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Core Viewpoint - Envista Holdings Corporation held its First Quarter 2025 Earnings Conference Call, indicating a focus on discussing financial performance and significant factors impacting year-over-year results [2][4][6]. Company Overview - The conference call featured key company executives, including the President and CEO, Paul Keel, and the CFO, Eric Hammes, highlighting the leadership's involvement in communicating financial results [4]. Financial Information - The company provided access to its earnings release, slide presentation, and other relevant financial information on its investor relations website, ensuring transparency and compliance with SEC regulations [5].

Envista (NVST) reported $616.9 million in revenue for the quarter ended March 2025, representing a year-over-year decline of 1.1%. EPS of $0.24 for the same period compares to $0.26 a year ago.The reported revenue represents a surprise of +1.49% over the Zacks Consensus Estimate of $607.84 million. With the consensus EPS estimate being $0.20, the EPS surprise was +20.00%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine the ...

Core Viewpoint - Envista (NVST) reported quarterly earnings of $0.24 per share, exceeding the Zacks Consensus Estimate of $0.20 per share, but down from $0.26 per share a year ago, indicating a 20% earnings surprise [1][2] Financial Performance - The company achieved revenues of $616.9 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.49%, although this represents a decline from $623.6 million in the same quarter last year [2] - Over the last four quarters, Envista has exceeded consensus EPS estimates three times and topped revenue estimates three times as well [2] Stock Performance and Outlook - Envista shares have declined approximately 16.6% year-to-date, compared to a 5.3% decline in the S&P 500 [3] - The company's earnings outlook is uncertain, with current consensus EPS estimates at $0.23 for the upcoming quarter and $0.97 for the current fiscal year, with revenues projected at $628.97 million and $2.51 billion respectively [7] Industry Context - The Medical - Products industry, to which Envista belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Envista's stock may be influenced by the overall outlook of the industry, as historical data indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Envista (NVST) Q1 2025 Earnings Call May 01, 2025 05:00 PM ET Company Participants Jim Gustafson - VP - IRPaul Keel - CEOEric Hammes - Chief Financial OfficerJonathan Block - Managing Director Conference Call Participants Jason Bednar - Senior Research AnalystElizabeth Anderson - Senior Managing Director & Research AnalystJeffrey Johnson - Managing Director, Senior Research AnalystAllen Lutz - Senior Equity Research AnalystSteven Valiquette - MD & Senior Equity Research Analyst - Covering Health Care Techno ...

