NVST - Earnings call transcript Q3 2021

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Operator

My name is Catherine and I will be your conference call facilitator this afternoon. At this time, I would like to welcome everyone to Envista Holdings Corporation's third quarter 2021 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]. the to turn now will call Mr. over I Investor Envista Holdings. Keller, Vice of of President Stephen Relations Mr. Keller, begin you may your conference call.

Stephen Keller

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

X, an on Instrument announced Treatment agreement business. we and KaVo our September Unit As sell to XXXX, reached

the of Principles. are operations as discontinued Accepting statements this our by quarter, results financial For reflected in Accounting as business required the current Generally

XX-Q continuing only flow the accompanying earnings, cash revenues to to presentation the of and the and XX-K except in All and financial required Additionally, included third remarks to GAAP. as company-specific discontinued will our business our metrics Instrument statements these by relate in included be KaVo references in Envista's for quarter XXXX measures. financial fiscal other Unit the and reflect Treatment for as operation operations business

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

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

Amir Aghdaei

our our quarter, We XXXX. In to long quarter third levels from of and our welcome and partner access third lives our Stephen grew the another in earnings significantly begin and portfolio, Envista's delivering employees employees delivered drive pre-pandemic our to of dental investments commercial improve term you everyone innovation. continue our The to core repositioning outstanding improved compared to execution to by passion thanking growth the and what dedication term success. quarter employees care. the third our revenue of Every our day, Thank XXXX quarter. long to oral want expand of continuing call. above professionals will with XX.X% operations is benefit I for and

our business. margin EBITDA a was longer profitability QX EBITDA adjusted year-to-date view, Our reflecting XX.X%. the underlying Taking our margin XX%, adjusted is of

margin in of results to organic growth on and our Howard priorities our are more investment our accelerating I progress towards long portfolio. it our we color discuss turn XXXX our IPO, in operating focused our through detail, execution. quarter our September I on provide innovation term Since transforming third more want accelerating commercial and growth, Before to expanding over to

We business continues deliver continue results. a to make to meaningful orthodontic portfolio, uniquely our our strong businesses. progress across With differentiated

only orthodontic to treatment of patients. offers the who enabling clinicians more a more company better, treatment full are provide to We range them plans personalized options

rapidly aligner expanding clear of continues with Our business over versus quarter to XXXX. the grow XXX% sales third

and while unparalleled tools our are experience. active geographic expanding and customer provides this business the processes our penetrating growth DSOs. We to footprint, further system ensuring increasing an user Envista The deliver base rapid

in time initial Since improve scan new start XXXX, to customer far are experience. to have year track XX% to are launching to continue and rate run onboarding Spark well shipment XXXX, on on in So from the our XXXX. and we the we case reduced million $XXX of way cases a our we early XXX,XXX end total achieving by in of by further

digit business the implant premium to XXXX. Our third versus growth core continues delivering accelerate, double quarter

growth with featuring XX% now globally Our continue best-in-class implants are our and innovative Xeal well TiUltra our and of our to surfaces surfaces. driving sold perform new

execution segment. is driving gain share in commercial global implant Our premium further

We are over education in providing X,XXX focused reaching training over and XXX clinicians customers on supporting globally. QX, opportunities our

Our delivering long growth and imaging confident focused for investing their Dental business remain for core in on the performed over exceptionally term. remain XX%. professionals the practices well in of outlook the quarter,

focus win This combined System expanding our imaging honored into improvement profitability. both long imaging dental technology, seamless September, and clinic clinicians. that provides industry workflow delivering access example term experience. with and foundation we on Our solution. is the of a transforming and of short DTX for continuous and best-class were for and our software offerings Envista seamless integrated digital customers delivers This solution for Studio to phase our patients productive workflow a Cellerant's an we how is award are our next the The Business DTX a with our

headwinds cost, daily significant management our supply points Our experiencing. execution organization drive our to competitive the drive operating and transform Across pandemic, million innovation. by improved in to sustainable gross our We To-date, on we increasingly chain and and of we quarter EBS cost growth tools seen consolidate focus team improvements. as term petroleum-based inflationary of some our business. continue the by actions we costs third supplies over Since as footprint. execution consolidating disruption in shipping invested have our allowed EBS many the structural the us We significantly despite chemicals. to start our and to through $XXX build versus utilizing delayering the advantage world of QX our in taken This took is our XXXX. aggressive portfolio long in structural our and across commercial to mitigate have is in well margins improve leverages XXX footprint, reduce our operational toolkit businesses, productivity basis the that

of With Instrument KaVo from a our our also higher-margin our made to and higher businesses, sale material XX-XX a segment. mix growth growth margin Treatment split segments. favor our products the announced technologies between of in two of toward higher segments term Unit goal progress specialty our long portfolio to reorienting and and The and XX-XX divestiture portfolio faster we shifts the

transformation our quarter By term to capital will to and expect disciplined driven to our use and increase now financials approach opportunities. now the net to performance a deployment. trajectory through to basis As manage XX I partnership more and We utilized XXX we solutions operating focused market in long are aggressive actively high we portfolio to we points. and turn XX an value business, standard our expanding a proceeds margins We go XX are the instrument the business our from EBS investment and basis by opportunities by sale M&A growth but plan with over points, while new unit treatment call cultivating inorganic accelerate core workflow pipeline imaging work of business, to more of and on our now consumables, our to to third detail. Howard through XX% the exiting directly segment higher robust and over clinicians. sold margin digital to

