Summary of DENTSPLY SIRONA Conference Call Company Overview - **Company**: DENTSPLY SIRONA (NasdaqGS: XRAY) - **Date**: March 10, 2026 - **Context**: Discussion at the Leerink Partners Global Healthcare Conference Key Points Return to Growth Strategy - The CEO emphasized a focus on a "return to growth opportunity" and the urgency in tracking progress on a day-to-day basis rather than quarterly [4][10] - Metrics for success include engaging and expanding dealer relationships, which are crucial for the U.S. CTS business recovery [10][11] Dealer Engagement and Simplification - New leadership among dealers has allowed for a fresh start in relationships, focusing on simplicity in deal structures to enhance volume and efficiency [13][14] - The dropship model is being implemented to streamline inventory management and improve cash flow, reducing the burden of excess inventory on dealers [16][19] R&D Investments - Incremental R&D spending is being allocated to enhance product vitality across various verticals, including endodontics, orthodontics, and implants [22][23] - The focus is on leveraging the DS Core platform to accelerate software development and improve product offerings [22][28] Market Dynamics and Product Penetration - The CEO noted that the market appears stable, but the company's challenges are internal rather than market-driven [50][51] - EMEA is identified as a strong market for implants, while Asia Pacific holds significant growth potential [68][69] Clinical Education and Sales Force - Investments in clinical education and sales force training are prioritized to enhance product awareness and improve sales execution [42][49] - The CEO plans to establish a CEO advisory board with dentists to refine strategies and enhance clinical education [41][42] AI and Technology Integration - AI is being explored both as an external tool for customer service and as an internal efficiency tool to streamline operations [63][66] - The company is looking to modernize its software and improve internal processes using AI technologies [66] Orthodontics and SureSmile - The SureSmile platform is being positioned to regain market share, with a focus on modernizing software and enhancing clinical outcomes [91][92] - The CEO acknowledged the need to rebuild trust with orthodontists after previous missteps [101][102] Financial Outlook - The company is undergoing restructuring, which may lead to EPS pressures in the first half of the year, with expectations for improvement in the second half [108][109] - The focus is on long-term growth rather than short-term gains, with plans to strengthen cash flow and shareholder value [109][110] Conclusion - DENTSPLY SIRONA is actively working on a comprehensive strategy to return to growth through dealer engagement, R&D investments, and market penetration, while addressing internal challenges and leveraging technology for future success [4][50][108]

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 by 10 basis points to 14.1%, with a gross profit decline of 300 basis points due to lower volume and sales mix changes [10] - Adjusted EPS for the quarter was $0.27, up $0.01 or 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 $0.07 or -4.6% year-on-year [15] Business Line Data and Key Metrics Changes - CTS segment constant currency sales declined 1.9%, with lower sales in CAD/CAM in the rest of the world and Europe, partially offset by high single-digit growth in the U.S. [11] - EDS segment sales increased 4% on a constant currency basis, led by a 17% increase in preventative products [12] - OIS segment sales increased 6.9% on a constant currency basis, with a decline in IPS driven by lower implant volumes [12] - Wellspect HealthCare constant currency sales increased 1.9%, with 15% growth in the U.S. [13] Market Data and Key Metrics Changes - In China, implant sales saw single-digit growth in the first half of the year but a double-digit decline in the second half due to procurement expectations [13] - Premium implants declined, while value implants were slightly down, primarily due to challenges in China [13] - The U.S. market showed low distributor inventory levels relative to historical averages, indicating potential for growth [11] 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] - Key pillars of the strategy include a customer-centric mindset, reigniting sustainable growth, empowering performance, scaling the organization, and financial strength [17][18] - The company plans to increase R&D investment by double digits to accelerate capabilities and drive innovation across various segments [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's potential and the execution of the Return to Growth plan, emphasizing the importance of customer focus [7][17] - The company anticipates positive sequential sales momentum in the second half of 2026, despite challenges in the first half [28][56] - Management noted that the return to health is not market-dependent and emphasized the need for improved execution [76] 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 plan [26] - The decision to eliminate dividends was made to reallocate funds toward debt retirement and share repurchases [27] Q&A Session Summary Question: Impact of dividend elimination on capital deployment - Management indicated that the elimination of dividends would free up $128 million annually for capital deployment, focusing on debt retirement and share repurchases [32][33] Question: Revenue headwind from new dealer inventory model - Management estimated a revenue headwind of about $30 million