Financial Data and Key Metrics Changes - For the full year 2022, core sales growth was up 4.1% with an adjusted EBITDA margin of 20.1%, representing a 40 basis point expansion over 2021 [8][24] - Fourth quarter sales increased 1.4% to $660.8 million, with core sales growth of 2.3% compared to Q4 2021 [30][33] - Adjusted EPS for Q4 was $0.52, a 13% increase year-over-year from $0.46 [33] Business Line Data and Key Metrics Changes - The orthodontics business saw over 15% core growth in 2022, driven by the Spark aligner system [16][34] - Specialty Products and Technology segment had a core revenue increase of 4.5% in Q4, while the Equipment and Consumables segment saw a 0.9% decline [33][37] - The implant-based tooth replacement business experienced solid mid-single-digit core growth in 2022, despite declines in China and Russia [22][35] Market Data and Key Metrics Changes - Developed markets grew 3.5%, with strong growth in Western Europe, while China and Russia saw significant declines [31] - Emerging markets grew low-single-digits, with China and Russia experiencing double-digit declines in Q4 [31][34] - The adjusted gross margin for Q4 was 56.2%, a decrease of 90 basis points year-over-year, primarily due to inflation and strong growth of Spark [31] Company Strategy and Development Direction - The company aims to accelerate growth, expand operating margins, and transform its portfolio through disciplined capital deployment [49][50] - The focus remains on being a leader in orthodontics and implant-based tooth replacement, leveraging premium offerings and digital capabilities [50][51] - The company is committed to continuous improvement and customer-centric culture, utilizing the Envista Business System (EBS) to drive productivity and operational efficiency [14][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth prospects of the dental market, despite short-term headwinds from economic uncertainties and geopolitical risks [11][46] - For 2023, the company expects low-single-digit core growth and adjusted EBITDA margins over 20%, with an anticipated acceleration in growth as China stabilizes [47][48] - Management highlighted the importance of monitoring patient traffic and appointment bookings, indicating resilience in patient demand but acknowledging potential volatility [12][46] Other Important Information - The company generated free cash flow of $95.1 million in Q4 and ended the year with over $600 million in cash [42][43] - Significant investments were made in long-term growth initiatives, with a focus on optimizing organizational structure to improve customer experience [25][43] Q&A Session All Questions and Answers Question: Health of the dental consumer in the U.S. and Europe - Management noted that patient demand remains resilient, with consistent bookings and patient traffic in specialty businesses, despite challenges in China and Russia [56] Question: Magnitude of VBP headwinds on EBITDA margin - Management indicated that VBP is expected to have a headwind of about 35% on pricing, which will likely be dilutive for the duration of 2023 [61][64] Question: Underlying trends in the first quarter - Management reported continued expansion of the Spark business and solid performance in implant sales outside China and Russia, while noting challenges in those regions [70][72] Question: European growth sustainability - Management expressed confidence in sustained growth in Western Europe due to systematic execution and strong relationships with orthodontists, beyond just DSO wins [81][87] Question: Share gains versus pricing in consumables - Management highlighted that the growth in the consumables business is driven by both share gains and targeted pricing strategies, with expectations for continued mid-single-digit to high-single-digit growth [92]

J.P. Morgan Healthcare Conference Amir Aghdaei President & CEO @ Envista Certain statements in this presentation are "forward-looking" statements within the meaning of the federal securities laws. There are a number of important factors that could cause actual results, developments and business decisions to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include, among other t ...

