- Earnings call transcript Q3 2022

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Operator

My name is Britney, and I will be your conference call facilitator this afternoon. At this time, I would like to welcome everyone to the Envista Holdings Corporation's Third Quarter 2022 Earnings Results Conference Call. [Operator Instructions] I would now like to turn the call over to Mr. Stephen Keller, Vice President of Investor Relations of Envista Holdings. Mr. your begin may you conference call. Keller,

Stephen Keller

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

XX, As full operations of our instruments are discontinued treatment in units of announced have of reflected this on and divestiture the quarters January closed The the as results Cabo of three XXXX. XXXX for XXXX, business business we first year the revenues financial other relate as continuing our flow measures. of accepted these earnings, remarks financial by accounting company-specific and Envista's statements accompany generally except only to presentation to references for cash All metrics the principles. required the business, in operations and

decreases to that are metrics or factors we period-to-period During references relate factors of performance. year-over-year year-over-year third impacted that in quarter significant to year-over-year. The financial otherwise describe company-specific performance. these the XXXX materials noted, more to remarks financial will additional impacted presentation, the references metrics increases Unless supplemental describe some and the in

in regulatory to applications developments pending future. do actual of filings, today. statements and and including be of making describe a date statements might as federal only believe, that that available we and to those forward-looking materially statements they made, certain laws, like call, obligation certain devices may forward-looking or where that set the Amir. statements, markets. certain any forth that may will we required submitted have subject or products in and statements With any we I'd within uncertainties, turn any in not differ by our forward-looking to are including These assume the are risks statements speak events we except the only During meaning update law. occur over the are Further, securities we call make number or also These to and from of SEC as forward-looking that, forward-looking approvals results regarding the anticipate the

Amir Aghdaei

Stephen. you, third to strong in this and earnings core quarter margins. over mid-single-digit XXXX Good a pleased EBITDA announce team, again Thank afternoon, despite are delivered call. challenging to macro that Envista's and with XX% Today, growth once we adjusted a environment welcome has quarter

objectives culture us Our and what within leadership, our coupled expanding on Envista our improvement long-term Business deliver allows around and to growth is customer shift centricity, transforming EBS, our and performance innovation, drives of margins continuous portfolio. operating System, accelerating respect

continue track proven of us growth a can margins. balance execution differentiation, expanding deliver Our record accelerating gives that and strategic we to confidence of

quick reiterate digitizing, our strategy. care. personalizing oral to market conditions provide Before detail, our At how principles brief Envista, progress into end take demarketizing embedding offer towards core quarter update priorities. life vision, update focus it governance, our I strategic partner and we more environmental, a I quality also with third dental are on the of to to to is our and social I professionals will insight sustainable improve want opportunity ESG in discuss on by on some over results this turn to provide to and Howard a long-term

and dental community. the X, opportunity premium our the and a sold lead and the the the This opportunity education importance European the with for engage and orthodontics, our in dental positive we introduce the in the dental clinicians to Envista Austria workflows and provided and high-impact the to over X,XXX of hosted the We Summit. the investor solutions, future of to continue for articulate market, On to long-term Envista professionals decade. at and transformed the The highlighted shape implantology strength feedback September dentistry was great scare coming lead future out dentistry. customers our educate digital vision care portfolio. in opportunities Vienna, event training the highlighting the for We unique the and it training very from that advancement latest in of was individualized the dental over dentistry combined desire learn, event while to and of

risks in While contract inflation private including no and the world, to about be potential and practices promising remain that is on impact heavy minds. for of and DSOs excited the around an there Ukraine the the geopolitical group outlook the clinicians' doubt economic with slowdown dental, various continues coupled for

their and their food, and offices. Having implants, traffic private We improve their invest to predictability cautious in opportunities remains are expanding that, efficiency of to patient the doctors procedures, treatments. ways said for scheduled is While looking and both enhance and robust group digitize and practices treatments thoughtful their improve more see remain continue for workflows specialty are capabilities, about specialty to DSOs and including their their investments.

expect term. market remain short there resilient confident for is in the the continuous be market improvement some over has term, ample growth uncertainty we continued and we room and While the dental long that to over

Turning to our progress. QX

Smart the delivered strong active while double-digit Spark driving recently growth the deliver Spark and approval to software. in of also continues in Release than Aligners We number features integrated true revenue greater announced approved root real-time the Clear doctors. growth which CBCT launch quarter-over-quarter business hooks of results. year-over-year XXX% feature the Spark XX, orthodontic Our differentiated