due to the transition to a drop ship model, expected to be resolved in the first half of 2026 [35][36] Question: Timing of recent dealer agreements - Management noted that benefits from new dealer agreements are not significantly included in guidance and expect to see results in the latter half of 2026 [39][40] Question: R&D spending and product launches - Management stated that increased R&D spending would not pull forward product launches into 2026, with most benefits expected in 2027 and beyond [81][82] Question: Commercial team reorganization - Management confirmed that the reorganization of the commercial team is complete and will be active in the new structure soon [51] Question: Strategy for DSOs - Management acknowledged the importance of DSOs and indicated ongoing exploratory discussions to enhance partnerships with them [70][71]

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 - Global sales for Q2 were $936 million, a decrease of 5% as reported or a negative 7% on a constant currency basis, with adjusted EBITDA margin at 21%, increasing 360 basis points year-over-year [13][20][21] - Adjusted earnings per share were $0.52, growing 7% compared to the prior year, driven primarily by active cost reduction programs [14][21] - Cash flow from operations was $48 million for the quarter, with a net debt to EBITDA ratio of 3.1 times [22][21] Business Line Data and Key Metrics Changes - EDS (Endo, Resto, and preventative products) saw a constant currency sales increase of 1.1%, while OIS (Orthodontic and Implant Solutions) sales declined 19.4% due to lower lab volumes globally [23][24] - CTS (Connected Technology Solutions) sales fell 5.9% in constant currency, with double-digit growth in imaging in Europe offset by declines in CADCAM and imaging in the U.S. [24] - Wellspect Healthcare sales declined 2.5%, impacted by prior year dealer stocking orders [25] Market Data and Key Metrics Changes - U.S. sales in Q2 were $293 million, down 18% in total or 11% excluding the BiTE impact, primarily due to softness in connected technology solutions and orthodontic and implant solutions [15] - European sales were approximately flat year-over-year, with Germany showing growth driven by CTS and SureSmile, which was up over 27% [16] - Rest of world sales were $239 million, up slightly year-over-year, with growth in essential dental solutions and SureSmile [16] Company Strategy and Development Direction - The company aims to enhance customer experience and support through simplified interactions and increased strategic investments [11][12] - Focus on innovation and speed to market is emphasized, with the DS Core platform gaining traction among users [11][12] - The company plans to streamline operations to unlock value and reduce costs, redirecting funds into sustained profitable growth [12][27] Management's Comments on Operating Environment and Future Outlook - Management noted that global patient volumes and procedures remained largely unchanged, with a focus on long-term strategies rather than short-term fluctuations [31][32] - The company maintains its full-year 2025 outlook for sales, adjusted EBITDA margin, and adjusted EPS despite current challenges [25][27] - Management is cautious about the impact of tariffs, with an updated annualized impact now estimated at $80 million [48][49] Other Important Information - A non-cash after-tax charge of approximately $214 million was recorded related to the impairment of goodwill and other intangible assets [21] - The company completed a $550 million hybrid bond offering in Q2, enhancing financial flexibility [22] Q&A Session Summary Question: Overview of the broader dental market - Management indicated that patient volumes remain stable, but procedural utilization in elective areas like implants and ortho continues to be soft, with a focus on long-term strategies [30][31] Question: Distributor stock dynamics - Management noted no significant revenue impact from distributor stock changes, with healthy positions in imaging and CADCAM [34][35] Question: Motivation for joining Dentsply - The new CEO expressed a desire to apply operational experience and execution strategies learned from previous roles to enhance Dentsply's performance [38][39] Question: Performance of implants - Management highlighted a decline in premium implants due to shifts from legacy brands, with expectations for growth driven by sales force changes and new consumer experiences [41][44] Question: Tariff assumptions - The annualized impact of tariffs has increased to about $80 million, with ongoing efforts to mitigate costs through supply chain efficiencies [47][48] Question: Adjustments on BiTE - A $4 million adjustment was noted for BiTE in Q2, with no further changes anticipated for the second half of the year [51] Question: Portfolio assessment and growth strategy - Management believes there are no major gaps in the portfolio, focusing on organic growth while remaining open to opportunistic acquisitions [56][58] Question: Confidence in value implants - Management acknowledged challenges in the value implant segment due to Middle East volatility but expects performance to improve in the second half of the year [88][89]