Financial Data and Key Metrics Changes - Reported sales for Q3 2022 increased by 3.9% to $631.1 million, negatively impacted by 4.1% due to foreign currency exchange rates [34] - Core sales growth was 4.9% year-over-year, reflecting solid performance in Specialty Products & Technologies, offset by weakness in Equipment and Consumables [35] - Adjusted gross margin was 59.2%, a 40 basis point increase compared to the prior year, while adjusted EBITDA margin was 20.2%, approximately 60 basis points higher than Q3 2021 [37][38] Business Line Data and Key Metrics Changes - Specialty Products & Technologies segment core revenue increased by 11.3%, driven by strong growth in premium implants and the Spark business, which grew over 20% year-over-year [39] - Equipment and Consumables segment core sales decreased by 4.7%, primarily due to a slowdown in equipment business volumes, while consumables business saw solid growth [42] - The implant-based tooth replacement business grew mid-single digits, with premium implants showing high single-digit growth [40] Market Data and Key Metrics Changes - Western Europe delivered core sales growth of over 9%, while North America was flat due to higher exposure to traditional imaging equipment [35] - The business in China grew by 9.2% year-over-year, reflecting a ramp-up in activity post-lockdown [36] - Emerging markets continued to grow nicely, up over 15% compared to Q3 2021 [36] Company Strategy and Development Direction - The company aims to partner with dental professionals to improve quality of life through digitization and personalized oral care [11] - Focus on embedding sustainable environmental, social, and governance (ESG) principles into the strategy, with a recent sustainability report highlighting progress [29][32] - The company is committed to transforming its portfolio by investing in fast-growing specialty businesses and enhancing digital capabilities [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the dental market despite macroeconomic uncertainties, including inflation and geopolitical risks [16][51] - The company anticipates continued core growth and profitability, reiterating guidance for mid-single-digit core growth and an adjusted EBITDA margin of 20% for the full year 2022 [51] - Management highlighted the need for productivity improvements in the dental industry, indicating a strong demand for digital transformation [67] Other Important Information - The company generated $19.7 million in free cash flow in Q3 2022, with over $500 million in cash on hand [49][50] - Adjusted EPS for Q3 was $0.47, compared to $0.45 in the prior year [38] - The company is focused on optimizing its organizational structure to improve customer experience and deal with macro uncertainties [21] Q&A Session Summary Question: Current dynamics and outlook for Q4 and 2023 - Management noted that Q4 trends are consistent with Q3, with stable patient volumes and a focus on productivity improvements despite macro uncertainties [63][66] Question: VBP impact in China - Management indicated that while VBP is expected to reduce prices significantly in the public sector, they anticipate volume increases for winning bidders [72][73] Question: European core growth and normalization - Management acknowledged that growth in Europe has been influenced by easy comparisons from last year, but they remain optimistic about future performance [80][81] Question: Pricing strategy in the current environment - Management highlighted that pricing has improved, with over 150 basis points of growth coming from pricing actions, and they expect this trend to continue [85][86] Question: Spark business and customer engagement - Management reported double-digit growth in active Spark customers and emphasized their focus on specialists while also expanding to traditional orthodontists [95][96] Question: Traditional imaging outlook - Management noted that traditional imaging revenue is stable but facing challenges due to supply chain issues and macroeconomic factors, leading to a strategic deemphasis on certain geographies [120][124]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements for Q3 and nine months ended September 30, 2022 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights ($ in millions) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $568.5 | $1,073.6 | | Total current assets | $1,366.0 | $1,835.8 | | Goodwill | $3,399.6 | $3,132.0 | | Total assets | $6,411.9 | $6,574.2 | | **Liabilities & Equity** | | | | Short-term debt | $579.3 | $432.4 | | Total current liabilities | $1,258.3 | $1,208.2 | | Long-term debt | $851.6 | $883.4 | | Total stockholders' equity | $3,957.9 | $4,058.0 | | Total liabilities and stockholders' equity | $6,411.9 | $6,574.2 | - Total assets decreased slightly from **$6.6 billion** at year-end 2021 to **$6.4 billion**, primarily due to a significant reduction in cash and cash equivalents, partially offset by an increase in goodwill from acquisitions[12](index=12&type=chunk) [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Statement of Income Highlights ($ in millions, except per share amounts) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Sales | $631.1 | $607.3 | $1,908.3 | $1,857.1 | | Gross Profit | $364.7 | $356.3 | $1,108.6 | $1,083.3 | | Operating