ZIMV - Earnings call transcript Q2 2024

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Operator

Good afternoon, and welcome to ZimVie's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Marissa Bych from Gilmartin Group for introductory disclosures.

Marissa Bych

Thank you all for joining today's call. Earlier today, ZimVie released financial results for the quarter ended June 30, 2024. A copy of the press release is available on the company's website, zimvie.com, as well as on sec.gov.

like this you statements. call I'd make management begin, during comments that we to that remind will Before include forward-looking results variety from statements materially may by Actual forward-looking the those due risks of indicated a and uncertainties. to differ recent uncertainties. company's SEC SEC a to for filed of discussion subsequent report most refer with periodic Please these filings detailed the the and risks and

XXXX. financial X, the will Reconciliations most this today the will ZimVie by future Relations or include new investor President and GAAP August measures. discussion directly today, events disclaims Chief information website. This financial company's the as intention to on forward-looking the call of otherwise. And of call obligation, are section any broadcast I the of to addition, found within live to measures statements, and contains In with non-GAAP the Officer law, turn these ZimVie. financial and/or or as Vafa of Investor included required information, Executive earnings Jamali, time-sensitive call measures comparable or or over except accurate update revise certain projections because any is conference the on whether release the issued of deck that, only

Vafa Jamali

to you digital across Marissa. second and our continue us. execution million our you, quarter, $XXX biomaterials all in portfolio implants, solutions. achieving afternoon, Thank innovate and I'm Good we thank as the joining of for pleased with revenue of

the now portfolio. solutions strong expand update operational our as starting gain PRO. strive rightsize invest our each TX dentistry market to the with traction Meanwhile, portfolios, and efforts an share and to our to costs We implants, we of dental advanced product also with on the the differentiated that our believe possible the implant continue We profile best patients TSX market. scale our our have improve we footprint. see implant newest our give and outcomes. I'll providers corporate We line provide margin we of and commercial optimize of to to business, continue

a the to Components, offerings and meaningful market These to support launched restorative implant best and differentiated date. we here. forward are a digitally-driven tight clearance tools, our quarter, announced U.S. crucial implant abutments GenTek We of series introduction launched look restorations the success, the already-comprehensive a this offering segment, of to functional our the like we we portfolio the to brings innovations week, have provide Restorative GenTek GenTek of strengthen market FDA first of the components. Last During launch portfolio of restorations. broad prosthetic Europe designed to and CAD/CAM aesthetic in long-term components surgical and and the offerings. and seal to to ZimVie's of portfolio end-to-end expanding seen in success ZimVie of competing in the family. U.S. XXXX that to The restorative fit supporting product components We tremendous

support growing some the to we most gained of include full July, portfolio of bars clearance expanded procedures. an our selection for for of As to restorative arch widely-adopted our abutments, BellaTek most XXX have its titanium complex platforms

our implant the to expansion the whole. dentistry driving market support of a market deliver implant while across simultaneously competitive will continue We gaining innovation of portfolio as share in

portfolio. biomaterials to turning Now best-in-class our

offerings. growth products. substitutes, During growth beyond. to continuing innovate this We a forward growth. our of and market within our the this indicator our of leading to to and back implant look believe quarter, we and of regenerative biomaterials the We portfolio half portfolio throughout in outpace future serve as may the drove products are for In efficacy membranes, modest quality XXXX segment, tissue this growth offerings. graft Providers in recognizing bone continues

efficiency in saw growth in customers greater to aims with portfolio, which we provide digital our strong their Finally, workflow.

grew outsourced sales, more single for scanner as and for Concierge hours portfolio, significant of solutions, represents of planning, services high believe and the We labor dental increase penetration accessible market. Our taking making Concierge cost result driving to could providers. The in efficient treatment our size of by implant iTero and surgery the Concierge our driven be in of Implant the XX% digits this by Implant need to premium removes a service. was that implants commitment providing unmet the out the quarter guided service second part over complete by growth procedure of large a equivalent office. workflow digital market excluding where in Implant

On our in RealGUIDE software. in detection greatly this surgical automated with efficiency note, most and software. guide nerve we new These of sales announced and over Version growth this recently release is significant the The a also version cloud time. accuracy Additionally, we and RealGUIDE the and experience. XX% tooth customer's features drove less design in of X.X segmentation. enhancement safety updates increase streamline tools bone X.X introduces one-click to library

enhance the also partnership aimed and treatment of restorative quality, ability to to to in our announce clinician. I'm our are and efficiency All patients excited and with savings both features deliver time Medit. for planning very design these scanner newest

price seamless distributing imaging solution Medit scanners alongside apps rest market points iOS-driven and and the to help this with powerful our addressable digital experience of our now opportunities existing a a range with create technologies, broader solutions expanding are include ZimVie's technologies. us of suite We of integration scanner The suite.