Howard Yu

Thanks Amir.

now discontinued to remind Instrument third as of Before we I results Accordingly, are Business on reported based quarterly sale business. Unit the quarter and Treatment pending that are Unit of reflecting Treatment KaVo would begin, Instrument and operations. the continuing our operations, our the results you KaVo like

moment this for discontinuing are performing continuing exceeded complexity, both into in Results that operations quarter. of our I confirm diving expectations to before just like Given continuing level and and take our results well. very businesses the to our operations, operations a the would set

to We confidence full are to invest have ahead our guidance of continuing while we raise guidance and the our on our based long the performance, term. year for

the to moving results Now the in quarter.

currency Reported rates exchange Third were impacted quarter X.X% foreign other discontinued XX% and to X.X% sales due products. $XXX.X negatively related increased to impacted to positively million. sales

to sales of compared core third growth the XX.X% XXXX. Our quarter was

X.X%, respectively, quarter and improve As market X.X% portfolio. and business Amir growth core continued Geographically, of conditions sales dental and XXXX. was the demand solid across year-over-year third our execution compared our across consistent growth to America reflects Western Europe's discussed, North to as the

we In rebounding solid grew emerging solutions. Our including from as markets, emerging China, business are orthodontic our Outside both continue quarter. lows. over to clearly pandemic in China, markets our see well of growth other important XX% as implant strategically our in China, the

of optimistic We markets continue balance demand roll continue the for we into volume pre-pandemic see about Overall, to Barring of believe we to XXXX. the balance major in levels overall the expect these volumes above any demand XXXX. or to continued to will vaccinations out for remain strengthening either economies as the and patient remain XXXX pandemic-related disruptions chain, that reopen. supply of and

quarter XX productivity margin volume, of due third by higher adjusted continuing points our XXX the from which points EBITDA to basis basis product year gross lower increasing mix operations initiatives favorable was across margins than to XX.X%, Our QX The portfolio. was XXXX. XX.X%, prior of compared and

innovation As with lockdowns. invest term the expected, activities in easing on to in-person we pandemic-related continued spending QX of long travel increasing customer-facing in and our continued while

Our costs the adjusted related and Instrument KaVo in to million stranded sale negatively by Treatment impacted business. the was of approximately expected EBITDA Unit $X

addressing of our $XX million We stranded approximately begin expect QX. to in costs annualized

from compared from quarter continuing third $X.XX to adjusted the $X.XX year. EPS operations prior Our was

by and products technologies from technologies XXXX, in to XXXX, third segment and products of implants to the our Our growth growth XX.X% revenue of quarter compared continued XX.X%. increased strong core and premium the quarter Compared growth segment specialty driven specialty core third was Spark. by

across execution and growth we saw solid are share improving implant the to premium premium core led in believe Our business most double XXXX. versus growth geographies digit in segment. gaining We

XXX quarter margin basis technologies and profit specialty our higher results. operating XX.X% was third Our products XXXX points adjusted at than segment

by Our customer-facing and spending growth, as activities and improved profitability primarily in on favorable investments term long innovation. as offset by savings driven well structural increased mix product solid travel was cost

to Our of third in XX% segment demand X% core compared increased from compared quarter over equipment XXXX. with and in Strong XXXX. to results and imaging sales the consumables continuing business of solid third growth this the drove our segment execution operations core quarter

lower the Despite share dental of infection sales, and trends sales our we distributors QX core that our from declined market expected, peak demand. indicate solutions our gaining medical are As by inventory markets. prevention sellout pandemic reported in

consumables single well CaviWipes and XX.X% demand should we the Additionally, XXXX. see protocols Overall, the capture has driving us this and term of margin continuing Equipment and in business XX.X% expect quarter adjusted versus future. share. market help to mid additional been enhanced operating received third X.X profit in digits higher in safety continue grow in to the operations was XXXX from long

commodities Solid prevention Further, restorative offset our we to solutions infection slowdown chemical inflation prevention. margin business. experienced imaging that in improvement some in the and by was related infection impacted

higher long sale margin Amir the business and Unit our As the consumables noted, equipment KaVo will and and pending Instrument Treatment Business, faster be business term. over of growth with