Spark. advantage of competitive All innovation treatment build aimed planning enhancing for the at to a further continuing sustainable while

growing wire growth Spark, In delivering traditional our and also mid-single-digit to the addition globally. business market and Brand outgrowing

new traction our system faster gain more to more with precise for provides that and Damon finishing. control Altima continue We Orthodontics

by an adjusted pricing as digits achieved commercial XXX implant-based XX.X%. of adjusted a QX margin XX basis Our long-term improvements continue for EBITDA basis margin expansion margin of In delivering and versus our XXXX. replacements initiatives. growth solutions. on improve basis margin our we execution points improvement delivered This of of implants In while solution XX quarter, our point offset inflation. meaningful and we QX we represents to points quarter improvement by driven focused net productivity of and gross the tooth grew in our investing sales the remain XXXX, premium regenerative We accelerate in mid-single

steps both add our spread across up streamlining flexibility speeding businesses. and and margins strengthen while chain took we organization to to of our improvement, supply also decision on making. expand our protect We continuous focus more the In

we macro geographies of have we over will made with As up our In to add the environment. sustainable advantage. a emphasize imaging making and The business, experience we improving intensify allows this set steps quarter, key competitive we where us structural to the strategic portfolio, a we long focus optimizing capabilities. on digital further accelerating This our to costs traditional have we reduce to decision lasting growth. growth term. In third both margins solutions to the structure transformation deal as portfolio for our forward organizational took to leading into our our while creating move businesses our by differentiated business the continues throughout uncertainties while customer to and XXXX additional balance further most to to our optimize fast-growing to continue in specialty more investments the the year efforts of and improve flexibility

are and expanding accurate distribution. with scanner software powerful have now flexible We and that our offers that DEXIS are range workflows. impressions, our fully intraoral DEXIS a intuitive and of solution the rebranded optimizing a scanners reach and speeds customer procedures to improve and intraoral full scanning enables digital portfolio coupled global

and for software DEXIS that scan a While photos, is to implant clinic awarded for dental images, unique the system, Celeron a surface our the DEXIS selected open work opportunity scanner DTX software, also and an year for We're best-of-class the been clinic a technology and as they all expert, providing stand-alone and tool models technology of are possibilities digital is clinicians the and bring with DEXIS view, world with efficient DTX CBCT the configured DTX X-ray intraoral a honored closely which Studio confidence recognized now and has dentistry. software Studio scanner, of Clinic CTX winners which Studio the second the aligns consecutive with planning. technology panel any the formats intelligence expands award powerful one XD, increasing a XD includes oral interaction that comprehensive from award in and extra includes distinguished clear for suite, groundbreaking simplifying Celeron Fusion, patients. Smart like imaging diagnostics, intraoral thus features workflows automatically into assisted Studio by

to digital our In expand implant-based replacements. our capabilities continue addition on in to tooth focus we workflows,

U.S.-based care BioMedical, Envista, implant-based replacement them for more As previously off solution best-in-class it's are patients, can while lasting shareholders. procedure. of each solutions, clinicians best important announced, excited to a start. the part procedure. we in strong to ability early an manufacturer support an we also about our therapies and better capturing Osteogenics' are delivering possible implant from This Within QX. providing Bone because By increasingly regenerative with tooth the of the acquisition clinicians of regenerative patient value is value a business and create

governance approach. keep digitize, personalize initiatives our embedding and in sustainability Intercare, As This of social sustainability that important our progress I'm in mind. our environmental, we also top report. end, and our an progress strategic proud to democratized make continues To to report journey in released recently of all-time principles it's

new employees. workplace have and an addressing our climate-related and in we opportunities footprint, for as While inclusive relatively solid fostering independent we diverse quantifying a and still environmental progress are our risks company, made

I'm our pleased in on shareholders. We're journey building dental newly progress that public upon it and call through the the our professionals now segment dental secure with our performance. to customers today, and our new metrics, Some of States, integrating and forward digitize, more climate-related with and values ability Howard and provide consumption climate of greenhouse our efficient task offer management our the Scope ensuring water through support reflects relevant environmental the an in achieving opportunities management business identifying generation. United into stable processes, continuity. gender and risk investing our risk proactive employees, in financial a company. as ESG go our XX% to success the existing will to analyzing care. gas I we details turn force eight undertaken recommendation, chain disclosures have and supply achievements over Incorporating financials X includes we look ethnic to sustainably, I our communities, to related to the and personalize to initiatives and supplier democratize By intend quarter progress that waste further oversight emissions, and X partner and including enterprise equity third