Financial Data and Key Metrics Changes - The company reported Q1 sales of $617 million, with core sales increasing by 20 basis points year over year despite a negative impact of approximately 140 basis points from currency exchange rates [12][14] - Adjusted EBITDA margin was around 12.8%, down 120 basis points from the previous year, primarily due to foreign exchange impacts [14][19] - Adjusted EPS for the quarter was $0.24, slightly above expectations but down $0.02 compared to the same quarter last year [14][22] Business Line Data and Key Metrics Changes - Specialty Products and Technologies segment saw a core revenue decline of 70 basis points year over year, while Equipment and Consumables segment increased by 170 basis points [19][21] - Consumables showed strong growth across most categories and geographies, particularly in North America [12][13] - The orthodontics business experienced growth in Spark and Brackets and Wires outside of China, despite challenges in the Chinese market [20][25] Market Data and Key Metrics Changes - The global dental market remained stable in Q1, with underlying demand similar to the second half of 2024 [9][35] - Positive growth was noted in North America, Japan, and emerging markets, while Europe remained flat [26] - Consumer confidence indices in the U.S. have deteriorated, but this has not yet impacted the company's Q1 results [10][35] Company Strategy and Development Direction - The company is focused on a value creation plan that includes growth in consumables, Nobel, and orthodontics, as well as price capture across its portfolio [25][26] - A tariff task force has been established to manage the impacts of tariffs and optimize supply chain flexibility [31][32] - The company maintains its 2025 guidance of 1% to 3% core growth and adjusted EBITDA margins of approximately 14% [11][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the dental market's long-term stability despite current macroeconomic uncertainties [27][35] - The company is navigating challenges through cost controls and operational improvements, with a focus on maintaining strong customer service levels [10][27] - Future performance is expected to benefit from the unwinding of revenue deferrals in the second half of the year [16][87] Other Important Information - The company has made progress on its $250 million share repurchase program, purchasing $19 million worth of stock in Q1 [22] - Free cash flow was an outflow of $5 million in Q1, typical for the first quarter due to timing of incentive compensation [15][21] Q&A Session Summary Question: Current tariff exposure and mitigation strategies - The company detailed its tariff exposure primarily in U.S. goods imported into China and vice versa, with ongoing efforts to shift supply chains to mitigate impacts [41][42][43] Question: April trends and volume-based dynamics - Management noted that April has started positively, with no significant shifts in procedure types observed [49][50][51] Question: Gross and net impacts from tariffs - The guidance includes current tariff activity, with confidence in mitigating impacts but acknowledging wider error bars compared to previous guidance [56][57][58] Question: Expectations for implants and product launches - The Challenger segment experienced a decline due to fewer billing days, but no change in trajectory is anticipated for the year [91][93][95] Question: Spark average selling price trends - No major change in Spark ASP was reported, with consistent pricing and value capture noted [100][101] Question: Size of the China business and inventory management - The China business represents a high single-digit percentage of total revenue, with inventory held in China and ongoing shipments incurring tariffs [105][106][107]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported sales of $617 million, with core sales increasing by 20 basis points year over year despite a negative impact from currency exchange rates of approximately 140 basis points [12][13] - Adjusted EBITDA margin was around 12.8%, a decrease of 120 basis points compared to the previous year, primarily due to foreign exchange impacts [14][20] - Adjusted EPS for the quarter was $0.24, slightly above expectations but down $0.02 year over year [14][23] Business Line Data and Key Metrics Changes - The Specialty Products and Technologies segment saw a core revenue decline of 70 basis points year over year, while the Equipment and Consumables segment experienced a core sales increase of 170 basis points [20][22] - Consumables showed strong growth across most categories and geographies, particularly in North America [12][13] - The orthodontics business, excluding China, saw positive growth in both Spark and Brackets and Wires [20][21] Market Data and Key Metrics Changes - The global dental market remained stable in Q1 2025, with underlying demand similar to the second half of 2024 [9][35] - Positive growth was noted in North America, Japan, and emerging markets, while Europe remained flat [26] - Consumer confidence indices in the U.S. have deteriorated, but this has not yet affected the company's results [10][35] Company Strategy and Development Direction - The company is focused on a value creation plan that includes growth in consumables, Nobel Biocare, and orthodontics, as well as price capture across most of its portfolio [25][26] - A tariff task force has been established to manage the impacts of tariffs and optimize supply chain flexibility [31][32] - The company maintains its 2025 guidance of 1% to 3% core growth and adjusted EBITDA margins of approximately 14% [11][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the dental market's long-term stability despite current macroeconomic uncertainties [27][35] - The company is navigating geopolitical uncertainties and has implemented cost controls to enhance operational productivity [10][28] - Future performance is expected to benefit from the unwinding of revenue deferrals in the second half of the year [16][39] Other Important Information - The company has made progress on its $250 million share repurchase program, purchasing $19 million worth of stock in Q1 [23] - Free cash flow was an outflow of $5 million in Q1, typical for the first quarter due to timing of incentive compensation [15][22] Q&A Session Summary Question: Can you provide specifics on your current tariff exposure and mitigation strategies? - The company has significant tariff exposure from U.S. goods imported into China and vice versa, with mitigation strategies including shifting supply sources and working with suppliers to manage costs [42][44] Question: What are the trends in April and how do they relate to higher ASP procedures? - April has started positively, with no major shifts in procedure types observed, indicating stability in the market [50][52] Question: Can you quantify the gross impact of tariffs and customer responses? - The company is a net exporter to China, with premium implants being the largest exposure. Mitigation plans are in place, and customer sentiment varies by market segment [56][62] Question: What are the expectations for ortho VBP this year? - The ortho VBP process is progressing as expected, with anticipated benefits in the second half of the year [69][71] Question: How is the company managing pricing power in a tariff environment? - Pricing power varies by market and product category, with higher-end clinicians willing to pay for innovation, while commodity products face more price sensitivity [78][81] Question: What are the expectations for the Challenger and Premium implant businesses? - The Challenger business experienced a dip in Q1 but is expected to maintain a steady growth trajectory throughout the year [94][96]