of to to digital to believe the features they very the the offices growth of reduce implant on our products these a and solutions and imaging. We are adoption. digital barriers enhance excited to critical of based expect We improve about remain workflow adoption dental ultimately of piece phase strategy downstream

of and and aiding X,XXX To over are Beyond our technologies. have introductions we products training trained greatly education date, in medical in innovations, the providers our and product adoption technologies.

our December a booked field our Our implant focus out of as continue in on in whole. programs are and market dentistry expanding presence we through the XXXX the as

patients, clinicians our the lab. and Our commercial across stakeholders, from advantage the continues deliver value to stem dental we

continued the resilience results second portfolio our to Our in line will turn now Rich outlook the team's performance and over financial review and our quarter greater reflect to our commitment. I of detail. forward

Richard Heppenstall

results reviewing we'll on begin close XXXX. outlook second good year for by and our commentary XXXX and full quarter Vafa, afternoon, our for providing by the operations, I'll everyone. continuing Thanks,

million, a XXXX, reminder, Please segment net our to the for third-party XXXX the results X.X%. of thus a second the net X.X% sale our on by our for U.S., finalized operations. Beginning of increased the financial discontinued $XXX.X discontinued a April refer statements. in sales X.X% currency. modest $XX.X constant for sales. million of we and reflected reported XXXX third-party spine with decline of in spine very In quarter decrease business financial X, rates in is sales second As were Total of quarter operations our of XX-Q from in

seen capital pressure sale sales, past couple which of is scanners. the the we us of for Over have oral on quarters,

continue U.S. We partially impact, sales and in see of strength on excluding by by of to sales U.S., that X.X% million third-party constant and offset sales. Outside biomaterials in by that basis decreased a $XX.X in net the X.X%, currency. digital implant driven weaker trend second quarter. grew the When X.X% solutions U.S. reported

exclude position flat U.S., core market U.S. markets stability and we When the capital constant We was the we over currency impact competitive the of our the quarters, in outside strong the of sales remains business recent in dental in have serve. seen terms.

the sold of sales products adjusted XX.X%, Second year quarter to roughly prior XX.X% was flat in XXXX of period. cost

quarter expect adjusted EBITDA was margin. operations share expensed was million million in quarter of was X.X% as over research duplicative products between benefit XXXX year Adjusted in compensation expense. Adjusted implant million organization, costs efficiency continuing million and QX more fully and share expense $XX million QX the earnings development attributable $X.X of continuing Other services $XX.X in full $X.XX income we our operations track of 'XX costs, the remain for adjusted million We manufacturing of of or $X $XX.X the mix of $X.X to XXXX reflects EPS by resulting the sales in share-based as a million diluted attributable that adjusted favorable the from per XXXX expect of adjusted our sales of from compensation the million, business earnings the in improvement offset transition prior of in sold QX second or We SG&A per the sales, general and and on compared compared and improve to spine was a share to count XX.X in streamline on million. XX.X% year. to cost share-based $XX.X and quarter. million time agreements expense from QX income timing share in to X.X% sales XXXX we our a on largely $X.X per sale share-based $XX.X prior deliver product year. or shares. recover. QX range year. of remain impacted cut stranded the compensation expense to guidance administrative

we sale. Quickly We sheet. deliver to performance plan X pure-play ZimVie XX% with margins second plus in to balance post continue on remain financial position a as financial the We EBITDA turning committed strides our dental are to as to to pleased the company. our achieving objective make of of quarter XXXX the year spine

was $XX.X As operations business. note the and debt our XXXX, approximately include of spine debt from million. balance cash does approximately gross not quarter $XXX the Note yielding of the net the continuing was balance million, of debt end of net million, $XXX a consolidated second ZimVie the seller sale

facility, credit was In maintain to which $XXX revolving undrawn. million addition, we continue our

towards outlook full XXXX. our Turning for year the

reaffirming We compared increase at full are year million, to our the reflecting $XXX an of to $XXX 'XX. guidance X.X% of million midpoint revenue

the due is impacts summer seasonal our year at third of of months. looking to the quarter quarter third XXXX, slowest Specifically the of historically the

third to and an seasonal our we basis of on and conjunction to revenue lower to is We year-over-year in approximately XXXX XX%. X%. patterns similar lower saw X% we in lower quarter, the the margin largely expect expect third trend XXXX. In with quarter This sequentially our QX seasonally versus EBITDA adjusted sales a by be revenue

of to of the to year be adjusted sales. range continue resulting XXXX EBITDA expect in to margin the EBITDA $XX adjusted XX.X% fiscal in in to million $XX of range an XX.X% million, We