Howard Yu

Amir. Thanks,

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

growth core while region Specialty traditional performance Europe over weighed segment sales basis, higher sales reflects segment. as by flat X%, delivered equipment. On Products and & core down to offset was year-over-year Our by Equipment exposure America our Technologies of a imaging its that weakness our in geographic was Consumables growth in North solid Western

QX X.X% up was lows, pandemic China of in ramp-up after year, of activity Outside the grow in Shanghai nicely in late China, from second business reopening prior of markets over to quarter. continue up the expected versus the reflecting versus XXXX. Our XX% emerging

to impact and gross adjusted improvements XX.X%, margin to margin long-term prior organization to by XXXX. higher quarter basis expand environment, XX continued XX uncertain in The to further margins actions was the points can basis quarter is streamline approximately QX due points offset we higher while in was volume, took actions inflation that Considering increasing basis of macro to higher partially and our investment third Our year which points growth compared than initiatives. pricing growth. continue about XX sequentially and our XX.X%, than QX we the EBITDA investing was by the for of our adjusted XXXX productivity ensure the of

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

our strong growth business Technologies Products year. revenue above-market XX.X% compared challenging premium opportunity growth remain invest third continuing a by segment revenue has opportunity. business Our macro with in core environment, growth of wires impressive & we to more increased Spark from rapidly. the implant prior to quarter, versus driven Specialty our that by grew business and to quarter confident In third on our a brackets combined and orthodontic accelerate continued capitalize our Spark over core wires and XX% Spark. and brackets in our XXXX, the and we digits are to growing Despite mid-single grow to this continuing business meaningful

mid-single premium across markets. Our by implant-based growth in implants grew prior XXXX in digit year tooth of replacement QX emerging versus business driven growth our high single-digit strong the and QX

In the implants, addition our acquired Osteogenics the to accelerate. to core in business including regenerative growth of business, newly continues

growth during increase Specialty Our as to the adjusted well third from long-term is operating customer-facing as XXX This increasing participated quarter. Products we in significant QX segment in investments primarily due down points activities Technologies the profit XX.X% & quarter. XXXX, drive basis was to in

sales of volumes, a in compared decreased This equipment growth solid X.X% by was offset decline third volumes core business. quarter by in our and XXXX. driven consumables equipment by segment QX in price business Our consumables to and slowdown

XXXX business digits as lower imaging and the in rising half COVID performance the to rates quarter headwinds, and uncertain macro traditional geopolitical strong declined with of the by as second well Zero and environment in in volumes interest double policy in China. attributable conflict most inflation, including the Ukraine was The volume Our lower caused partially geographies. across

as some as we margins a our have help This impacted chain competitive growth negatively quarter. focus performance indicated, we Amir to the in supply we us As also our weaker where key decision efforts and advantage. certain geographies made both to will to accelerate which the over the commercial long experienced chips, markets, on sustainable both related challenges well of developed In run. revenue have

very reach new investments are make improve market. distribution. positioned for our investing business focused our iOS to iOS global our enduring solutions Clinicians and quickly in The workflow. setting and their expand we business the well in optimize solution is continue to overall interested as are We success up outperform on them DEXIS iOS in help to this

commercial We portfolio, our are the in taking focused across address accelerating America on full execution our and to imaging steps North including are and iOS. Europe performance

consumables in demand, more QX, and Endodontics underlying business X% the from Restorative & our in grew prices than benefiting normalized side, channel. increased the On volumes solid

saw in Western the very modest As the did a you this in Geographically, quarter. business solid growth America, North double-digit growth in recall, second see North emerging strong modest in and destocking a markets. we Europe in America decline

our sales softer is in expected, and double standard at are channel in total infection prevention clinician's of As both XXXX. the our increased that solutions believe normalizing of levels. QX digits QX prevention business compared returning that offices to a now We infection inventory to

that are XXXX. balanced was of suggesting we normalized Equipment in XX.X% rate. quarter to figures, the seeing more of this in stable, profit Additionally, should third growth XXXX adjusted business QX margin and & long-term sell-in sellout a versus operating Consumables more return XX.X%

productivity belief the consumables quarter our supports $XXX free business $XX.X in will as mix, faster our pressure favorable inclusion driven by Our the forward. the inflationary million impacted offset equipment third more Overall, partially our to actions businesses. ended strong grow materials cash. our and commodities increases quarter, move and that and and sales of by with profitable be to increases, that and the the we cost improvement In flow cash of we million related iOS was over price generated business margin on increase overall

payments with tax free part Our operations costs, as free flow than to investments well year, elimination due payments. as our discontinued restructuring QX in cash and onetime XXXX transaction lower flow cash prior cash for the was of associated in