For with KaVo the over Instrument expected the cash Business and $XXX excluding sale. generated of ended third flow the Unit in million quarter proceeds the cash million Treatment and we $XX.X quarter, from free

liquidity as opportunities is to sheet pursue ample inorganic available. balance and they growth very Our we strong become have

We and expecting forward EBITDA continuing million of to million. Business. stranded KaVo associated $XXX deliver This with raising from XXXX, negative and to Treatment year billion includes adjusted of and we impact now approximately between Instrument between revenue further are the a $X.XXX Unit are costs $X.X million full of year and $XX billion. $XXX operations sale to full deliver Looking expect guidance our

these addressing XXXX. to costs impact move As QX through reduce and mentioned, work as we we in begin expect to the

our early our over term too to is by it increasing guidance initiatives. annually I for basis some call growth, remain we the comments. margins while for will delivering XX our operating single long term points While funding target to Amir turn committed growth to provide XXXX, closing long XX of to mid digit

Amir Aghdaei

Howard. Thanks

remain growth, Ultima our lower improved moved are lower-margin business. optimistic our We exiting of pleased decisively transforming We and portfolio with where reshape and and IPO, very across Since businesses the industry. results our our future our Damon quarter to including we execution. in our third Spark, we differentiated. our organic focused portfolio TiUltra, improving and CaviWipes by operating have the on about growth, and margins less commercial invested the our We X.X dental divesting were innovation accelerating

Finally, we significantly structural reducing costs and operating improving our productivity. by improved margins

As specialty providing company, products from consumable transformed underpinned workflow our to a highly differentiated portfolio a consumables broad digital result, and solutions. focused dental equipment, we and specialty of dental strong mix by a products

We segments of fastest most to growing, attractive care. the their with and to streamline are industry now focused our the clinical continue on improve and partners dental work operations patient

as We oral actively care. improve they are to organizations with partnering dental access service

We choice segment. of growing as are customer positioned for partner a fast this

aligners. integrated be of a goal wires treatment is our suite in forward, to differentiated Moving including a bracket and clear leader and and options, providing orthodontics,

to full implant growth our and offerings. prosthetic across by our solutions premium regenerative franchise provide including workflow, implant accelerate further will We leveraging implant the in

access to business. will profitable and consumables grow We our continue and differentiated to highly broaden

improvement focus leverage management from invest in portfolio our further the we customers quarter integrated planning our execution continuous this to imaging progress and diagnostics treatment growth transformation. have direct to and inorganically will clinical commitment our organically we significant in culture The digitally and accelerate for and see reflection of to is to a via Finally, strength build our made we our industry. to opportunities partners. to dental flexibility and the trajectory diagnostics We financial our workflows

growth to journey digitizing dental and and to professionals purpose beyond. forward is continued We lives by partner XXXX democratizing our Our look dental in improve personalizing, patients' and care. with

Stephen Keller

Thanks Amir. formal That comments. concludes our

We are questions. ready for now

Operator

from Instructions] question [Operator Anderson with Elizabeth our go ahead. take We Evercore. first will Please

Elizabeth Anderson

maybe sub-segments, on Thanks. go very into the nice in saw equipment like much in from about patient were more volume consumables. Congrats guys. you the the Hi and side? Thanks the the notably detail you the quarter, seeing nice maybe specialty for implants Despite you quarter. and on some comps growth ortho perspective question. Can a obviously tougher and both in what of specialty on

Amir Aghdaei

pre-pandemic Thank patient above has volume developed Yes. Elizabeth. levels Broadly you in is China. in the speaking, and improved markets

look business almost in North and If XX% you is Western our our business, China. Europe, America of in at

positively. outbreaks based localized and pockets remain things weakness there While overall, of on trending shutdowns, are

think remains variants areas. we rollout vaccination emerging Our a as starting to in was are saw active risk as case doctors' an very are question well growth. but well about some by Spark, sequential as these clear usage outside on optimistic, markets see your implant that significant for there We driven well we premium pandemic digit loads. aligners. of continued Both from submission new is What segments remain third quarter see uptick so China mindful as what as there certain Answering underpenetrated slow as new the are double and we growth runway. about in

support the this to the differentiation in see really understand technical are space. continue and level capabilities that of We to competitors and we offer of versus People we they the show acknowledge offering it. well as They Spark. between demonstrate the value as what

business make Our to premium continued progress. implant

a past the growth we done continue work mentioned, And we double that in of see years have that about couple we worldwide. As to to are trend QX. in the digit optimistic

Elizabeth Anderson

That's super helpful.

to And double sorry, I sequential in clarify, you digit Spark. hear just correctly? you growth said Did

Amir Aghdaei

Absolutely. Yes.