EBITDA we April before, X, XX% mentioned plus to XXXX. our As remain adjusted by committed margin

million, seller expense action $XX to the of now sale payment profile. Considering our approximately recent of a quarter and on inclusive spine, the interest the the second interest from in million we the pay in substantial be interest to down our of $X.X resulting interest of note XXXX. Turning XXXX of debt our began to expect we expense portion accruing kind expense

in the we to We for adjusted expect share-based EPS the to reaffirm compensation million our guidance. to $XX.X $XX lastly, range be million full And pleased year. of expense are

we of now I'll that, XX.X turn $X.XX to on a Vafa. adjusted earnings generate over share share to diluted call the million the expect fully share to year. With per for $X.XX Specifically, per count of shares back

Vafa Jamali

half first of the Rich. XXXX that that, you, in great up of Thank very team's proud we'll opportunity of our a us. ahead have and to I'm questions. With it believe execution we open

Operator

Needham of [Operator first from the with Instructions] Our line David question Company. & comes Saxon

David Saxon

Maybe question I'll within with level about philosophical just your a dental. start higher positioning

So I relative have portfolio to you a very focused competitors. mean

build So would to desired digital portfolio when certain you scale, is are reaching out we're categories of organically? around continuing kind of this portfolio that Or [ there implants about if your product that be your complementary? think kind at capabilities ], with

Vafa Jamali

David. question, Great

which a been which been can unique this on bit where highly premium able that implant position rapidly that give on well able expand is a are market. square really we've and done now the -- growing profit to market. unique puts us do, and what far well. What's And and what is to differentiated one, and have margins, Just us the again, we unique, we're looking think a I sales our price gross we we've post to in dental with really plan how especially hold is yes, right the offering, unique is so in excellent more the believe is, digital we've focused assets conjunction really

market. power Now that restorative, and Implant we're adding think think I be which Concierge. so a also significant and Concierge a more that Implant behind we we're this GenTek, mentioned -- expand we're is I can We adding contributor, can like things

we markets price. for that little may a think, I at other bit be pressured may are look selectively, interesting,

a One may that like group. advantage us require got made some we that to we're add of to we've I there. in same of it the but [ ], make segment, within areas Frontier is the technology have we work it And that make a so [indiscernible] the slight which implant lot different doing that

at look can are underserved accelerate markets you think the I we some So tech after could procedure-by-procedure think or either go somehow to us use them. that really

the of the So the areas. those happy are the addition key with Medit announcement We're scanner. for

to profile more compete us a think bit [Technical color. there, gives price a the margin I different to that compete point gives better Difficulty] us a alongside

David Saxon

Okay. Great.

question so maybe hopefully, a my up hear just me. But iTero. broke next you can little You on

restorative XXXX impact or help how that what a Lumina's quarter kind of And about If you're the up any launch how a at more partnership? be talk have offering? that about So on Medit is then all? so, And Did that was delta? so. value delayed your that to made maybe can going thinking about strategy? of I mean, you does

Vafa Jamali

Okay.

up So sorry if there. I broke

If you scanners, and look look did scanners, year-over-year, worse at profile. without specific the the scanners, our a pretty then at it's digital the offering you well. business With

the next is So this of year. equipment some great to been because that it of year. hasn't maybe sometime come And Lumina is

our So scanner is miss missing all in digital of from sales.

don't it It's technology. product quite that lines terms a positions. near but new comes got new different we does this actually an well is that we equipped. relationship will with the we've the is does resolve offering, term, have But think of in [Technical So we're that itself when Difficulty] quite different Medit, sacrificing the have which out. It that, rich in our believe do issue future

of of is satisfy need So to the accelerates the the mentioned will comes used, do platform, quality frankly, digital that which, advancing we've more we number customers implant to a implants in as it and out terms the it before, digital. of of what rapidly