of is our flexibility flow balance XXXX. income flow support Spark long-term the through to Overall, to will the that long-term investments. improve margins and the in Despite growth free cash midterm short on in into our pursue free automation. free delivering sheet our we We net ample focused and investments capital in and significant in the improvements lower flow to excess fourth have and remain see make cash of term, and liquidity appropriate continue also cash quarter in strong, we expect goal

the year in continued risk including the and Turning issues, to our macro chain and adjusted supply deliver expect for potential in full energy expect for Europe growth full are XXXX. and and forecast China we geopolitical $XX the full our DEXIS currency as continued deliver three the growth our likely with environment, inflation, core acquisitions million This impact crisis reiterating a core the repositioning. acquisition than XXXX, sales more in EBITDA full margin than guidance persistent to of for is XX% challenges outlook. annual of to points Europe slower modestly, rebranding a we growth further profitability along impact for Ultimately, within greater as and down to the mid-single-digit We expect year XX our iOS in year of basis Despite acquisitions year. timing well reflecting years. of add and growth

remain we environment While and reshaped more in in QX our future of XXXX, market a confident resilience we the dental the challenging as operating well the portfolio. of as in anticipate do

differentiation, margin some coupled accelerate our final can turn to for while with proven I'll Amir, track it over consistent that thoughts. now we to strategic execution us continue record Our of confidence expansion. growth driving gives

Amir Aghdaei

Howard. Thanks,

transform our operating growth, remain accelerate the and to margins and through priorities deployment. expand forward, our active same: further disciplined Moving our portfolio continue capital

to is Our to improve dental partner lives. professionals intention with

prosthetic for differentiated of wires portfolio for leverage and including clinicians that implant to to we continue dental, a profitable will consumable solutions, in aligners and provide with as complete In workflow empowers specialists Our and and everyday the provide options, and diversified choice implant-based will to we access treatment the the brackets tooth This positions we to diagnostic solution our highly of clear and suite best broaden our a digital will treatment capabilities including our for regenerative and clinicians us business. globally. differentiated offerings. comprehensive orthodontics, partner personalized patient each business, provide integrated replacement

leverage for our from in and workflows diagnostics strength planning our partners. will integrated treatment to to diagnostics execution open build seamless digitally We imaging and to personalized clinical

Finally, balance cycle. we draw expansion the to to a margin continue heritage and across EBS upon of economic growth drive our

committed leadership. have centricity, on and improvement and I'm proud and a culture of strong customer We focused team, innovation, continuous respect, our capable

and in of dentistry. to and differentiated environment, the As for we we're record and growth, significant economic employees care, more challenging value a of excited and continue Even track we to personalize see margins execution. patients, dental digitize, strategically a democratize We're proven future about improve shareholders. accelerate have customers create opportunity long-term

Stephen Keller

Thanks, Amir. That our concludes formal comments.

ready We now for questions. are

Operator

from [Operator Anderson take Instructions] We'll Elizabeth with first Evercore question our ISI.

is line open. now Your

Elizabeth Anderson

to talk say thanks this not guiding sort spectrum guys, as you're maybe I changing And the that seeing there could question. but Thanks. evening, - Hi dynamics. you of in - wide in help sort of Thanks you for quarter? right extend for color Could that narrow sort down so you're appreciate is on of you be the XXXX that seeing front? us helpful can and the you're of formally then them first now. fourth of the can you opportunities quarter, guys the that, much that of on what the the of to on as understand all currently the about extent I both also that through sort saw gotten Can we you anything thoughts on out and sort context what for of in the sort month your

Amir Aghdaei

with the major you, geographies. we very in uncertain of in what bit not remains have - so so QX a little Elizabeth. in comes - we specific a Thank situation when in to it course. here seen QX saw consistent change far is Yes, What

of the into in but QX because almost we a products saw double-digit had we in QX challenges example QX. Russia, In for we China, some that mid-single-digit fact QX the low So step place. in had came in saw first decline that half, a in a up single-digit in the we robust growth despite decline in need Russia, in getting after

visits. And remains remain confident eight that. had intact, individual uncertainties step visit on that So you year, I've eight the ground, two, But we is specialties common the distributors, I've book here there over stable. in or have in and been hundreds back over challenge not And for tell we have the guidance I took of the looking DSOs, bit, hear the we the is, a majority at can macro scheduled trend taking impacting specialty inflation university. that remain over practitioners, road, months weeks stop transformation. the hear on The for And aside, that these a resources continue cities. that major factor the multiple next the we're we that third the weeks be to have given macro changing little of of a If specialty need CapEx. and provided business, and talked the I environment. digital on group customer this and to across volume, the patient's practices, a over

two be innovative of forward. variety people they they that order seen by past we place. innovative in we It's for that maximum lead have We in that I rocky are in You productivity that is of need back, what simple has this years, productivity answer the it The that transformation, is confident help to all have move we difficult the you are we shine that competitive to is leveraging a get giving exist that but the of talk come in in industry bit there move forward. is do really to order a it where we been. advantage to talk ripe for this little higher what asset need EBS a short-term. the ever in disruption makes industry disruption, than pull has can exist traditional This But assets the - positioned the we to way industry growth, about tell about and for segments to the well the models can an order that it capabilities going utilization. is can together, can more business