Elizabeth Anderson

that core in like call underlying out? visits, you KaVo about then of other some results. your anything And numbers anything know the far the you numbers XQ embed the revenue takes obviously Can out, NX I what the or and with things, there assumptions Perfect. types about is Okay. taking puts XQ, would as of guidance of any terms for as talk are out that

Howard Yu

question. is I this would Howard. say, Thanks for Yes. the Elizabeth,

I quite relates anticipate uncertainties good I we of, dental that There feel year-to-date. the are and would And it that at, in where to about a pre-pandemic QX. performance-wise are we relates continue here think like it to customers to couple and it relates say, things as we office the as as think quarter demand I to fourth visits.

of from in given disruptions business. different slightly some COVID, our are think the seasonal patterns, we imaging I particularly seeing

nearly while had, in is think imaging that over-performance we and a likely our little growth quarter some we in bit that grew there. the will we have here so moderate fourth business XX% strong QX to And

And a the off. that also it to thing I forward mind. And we that's they in that time think bunch think I as of so had one have some have number to days, keep relates to taking of looking clinicians year. good really are

there's field well so pent-up And the we that vacation from demand. as hearing are some

up it ramp about And we to a little the margin activities expect might And or whether mindful longer us the we as bit, had so side, impact term, to those and on the around too, as come need it's we maybe that are thoughtful some little that. continued into Amir are customer-facing well. certainly seeing for of of be just talked mean commercial about as then things inflation a that we relates I transitory play. and bit of

margins speaks of QX. as And to so the anticipate for we that some

Elizabeth Anderson

That's very you. helpful. Thank

Howard Yu

Sure.

Operator

comes The ahead. next Johnson Please Baird. Jeff from go question with

Jeff Johnson

Good level you. just you? crosswalk tonight. have of kind It been this hoping it what I the the on set see Unless I your I Howard, are to update am guidance. be us from prior guidance would somewhere, divestiture afternoon helpful, excluding Thank would How I all. a don't guys. was to think, missing

see the if would say divested the guidance are You have without just in last your products kind we there? you been of raising could guidance. what quarter But

Howard Yu

that is, $X.X we up. would $X.X topline to between way, billion. and easiest we historically all That Yes. this say Maybe our was revenue, think billion somewhere about Jeff, anticipated the provided we guidance

taking the performance, the very to and of light about be up would high that operations entire our it number think now up discontinuing of we continuing way about say operations, So end in to that guide. QX if the think is, would we I

And and that of instead better $X.X see ops be ops overage the bit performance would to in in to because closer of stronger. continuing the the as $X.X we as discontinuing so billion we a the coming billion well billion, the $X.X both

the year-to-date very guidance, have As it in quarter, the to we of EBITDA that particularly adjusted we provided teens relates or take And the high light we the would said. to bottomline third had the what we up performance teens. in historically is that high and have

to comparison as so apples see And able and provided. what helpful be being to historically we it apples that may relates have from

Jeff Johnson

business. Yes. for. together And was comments to Amir, then, of strengthened And trying with few that's quarter, on looking Thank made I the exactly have I double each couple Nobel basis. year-over-year No, the of implant on am business this on a you you. a especially of even quarters in as it what two-year the premium has the me implant digit business, piece basis, to kind if seems that kind growth premium last Biocare quarter over

what last to the would helpful about into we year for last kind However, trends And premium last want few Thank quarters? be those Nobel and your I guess or talk of kind over COVID normalize would? every kind noise been you Biocare this of you seeing each But That quarter year. business, and have been of just Have the strengthening of quarter? if even you. they

Amir Aghdaei

compare premium double exact digit XXXX. high you digits Yes. implant when Thanks number. a we And third single Jeff. it grew to the QX versus XXXX, In XX.X% XXXX. was grew number, quarter,

to we compared grew XXXX So QX, X.X%.

has have we seen uptick step an quarter, you you on premium lot recovery and a what implant we have we better look back. that take it, than the pre-pandemic the post-pandemic almost And every continued. at seen performing did if a So

it why So moving we comfortable of and been execution. done the forward? what commercial do we strong Primarily, have because has feel here in differently

to than did better we past in performance made about in that every trend we to the have We of add we in XXXX start And that had recall, we place. that that, We continue North you seen did changes in transition what thing As in some quarters, just America U.S. to see continue. we before. quarter and to to beginning And that take October, same the three XXXX. the We talked Europe. seeing

the innovation think the And extremely We put existing with are core well. this with pretty time, and of aim upcoming have the the some and to over digit NX, commercial surfaces new optimistic the are we portfolio that in doing we execution innovation is coming single coming we the business in new plus put double and really to in and get which high do growth quarters digit what will years. us a place,

seen and really And So are to commercial Nobel is foundation team and to have to customers what here the see been of pleased we able do. we the the they to beginning the customer respond trend expected continue. that execution that back. it are with experience And what in has coming from

Jeff Johnson

Thank you.

Operator

Stifel. Block Jon question next The with comes from

Your line is open.