Financial Performance - Q1 2025 sales were $617 million, with core sales increasing by 0.2% compared to Q1 2024[7] - Net income for Q1 2025 was $18 million, down from $24 million in Q1 2024, with diluted EPS of $0.10[3][16] - Adjusted EBITDA for Q1 2025 was $79 million, representing a margin of 12.8%[3][7] - Operating cash flow for Q1 2025 was $0 million, compared to $40 million in Q1 2024, with free cash flow at ($5) million[4] - Adjusted earnings per share are projected to range between $0.95 and $1.05 for the full year[13] - Net income for the three months ended March 28, 2025, was $18.0 million, a decrease of 23.7% from $23.6 million for the same period in 2024[23] - Gross profit decreased to $336.0 million, down 5.5% from $356.3 million year-over-year[23] - Adjusted net income was $41.5 million, compared to $45.8 million in the prior year, reflecting a decline of 7.5%[28] - Total sales for the three months ended March 28, 2025, were $616.9 million, a decrease of 1.1% from $623.6 million in the same period last year[25] - Free cash flow was negative at $(5.1) million, a significant decline from $29.3 million in the prior year[32] - Adjusted EBITDA for the quarter was $79.0 million, down from $87.2 million, representing a decrease of 9.4%[30] - Operating cash flow was $0.3 million, a sharp decline from $40.3 million in the same quarter of 2024[23] - The company reported a total operating profit of $39.0 million, down 18.9% from $48.1 million year-over-year[23] Sales and Growth - The company maintains its 2025 guidance of core sales growth between 1% to 3%[6] - Positive growth was noted in Equipment & Consumables, with growth in the Consumables business offsetting softness in the Diagnostics market[7] - The company reported a modest contraction in Specialty Products & Technologies, with growth in Nobel Biocare and Spark clear aligners offset by contraction in Ortho in China[7] - Core sales growth was 0.2%, with total sales growth impacted by currency exchange rates positively by 1.4%[31] Cash and Assets - The ending balance of cash and cash equivalents increased to $1,077.3 million from $948.5 million year-over-year[21] - Total assets as of March 28, 2025, were $5,466.4 million, an increase from $5,350.5 million at the end of 2024[19] Non-GAAP Measures - Envista's management uses non-GAAP measures to evaluate operating and financial performance, providing insights into long-term profitability trends and revenue performance compared to peers[36] - Adjusted EBITDA is utilized as a supplemental measure for assessing operating performance, excluding interest, taxes, depreciation, amortization, and unusual losses or gains[35] - The company excludes amortization of acquisition-related intangible assets to facilitate consistent comparisons of operating results over time[37] - Core sales exclude the effects of acquisitions and divested product lines, allowing for clearer evaluation of ongoing operations[37] - Free Cash Flow (FCF) is adjusted for capital expenditures to reflect the operating cash flow available for strategic investments[37] - The company reported significant acquisition-related transaction expenses and integration costs, impacting overall financial results[34] - Adjusted Gross Profit, Adjusted Operating Profit, and Adjusted Net Income are key metrics for understanding Envista's profitability trends[35] - The company believes that excluding certain costs provides a clearer view of ongoing operating costs and underlying business trends[35] - Envista's management emphasizes the importance of understanding intangible asset amortization as it contributes to future revenue generation[37] - The company aims to provide investors with a means of evaluating ongoing operations by excluding discontinued products and currency translation impacts[37] Share Repurchase - The company repurchased 1.1 million shares for approximately $19 million during the quarter, with $231 million remaining under the stock repurchase program[5]

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Core Viewpoint - The market anticipates a year-over-year decline in Envista's earnings due to lower revenues, with a focus on how actual results will compare to estimates [1][2]. Company Summary - Envista is expected to report quarterly earnings of $0.21 per share, reflecting a year-over-year decrease of 19.2% [3]. - Revenue for the quarter is projected to be $609.03 million, down 2.3% from the same quarter last year [3]. - The consensus EPS estimate has been revised 2.44% lower in the last 30 days, indicating a bearish sentiment among analysts [4][10]. Earnings Prediction Insights - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Envista is lower than the consensus estimate, resulting in an Earnings ESP of -1.21% [10][11]. - Envista currently holds a Zacks Rank of 3, making it challenging to predict an earnings beat conclusively [11]. Historical Performance - In the last reported quarter, Envista exceeded the consensus EPS estimate of $0.23 by delivering earnings of $0.24, resulting in a surprise of +4.35% [12]. - Over the past four quarters, Envista has beaten consensus EPS estimates two times [13]. Industry Context - InMode, a peer in the Zacks Medical - Products industry, is expected to report earnings of $0.33 per share, reflecting a year-over-year decline of 26.7% [17]. - InMode's revenue is anticipated to be $77.4 million, down 3.6% from the previous year [17]. - The consensus EPS estimate for InMode has been revised 2.3% higher in the last 30 days, but it has an Earnings ESP of 0.00% and a Zacks Rank of 4, indicating difficulty in predicting an earnings beat [18].