Operator

from Cherny question And take next will our we of with Bank America. Michael

Your line is open.

Michael Cherny

question. you thank taking the afternoon, Good for

talking spent of now You time about the some obviously China.

the business Let's think and on, going in vein your the between you terms talk not succeed expected or side on positioning you of exposure? little us fill pricing that among public bit manage against in best China what's the can of about through about communications guidance. providing the across in to VBP again, a necessarily the about But any and China hospital your to and how especially headwinds you're difference private next see,

Amir Aghdaei

Yes, happy to do, Michael.

As I mentioned, high almost in grew QX, China X%. business single-digit,

the we a the policy. Obviously, all While and lot had that a decline do environment a to lockdown Zero by mid-single-digit Despite half. macro of first in of had Shanghai with of China's slowing COVID we growth now have expect and outlook, doctor China. business business VBP. that Imaging let's specialty about talk that, softer quality to macroeconomic the performance assess the economic is in expected But in environment. our continued

of side, implant expect end November. results, to hopefully, some the see and by the we underway, On VBP already is

to down XXXX, we those be of maybe in primarily price guidance for was care before risk-adjusted patient to volume I'm implant volume And private of driven a winning sector. discussed we for a out remainder public access come that how a going we mostly question, this we XX% is And XX%. see from before, the answer public - and guidance by process. to decline our - more large XXXX - XXXX. degree, the The given materially, a need would think - side increase and be return in they that XXXX. dynamic plays will comes XXXX come that in - this remainder Over volume can the have to in and is have are sector China we will offered As see over sorry, We provide in provided. going self-paid it to a of the prices the the your to any have What we bidders. come price business

- We think premium have have going a that we in sector that side and a the good business position and we're continue the faster. build side growing there, to our continue of shifting to the really private lot I in on to to is and private space been capabilities

On on This and is nothing going going piece-by-piece, in official. to likely only the be is not the is going it's to this clear still place side auto aligners. come to - most

long-term. we going that high single-digit, the be to we margin. year to in and We in were by view We on It's the - be difficult XXXX, and the XXXX, various wire on have going able growth regardless communicated of scenarios but China, high in long-term impact to to details earlier to for in And we we manage plus traditional a bracket considering still in what expect to XX.X% but well, is that through we the the comment have on single-digit in that be think continue and flux. make short-term are that and are as here above to are impacted sure able see deliver that uncertainty. commitment

Operator

from We Johnson will question with take next Jeff Baird. our

line Your is open.

Jeff Johnson

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

Howard Yu

Yes, we Jeff. can hear you,

Jeff Johnson

Howard. thanks right, All

here So for guess me. two questions I

growth guess of at markets trying But European again, last help XX% to and emerging giving us growth that respecting they're core and - about especially, where next of are the it's end look other we of Just going both comps normalize to little kind we the going over Thanks. the helped think going starting two of a quarter two, not market forward? be really comps, are and or which of so at shutdowns in year X.X% the Western European markets, still I to Howard, that those because from guidance. comps bit you're not kind understand How quarter driven at kind should normalizing by kind on? - and kind this and easy really of factors pull-through XXXX,

Howard Yu

prevention, would so primarily peaks. context America pretty because it Yes infection example, about anticipated, North those off had And here in those we half of see we COVID some for do kind where think as sizable had other that second I in way of sure, growth. of talked the we've swings we the Yes, as one we've or lapped sure, highs Jeff. the some of We comps. of some

things so in offices. normalized, clinician's both channel more the in as as well And the are

And comfortable that. so, we feel about

more broadly, Europe, some that there. I energy better to the macro I even we example, of driven for on better to think being of that U.S. relates concerns business there a Over the about as our business to outside potentially bit for really growth. the macros, the looms sales crisis little XX% there the clarity it are grow. relates think we feel until get some And about feel iOS that of it prospects good is able as But consistency business, we

we continue very to about outperform feel bullish expect market. the so, that and And to