Jon Block

you to costs working Good give I guess in called evening. I try know XX inclusive, will you that question. I And but start to there's the just XX million expansion. talk this did to guys. of think be bips, XXXX. bips XX XX that XXXX in Hi am I going a but that think to of XQ, I stub clarity inclusive through about $XX into you guessing is guidance, a official Is didn't you out OM is that sort the of stranded

overall on maybe that? And reflect So and does just from as tack a acquisitions it divestitures.

that guys any guys to in to out speaking, the M&A. and feel of your still terms want there? you that broadly flex pruning? to portfolio discussed you ask where are desire other Thanks the follow-up. feel Just will a you product have it is might lines are then non-core be You do there entity I But be

Howard Yu

basis mean I we to XX thanks think relates formal XX are Jon, problem. overall. with expectations I as on guidance, the No I questions. for but do point feel I Yes, it improvement providing think comfortable not we to mean XXXX, Sure. that

well reduce a able done of team in to that have has terms being structural costs. We

see we start we And in the margin so here throughout get that, the us And adjusted EBITDA as XXXX. part does XX% attacking quarter. XXXX. fourth that up those of will are to to these we that think And progress, stranded in going costs,

And so good we about feel that.

to the second there. and me Let over for piece go ahead it hand Amir

Amir Aghdaei

Yes.

going So is that that of top to XX million is this and with $XX are assuming that deal to that. XX stranded we cost basis point on

like, that differentiated, the you As recognized year meeting what portfolio, expectation, wasn't basically looks portfolio no our last it as impact far Jon, on margin. wasn't exited X% as we the about had know of the

we So that. did

execution, KaVo the aligners exit the bracket With a operational orthodontics. Unit clearly us our of of portfolio very our Instrument, differentiated. we now created We segment, as player, digit, and professional the growing about that one, good position continue feel that be advantage, performing In that, wire well high have in focused as and it to on of we on a orthodontic is clear on in segments: number major the is very pretty as And we double plenty portfolio, you a think which of rapidly, runway Treatment segment the are three is put well have that really know, that capabilities. of business we us give competitive our combination end

implant business together nicely. has Our come

investment made there. have significant We

to prosthetic organically, that on as portfolio business on a and on well inorganically We of the continue operate. as is to think very segment are regenerative. digital good place adding as well We the in as

take and share taking broadening and I opportunity have And an that been access we continue is really high to differentiated. by to have think up traditional segment, we margin consumable to and that share. Our set

in view geographies. of taking sellout a the very various what place on is have We good

a and been out we in past in imaging are improving And team come we set what our put taking over on share as of better access, to we improving in really restorative quarters, have endo We done a really and quality, much situation business several of forward. ourselves proud this the the go has CaviWipes have time. position differentiating

we you the Obviously, positioned our business at look we portfolio, going to mix. continue segments differentiated. at and these well are look to think it's in So

are our continue differentiated. portfolio We optimize to to going in to be order

opportunity mid high a want plus improve and over trajectory single have single about a further think that progress. digit have is continue Our time. single some XX% growth to goal I reached we digit that But goal that plus now very today what have firepower to is EBITDA, walk our and digit through mid our we and of to we growth we achievable we hands, make as the XXXX in

Jon Block

guys. calling little October strength we continue But market, player be you dental about that bit seem that Fair there. reported think among of Thanks trend a the maybe already speaking, be that think just when line There enough. we about persist a I to on just myopic some areas. broadly seems into some And and hate did trends. And the yourself, September that the think dental you follow-up. the I most October? above in current did to have talked global out, to like Did tighter October? be guys the of just companies that And a into debate and that throughout month pre-pandemic of

Amir Aghdaei

Jon. Absolutely, Yes.

partners there us can in now that we talk the there forward. We be DSO deliver behind horizon. is what that saw what we confident gives and execute haven't to our that We of is They causes QX it's in go we a fairly not provided, that us, an the we about concerned them continuously. a anything seeing think seen as Howard indication change that guidance continuation are feel the and that to October, about anything trend. momentum

Jon Block

Perfect. time. Thanks your for

Amir Aghdaei

course. Of

Operator

The with next question JPMorgan. comes from Tycho Peterson

line is open. You

Casey Woodring

Casey, is This Tycho. for guys. Hi on

quantify kind that headwind of the headwinds margin called side? remarks you are Just Can business. anything guidance? prepared baked any out wondering the And from around, seeing chain there you equipment the in supply on into it you are

Howard Yu

Yes.

