NVST - Earnings call 3 2023 | Envista Holdings Corp

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Operator

Hello. My name is Chelsea, 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 2023 Earnings Results Conference Call. [Operator Instructions] I will now turn the call over to Mr. Stephen Keller, Principal Financial Officer of Investor Holdings. Mr. your begin may you conference. Keller,

Stephen Keller

to Good Great. are other any presentation portion available the and supplementing thanks our information want joining website, today's non-GAAP to call this on Events Investors under remain the reconciliations financial our by and quarterly will measures With Thank archived Chief our audio provided release, me the archived and that section section slide Officer. I website next be President required www.vistaco.com. you. related will call. call The call. Investors our of today of for during call Aghdaei, SEC that of G the afternoon, heading the later is the Presentations out until point and the Executive earnings on Amir & our today Regulation

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

applications regulatory in products may and we the that markets. During approvals certain call, and devices pending or have certain are describe only certain submitted available

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

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

Amir Aghdaei

afternoon, us and appreciate Good Quarter Stephen. join Earnings you, Call. Envista's taking Third today. XXXX welcome Thank to to you time We the

third EBITDA margin of strength positive mitigate and quarter, our growth we orthodontic environment In outperformance while and an business we macro core continued challenges uncertain the the business delivered to long-term able of XX.X%. were by our in in success. setting Driven an for up consumables, adjusted

As will discussed in create deemphasize are margins. to adjusting our sustainable in improve differentiated our specific selected focusing to business competitive in resources proactively growth more previous geographies By product be categories quarters, have able we long-term focus the broader we where competitive and solution, advantage we imaging and advantage. our diagnostic and less of our

as our America. While well implant business in in our as positioned, well impacting This was global to higher-end due specifically full-arch long below performance restorations both continued quarter is expectation. uncertainties macro term, the North was underperformance

results in were While we North our believe will disappointing, this America be temporary.

incredibly and leading a brand, capable a We community product portfolio, have an strong specialists. implant a and dedicated of passionate team

the third in Starting quarter.

further have we as refresh with improv improve support training and move through clear path growing our the in growth approach through our made investments aim our execution XXXX. and targeted community. to to be commercial a marketing, to education North We market see our clinical and We to invigorating America

and perspective our take on towards progress update operating discuss Before to it more this on environment our to I I detail, current to priorities. then over want to turn the an opportunity offer quarter in Stephen third further results strategic provide our

weighing and Globally, sentiment. geopolitical remains the around on risks macroeconomic market backdrop very concerns dynamic the market with

and cases as higher-end While thoughtful and both DSOs inventories. doctors generally are in a Private patient well and macro traffic about are the adult quarter, restorations. of third in a implant in clinic-level patient including and monitoring environment dental orthodontic both near-term as demand we full-arch stable practice remained see equipment being continuation did procedures, investments the slowdown overall

While created to practice, operating are proactively confident areas term, in that help invest environment making digitize the to in productive more that ensuring we clinicians care. term, patients them care longer short the prioritize them a can challenging their and our provide that dental this highest-quality more personalized and has they will continue

Focusing our progress on QX. in

specialists of Our tripling in we pleased XXXX, target XXXX. orthodontic sustained aligners. of ahead on announce worldwide. that our track are that we to year to be reach business comprehensive the well the year hard driven choice value are schedule. performance Spark working long-term see clear of in Orthodontic continue April the of uniquely positioned orthodontists milestone business and continues a to portfolio quarter of of by the perform of to announced our by fourth Spark over for In a to partner end I'm of this solutions

case. growth Envista Business increasing our doctors doctors the new with adding case existing System, are EBS, consistently and per and growing drives spot formula, we the revenue volume

now success of business. we our business. to on growth the and delivering as next we're investments today By of ambitious support XXXX, double our milestone. of In our this focused of as we support well broader growth end growth, overall make trajectory to to the and our Spark, long-term Given long-term orthodontic Spark profitability Spark intend our continue

experience margins new we the in the our factory expand received approval Republic This medium in Spark help improve our our flexibility customers, clinical achieved in facility orthodontic first factory. the Czech QX, regulatory increasing term. and for manufacturing customer will European In and produce to

investing opening addition look we improve also a optimize further additional to automation factory, to In margins. production and we are as new in our

sequential balancing we growth, on profitability. near-term continue our focus maximizing below long-term While improvements the Spark margins to make average, remain our and fleet

optimization, delivered VBP QX, occurred price on margins. commercial We points controls EBITDA systematic despite impact implant sequential expense XX margins a in long-term structural North in of of our America. cost to we This and manage adjusted leverage improvement basis underperformance expansion the a expected, price solid the to and As investments, reductions our brands EBS our focus through China reductions.