Spark just Jeff, think and it has an been to growth. example I incredible us super relates as adoption where for frontier another Europe is fast

as Amir is Europe in ramp-up surpassed quickly other seen excited any we're As in as the that region we've so, calls previous that about growth that well. in indicated

Jeff Johnson

dental basis that's some But the own rising the flip months. a as who compares industry rates And importantly, Thanks price when just XX cost to is try a across their to past go more your next of maybe all need about XX get to probably think frustrated the follow-up, seeing over to just little less this six that I thanks. helpful maybe with optimistic obviously you And got they've pricing dentists you've how years. But about increases then, you've here not of us year to got past price how far think, net so you into little reimbursement feeling where side are that cover? on up, philosophically, the a seen Amir, yourself kind just a is year? remind business, their do maybe going

next how pricing do year Thanks. going about deeper So to a from we into of kind standpoint this as environment? inflationary think market get just you

Howard Yu

Jeff. Sure,

encouraged. regards degradation take well. second With price some I'll maybe we see to that one the So historically, as know when started pricing, we've that of to pricing XXXX, probably we're I seen traction. XXXX, half until

we're here the in points is systematic trying continue Amir that, continue from third much to pricing. tailwind see that as of XXXX indicated, anticipate over going recently quarter. getting coming in quarter, approach We around do pricing. well here certainly to the to of fourth more what We that basis as in build is a as XXX that And growth

to even viewed we'll in the it so as get that one we The is mind we've profitability. some relates pricing. inflation innovation the win as that ASP when modest day still And like us thing it's moderate long-term, helps as well here keep that some, to it the anticipate always and that things relates increases in as to

move technology. you our so deal can regards with in And to the and TiUltra surface to see from implants TiUnite that

[Clear] brackets wires Damon we move You business also that see in our from as and Ultima. Damon to

long-term, for as hold growth higher that being drive able to we again, to what And expand relates and dear as is it so margins, well. ASPs

Jeff Johnson

price right All is apologize in missed net the XXX for have that prepared that I that million, the that that remarks, must was this company-wide quarter? $XXX I this quarter, Howard, for but

Howard Yu

right. points It's That's north of for basis QX. XXX

Jeff Johnson

Thank you.

Howard Yu

Sure.

Operator

our And we'll take Stifel. next from with question Block Jon

open. is line Your

Jon Block

core Great, versus it, X,XXX call orthos regards thanks non-Ormco start Maybe afternoon. like you new the Spark bringing so on or in your where into, orthos guys SP&T to Spark, tapping into equation. on to good Ormco with are

tack up to any And maybe I really within mid-single little on to would implants, haven't believe, premium. and a NX on we I while helpful. that, just anything think Just heard And be for then SP&T? color

up Was I XXXX? my a for mentioned what on that or how expect that should I'll into we think have the premium guys you high single it then follow-up? might to ask anyone went product And side? tailwind

Amir Aghdaei

happy thank that. to Yes, you, I'm Jon. answer

of mentioned, we active double-digit they customers, are as that coming number So customers seeing, using the we it's on Spark. and are growth

has specialist. target been always Our

the And time same customers. and using with articulated, by that letting them salary training, making that sources And the The them we that expert same We education, provide able same the combination Damon see company. recent or to by we in a either and really our that same can capabilities complete dynamic in have possible the focus having wire. started you and a, clearly allows started far solution. the by best market offering Ormco know That's geography-to-geography. able with from .What started, solution actually on clear we as solution it how have us use expanded bracket-wire we to the got company. that has are bracket give price they choice provide possible started that specialists. as people from They can and the to and best a liner been now interesting we because being by business seen this to expand a

plenty answer, have the but customers, traditional Damon with out. branched of still we simple work to So room we have

cases, as We opportunity take is commitment of three not in the purely the after demonstrate a as transition to a intact. this of combination years us provided to orthodontists seeing of and the a clear the doctors product forward. made seen well and best size far aligner, over given number traditional the we they of we to place. solution are have going but triple business as that market, the has going the Damon clear and remains Results of as customers, transformation performance that number even that And think may not the new been this have still you've business that of indication but

show combination over of Now us teach, follows process the critical has points to similar Spark, of in put extended, and XXX Spark NX on started Group answering We and the success basis as five your growth Spark. ground transition. then very year-over-year. NX question, to a we of a given we team and NX

what single-digit, different our think the innovation of and be of high NX teach geographies take how go part are in X exactly taken for execution, We piece-by-piece our Europe in America. long North with expansion hours, learned performance in XX then offices new commercial them improved five the are implant growth doing combination important over transition of in that it in supervision. to thing as run. implant has hours, growth do NX. or implants We our their room we an we plenty extending is and to and under there We placement for they to same time going that place premium to XX, tooth XX really is to for able implementing Group base