year-to-date, about, as based mean we products modest seen with chips very we to up and talked and I some that have impact think chemicals around well. I Casey, as So it. petroleum associated it's

into said, that more the types countermeasure there to-date more realize And we this an be team as has about QX of incredible being that broadly. go to risks. to so That we and able job done continues those shortages concerns

investments And mean, And meet clear, it and inventory as put made in customers. times of as that our a our have that well. bit demands customer not some a we little to in be so lead and I stock enough buffer we like to have to buffer can balances to so the extend we relates have

have like we we so as mitigate pressures. been these into The we of what can we And go that doing the are certainly experiencing everyone in is, some world, those to risks. reality ensure QX else we

bit so have well. contemplated the And little we a guide as that in here

Casey Woodring

in up question from this And premium you. following on A launched recently. your competitors just of Got have then the earlier. products implant couple space

especially thoughts to Just wanted to updated launch Any thoughts in your of environment, the the competitive NX as get U.S.? on around incremental there? you your take kind prepare

Amir Aghdaei

to Happy answer Yes. that.

a tremendous amount to work We done look of at. have

If you implant we was execution. are Jeff's the But have premium we purely because on before to strong as question, commercial growth I also, look at seeing launch, answered that of to lagging some close some able to quickly. been products, gap received. launched specifically well the are products very on were surfaces. have that very And incredible and We those to degree we

it very We NX about feel has they as surfaces. Europe. progress the continued responding are today. We make good these now, portfolio in the well, stands new XX% have of really to implant

process. going the through are We working with approval the FDA

market, on along into NX market up year you innovation, the is execution, response what we us When market. team think perform categories That's as to And that than we we get to seeing put at XXXX. like, place we embrace set are than we is continue new is we in hear going execute continue, along to mentioned, product to to what end a October. look that the commercial trend of the to surface with have and that able place. expecting be in the in that are the are applications the the XXXX. hoping commercial look expect We And to And in to here. in the trend in intention by our be higher to growth with better

Operator

We next Bank question will the of Cherny from go with to ahead Michael America.

open. is line Your

Michael Cherny

terms in flat I don't to correctly being moving comments made, I afternoon. recast of on some XQ everything pieces. you I the of just the the of an being to XQ midpoint recall other that and said, get any some Good get and guidance, that implied your want surprised comp new earlier go guidance. question, Howard, your about year to still I imaging implied That heard that's pieces I with regarding am normal the make number. the sure all case. back the roughly

do that, pressure you weight when at in how that again your those guess, basically through the So parity guidance? that you implied dynamics numbers I has risk midpoint of think the at

Howard Yu

Yes.

feel where about we good the we year-to-date Michael, performance. are at, So

Bear in end think just that the as do in both consideration effectively, up a our here. collective I put we taking of of and very, including discontinued a very bit little are mind we to continuing the that ops. high guidance us

fewer have here We three days in quarter well. as the

demand And are so likely going mean earlier, vacation pent-up of And indicated mindful mean, from end we know that's there's that amounts something we I be that have in the of. then here particularly the our to I in hearing as commercial year, be to Europe. significant of teams. I

in year mind keep in as here last that growth so little And do well. also in well. have we that we And as QX of a factored bit

some comps line. QX. an there's there. Sequentially, It's increase growing we are from our top So

we collectively, it. And about good feel so

Michael Cherny

turning to And Spark and Got again. then nice performance it. back sequential

spend? orthodontic take about the million How think what three more about think you already want however we term you market think, about mass or to more the and rate, quality, you are what next how medium $XXX ability long, you As think now take of captured? about, it penetrate critical the product that leap about run Is opportunities relationship, biggest in have more about continuing you marketing further share? to terms of getting at are to beyond do toward the next the should that years growth

Amir Aghdaei

to answer that. Yes. Happy

Zealand this go XXXX in U.S. launched the back, Australia we in in we brought it and and New we say, So

We on break it are well cases do end our down of way pieces. the to XXX,XXX to if we year. But this by

they basically So how in company, relationship place? this they customers. aligners These great were for alternatives one customers with on-core have Damon get we have looking that and same past. were are same service, Step they with they and of the using to level that did was clear same the relationships

that North we So New Australia space America, outside started started Zealand. in we and in and

selected product product price lot and three larger, factors, have was why due that And a bigger. sphere We performance. expanded quality to the lot they

is it. versus starting when in available what put by using that So good they they making market, of switch side side about or Spark the it really feel

and that Second was customer are about service and support we relationship providing.

level seeing given of same of putting lot that trend coming software. they And I decades innovation Spark. what more had now telling new we I what for have experienced the us, different are in they about they material, more product Last dual doing. that seeing, Damon it and are are are with case of the case, after and trajectory, wanted am what them capabilities I A Case we have that's we systems. the support and system, out. anticipated, least, better We service are and place innovation through Ormco but not the after it's in putting

point. different then? Europe, have quickly, geographies since have starting we What to a very in up that's done We very picking So gone fast.

to gone DSOs. have We

major DSOs factor Now on becoming a are growth us. for

geography registering approval every Keep are and outside and gives an bracket States, that. is Next, current United us in we of in. wire opportunity mind, product really we getting our that are business the XX% extend to in

we teaching, to Next these really the level no alternatives practitioners to really hit that general year, support some they to to going going support. all competent kind comfortable after are feel that us. are this are is the best them There early had giving that of goal we that That's of orthodontics stages, provide A that rate. domain bring continue. why on combination mark that. And million becoming of new put just are meeting ourselves. next think beginning this really Spark at helping on we And providing a ones for of that is trend there that to ceiling coaching, of we them are them. that, for We run can and $XXX

have We any to we haven't that goal to or to deadline get put point. say,

capacity We have now. the

of team. we We that map provider think a in be a there. space player marketing We solution is spend road on is Product ortho factor growth and to for Envista there. differentiated to a The and have come. this as years the whole key the continue can be in really a

Michael Cherny

Thank you.