Profit | $74.5 | $81.7 | $231.2 | $260.1 | | Net Income | $47.6 | $92.9 | $169.6 | $254.7 | | Diluted EPS from Continuing Operations | $0.28 | $0.45 | $0.92 | $1.25 | - Sales increased for both the three and nine-month periods ended September 30, 2022, compared to the prior year, but operating profit and net income declined, indicating pressure on margins and increased expenses[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Nine Months Ended ($ in millions) | Activity | Sep 30, 2022 | Oct 1, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $72.4 | $225.6 | | Net cash used in investing activities | $(656.2) | $(25.9) | | Net cash provided by (used in) financing activities | $80.8 | $(467.4) | | **Net change in cash and cash equivalents** | **$(505.1)** | **$(250.1)** | - Cash from operating activities significantly decreased to **$72.4 million** in the first nine months of 2022 from **$225.6 million** in the prior year period[22](index=22&type=chunk) - Investing activities saw a large cash outflow of **$696.2 million** for acquisitions[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, business segments, acquisitions, discontinued operations, debt, and segment performance - The company operates in two segments: Specialty Products & Technologies (dental implants, orthodontics) and Equipment & Consumables (digital imaging, restorative materials)[26](index=26&type=chunk) - In Q1 2022, COVID-19 lockdowns in China impacted operations, and the Russia-Ukraine conflict poses potential risks to business in the region and the global supply chain[31](index=31&type=chunk)[33](index=33&type=chunk) - On July 5, 2022, the company acquired Osteogenics for approximately **$128.2 million**; on April 20, 2022, it acquired Carestream Dental's Intraoral Scanner Business for **$580.3 million**[37](index=37&type=chunk)[38](index=38&type=chunk) - The company completed the sale of its KaVo Treatment Unit and Instrument Business on December 31, 2021, reclassifying its results to discontinued operations for all periods presented[29](index=29&type=chunk)[42](index=42&type=chunk) - As of September 30, 2022, total debt was **$1.43 billion**, including senior term loans and convertible senior notes, with convertible notes classified as short-term debt due to early conversion conditions being met[75](index=75&type=chunk)[88](index=88&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 and nine-month financial performance, key trends, segment results, liquidity, and cash flow [Overview and Key Trends](index=33&type=section&id=Overview%20and%20Key%20Trends) Overview of dental product segments, key performance factors including COVID-19, geopolitical risks, foreign exchange, and acquisitions - The sale of the KaVo Treatment Unit and Instrument business is a strategic shift to focus on higher-growth, higher-margin segments, increasing the revenue mix of the Specialty Products & Technology segment to approximately **60%**[123](index=123&type=chunk) - COVID-19 related lockdowns in China impacted operations in Q1 2022, and the ongoing zero-COVID policy creates uncertainty[128](index=128&type=chunk) - Foreign currency exchange rates negatively impacted reported sales by **4.1%** in Q3 2022 and **3.2%** in the first nine months of 2022 due to the strength of the U.S. dollar[133](index=133&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Q3 2022 sales grew, but gross and operating profit margins declined due to foreign exchange, acquisition costs, and inflation Sales and Core Sales Growth vs. Prior Year | Period | Total Sales Growth (GAAP) | Acquisitions Impact | Currency Impact | Core Sales Growth (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | **Q3 2022** | 3.9% | (3.1)% | 4.1% | 4.9% | | **9 Months 2022** | 2.8% | (1.3)% | 3.2% | 4.7% | - Gross profit margin for Q3 2022 decreased to **57.8%** from **58.7%** in Q3 2021, primarily due to unfavorable foreign exchange rates, acquisition-related inventory costs, and inflation[147](index=147&type=chunk)[149](index=149&type=chunk) - Operating profit margin for Q3 2022 decreased to **11.8%** from **13.5%** in the prior year, driven by lower gross margins, higher sales and marketing expenses, and acquisition-related costs[153](index=153&type=chunk) [Results of Operations - Business Segments](index=40&type=section&id=Results%20of%20Operations%20-%20Business%20Segments) Specialty Products & Technologies saw strong sales growth but lower margins; Equipment & Consumables sales declined but margins improved Specialty Products & Technologies Performance (Q3 2022 vs Q3 2021) | Metric | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Sales | $395.4M | $363.4M | | Sales Growth (GAAP) | 8.8% | - | | Core Sales Growth (Non-GAAP) | 11.3% | - | | Operating Profit Margin | 15.8% | 16.9% | Equipment & Consumables Performance (Q3 2022 vs Q3 2021) | Metric | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Sales | $235.7M | $243.9M | | Sales Growth (GAAP) | (3.4)% | - | | Core Sales Growth (Non-GAAP) | (4.7)% | - | | Operating Profit Margin | 19.0% | 18.6% | [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity changed with decreased operating cash flow and substantial cash used for acquisitions, reducing cash and equivalents - Net cash provided by operating activities decreased to **$72.4 million** for the nine months ended Sep 30, 2022, compared to **$225.6 million** for the same period in 2021[181](index=181&type=chunk)[183](index=183&type=chunk) - Cash used in investing activities was **$656.2 million**, driven by **$696.2 million** spent on acquisitions, partially offset by proceeds from the KaVo business sale and settlement of derivatives[181](index=181&type=chunk)[185](index=185&type=chunk) - As of September 30, 2022, the company held **$568.5 million** in cash, with **$476.9 million** held outside the United States[189](index=189&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures since the 2021 Annual Report on Form 10-K - There were no material changes to the company's quantitative and qualitative disclosures about market risk during the quarter ended September 30, 2022[198](index=198&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report[199](index=199&type=chunk) - No material changes were made to the company's internal control over financial reporting during the third quarter of 2022[200](index=200&type=chunk) [PART II. OTHER INFORMATION](index=46&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to legal proceedings from the 2021 Annual Report on Form 10-K - There have been no material changes to legal proceedings from the company's 2021 10-K[202](index=202&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors highlight adverse effects of current global economic conditions, including inflation and slowing growth - The company updated its risk factors to emphasize the adverse effects of current global economic conditions, such as sustained inflation, rising interest rates, and slowing economic growth[205](index=205&type=chunk) - Economic pressures can reduce demand for products (especially discretionary dental procedures), increase price competition, cause supply interruptions, and increase the difficulty of collecting accounts receivable[205](index=205&type=chunk)[208](index=208&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the period - None[207](index=207&type=chunk) [Item 6. Exhibits](index=48&type=section&id=Item%206.%20Exhibits) Index of exhibits filed with Form 10-Q, including agreement amendments, CEO/CFO certifications, and XBRL data - Exhibits filed include amendments to the Master Sale and Purchase Agreement with Planmeca, CEO/CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906, and XBRL interactive data files[213](index=213&type=chunk)

Financial Data and Key Metrics Changes - In Q2 2022, reported sales increased by 1.3% to $645.8 million, negatively impacted by 3.6% due to foreign currency exchange rates, while acquisitions contributed 0.9% growth [30] - Core sales growth was 4% year-over-year, reflecting solid performance in the Specialty Products and Technology segment, offset by weakness in the equipment and consumables segment [31] - Adjusted gross margin was 58.7%, an increase of 40 basis points compared to the prior year, while adjusted EBITDA margin was 19.7%, also up 40 basis points year-over-year [34][20] Business Line Data and Key Metrics Changes - The Specialty Products and Technologies segment saw core revenue increase by 9.6%, driven by strong growth in implants and the Spark clear aligner business [37] - The combined orthodontic businesses grew 17% year-over-year, with Spark revenue accelerating significantly [38] - The equipment and consumables segment experienced a core sales decrease of 4.7% compared to Q2 2021, with declines in both developed and emerging markets [41] Market Data and Key Metrics Changes - Western Europe delivered core sales growth of 11%, while North America increased by 0.5%, impacted by higher exposure to infection prevention and modest destocking [32] - The business in China was down 0.3% year-over-year due to extended lockdowns, but activity ramped up quickly as Shanghai reopened [32] - Emerging markets outside of Russia and China grew approximately 20% compared to Q2 2021 [33] Company Strategy and Development Direction - The company aims to partner with dental professionals to improve patient quality of life through digitization and personalization of oral care [10] - Strategic priorities include accelerating growth, expanding operating margins, and transforming the portfolio through disciplined capital deployment [51][52] - The acquisition of Carestream Dental's iOS business has been successfully integrated, with plans to enhance the DEXIS scanner within the DTX platform [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges from persistent inflation, supply chain issues, and geopolitical risks impacting the second half of 2022 [50] - Despite these challenges, management remains confident in the long-term resilience of the dental market and expects mid-single-digit core sales growth for the full year [51] - The company is focused on maintaining a strong balance sheet and ample liquidity to pursue additional growth opportunities [48] Other Important Information - The company generated $11.9 million of free cash flow in Q2 and ended the quarter with over $500 million in cash [48] - The DEXIS iOS solution received a 2022 Red Dot Design Award, highlighting its design and functionality [26] - The company signed a long-term agreement with dentalcorp, enhancing its position in the implant market in