areas the significantly reducing of Despite from VBP example action. by is expand we pressure the organization, Our focusing where our and advantage. our how execute we on margin expenses margins driving a EBS in focus growth our the most every significant we able and epitomizes operating day. in challenges performance This use our program, macro local streamlining were price competitive to expansion to despite China EBS in have perfect efforts

move next to year, we improvements. As QX approach we margin balanced into a and will to investments maintain and growth continue

our mentioned, to commercial we investments Spark As North expect supporting I capabilities in previously America. both in implants and accelerate

expansion. investments faster setting significant also growth some While our us planned put for help pressure the on position these expansion, while for further will margin will short-term they margin foundation

our portfolio differentiated as more solutions Dental. and By well of portfolio. a the focusing attractive segments more continue building specialists, on providing Long stronger, implant growth-oriented to priority comprehensive most our to as is we'll shift term, for orthodontists

of We With are digitize set transforming a they comprehensive diagnostic as solutions, business their our and also and our business support that confidence. to imaging offices. productivity deliver DEXIS clinician software diagnostic a solution imaging business simplicity,

new quarter, the including wire a IOS and range DEXIS LX OPXD of we In the products, third scanner. launched XXXX intraoral

the the margin community. was loss, released inter-oral are restoration. clinic bringing DEXIS suite. features solution innovation The root Studio also software third discrepancies X-rays, X practitioners the [indiscernible] in year, of the XX the detect helps at DEXIS dental calculus, DTX canal, including imaging XD we Celerant into We AI bone the software solution the filling carriers, consecutive integrate lucency, deficiencies to pathologies to radio DEXIS awarded award best-of-class existing and recognizing for technology to

pipeline and to strategic excited organically further about made We cultivating are inorganically. deployment. we improve and capital both EBS-driven approach partnerships we approach of today, opportunities, are an currently that additional opportunities a While investment We're move our committed pursuing the to M&A and new portfolio, our opportunities. to and strategic robust to have we manage see disciplined we utilize

now Stephen to quarter to through turn financials details performance. the and our will I more our call go third on segment provide over

Stephen Keller

quarter we of quarter, basis. Amir. a impact the Thanks, the single-digit X.X%. our Technology Consumables million slight third decline core our currency by represents XXXX. of of $XXX.X continuing on This & This rates, Adjusting in In & offset reported growth Equipment grew delivered the a sales for over exchange sales segment, third low Specialty in increase a Products quarter for segment. the reflects

declined digits, America Europe double geographic single From North grew perspective, digits. a Western while low

obtaining single grew year-over-year anchored digits focused in of as a comparison quarter due the of markets both impact changes modestly be QX, continue comparison and year-over-year and VBP to and in impact the by and China, to licenses licensing and low difficult as serve supply to on patients. which to on Russia sanctions optimize difficult to and declined dynamic remain grew China fully full appropriate our despite We sales their year both requirements. we markets. we a allow well emerging Our pricing. grow lingering supply we customers U.S. a us expect X chain these take to expect to our Russia, and the to compliantly Russia to important In steps down implant

Our our third gross down margin growth. product prior attributable VBP-driven price mix, quarter basis decline was was gross XX.X%, which and an long-term in declines investment adjusted points margin to XXX unfavorable The year. from primarily continued is in

Our represents of point a from QX XX of and XX sequential which adjusted points basis improvement XXXX EBITDA a XXXX. margin QX was XX.X%, basis versus decline

from an Our interest EPS partly adjusted was the rates. EPS of $X.XX higher the for year. in in quarter in was diluted the The by to the $X.XX reduction compared period interest in quarter prior comparable expense driven increase

Specialty Products set our & grew by Technologies the core In revenue quarter, in X.X%.

with orthodontic business growth, double-digit accelerated Spark continuing Our expand rapidly. to