So that where at. we're is

you, any I on ask think Dave? details didn't -- that, you financial did

David Saxon

I don't know.

to share, want you go it. for If then

Vafa Jamali

want you Rich, any add on... to color

Richard Heppenstall

Yes. Yes.

guide, you of U.S., we business our the year equipment the in mentioned, the us contemplated for kind impact the iTero our lower capital of one we kind points numbers, when of so the year-over-year right, of the of guide. And us. for already it's baked And the by in have So in sales. exclude Lumina, is U.S. that Vafa the David, was sales actually as that full sort and contemplated in of prepared delay in basis made actually remarks grew iTero relative XX U.S. to in

we've performance the that in pleased second so U.S. watching particularly while. something been been market, with a you it's we're in as and has So the really quite The quarter, know, pressured U.S. our

David Saxon

question, Okay. of next if That kind gets could. I into my

quarter kind I in think third should So of already down, mean, X% be baked last was to X% seasonality. year-over-year. that the I theoretically guess, it I year,

the think this you of terms patient just is And So demand worse? I recovery a mean, there and -- that's back traffic? Or Is also and I then I'll market half? the it mean causing one are seeing more stability? Or does it in Or anything then assume in more. kind do what decline? get of you even is have conservatism? guidance in

Vafa Jamali

to Rich, want Sure. you one? take that

Richard Heppenstall

Yes, sure. Vafa. Thanks,

road call, can then and the second prudent execution, good of portfolio, general quarter,is performance challenges to as largely right? as kind so we what have so recovery QX, of to our to, in second the our what prudent QX we think, earlier and the not and like Vafa so so because on market, in we're been about you to our the -- differentiation -- the prior alluded in based on being and in quarters we're market in right, execute performance have the continue I that so the -- quarter, performance with we're also related the as And QX market hearing classify underlying David, on our know, historically even our space plans. right, being completely just subsided, right? And to market the we're we the in So though not pleased well is the

David Saxon

lastly I'll with then Okay. Rich. you, for stick Great. And me,

in I and the on XX% think heard EBITDA, closer if doing quarter, right, third it's EBITDA that it I the math quarter fourth I'm cadence but I so fly, margin think so XX%. apologies, the be, the on a might the So not to implies

I guidance am, know -- is relates guess, I if as I about the to that XXXX rate and then it going is you're margins? I here. should probably Or am exit mean, to give -- that So we not think thinking how -- I like about right?

Richard Heppenstall

generally that's you're revenue bottom that an on cost revenue, downstreaming or our way The historically about dollar said thinking $X.XX is to infrastructure. yes. fixed of upstreaming drops because right? correct, Yes, the the that it, whether speaking, We've line,

And lighter an $XX see a so to QX going QX we're impact XXXX, million adjusted being than over EBITDA as of to result.

the quarter, And is of of kind so way. really in internally cost forward -- we're fixed purchaser a That, fourth TSAs number when still take and the we to then further of organization, the of out even a business that with comes around the spine that of P&L. the of within the back of our you lot kind course, cost absorption that, have business. operating initiatives though doing to step And other also

little there's a a out bit in mentioned, yet And to of and not of QX for the we're also we good like quarter will rate continue there fourth so a think appropriately exit to quite And give benefit costs then we but that us any position as specifics at there it. yes, you us about the more business. XXXX, take

Operator

Our of from Barclays. line Miksic the Matt question next with comes

Matthew Miksic

Maybe of I a where the have guide on [Technical you planning sort business Maybe the appreciate broader follow-ups Difficulty] sort across of number disclosure of... all the here. of couple color. a

Vafa Jamali

I'm Could we think didn't catch beginning. you I sorry. sorry, you The the repeat audio Matt, at the question? wasn't really functioning.

about Sorry that.