Canada [18] Q&A Session Summary Question: Market volumes outlook in different areas - Management sees a positive overall outlook, with strong patient traffic and continued investment from dental professionals despite macroeconomic concerns [58] Question: Distributor destocking impact - Distributor inventory has reduced by 25% to 30% as they prepare for an uncertain environment, impacting sales [65] Question: Updated guidance for the second half - Management expects mid-single-digit growth in the second half, driven by recovery in China and destocking normalization [71][72] Question: Trends throughout Q2 - Q2 was not linear due to the Shanghai lockdown, with a stronger performance in the last weeks of the quarter [80] Question: IOS business integration progress - The IOS business is expected to contribute $50 million to $60 million in sales for 2022, with strong growth potential anticipated [94]

Second Quarter 2022 Earnings Presentation August 3, 2022 Forward Looking Statements Certain statements in this presentation are "forward-looking" statements within the meaning of the federal securities laws. There are a number of important factors that could cause actual results, developments and business decisions to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include, am ...

William Blair Emerging Technologies in Dental May 17, 2022 @ Envista Forward Looking Statements 2 Certain statements in this presentation are "forward-looking" statements within the meaning of the federal securities laws. There are a number of important factors that could cause actual results, developments and business decisions to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These facto ...

Financial Data and Key Metrics Changes - First quarter sales increased by 3.1% to $631.4 million, with core sales growth of 5.4% compared to Q1 2021 [22][24] - Adjusted EBITDA margin was 19.7%, representing a decrease of approximately 185 basis points from Q1 2021 [25][17] - Adjusted EPS was $0.47 from continuing operations, down from $0.49 in the comparable period of the prior year [25] Business Line Data and Key Metrics Changes - Specialty Products & Technologies segment saw core revenue increase by 11.2%, driven by strong growth in implants and Spark clear aligners [26] - Orthodontic business grew 18.7%, with brackets and wires growing mid-single digits and Spark continuing to accelerate [26][13] - Equipment and Consumables segment core sales decreased by 3.3%, with strong demand in restorative business but a decline in infection prevention solutions [28][29] Market Data and Key Metrics Changes - Western Europe grew by 17.6%, while North America increased by 2.4%, impacted by infection prevention exposure [23] - Emerging markets outside of China grew by 15.6%, while China saw a decline of 14.3% due to COVID-related lockdowns [23][24] Company Strategy and Development Direction - The company aims to accelerate growth to high single digits while expanding operating margins and transforming its portfolio [12][19] - Focus on digitizing, personalizing, and democratizing dental care, with significant investments in technology and training [11][20] - The acquisition of Carestream Dental's intra-oral scanner business is expected to enhance growth and operational capabilities [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from inflation, supply chain disruptions, and geopolitical issues but remains optimistic about long-term growth in the dental market [33][19] - The company expects core growth between 6% to 8% for 2022 and aims for an adjusted EBITDA margin of over 20% for the full year [35][39] - Anticipated sales from the newly acquired IOS business are projected to be between $35 million to $45 million for the remainder of the year [33] Other Important Information - The company achieved an adjusted gross margin of 59.2%, an increase of 20 basis points compared to the prior year [24] - The first quarter saw a consumption of $16.3 million in free cash flow, ending with over $1 billion in cash [30][31] Q&A Session Summary Question: Pricing Strategy and Impact - Management is actively managing pricing, taking selective price increases and reducing discounts to counter inflationary impacts [42] Question: Spark Revenue Growth - Spark revenue doubled year-over-year, with strong sequential growth of 17.3% from Q4 to Q1 [46] Question: China Market Performance - China revenue was down approximately 14% year-over-year, but management remains optimistic about recovery as lockdowns ease [50][68] Question: Integration of Carestream - Integration focuses on go-to-market strategies, operational improvements, and leveraging R&D capabilities for long-term growth [55] Question: Supply Chain Visibility - Management is cautious about supply chain dynamics but has improved visibility and inventory management to meet customer demand [60] Question: North America Growth Excluding Infection Prevention - North America experienced low single-digit growth, with strong performance in implants and Spark business offset by declines in infection prevention [71]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________ FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39054 ENVISTA HOLDINGS CORPORATION (Exact name of registrant as specified in its charter) (Stat ...