Jon Block

of thanks. I to go mentioned we're but not here. guidance, maybe very to And better SP&T to should have know seems think E&C going momentum. just solid get helpful detailed from get Got you lot it, a in a different 'XX direction. I

the side 'XX. On VBP in you've the headwinds other equation, likely got some of

sort to comfortable accelerating off the guys XXXX are revenue step just up growth back, in at you a modestly into moving maybe roll Thanks a we of level, year? all guys. parts head when in take it, - next number 'XX So as mid-single-digit we this with, high call try to

Amir Aghdaei

forward. long-term think XXXX. at in We on imaging, significant to a call QX, really made, commitment moving we're this replacement, because it's going And we've growth. solution, inorganic continuing approach activities to the have to away we're can opportunities about provided. to delivering diagnostic Jon, disciplined focused difficult going solution. on long-term orthodontic tell we invest tooth What not our you broader We're implant-based point that guidance is, be that thoughtful Spark I really a the from iOS,

with record. some short-term, moving have not it. challenges core have to Our you mid-single to EPS to that In we is are single-digit, XX.X%, over seen we we we from growth track and want our over goal going the we away go may proven we digit indicated need EBITDA a that and sales high deal XX%. XXXX, that have hopefully, plus, get to growth to That's

margin, and going that forward to We indicated, moving places. and manage that of challenges we're balance VBP, you growth despite continue of have do other and been the able some to this to Russia

Jon Block

guys. thanks Fair the for color enough,

Operator

Wright next with Morgan our Stanley. Erin take We'll question from

Your line is now open.

Erin Wright

current mentioned characterize you you how Carestream just plan the iOS seeing that efforts overseas. is I to macro and would across the business? How relative thanks. or in? Thanks. according strength playing how you're given think out the - and integration we're are here But things - traction to environment Great, the

Amir Aghdaei

Erin. Thanks, course. of Yes,

streams. at So three we when started looked the work process, we

the We to that, that lockdown COVID was sure secure of make in The are first COVID operational. produce we able Operationally, we out supply. Shanghai. to zero coming one obviously, wanted

as We able have ramp to quickly up been that as really possible.

I extremely is going well. think the operational integration

able been have We rebrand to it.

opportunity We there time. for have continuous been put capabilities to improvement, margin for expansion And significant opportunity we over around is that. think further able

end-to-end think can that stream a to we will have DTX our it solution product, standalone well first a now. any the software work in We as innovation have as was we iOS done ortho fully implant despite end - the and the in the on integration, as We stands auto business have well innovation we and rev business. step was software, one that around really by can ability of workflow, for of we process for is put this it over an Integrated is as that sell place available the implant our fact year, to the product Second the DEXIS both with it for as DTX, great to want today.

the are this And the The We wanted make to work today. different was to to in what do, wanted existed stream we around we we third capabilities leverage go-to-market. in that position the go-to-market, sure expand wanted and able to distribution. that geographies

we've through, going look through replacing have previous as the been the at working channel the DEXIS a working take Carestream forward. We been it inventories, product,

do be execution work our be confident the we're in going But able is in various good it to to work And long some move got we've commercial more we're done So run. forward. geographies. here. in that to to really and improve about we feel strong there to And

this all. business to set product to at hasn't this Our commitment changed of

is if look is and of anything, the participation. more One the thing be in we This got has we iOS. going take In is we good but they confident of the offices the is do nothing and see product, you is tremendous fact, potential outside underpenetrated, to are right a the have this amount as product, really upside product business States. price through a And XXXX there it move significantly good XXXX. more keep at a XX% mind number the United to a that that an at underpenetrated. We've and of

$XX we We've distribution. to we've sure to distributors. that And sold months, of million of the that it. we confident this on only about make $X.X some that, To In that owned we sold QX, and our was are got business some to in though was numbers, we're global QX, get manage So can got million. right give business but through working for track. two even - optimize we about that you the the

progression this, - XXXX by a good the you going as we of XXXX. be to So saw in think at and we're looking really XXXX place

Erin Wright

on one meaningfully more quick the I it a should about enter just category when, GP And how Thanks. you. you would we there? Spark, think thank Okay, potentially about guess,

Amir Aghdaei

our we Yes, on primarily changed, focus focusing primary are and hasn't a specialist.

