeth Anderson

of question. the a mix. much thinking players, so different client We've are year? the the infection heard category guys half have for that different and of a but Hi in the slightly also guys. How back in slightly about control Thanks you in things variety growth from different you offering a

terms would the helpful? the half you and back what year of about if that about So, of talk you be you see could what in think

Amir Aghdaei

you, course. Elizabeth. Of Thank

you're would first about people I'm we versus lot a offer to talk different in be consumable this on market. not business. from So it what hearing of focused a sure other segment We're good

prevention We to the industry of the tech are on offering dental to product point even a care. professional company to infection medical to the specifically professionals industry, med

We been -- have good in you of a for that volatilities consumable lot And never that's segment segment. see in reason. the

about categories differentiated. talked that three make product have We things our

and significant The North this in of that was that XX% because opportunity over market America. business first of have dental is there we share to part in expand us for XX%

a have we geographies product of standard So expanded. series to in other our get Europe initiatives

opening different in new geographies. expanding front So Medical. a

We not strategy differentiated innovation. less that really than area market CaviWipes is last that an than lot med And us opportunity tech our is the and efficacy of solution. is this gives demonstrate Dental. product tell in about the have go-to-market And we market a professional participate a plenty bigger is of but XX% in to that too least this runway. an segment provide that have share

in innovate space products this get to approval process state by state. by continue We through geography geography

continue. growth So to we the expect

Howard over to before eventually slowdown a as approach mid-single-digit However, said going mentioned well a is more time. we get to that that this of it have a

really have We a first had good half.

not coming you place. in recall and optimistic. we But Demand optimistic XXXX that on we said We're is X. next right or that in capacity $XXX didn't as to the year in business and are we we margin have couple -- the add of the want about years, that Our are to is segment this million $XXX replacing do they back. had we they growing million products were the that over over track to next able be

Elizabeth Anderson

back however more in about can what little you of but the terms about super That's helpful a bit in year us your of situation that? you be of terms talk the in half I And the best terms fluctuating know is COVID assumptions the helpful. then of guidance? returning just or are volumes think to framing it would

Howard Yu

Sure This Yes. is Elizabeth. Howard.

We of still in probably we think improved terms slower, about levels generally think the way bit monitoring regards and regularly with So and have pickup markets are QX. obviously seen us lows while that volumes markets the China. working a delta how it's we geographies new said see variants That second from pre-pandemic the expectations and to their we're the impact online out. the into that the things environment. And is in And updates of we're all to that all patient yes, having. and optimistic half particularly have I and emerging pockets coming some of from developed let our to exactly these we going volumes get pandemic in our know rebound

provide so range billion of billion the we in improve And half. second some that why trajectory $X.X a our And the here between is the in reason that year. the terms broader do of we the for $X.X revenue to continue even anticipate full and to

Elizabeth Anderson

helpful. Thanks. That’s

Operator

I will turn call the over the And to back speakers.

John Moten

to concludes to and the for Thanks our we comments on Amir us call today. joining you soon. This and thank you look speaking formal forward

Operator

program. concludes you for you This any and at disconnect time. participation may today's your Thank

Envista (NVST) 4 Aug 212021 Q2 Earnings call transcript