Financial Data and Key Metrics Changes - Global sales for the second quarter were $3.2 billion, reflecting a sales growth of 3.3% compared to 2024, with constant currency sales growing by 2.7% [24][25] - GAAP operating margin for 2025 was 4.67%, a decrease of 42 basis points year-over-year, while non-GAAP operating margin was 6.96%, down 79 basis points [25][26] - GAAP net income for the second quarter was $86 million or $0.70 per diluted share, compared to $104 million or $0.80 per diluted share in the prior year [26][27] Business Line Data and Key Metrics Changes - U.S. Dental merchandise sales declined by 1.2% due to increased volume offset by lower product pricing, while U.S. Dental equipment sales fell by 4.7% due to economic uncertainty [28][29] - U.S. Medical Distribution business sales grew by 6.3%, driven by increased patient traffic and strong performance in the Home Solutions business [29] - Global Specialty Products Group sales grew by 4.2%, with solid growth in the implant and biomaterial business, including double-digit growth in value implants [30][31] Market Data and Key Metrics Changes - International Dental merchandise sales grew by 1.9%, impacted by the timing of Easter, while international Dental equipment sales grew by 12.1%, driven by strong sales in Canada and Europe [29][30] - The U.S. Dental market growth is still impacted by staffing challenges, but practice productivity is increasing as dentists invest in devices [48][49] - Patient traffic in the dental distribution business is reported to be stable globally, with some regions showing positive trends [46][51] Company Strategy and Development Direction - The company is maintaining its full-year guidance, expecting earnings to be weighted towards the second half of the year, aiming for high single-digit to low double-digit earnings growth [7][39] - The company is partnering with KKR's Capstone and engaging global management consulting firms to enhance distribution gross margins and increase efficiencies [7][8] - The Bold plus One strategy is being advanced, focusing on customer satisfaction and financial goals [8][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to high single-digit to low double-digit earnings growth, supported by strong July sales and targeted sales initiatives [39][40] - The company is confident in the stability of patient traffic and the potential for growth in the second half of the year, particularly in the dental equipment sector [66][67] - Management acknowledged macroeconomic uncertainties but remains positive about the overall market conditions and growth opportunities [66][67] Other Important Information - The company expects to achieve annual run rate savings of over $100 million by the end of 2025 from restructuring efforts [33][34] - The company repurchased approximately 3.7 million shares of common stock at an average price of $70.88 per share during 2025 [34][35] - The CEO announced plans to retire at the end of the year, transitioning to the role of Chairman of the Board [21][22] Q&A Session Summary Question: Can you provide insights on the dental business and patient traffic? - Management reported positive trends in July sales, with stable patient traffic and confidence in sustaining these trends moving forward [46][49] Question: What is the current state of the engagement with consulting firms? - The company is focusing on gross profit enhancement and restructuring, with expectations for positive results in 2026 [55][59] Question: How should we think about EPS cadence in the second half of the year? - EPS is expected to grow in the third quarter, with further growth anticipated in the fourth quarter, supported by targeted sales initiatives [65][66] Question: Can you comment on the orthodontic business and its turnaround? - The orthodontic business is small but showing signs of improvement, with efforts to stabilize and enhance profitability [70][73] Question: What is the outlook for DSOs and new office design projects? - DSOs are generally moving in a positive direction, with funding available for expansion and consistent growth in new office design projects [80][83]