China declined the the bracket solid world. digits, with low in demand wire by being traditional Our growth and rest single in of weaker business offset

digits single low declined the business implant quarter. Our in

geographies franchises. market China strongly in America and impact in VBP. As quarter, performance from Europe our above the the in well performed in previously, both was or weakness value and most premium Amir grew mentioned business despite offset at our by pricing Western negative North

versus versus XXXX is profit of third XX.X% operating segment in points of in is was the basis XXX basis points quarter. 'XX. QX up Adjusted down this QX sequentially XXX This but

support continue invest segment to long-term this to will growth. We our in

Turning XXXX. declined to compared our & Core segment. Equipment of X.X% in QX sales second quarter the to by Consumables

digits by focused on our emerging market world. above believe driving we business the we that most low geographies sellout, grew consumables single Globally, at Our performance performance or in led is sell-out strong are and around consistently markets. the in

for we and macroeconomic rates higher around interest declined environment imaging high the equipment. as business, digits In single demand concerns Equipment reduced global larger the

we and Western improved, Our markets the solid performance in delivered developed growth quarter. Europe third in in

in markets macro of quarter, Emerging decline larger our reflecting as the well saw conditions refining tougher both the focus. a as

competitive order is markets nonstrategic deemphasize in sustainable solutions concentrate intention geographies in efforts to can a build our advantage. Our we and maintain and to where

create long allow growth in term, accelerate will this a modest term, to margins. to the short us this and will both While headwind core growth

their digitize in offices. strong as reach with expand this growth units distributors Our help saw year-over-year partner quarter global we and IOS clinicians our business to our

was growth stabilize, said, robust, that unit note pressure prices this faster than revenue have beginning are believe ambitions for to growth IOS segment growth ASPs Envista. a be we important and will to putting While in business. fallen our very anticipated, remain for it's that long-term we confident DEXIS driver short-term that That on this

operating XX.X%. Equipment margin quarter, points profit decline as driven in XXX represents only In adjusted offset controls. third equipment productivity our cost basis was segment This Consumables revenue EBS the gains lower and was & partially by year-over-year

pleased the payments remain fourth free $XXX well Turning capital of of year-over-year and to net cash income. cash cash our of are longer-term third generated excess quarter. cash. driven flow with in quarter, improvements was progress working flow with to Overall, The $XX over goal the improving free free in In improvement as our and to as the until million committed cash we deferral cash annual delivering flow. management flow ended million than our tax the flow greater we by quarter federal in in

note in It due steps at around we $XXX million XXXX. structure. XXXX. we our notes also in We that is capital important new convertible due update to exchanged And in notes important took XX% QX, of convertible our issued in to X.XXX% prior X.XX%

related debt, also our goals our to to actions manage to financial current expense revolver, dilution our of extending interest flexibility. and the overall The and was ensure We refinanced X and XXXX these improved dates convertible tariffs. and reduce term the maturity long-term loans our future

become Our strong provides available. they cash as flow the balance appropriate flexibility significant to us sheet and make investments

While our have is flexibility, be very we in our deployment. intention to financial capital do disciplined

full year to our Turning outlook.

year. to drive to North XXXX investments channel increased long-term the in our of the full impact will the macro revising expect year now growth and are guidance be full uncertainty, and of returns. We XX% importance core for We volatility American see the making adjusted between distribution for XX% being slightly, EBITDA down to shareholder margins that we reflect

the on reflects in additional the guidance increased new markets, updated challenges the Middle continued Russia in macroeconomic by risks brought Our the East. conflict in developed our risks and

note represents East, of further [indiscernible] around Israel a important the implant local annually represents that important that and to is for it our $XX production brand. market Middle Regarding location commercial tech Israel million an

steps While we've to the some impact region, our anticipate supply performance. QX in our stabilize volatility and chain, taken we this do could

Our our reflects accelerating North as impact in in well guidance investments the business. investments as additional updated of American implant Spark

these return as to in investments into next XXXX America to continue expect within year. We market-level implants growth North the

While it too soon expansion focused are margin next is a for and year. guidance to delivering XXXX, provide growth we on

the turn discuss to I'll closing call back and additional Amir our Now outlook provide comments. to long-term

Amir Aghdaei

Stephen. Thanks,

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

and to a positions professionals choice clinicians for comprehensive diversified and intention Our believe of our improve partner partner lives, is dental that globally. as portfolio we us with to

In the our aligner offer strength of our options comprehensive bracket as solutions business building traditional focused both to specialists available. our of orthodontics orthodontic and business, as on integrated treatment Spark suite on the wire we most and well the are clear

practices personalized and will provide care they that build an smiles. patients' We support as strong improve

partnership short-term treatment tooth we significant implant are to plaque of a to that treatment continuing focused America innovation, North ensure the on is choice. address execution our and improving while under of in the community. implants our opportunity There In are drive businesses, and

We to future of lead are well the positioned implantology.