Financial Data and Key Metrics Changes - For the full year 2021, core revenue growth was 29% over 2020 and 8.9% over 2019 [11] - Adjusted EBITDA margin for 2021 was 19.7%, representing a greater than 650 basis point improvement over 2020 and over 400 basis points improvement versus 2019 [12][24] - Fourth quarter sales increased 5.8% to $651.8 million, with core sales growth of 6.6% compared to Q4 2020 [28][29] - Adjusted gross margin for Q4 2021 was 57.1%, increasing by 60 basis points compared to the prior year [30] Business Line Data and Key Metrics Changes - Specialty Products & Technologies segment core revenue increased 14.5% compared to Q4 2020, driven by strong growth in premium implants and Spark [31] - Orthodontics business grew over 20% in Q4 2021, with Spark achieving a $100 million run rate [32][19] - Implant business delivered over 30% core growth in 2021, with double-digit growth in Q4 [20] - Equipment & Consumables segment core sales decreased by 3.3% compared to Q4 2020, with strong demand in imaging but a decline in Infection Prevention solutions [33] Market Data and Key Metrics Changes - Western Europe grew 15%, while North America grew 1.8%, impacted by greater exposure to Infection Prevention [29] - Emerging markets grew 12.8% despite weakness in China due to localized pandemic lockdowns [29] Company Strategy and Development Direction - The company aims to transform its portfolio towards higher growth, higher margin segments of the dental industry [13] - Plans to triple the Spark business in the next three years while expanding its orthodontic offerings [41] - Focus on leveraging premium implant franchises and enhancing digital capabilities [42] - The acquisition of Carestream Dental's intraoral scanner business is expected to close in Q2 2022, aligning with the company's strategy to support dental digitization [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of patient volumes post-Omicron peak, with limited loss of demand anticipated [10][50] - Guidance for 2022 includes core growth of 6% to 8% and adjusted EBITDA margin greater than 20% [36][37] - Confidence in achieving mid-single-digit growth in Infection Prevention solutions by the second half of 2022 [86] Other Important Information - The divestiture of the KaVo Treatment Unit and Instrument business has shifted the business mix to a more favorable 60:40 split in favor of the Specialty Products & Technologies segment [13] - Free cash flow for Q4 was $157.1 million, with over $1 billion in cash at the end of the quarter [35] Q&A Session Summary Question: Impact of Omicron on business - Management noted a significant slowdown in patient volumes due to increased infections and staff shortages, but expects a return to normal demand as infections peak [49][50] Question: Demand profile and growth expectations - Management anticipates mid-single-digit growth in Q1, with improvements expected throughout the year [51][52] Question: Pricing power and increases - Management confirmed selective price increases across various segments, including consumables and implants, to protect margins [56][58] Question: Spark business growth expectations - Management confirmed a goal to triple Spark's revenue over the next three years, with strong growth in the number of dentists using the product [59][61] Question: Carestream acquisition strategy - The Carestream acquisition is expected to enhance the company's market presence and integration with existing products, with significant growth potential [66][68] Question: N1 rollout and training - Management outlined a phased approach for N1 training in the U.S., similar to the successful Spark rollout [75][78] Question: Infection Prevention long-term growth - Management expressed confidence in returning to mid-single-digit growth in Infection Prevention by addressing overstock inventory and focusing on market share [86][87] Question: Spark traction in international markets - Management highlighted strong international growth and ongoing efforts to integrate Spark into DSO relationships [91][95] Question: M&A pipeline and focus - The company is actively pursuing opportunities in the implant and orthodontic spaces, focusing on digital capabilities and differentiated solutions [97][99]