Amir Aghdaei

course. Of

Operator

from William Blair. with We Kreger question next take John the

open. is line Your

John Kreger

Spark, Hi. question. Thanks four Michael's we XXXX project? much. that on, three very global something maybe Or that years? follow next Amir, that should or sounds to is the on for a rollout think interesting. just Is That about over

Amir Aghdaei

It already has John. started,

China. are We in

in know. are and Australia New as Zealand, We you

place to from We And step that with local a by the geography. are is And lot taking the has of geography in requirements. do registration Europe. to step

of this to And Some level the but expansion. best a registration we we capability into see provide step takes as are XXXX, outcome think that we in are are support than in we places, layering business. lot that our to others, the present that with we faster some of XXXX, currently we and are can hoping of that and we everywhere Ormco going

So started and XXXX are as we we that we forward. rolling it beginning go of

John Kreger

the in demonstrations you to Sounds clinicians now Or A is of to unfettered access point some you. and Europe do at good. Are where want? got being constrained the you NX. sort teaching degree business Thank on quick that the question have implant still follow-up the by pandemic? that and you the the to

Amir Aghdaei

in but QX little QX still what like a saw of bit It's this a lot and we than better year. constraint, of

we going in. what So We did a to them XX. are is the cohort it, Spark. of John, five similar about very to way get we with the We bring

days We of a have a training, training. couple of

implant four, the place them them only three, let We really the will them them, the it. staff but cohort. good that stay use we can for an is not place sure to we in Then five a first NX up. ramp and they We and make next with sign

it I phased Spark, of expands format then kind that similar this what rapidly. in to this Going process, of forward and starts in approach we did think with

their we the after group, we get approach happen place. approach, do group that are Some we it What spoke. hopefully NX that seen would would capable, as phased through Spark, in do about that event this second then of leaders, in after first with really opinion a that a training teaching people process through this is a Damon, we We are much go teaching hundreds We they take because as of as majority now expect don't similar we Europe year Those to and we approval, to that that that and did things phased the ago see we credibility, it for place, to some have expert they take of the key have are think had in area. people and through best-in-class, they expand that depends over very have recently network. they referral. that's up of took through the some are those, show Spark, have on the momentum that going and hub to time. individuals place to their quickly network, how that really followership And they going the an

locked us the come. depending really and And into really partnership in for format years works on Europe. are We this the premium for on U.S. NX implant. help to to The best-in-class expand orthodontists same

John Kreger

you. Sounds good. Thank

Operator

from Nathan question next with our take will We Rich Goldman Sachs.

Your open. line is

Nathan Rich

like in M&A. looking a large out Amir, key kind a to respect lens of It where sounds to building bigger? pillars with thinking just Hi. has like and maybe geographies the maybe pretty get presence would it categories perspective you but about orthodontics or Good broad product on at are great specialty of to today opportunities of how an may questions. the company sort afternoon. bolstering be you your Thanks for see not get as versus the implants have opportunity for

Amir Aghdaei

Nathan. Yes. Thank you,

monthly funnel. in every an team, the year a we dental. seven one-shot. This EBS brought One review work. as I of market the my of and of things basis a been that entire of And capabilities month. And have ongoing myself have on this almost is our Danaher cultivation is not Howard, doing in that It with us one-time, where and part place. come cadence is this we was

invest what opportunity have market, funnel want in now means companies, wherever sure that integrated looking that But we but cultural So workflow taking make after. want also of improve are a these a target versus at that specialty to an to do trying What there workflow. a we is, we understand the is improves to large match we the we really the the that to investing rate. are capabilities the consumable with acceptance between working back, step and cultivation, we

somehow to have XX% in they DSOs other XX% XX% about States acceptance. think and So the geography, to United

acceptance And on through help to So them they There in do patient can confidence, it, the performed There's that diagnostics can to is aspect Anything procedures. four a visualize up. do they to make productivity. imaging more rate times, that diagnostic better monetization sure job see diagnostics improve that care. actually capabilities their it. they to better to here we go digital do of three times the better than that

we in it significant regenerative make those investment geography. geographies then that from some what, order going imaging that to said for is and it's to continue exactly easier do on to see So the In areas our software invest are for as we opportunity are about that on a as can rather where under-indexed. in us places and lot we can Nathan, that partner, two you acquire coming us Value geographies, well presence to bolster to organically. than implant,

we can our acquisitions organic go growth to committed. it plus performance mid rapidly have years start we rest executing and in and very pretty this one-time, of be We what throughout business growth that that want be and well important to We and in we is want a to top the margin are want digit as digit what our be We come. we bullish high this single to of want for and XXXX on we about funnel an XXXX to single element we pillar have are as as growing We one-shot. of another don't forward. an think our increase