the focus diagnostics offices. digitization to we our while continue business, streamline In dental of will accelerating our

simplicity to and with diagnostic productivity. is Our confidence, provide goal clinicians

of globally. outcomes. we penetration workflows clinical installed clinicians digital intelligence Further assisted in superior that provide are care and base, drive strong augmented our IOS differentiated will We solutions by and leveraging providing improved will support

are prevention will comprehensive our to outcomes, with for offering in deliver on continue infection the of consumables clinicians supporting growth aesthetics workflows solutions. orthodontic simplicity, to continue a we we and restorative portfolio choice to By brand of Finally, and will designed driving that sellout in focus globally. business, clinical be high above-market great clinicians by

patients' personalizing partner Our lives improve by and to is purpose with to care. professionals dental democratizing dental digitizing,

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

Stephen Keller

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

Operator

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

Elizabeth Anderson

I two have questions.

was in if The of there's macro you're is as more step environment. We've September. in first of heard trends could on it's those the them you how you year. a through ago, environment X, on November other broadly weeks , down -- seeing sort sort -- had I then current been wondering comment about just November. guidance October one so reiterated I And actually full for question the was sort the the X on of

you of of of detail super X caused If that that, Is be you a last that of it what sort other things? the to would down, function helpful. weeks? within more So sort bit it a combination a could step little provide change on

Amir Aghdaei

Of Elizabeth. course. Thank you,

Let's talk about macro first. the

of DSOs, mindful the a insight Despite fact that a term, large they they're going in current of number the What tremendous in group remain on to macroeconomics. long around the by world. step is of in most to bullish seeing the they're stability practices, general have we talking down. amount what's We RS past and seen probably in to Adult dental challenged have unrestorative orthodontic more in was X a cases further and which care, XX in full begin weakness weeks, have procedures. restorations, implant higher the with, declined recently, doctors

the money, directly run. about more equipment implant DSOs their the Nobel, our investing offices footprint recently business impacting about And business, of and there was elements some which They're key cautious. have in cautious the in that been of very growth the cautious Clinicians borrowing expanding one is and of around are bracket the inventory wires. and long around management expanding

North And On business we really and side in I number high America. stable challenged. end specifically we a is side, the the implant have they're implants mentioned, seeing But as a feel on good are that worldwide, demand. of placed really

continue and challenges that recently. some We and are in throughout seeing QX started most QX

adult interest diagnostics, geography, challenges take stable higher have on consumer end, we're radically developed we solid basic the too lower the China, generally before, we remains geography is were weaker. really that challenge out resilient coming pent-up procedures, rapid I by The through been key macro communicated teams demand COVID high concern rate stable China. has demand and sentiment in our VBP. seeing for we for us specifically for procedures, than market, and our it. ortho, a And everybody visits, a throughout high-end demand consumable resilient. that cases issues and anything On a made saw can of after In and communicated tells not different you the

the So that in is geography. a bit more difficult long-term little visibility

we happy Russia, continue China, we demand and challenges in issues working that stable. seen Unfortunately, conflict, demand Envista. have with and recent has caused is markets progression. licensing. is and that of the are commercial issues manufacturing what continuing Emerging additional execution so challenges Russia we outside soft, through Israel for around the and some We're have far

challenges near specifically what amount a last, not are some our rest in Europe procedure of have North the seeing of in in put uncertainty tremendous in ramp-up the America, around in not than year. the least, some distribution about of changed we and even X Normally, Now coming complexity after weeks the expect we is your specific volatile back environment past. what become has to Geopolitical X macro increasingly to XX ago. in seen the ago, and summer, more was challenging had One, procedures, And last of we see it X concerned see that. term the weeks more question but weeks, a and North we high-end elements. in America that review

more have we continue to make prudent and advantage take we challenges investment, make us sure of the that the we for Spark. That The it to about that on the implant be then to to thought we that accelerating That would more ramp our ahead combination we opportunity decision we have growth that is year it challenges, Spark time volume, to of mix. in consider challenging around to those America have plan in a for and build business positive North all timing stronger, education, development, forward. made And make that right that thought average, do together, made, community us as fleet the the us so ramification is a Spark about to margin long. guidance of we build decision of that investment the the order that for training, a higher talked right margin. below go are for thought our Combining we adjust foundation marketing, has in resilient

Operator

question Johnson come next from Our Baird. Jeff will with

Jeffrey Johnson

me Can you hear guys?

Amir Aghdaei

Yes.