Matthew Miksic

intelligence general that lot that And or insights thing? trends you your had that tells from wondering guess, any picking of you that, software. like up that to sort using just I access any -- sort are planning of wide, able your market of just platforms of a are I'm you're sort Maybe a from surmise you to different

Vafa Jamali

are the of XX%. the over Sure. software Concierge, Implant them guided and yes, each growing Well,

the a of of -- guided and substitute movement surgery until wouldn't we of using say you said, comes leading that look there then as used implant. back. It demand say overall great stabilizing. And we but market. is period be substitute I a lot they're is should any the is bit it's like a at stretch, bone is more So lab little hearing practitioners our bone of kind to by towards in a indicator might work. waiting another patient what an biomaterials, it which stabilizing. from are the outsourcing indicator the prior an That's wouldn't I of And

just example, they would delayed to get if, as this and procedure reasons, when sort a do where get that point so of inexpensive That to that it to difficult well. jaw as for degenerate the So of leading ready the preserves the [ the is a back ready. And financial is themselves doesn't the surgery procedure going they're a becomes for an indicator and to in-between, for bit come bone ]. me

feel be the in So X good the those would stability market where well. also we market, the would not as is say gone. And again, about segment the I certainly areas we pretty so premium feel

Matthew Miksic

you I Vafa. great. must up me you breaking say are okay, touch. hear I hope That's can a

systems line, been platform back as you're you sure but strategic of my around maybe and of use question, of is down discussions kind is if hear think and just how interest between of pulled another your your next commented lot broader juggling is this Or RealGUIDE be of the how companies, and open? of take with forth there the about So love is great -- having way you've can't as that's that? we just road a not different a I've being wondering thinking of have you that I'm I'm some if of like are, across ever to of value remain becomes about Switzerland comment that as theoretically, into, much -- to the Or company. But the that then used you a the put a how I'd the potential on said much and a -- implant is a of people a sort or to get as couple more calls say, part number strategic to would thinking in you closed? where bunch you implant there platform competitors implant think

Vafa Jamali

Sure.

Okay.

when it's think ours [indiscernible]. business, and I speculation be which wasn't going tech, assets So -- a maybe that on like in size, based med we around to now it's so even more the pure-play implant the there's dental always case

unique company need So the asset right? is what the we're very it is to in dental XX market. that we going for do But also know years, have we run to run very we differentiated that like a

been the and and we're Many of participate in we more We've to price. price. our to have that that we've able left retain the well hold holding differentiation, So able been premium doing we're segment, our segment. competitors

own. great, both We great also us allows this which and help have digital platform, to competitive our

it a significant if the mind. be I our get middle, run Difficulty]. Switzerland we significant plan decision for as at us later probably that, look got now, with running think for company, I strategically. happens next open. being you've closed, that only I years, something you're to Otherwise, market versus [Technical It's like have that XX very open That open in when for the really software you to will a close would if open is comment and is -- I an good but for also understood on to point. But that it don't if right the a it we really, had around share. public

what So different is. approach that. I got if don't terms I can -- know Rich, a how perspective don't in that my if know, more of much than I say you've on

Matthew Miksic

going you're no, very understand all or be about, that's just company for X years. actually No, it -- helpful I all and if is this another I the these understand to without to XX running running a considerations framework the Yes. think

a come topics up in on and just Asia. And little lifts prepared it? up think or touched of in you side X on capacity be Would on temporary, some that So in maybe of a the of China any shift bit other or is that -- there's sense beginning maybe the been slog? some is remarks, that amount fair Any the hints a but of your a sluggishness helpful. and of lastly I -- Asia capacity it that the picking China longer you're have or super

Vafa Jamali

add But reduced really to start. can color. exposure I'll some we Rich, China. you our

it's So have and to based compares really to that us, to China continue is ups going the downs to. think I on immaterial and year it

So very we really mostly the we've But of that exited we're exception a with it that private section market seeing kept. [indiscernible].

Richard Heppenstall

that in China performing Yes, yes, Yes, What when minimal, we're do Asia well actually and so the is of correct. about actually Pacific we of exposure don't our kind Pacific? you our we in China. volatility market. is Asia get referencing wrapped in business, with up pretty you're that Actually, say particular that segment kind

And we the X.X%. had currency, drastic us, number quarter reported the in so a pretty declined Asia the yen change for for is, Pacific about in a headline in But quarter.

one, Japan is solid business fast-growing Pacific seeing actually you is And And our number business reminder, grew a constant business what we're is Pacific really in just also X.X%. currency, good, in look in business, and our in a that have and so really when India, growing biggest Asia that Asia a but adjust at -- you a Australia. is actually businesses we

there And China, a right outside result, Pacific currency. constant have actually Asia in so and we Asia we're, we're the win to like positioned right feel as a Pacific markets of growing and in in

Operator

the program. does conference. This you the in time. for concludes your session. There Thank conclude questions This at further question-and-answer this participation are today's no

now disconnect. You may

ZimVie (ZIMV) 1 Aug 242024 Q2 Earnings call transcript