DENTSPLY SIRONA(XRAY)2025-02-27 22:03Financial Performance - Dentsply Sirona's net sales for the year ended December 31, 2024, were reported across four segments: Connected Technology Solutions, Essential Dental Solutions, Orthodontic and Implant Solutions, and Wellspect Healthcare[21]. - No customer accounted for 10% or more of consolidated net sales for the year ended December 31, 2024, indicating a diversified customer base[35]. - The company generates a substantial portion of its revenue through a limited number of distributors, with the two largest distributors accounting for approximately 13% of annual revenue for the year ended December 31, 2024[102]. - The company delivered a one-year notice of non-renewal to Patterson Companies, Inc. regarding its distribution agreements for dental equipment in the U.S. and Canada[102]. - The company has approximately 700 million under the 2023 Credit Facility[130]. - The company experienced a material impact on its results of operations due to the voluntary suspension of the sale and marketing of its direct-to-consumer Byte aligner systems, which represented approximately 3% of annual revenue for the year ended December 31, 2024[165]. - The company recorded pre-tax goodwill impairment charges of 359 million for Orthodontic Aligner Solutions and Implant & Prosthetic Solutions reporting units, respectively, for the quarter ended September 30, 2024[118]. - As of December 31, 2024, the company recorded a pre-tax goodwill impairment charge of 269 million for the Implant & Prosthetic Solutions reporting unit due to weaker sales trends and increased competition[120]. Research and Development - The Company maintains an R&D spending level of approximately 4% of annual net sales, focusing on innovation in digital workflow solutions and enhancing patient care[37]. - R&D investments focus on accelerating product innovation and improving manufacturing processes, with an emphasis on customer feedback and returns-based funding[41]. - The Company launched its cloud solution, DS Core, in 2022, integrating digital dentistry workflows and enabling access to case files and orders without software licenses[38]. - In 2023, the Company introduced the SureSmile Simulator, which creates 3D visualizations for clear aligner treatment, and expanded milling and printing materials for Primeprint and Primemill Solutions[39]. - The Company released Primescan 2 in 2024, featuring a cloud-native design that enhances mobility for dental professionals during patient treatment[40]. - The DS Core Enterprise platform was introduced in 2024, allowing dental service organizations (DSOs) to centralize management and monitoring of equipment[40]. - The company faces challenges in developing innovative products due to rapid technological disruption in the dental and continence care markets[94]. Market Presence and Strategy - Dentsply Sirona employs around 4,600 sales and technical staff to provide comprehensive marketing, sales, and technical support globally[32]. - The Company has a significant market presence in approximately 150 countries, with a strong foothold in Europe and the Asia-Pacific region[17]. - The Company focuses on integrating its dental product portfolios to unlock operational efficiencies and enhance its healthcare consumables product portfolio[20]. - The Company believes the dental industry will grow due to factors such as an aging population, increasing demand for aesthetic dentistry, and a shift towards single-visit dentistry[31]. - The Company expanded its implant business in 2024 with the MiS Lynx implant and new technologies for guided surgery and restorative solutions[40]. Regulatory and Compliance - The company is subject to comprehensive regulations, including the EU Medical Device Regulation (MDR), ensuring compliance for its medical devices[49]. - The company maintains compliance with various anti-bribery and anti-corruption laws, which govern its relationships with governmental entities and healthcare professionals[51]. - The ongoing German Tax Investigation could adversely affect the company's reputation, business, and financial condition, with significant time and resources already expended on this matter[164]. - The company must obtain necessary product approvals and marketing clearances from governmental authorities, including the FDA, which can be time-consuming and costly, potentially hindering product market entry[154]. - The EU MDR regulations require significant upgrades to quality systems and processes for medical device manufacturers, with deadlines extended until December 31, 2027, for higher-risk devices[158]. - The company is subject to various regulatory environments, including potential litigation and regulatory examinations related to financial reporting matters, which could harm its business and financial condition[153]. Workforce and Employee Relations - As of December 31, 2024, Dentsply Sirona employed approximately 14,000 employees globally, with around 3,000 in the United States[59]. - Dentsply Sirona's total rewards strategy includes competitive compensation and benefits programs aimed at attracting and retaining top talent[64]. - The company has nine established Employee Resource Groups (ERGs) with approximately 3,800 members globally as of December 31, 2024[67]. - The company has a dedicated Employee Health & Safety program aligned with international standards to ensure employee safety[70]. - The company anticipates a net reduction in its global workforce of approximately 2% to 4% as part of the 2024 restructuring plan[109]. Cybersecurity and Risk Management - The Company maintains a comprehensive cybersecurity risk management strategy, integrating risk assessment into its overall risk management systems[195]. - The Chief Information Officer oversees the company's cybersecurity approach, collaborating with various teams to manage digital risk effectively[197]. - The Company has authorized a share repurchase program of 1.2 billion remaining as of December 31, 2024, with an increase approved on November 7, 2023[214]. - The Company maintains cybersecurity insurance and regularly reviews its policy and coverage levels based on current risks[202]. - The Company has not experienced any material information security breach incidents in the last three years, but future risks remain[202]. - The Company conducts annual information security awareness training for employees and performs monthly internal phishing tests[201]. - The Company collaborates with external third parties for threat assessments and security enhancements, sharing best practices across industries[200]. - The Company has developed contingency plans for business continuity in case of vendor cyberattacks impacting their systems[200]. Environmental and Social Governance - The company is increasingly focused on environmental, social, and governance (ESG) considerations, which may lead to increased compliance costs and scrutiny[190]. - The company operates in approximately 150 countries, making it vulnerable to climate change and natural disasters that could disrupt production and distribution[189]. Financial Reporting and Internal Controls - The company has identified material weaknesses in internal control over financial reporting, which were remediated as of December 31, 2023, but future weaknesses could adversely affect financial reporting accuracy[148]. - Changes in distributor relationships and inventory levels may lead to fluctuations in projected future demand and financial results[104]. - The company recognizes the risk of legal actions, including product liability claims and regulatory investigations, which could materially harm its business and reputation[187]. - The company faces significant fluctuations in quarterly sales and earnings due to various factors, which may lead to failure in meeting investor expectations[180]. - The company has experienced higher prices and supply chain disruptions for certain raw materials, particularly electronic components, which may negatively affect its financial performance[182]. - The company has sought to offset elevated costs from raw material inflation with annual price increases but has been only partially successful[184].