Jeffrey Johnson

a have questions, All right. Great. but to and other Amir, long think you I'm maybe you questions I known each so going two ask tough I time, fair here.

were that's a down on years, 'XX, those core in sense 'XX, the looks for I back it's couple Consumables a growth the growth & of you to those 'XX pre-COVID, is, years And going on So most tell points Equipment was on of X basis. and each be down last My core negative year although go the year to below market, basis. It E&C like of year-over-year. few if a to hard years. even

question in something to when there think of broader it to your in market, improves the market X%, tough product kind your market So or market eventually? for even X% categories do to that's be Or I X% a market disadvantaged going market? guess to E&C back when structurally positioning at growth to we rate get recovers, you you whether can make is get back the is, to X% my

Amir Aghdaei

question. the I appreciate

you a & be You question and we Equipment I'd to tell the get transformation business. of heart to went that that through able Consumable radical our and to it, of answer love

from the lot of that today obviously many and with product that a selling from building other years geographies categories, You of really in us have since the years been business, of and moving as animal away health moving around, businesses. the I've moving first wasn't transformation, SaaS a XXXX, advantage, been [indiscernible] care the past Envista was away or journey X X X this

I really example business, the as inventory If we in So last About, see, what it a we have see. North I I here's compare the a at take say, then exits is our feel of in going on look moved, take months geographies X America. of sellout. XXXX, for if consumer our what and we that the an and and on good to would I have X/X what's of equipment, consumable here's the

a tremendous of about We the have sellout. insight amount

past at We above every months almost the are in or in X sellout category.

out. and what watch of that very the back, looking ground. that's sell see watch appreciate I but the We we carefully. watch So on perspective We inventory. the reality We

above You XXXX. going here. and now may quarter-to-date, is good stable, to at imaging. a our some a We're but going in categories, we with the We're in get tell starting see behind going to Majority more the And really sellout. But be a be with resto. on role infection of you forward to want with see. some is think expect manage us. or to above what imaging of in geographies, equation the quarter-to-quarter ups a in it place this important product I around such sellout in deemphasizing an and at prevention, it's turn the innovation of business, then there going piece with endo, downs, we're to discussion of to We categories Last consumable, differentiated. past or consumable to this play and to

in to that have new Just category, presence. expand LX months, put past our going the we OPXD X a is

We intraoral have new released a scanner.

continuation and a market forward. go that We as going a approved work are FDA is or installed business this EBS at AI A of in combination putting to put of at large focused on base we go-to-market now sensors. of activities we DBS, have innovation above

now. our forward, What done, put when all a Jeff, We're very turns this think changes and is the we're of We're have position you done here. expect. see market really well. is above slower us again, as have in those a we lot to than We positive good place, I It in our going mentioned seeing at with a that market work changes this done have performance. really distributors. we're trajectory, really a has you relationship And different we today. that this we or a confident know proxies. future the we move

Jeffrey Johnson

hear. Well, obviously, that's then, great right. to second business. Nobel And business me here. the on the let American All ask question North you have And implant Biocare your

$XXX You implant gap, seems direct like $XXX think a price that. have the premium in profitability implant as off business. some of bit like point, the pressure practice, a docs out premium has these that to least of XX a here come And view, at my to $XXX, XX to of to starting under at price minus maybe points, It the months a gap $XXX kind the in appeal there. maybe I offices. in That's lot past something category, savings

So channel support is, there. my putting you're out question more

product in education, enough that. that need you American you premium in North investments Is gap do like things more training, business, fill putting how you do, if do that that it? do the to You're And minus?

Amir Aghdaei

at What we let's the to take to went have in back Jeff. probably done Great what XXXX a months, X and did, said, question, X XXXX. we we past look

to new like prices, at before And of what in like. Let's look the for the that's at say, us see That's we word looked look that We like able order at would value. world the premium implants, at norm. versus 'XX COVID okay, what the look erase XXXX, order be in I'd XXXX, to assume number to what look 'XX, look we 'XX. like to 'XX, look

What part volume have be Volume, I dollar anticipate continues side is quicker, at going prosthetic, dropped happening. if a a premium on that radically value going premium hasn't the as lot now The side changed lot the implant, the that volume it look we important see lot happen you and an that pricing anticipated. implant, on on which as talking here the premium aside not really that, on this dollar shift say, Value the quicker, it's a the spent as prices well hasn't faster. faster. has lot take on stay the purely everything and regenerative, if equation. to both the in dollar, side as it is patient the But But you side, we're radically. all -- dropped to look volume, -- on people value, a to at spend, of practitioner has include increased in

I'll one mention of then point, and answer I more Nobel. your question

If you Despite changes one and at market up. single of XXXX to go the a have the back, prices price reduction, take in price look gone all replacing implant the of today. from

are they charging So people more that now charge before.