We are medtech a company. premium

the they to those have of goal and those that that implant Our is those they possible a do they do volume they that that also place their best sure in large do hands. make they solution -

specialists, to there. we're and going focus continue are to focus Our

over train their that is product. is properly. GPs, those they orthodontists, We're a inside orthodontists if Large little what that to push called this this have to we other they note time, DSOs, Majority on to with the is, just The and thing product and are On of maybe can One DSOs, happy DSOs. hear model they these clarify use is of provide to hub they may priced want teach bit and have we're product. based a of transition some to with them. stopping than more companies their outstanding, spoke. We organization. and work people not able hand, this a Spark and they partnership

really has is It up of the clarity Software service and support the it and to-date. experts. key

are people is a beginning geography-by-geography really we and various tremendous it there geographies. So as approval get around in energy amount of transition to

there to a be our is on focus for demand obviously, specialist. So but it, continues

Erin Wright

you. thank Okay,

Operator

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

Your line is open.

Nathan Rich

for Great, America the America imaging? then then macro into impact near-term And sales how are it two geographies, the you on thinking outlook in geographies. North what thank you. Is is kind and extensive factors: the in certain and a the of You the deemphasis of deemphasis on Amir, North weakness those how elaborate mentioned about traditional have next of environment? that function year? you mainly of might can weakness

Amir Aghdaei

Nate. thanks, Absolutely

several practices picture DSOs key with, There a those begin to environment. are from of answer contract. quarters. are important A that group business one-third Imaging been, for other And have downturn an fairly DSOs. part a the a for paint in just is the even you comes couple really imaging in offices. of tailwind service revenue me then on DSOs our the and stable, I'll and positive the imaging play sensors, points Then new for question. let So of building

inflation we - about, are stores. resource And Some recent they're chain-related the it. is due we obviously that supply softness new opening in the we that, impact talked of feeling all issues see and to of

proxy But in what before. this compared China combination the - makes of let compared saw is question is U.S., to the that than also to me talked DSOs last of impacting year, Europe issues plus a macroeconomics in bit as year you What in Some U.S. about in last softer North America we your answer what geographies. little year. about a

as portfolio, DTX run. differentiated, and rest the not imaging acquisition that really really selling really - some while it's in But connected investment a in not every iOS. standalone, the workflow. is to there avenue to gives with has to while at practitioners good solution complete and a we commitment geographies, of of as is a it's not of other it Our diagnostic product in changed procedures, to software be It wanted the a long in end-to-end here a not We of an give set all. present sort think it

a get stand-alone then only to able we it and at unit product there that just create the greater way our If true competitive differentiation. our business you this that's in offering, by not with advantage as done a price, model. to itself is to our is take not treatment If our and a well. If we look it, be have is any overall it would

to It's about continue That's done. sustainable parts continue to game. to some, how going we why That's element decided We is investment various our a create about to It's and model resources business, deemphasize can what do innovation. of the advantage. business with improvement That's able that. management EBS. is margin. Portfolio key we and about are where productivity continuous end-to-end going Our that geographies our did we are we differentiation. that to redirecting start we deliver of have competitive and have we're

the and to performance. on through imaging of We of You the faster part margin, intentional. can want business. margin a invest better part challenging versus environment. work balance consumable, continue and in get that our is better growing this to growth difficult We margin, To saw equipment

Nathan Rich

February? the do And give you'll for implant of Thanks. in on that And have VBP, have volume to think much a you the a is bid how come? for at view has do program visibility guidance you when this on impact point or 'XX of the submitted you been still

Amir Aghdaei

would the Our side. have on end made of by players two the decision November, we premium expectation beginning top of is December, a on

we what need give feel good So many, impact I expect are should volume, a how public XXXX. to pretty we you as it's understanding, us that the we tell specifically that in for can should The expect what we know in sector. current but we mentioned, to going

forecast as we good well would pretty guidance. We're need of got of As value. feel all as a that, we yet, tightly, XXXX which monitoring business I versus to in at really look that XX% build the are a mentioned on premium but our before, give about comfortable about closely, adjust of take as as I should less than this And again, is And there XXXX. public we we us it sector. feel combination you to we as not QX. enter our our a

Nathan Rich

Thank you.

Amir Aghdaei

Of course.

Operator

program would I over questions allotted to We today. additional for Mr. for back or have like closing reached turn now remarks. any our Keller the time to

Stephen Keller

your Really future We events you. evening. in you Have quarter. and joining. a connecting great next interest with appreciate then Thank for everyone, in Envista. investor great to forward continued look Thanks, afternoon,

Operator

conclude program. This you Thank does today's your participation. for

at may any You time. disconnect

Envista (NVST) 4 Nov 222022 Q3 Earnings call transcript