Core Viewpoint - The strategic investment by Aidi Te in Shanghai Yangshan Medical Technology aims to enhance the digital dental ecosystem by integrating Aidi Te's industrial capital and channel resources with Yangshan Medical's R&D capabilities in dental hard technology [1][2]. Group 1: Investment Details - Aidi Te completed a Pre-A+ round strategic investment in Yangshan Medical, focusing on a comprehensive ecosystem of "materials + equipment + services" [1]. - Aidi Te has nearly 20 years of experience in the dental field, providing support in market channels and industrial implementation for Yangshan Medical [1]. - Aidi Te's core products include zirconia blocks and glass ceramics, with nearly 70% of its revenue coming from international markets [1]. Group 2: Yangshan Medical's Focus - Yangshan Medical specializes in dental hard technology, particularly in robotics, artificial intelligence, and innovative medical devices for oral and maxillofacial surgery [2]. - The core team of Yangshan Medical has an international background, with expertise in robotics, oral medicine, and artificial intelligence [2]. - Yangshan Medical's recent achievement includes the approval of China's first contact navigation technology-based dental implant surgery robot, PlanT, which fills a gap in the domestic market [3]. Group 3: Strategic Synergies - The investment aligns with the industry's shift from price competition to technology differentiation, addressing the demand for precision and efficiency in clinical implants [2][3]. - Aidi Te's global marketing network will support the promotion and market penetration of Yangshan Medical's products [4]. - The collaboration aims to transform from a single supplier of dental consumables and equipment to a provider of integrated digital dental treatment solutions [4].

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]

Financial Data and Key Metrics Changes - For Q3 2025, global sales were $904 million, a decrease of 5% as reported, or negative 8% on a constant currency basis [7] - Adjusted EBITDA was 18.4%, up 50 basis points versus the prior year, driven by lower sales on favorable product and geography mix [8] - Non-GAAP earnings per share was $0.37, down $0.13 versus the prior year, with approximately half of the decline reflecting impacts of sales mix and tariffs [9] Business Line Data and Key Metrics Changes - Sales in the U.S. were $291 million, down 22.2% year-over-year, driven by lower sales in Essential Dental Solutions, CAD/CAM, Imaging, and Implants [10] - European sales were $382 million, increasing 9.9% as reported, or 2.6% on a constant currency basis, driven by growth in Connected Technology Solutions and labs [10] - Wellspect Healthcare sales grew 9.3% in Europe on a constant currency basis, with significant growth in the Rest of World segment [12] Market Data and Key Metrics Changes - U.S. sales were down 22.2%, while European sales increased 9.9%, indicating a divergence in market performance [10] - The Rest of World sales were $231 million, down slightly versus the prior year, with strength in Essential Dental Solutions offset by declines in Connected Technology Solutions and implants [11] Company Strategy and Development Direction - The company is focusing on a return-to-growth action plan with four key pillars: putting customers at the center, reigniting the U.S. business, empowering people, and evolving operations [14] - A transition plan is in place following the departure of the CFO to ensure continuity and maintain financial discipline [6][20] - The company plans to increase investments in R&D to improve product development processes and enhance customer experience [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the need for bold changes and emphasized a commitment to reposition the company as a market leader [27] - The revised outlook for 2025 includes net sales in the range of $3.6 billion to $3.7 billion, with constant currency sales expected to decline by 5% to 4% year-over-year [13] - Management expressed confidence in the company's potential and the importance of executing the return-to-growth plan [26] Other Important Information - The company recorded a $263 million non-cash after-tax charge related to the impairment of goodwill and intangible assets due to tariffs and lower projected volumes [9] - The Wellspect Healthcare business will play a key role in achieving financial goals, with a decision made to retain the business for greater strategic benefit [25] Q&A Session Summary Question: Insights on the U.S. market performance - Management indicated that the U.S. market's decline is due to multiple factors, including structural approach and execution issues [31][32] Question: Cadence of growth over the next two years - Management stated that while they desire to return to growth quickly, they need more time to refine the growth plan and establish a timeline for improvements [35][36] Question: Capital allocation philosophy and dividend importance - Management emphasized the need to explore the value of dividends and prioritize business growth and debt retirement [37][38] Question: R&D investment acceleration - Management confirmed plans to pull forward R&D investments to strengthen the company's position for 2026 and beyond [40][42] Question: Characteristics sought in a new CFO - Management is looking for a CFO who can analyze data effectively and communicate meaningful metrics to drive the company's return-to-health strategy [64][65]