Nathan Rich

that quick to pass you cost And about that. and that two Could those inflation freight Thanks able costs just commodities seeing feel referenced? you of in follow-ups the for talk maybe increases for are magnitude you you are Howard. do maybe you that through? fourth a revenue tends you to maybe given can would guidance? last the give then of the XQ that equipment give help I us a more And the seasonal KaVo could able be be especially think business help quarter clearer that to picture in maybe And year?

Howard Yu

Yes.

the one I inflationary say go and are that So answer Yes, around seeing some you. pressures. ahead first let most costs. here significant would me we shipping that is for

the surcharges have we instituted to, to freight. we for to along actually those some things, are so able pass point as And of

we we something done. And pass able really had have that's significant year, that for so to first the have this have some through. pretty pricing And been time we that

I the think, in to XX that basis to able represents, have in about have think XX quarter, basis $X we pricing been we for had points as about I pricing excess of million the capture. represents of well. That points XX year, and

along. And so we pass are things those pleased some about being able of to

to million business, KaVo think, your specific that to As it relates I about thereabout. business, question $XXX QX, was

Nathan Rich

$XXX million in QX last year.

Howard Yu

right. That's

Nathan Rich

Great. Okay. Thank you much. very

Operator

We will go now Sandler. to Jason Piper with Bednar

line is open. Your

Korinne Wolfmeyer

Thanks Korinne, is Jason. for question. for the This [on taking Hi.

and for can on ramp the plans their focused sales that's momentum scale And to exists us. that current the from versus and your business. thinking time touch how about reps So U.S. you here? are the NX continued first Once, comes, on for in balancing you approval one NX

Amir Aghdaei

Yes. that. Happy answer to

to of We XXXX, to XXXX. capabilities, pretty am have built manufacturing in quickly. went sure Most to be the that make to up order capacity NX investing even in we So capabilities. able and that to operational investment we Spark and significantly. of we I about ramp tremendous this made amount XXXX, been have that going a XXXX, investment starting in talk capital

So at we operational don't have all. any issues

is The NX the to reps. to Now base exactly coming current uses use that premium customer same customer products. back Nobel going that base is sales

a place give differentiated the that, for we lot prosthetic use. The for both of advantage. reps, in see easier is they offering they driving ease seeing And step. are NX So competitive protocol that's place. in their NX, the business in adoption. it implement, step and option customers by doing put now offering are are we Europe starting is transitioning that transforming And those to A reason And and that are that a example, training put It's options. we what point. the the they that

ease model, of but same place use. So this are they compensation the to able more using, implant are reps, of same those that because they

sell to to As rep do am and be am to more an NX more of them, able outcome, transition. make that I can a if I I incented

is in product. this no their to there sell are So change and anybody else we for looking not time

they We adoption. have capability technical are this and experts helping pioneering that training

So program. And using, I get another they the people get stay phased the first then the we it that's and the And move up with the about go it then go quickly. teach through order sales very They them XX, going made training expert to forward. through five, time. rep. They stay on them comment the are and in up in to we we to sign get XX, approach. on speed that customers continue to process we to depends over After the other

Korinne Wolfmeyer

skew in And turning Can bit mix adults provide Great. Spark. can case teens? between any that yet? you Are you are more you and it more the you. on you Thank younger starting see teens Or to to a speak seeing just age group? little insight then to toward and that pickup

Amir Aghdaei

to adults. been so is really Damon the system today traditional our have So a lot and with toward it complicated traditional and Spark, of But tilted using more a The traditional answered customers young adults Ormco has that systems, are good Damon portion teens I begin cases. orthodontists been with. that, the

it. beginning and using to both, they are as bracket and offer clear aligners as are they Now well wire

the a and to a good solution. both. adults, if of option combination coming But sold, have is use coming getting a aligner one can they or of as Spark percentage part a Now Spark clear from other those take are to or it the versus of today, that offices we

Korinne Wolfmeyer

Thank you.

Stephen Keller

Thank you very much.

appreciate I think We out time. of really are we questions. everyone's

questions the up week. to they anything, come as rest through are any here of the obviously We answer past

time. out. please But much thank you for very See you reach quarter. next your So

Operator

today's you Thank program. your for concludes participation. This

time. at You may disconnect any

Envista (NVST) 4 Nov 212021 Q3 Earnings call transcript