business this So remains a high healthy margin. a with business very

bit customer why sudden we did why taking you COVID, we say, was you a of place Now have this now, After have of a a kind little challenge. caused of what all recognized pent-up demand, us to above misread that it's off. China, on training, execution, changes proxies. XX% North of Over the commercial or the outside VBP did in proxy experience, at education, realities. performing America we paying business is in All our

our to different, environment. give experience localized. change oral DSOs. opportunity We our digging to high-volume radically more learn to to of and this become approach. the and build The these the is segment they're future what business. into these relationship community on need we and reps, specialists, younger these in of the lab, value We people. you becomes with a is to do what placing of and people the the need start When build more supporting teach going infrastructure, America, network We future, specialists surgeon, we a lot need a local need and this need GPs, to those diverse, to each implant, the that front lot We are community. impact referral the and and building important, proposition, training for ground need be North adjust to who Customer

at we wanted have for ground time, some to of what good the place really take before we serious We that been on taking so actions. this sure quite is make have understanding a we

understanding that have now. We

not a important, to it's building I'm innovation. look term, not some is to important product well-known Now away and and suggesting impact the getting approach. we shouldn't drastic brand. we most let number that be portfolio. of gap I'm to customer people, me the importance, from continue experience, large go is There that do. place the back communities When moving have interviewed not to learn to portfolio. short have a the implant, short-term, we got doing but Nobel interview, long-term we In the that. at people thing how are

the the what While look some that a we the of surfaces and sure portfolio continue is future, some to fill have as well areas, needed predict been momentum. as to try build added the take we today at in with make in to that of NX partnership a try and

feel issue about the Do is part we now big of what That are a exactly have that good we what understanding. problem. is? think know the you We understanding. We that

we as resources, action, see training have you're we different program, adding we're forward. -- a been to and creating go Now performance going in we're making we're and those investments, starting this education

Operator

Block will question come Stifel. next from Jon with Our

Jonathan Block

correctly. the the first Stephen, expansion in XXXX, heard growth for sounds I you Maybe like EBITDA expectations for modest one, it revenue if and

And for So EBITDA we year. bps. the bps what that's think doesn't like than new do XX.X% teed off that greater XXX implies margin the year up this XXX LRP of XX.X% for XXXX? about And next seem

So be back-end wildly it weighted. would

table ask start ago? the X only was take there. the or XX table, Do which So on we let follow-up. that the I'll And off arguably me then maybe months

Amir Aghdaei

in in guidance We Yes. long that, there to to to said a that XXXX single XX.X%. Jon. run, about answer digit out want high put get to we the Happy and

-- those, core in important meant communicated the role an assumptions plays in reaching that what business. made We is that run. next we or out calculation, that long To we our in significant make one. size just has such of milestone to were Spark the in opportunity do double That changed? find we the we that just years, expansion our So have area, X intention when what for you'll growth

quarter, every the quarters, in better -- the we have look in is have fleet average. than quarters, what if specifically we Two, the below our we the last margin at one. Spark on X previous margin it And last

to investment, to be as we do try years, outer such. continue to EBS get margin to order While in make average to the in this network, automation, get we improve fleet continue we'll

work. average As fleet to investment our and getting growth make significant of that portfolio more and equation really portion

So of that's element the this. first

That plan business market XXXX. is Second, operating place to high-margin performing is couple going been of in have the a proxies. to in plan to huge the by years, make The But a the implant itself improving our next that proxies that get over business. difference. we start below that market been has that go such execute -- It's to it.

us. of piece That's behind going correct equation this be around of deemphasize third is to The product going to the diagnostics. We're region, categories, a course performance. and We some better see

better our X & to the that have Equipment deliver. in seen You margins quarters, Consumable past continued has and

view. imagine market higher that to in That margin proxy, that single-digit to to to Now area. going is getting proxies add long-term improvement, add the to market

do that acquisition, program that short goal on any we think We go counting our we without long-term on is achievable. have execute to on radical view any long-term it have we that term. we changes. in place, math. execute We're We the what We not in in need deliver the and

again foundation some excellence. record building operating growth credibility done to in operational have moving confidence trade-off This the proven to XXX make and improvement, have we the that that has We and order We tracked point for of have margin that. can build in organization long basis margin forward. of they run. do between

