Financial Data and Key Metrics Changes - In Q4 2025, revenue was $961 million, a reported sales increase of 6.2% and constant currency growth of 2.5% compared to the prior year [9][10] - Adjusted EBITDA margins declined 10 basis points to 14.1%, with a $15 million impact from tariffs [10] - Adjusted EPS for the quarter was $0.27, up 4.9% from the prior year [10] - Full-year sales were $3.68 billion, representing a reported sales decline of 3% and a 4.3% decline on a constant currency basis [14][15] - Full-year adjusted EPS was $1.60, down 4.6% year-on-year [15] Business Line Data and Key Metrics Changes - The CTS segment saw constant currency sales decline 1.9%, with lower sales in CAD/CAM in Europe and the rest of the world, partially offset by high single-digit growth in the U.S. [11] - The EDS segment, which includes endo, resto, and preventative products, experienced a 4% increase in constant currency sales, led by a 17% growth in preventative products [12] - OIS segment sales increased 6.9% in constant currency, while IPS declined due to lower implant volumes [12] - Wellspect HealthCare constant currency sales increased 1.9%, with 15% growth in the U.S. [12] Market Data and Key Metrics Changes - In China, implant sales saw a single-digit growth in the first half of the year but a double-digit decline in the second half due to changes in buying behavior [13] - Premium implants declined, while value implants were slightly down, primarily due to challenges in China [13] Company Strategy and Development Direction - The company is focused on a 24-month Return-to-Growth action plan aimed at restoring momentum and delivering sustained profitable growth [17] - The plan includes five pillars: customer-centric mindset, reigniting sustainable growth, empowering performance, scaling the organization, and financial strength [17][18] - The company aims to strengthen its U.S. business and improve its competitive position through strategic partnerships and enhanced sales force training [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's potential and the effectiveness of the Return-to-Growth plan [7][29] - The company anticipates a net sales range of $3.5 billion to $3.6 billion for 2026, reflecting a -3% to -1% operational growth [28] - Management emphasized that the return to health is not market-dependent and that improvements will come from better execution [75] Other Important Information - The company initiated a restructuring program expected to unlock approximately $120 million annually, which will be reinvested in the Return-to-Growth action plan [26] - The decision to eliminate dividends will allow for capital reallocation towards debt retirement and share repurchases [27] Q&A Session Summary Question: Discussion on dividend elimination and capital deployment - Management indicated that the elimination of dividends would free up $128 million annually for capital deployment, focusing on debt retirement first and then share repurchases [32][33] Question: Impact of new dealer inventory model on revenue - Management explained that transitioning to a drop ship model would result in an estimated revenue headwind of about $30 million, expected to be resolved in the first half of 2026 [35][36] Question: Timing of recent dealer agreements and their impact - Management noted that benefits from new dealer agreements are not significantly included in guidance and are expected to materialize in the latter half of 2026 [39][40] Question: R&D spending and product development cadence - Management stated that increased R&D spending would not yield immediate results in 2026 but would accelerate product development for future years [80][81] Question: Commercial team reorganization status - Management confirmed that the reorganization of the commercial team is complete and that the new structure is already being implemented [51] Question: Strategy for DSO penetration - Management acknowledged the importance of DSOs and indicated ongoing discussions to enhance partnerships, although significant moves are not expected until 2027 or 2028 [69][70]