Jonathan Block

was great. commentary. implant in a might more But apologize don't That advance the understand bit really question for straightforward, the little it. helpful. just mean I I just Okay. That be very and was second I

late. like donor it in you've share the been main industry of the seems So

Spark out. when it's everything big because chunk your grow value. You're your back not growth weight it's digit if it, doing you And is terms in that how for detail How you you 'XX then get growth odd so back at premium is going of, mid-single-digit poorly such like with of really hard do well, you growth to mid-single versus revenue of guys market in weighted biz call is actually do XXXX? Maybe to sort of XX% getting you growth as portfolio, a as to an modest I early feel quickly. and land to still Amir. expect can market to

that's quick to them So get Any I a details starting can that. to then to point find great. you against at mix your considering really turn And odds, if back you? market maybe talk with growth would be

Amir Aghdaei

Thank for. you what me tell -- much confidence, But for your so is me let Jon. down let this really I you appreciate break it.

business, that XX%, proxies. and correct. this absolutely market operating the of of is XX% XX% You said

that look short is something -- that? term? purpose? that What that's of stands a is the of North last And the you you have think committing which market step America the not proxies of going No is X proxies impact, share the transformation. back And the and the XX% in business, We're taking So this It's all you is of North what's the one our in America. below of below what in math we below sit look up causing the market XX% immediately which North on down today a do start is do in North term about We operating take in market it what coming we're good as at market is view what question announcement today. know again, can segments can say, operating is all we wholesale business XX% to are the we to a place months about we is and what not those proxies operating And that's about lab. taking long like, while about it. Anyway, proxies. America. are business, proxies. very each America is

business. we stopped doing These are -- of new the experience a improvement. things training putting Jon, and in XXXX, In the done. some a that the some of Europe in We areas, in are We the education, than we're are customers, did to we specific XXXX. we in bleeding operating committed our that job getting result proxies. customer that saw time. over building quarter-to-quarter the even this the We're with better better in have implant with started and we and geographies, XXXX we that proxy

is we get It XXXX we we didn't that. saying So guidance. is to together of. What not go you will we we start off not would with and through is we better taking, you XXXX. deliver as a -- haven't paying that it -- QX, that for going view We're actions we But we a February are give in investors, give to started, XXXX. of guidance think something haven't the By that. we time working through we the done. When are have unheard is committed that we we

Jonathan Block

color. That's Okay. great

Amir Aghdaei

Of course.

Operator

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

Nathan Rich

us you targeted guidance. with in start like to quarter like with imagine, fourth more challenges, Could core single-digit wanted maybe distribution it It implies help It segment? weakness. called about You and E&C. by seems the impact decline segment the I low specialty The aligners. a maybe the looks would growth. implants out that be on I'd think macro impact

So your couple clear, it in just has that Israel, the to on it to could embedded . And as QX is fourth as specific guidance? wasn't management. of by performance a of questions. business? you to quarter I order for us guess factor? through Henry Has disruption relates segments relative had an swing there additional highlighting long the related an QX? Sorry And headwind you been Or a specific were just impact think the that. ones Schein help in impacted maybe their that the Obviously, X

Amir Aghdaei

Nathan, course, questions. answer and X talk X, Stephen have to first QX. I'll I'll the Of

with Let's a and X Stanley my I have tremendous being been a is just Henry in this that This amount somebody friend, respect of Bergman year Schein. me start has mentor to industry. for.

to out reached have We them.

our We have offered support.

we here situation. we unfortunate them told that an can to is are that have We help any way

able out relationship Schein how We America. mitigate impact trying us distribution, to be in to of all when businesses really largest take close customers. really And very are of X/X But some very, We're we distributor given North to that Equipment I visibility but going directly going can't impacting some that and with figure have can place. us. how They our is the something negative in as to for see us. impact. difficult our Consumable forecast challenges. them. recovery working a as order. that cannot we working And take America. We're They that's North to very this say we mentioned, have Henry It's is other make with & with to dynamic is

that a acquisition. really a prior bought Let me talk to company about ABT Nobel little ABT bit. is our

Tel Modlin We outside have an side incredible in Aviv. manufacturing

come difficult. to but work have they're working people environment is Our and in, really

to Latin has we Europe, expecting kind for inventory, America, that Israel. we QX, which ago. trying through in our business but in to in caused million huge but weeks We China. That manage as $XX that, see us it's in have build face whole that X is side not We're a we're conflict anything didn't about business, a in ABT with. of to it's for are trying a manufacturing present Obviously, also dealing realities uncertainty

gap the Now talk QX a see little that bit about and let's we there.

Stephen Keller

but quarter. we're delivered implant not by to Nate, alluded the business to going that macro to be growth as weakness ultimately really some what going in well we've continued look, QX, is, American expect growth you're -- strong North consistently, seeing as look, as the in to our in turn that we're here tempered Spark expecting is Amir's around fourth of

of channel around again, of fourth We planned deemphasis continued next consumable be -- lumpiness then then, North American kind -- products set a the the in growth we underperformance side, around the exits in have quarter as performance then as on specific really the potential specifically, for And top that, year. better and about, expect on the will you Amir on And and E&C or distribution talked headwind again, side. geographies that the of to up growth. modest uncertainty sales you the a have and

together comes margin we're obviously, growth single-digit make do investments continue about. to Spark temper side, both decline. and that on low So we'll the for profile And that a implants, margin on talking Thank you. which the

Operator

Our next from with Sandler. comes Jason Piper Bednar question

Jason Bednar

these trying environment The with of but and we've message year. certain been But I ways year. EBS. to geographies, in business in margins off. on at a months, year second in got We're know you're here the reinvestments. lean. maybe, we're that. like has It's And been pivot EBITDA consider for we've where Envista, message tougher higher X this know in today's deliver a going paying just understand the meeting last weighted, to half the operating but are We're few We're I all in we already different where versus the an a start really want we've long. to where covered seems back-half for business apologies, improvement margin this spending the message restructuring EBITDA

Henry help around and we're it's So question, are of are understand that about a look, the your just control Schein, talking with margins? EBITDA with cadence messaging in like here outside decisions things but tough there I can you of

Amir Aghdaei

Yes. Happy it. to do

plays expecting about These that an high-margin Implant, the plays are growing certainty we're So an lot we going here. an continuous while customers, implication. in forward. expecting not we Spark Uncertainty down, North and role. mix in are doubling talked we're a channel, fleet role that if here. to to that quarter, with shift, after important put radical around talked to in we Stephen very important products we deliver after that, America are able a new important improvement the have expanding that quarter opening moving distribution faster, it's play quarter average, factory, not about, grow a any as role

on gross it as of quarter. quarter our not of sure such continued all in that, part, to to about is specifically Spark, improvement -- possible continuous that everything margin Combination doing make after areas on improve we're

more getting profitable business going imaging Our more forward. and

impact. on-time is those really in a headwind from format on The are we quality, seeing drastic is structure. possible having delivery, consumable areas the best margin Our

see and certainty want we to deliver commitment, North to outcome balance margin impact. in want XXXX. to to have today make on to through a those we Yes, build going to with want what that what also making And this the we going that long-term are the QX. long to to And rethink is of said do America a then we XXXX Investment we Nobel that XXXX, driving activities, We have we of in versus we able Spark, for we but to guidance do business we're and expansion. are sure achievement have, we run. have investment commercial of that

have and is Those looking make, get the better on better time back needed for in that we in to to to a make those ourselves we the tough for past, long place, decisions this to us a run. the we what position done think ourselves are balanced decisions put in

Jason Bednar

piggyback to Jon sand aligning rather for able want maybe profitability are the then here long question. as Or And quantify off term biggest now like Okay. than we I LRP definition the delta goalposts the XXXX versus Are Block's like that XXXX? saying your the your is is the you intact? moving where to are you at where LRP were Amir, disruption did how seems much distribution X impacting that is months ago?

Amir Aghdaei

Yes.

we -- ABT, as anticipating look So don't challenges are additional like North have What there. forecast. There there, get to series that That's and how specifically to we we what activities our revise milestones we of we well what risk in is kind on are the XXXX, some the guidance places. we to to that as just -- have going distribution a have America we a communicated other about specific are have we we path those what do on we're of there. segment, of get a by talked to provide

have worse that environment that put place, what we we and it provided. the that have or deteriorate guidance us doesn't faster the in innovation investment, place, get macro the the to that is, should XXXX than Assuming in they mathematics activities are

our a a the the our We to a difference. are focused that opportunities after what we discussion more team do to do best that making company, Right to care can of now, a future sees in of can that meet work trying as huge customers, make when have take lot lot to have we sure results. QX do, we more February to and we on

a years. so the in in the to And Envista. future of do think see come what not Thank need have term what past you of a we We're blip future industry build long We to the the we X we is way short stopping here. much. and in this in

Stephen Keller

that, We With we're going appreciate the to the conclude forward to in weeks. I to look you coming everyone's really time. call. talking

Operator

Holdings Earnings Ladies Call. this the Corporation gentlemen, and Third Quarter concludes Conference Results XXXX Envista

may now You disconnect.

Envista (NVST) 1 Nov 232023 Q3 Earnings call transcript