Financial Data and Key Metrics Changes - Global sales for Q2 were $936 million, a decrease of 5% as reported or a negative 7% on a constant currency basis, with adjusted EBITDA margin at 21%, increasing 360 basis points year-over-year [12][20] - Adjusted earnings per share were $0.52, growing 7% compared to the prior year, driven primarily by active cost reduction programs [12][20] - Cash flow from operations was $48 million for the quarter, a decline from $28 million in the prior year quarter [21] Business Line Data and Key Metrics Changes - EDS (Endo, Resto, and preventative products) sales increased 1.1% on a constant currency basis, with growth in the rest of the world, but lower volumes in Europe and the US [22] - OIS (Orthodontic and Implant Solutions) sales declined 19.4% in constant currency, with BiTE accounting for over half of the decline [22] - CTS (Connected Technology Solutions) sales fell 5.9% in constant currency, with double-digit growth in imaging in Europe offset by declines in CADCAM and imaging in the US [22] Market Data and Key Metrics Changes - US sales in Q2 were $293 million, down 18% in total or 11% excluding the BiTE impact, primarily driven by softness in connected technology solutions and orthodontic and implant solutions [14] - European sales were approximately $400 million, flat compared to Q2 of the prior year, with Germany showing growth driven by CTS and SureSmile, which was up over 27% [15] - Rest of world sales were $239 million, slightly up versus the prior year, with growth in essential dental solutions and SureSmile up double digits [15] Company Strategy and Development Direction - The company aims to enhance customer experience and support through simplified interactions and increased strategic investments [10] - Focus on innovation and speed to market, with a goal to shape the future of markets by partnering with practitioners [10] - The DS Core platform is a critical element of the strategy, with 50,000 unique users and increasing connected devices and lab orders processed [10] Management's Comments on Operating Environment and Future Outlook - Management noted that global patient volumes and procedures remained largely unchanged, with a focus on long-term strategies rather than short-term market fluctuations [32] - The company is maintaining its full-year 2025 outlook for sales, adjusted EBITDA margin, and adjusted EPS despite current challenges [26] - Management emphasized the importance of focusing on customer needs and improving execution to drive growth [95] Other Important Information - The company recorded a non-cash after-tax charge of approximately $214 million related to the impairment of goodwill and other intangible assets within the OIS and CCS segments [20] - The company completed a $550 million hybrid bond offering in Q2, enhancing financial flexibility [21] Q&A Session Summary Question: Overview of the broader dental market - Management indicated that patient volumes remain stable, but procedural utilization in elective areas like implants and ortho continues to be soft, with a focus on long-term strategies [31] Question: Distributor stock dynamics - Management noted no significant revenue impact from distributor stock changes, with healthy positions in imaging and CADCAM [34] Question: Motivation for joining Dentsply - The new CEO expressed interest in applying operational experience to enhance Dentsply's performance and accelerate growth [39] Question: Performance of implants - Management reported a decline in premium implants due to the transition from legacy brands, with expectations for growth driven by sales force changes and new consumer experiences [43] Question: Tariff assumptions - The annualized impact of tariffs has increased from $50 million to $80 million, with ongoing efforts to mitigate costs through supply chain efficiencies [48] Question: Adjustments on BiTE - A $4 million adjustment was noted for BiTE in Q2, with no further changes anticipated for the second half of the year [52] Question: Portfolio assessment - The CEO believes Dentsply is well-positioned in the market, with a focus on organic growth while remaining open to opportunistic acquisitions [58] Question: Market share dynamics in implants - Management acknowledged challenges in the value implant segment due to Middle East volatility but expects stronger performance in the second half of the year [90]

Core Insights - DENTSPLY SIRONA Inc. is set to release its second-quarter 2025 results on August 7, with expectations of revenue at $851.6 million and earnings at 29 cents per share [2][3] Group 1: Q2 Performance Expectations - The company has shown an average earnings surprise of 2.73% over the past four quarters, indicating a potential for positive performance [2] - The Imaging segment is expected to benefit from the relaunch of Orthophos SL and Primescan 2, which may have driven growth, particularly in Europe and APAC [4] - Orthodontics, particularly SureSmile, is anticipated to show stable global growth, although U.S. performance may be hindered by softer discretionary spending [5] Group 2: Challenges and Headwinds - The suspension of Byte aligner sales is projected to negatively impact organic sales by approximately two percentage points in 2025, affecting second-quarter results as well [6] - Essential Dental Solutions may have experienced stable patient traffic, but overall segment growth is likely to be limited by softness in elective procedures and weak U.S. implant sales [7] - Connected Technology Solutions, including CAD/CAM, continues to face macroeconomic pressures, with subdued retail demand in the U.S. despite growth in Germany [8] Group 3: Operational Insights - DENTSPLY SIRONA's Phase II transformation activities are on track to deliver full run-rate savings by the end of 2025, with expectations of gradual stabilization in gross margins throughout the year [9] - Cost initiatives and SKU rationalization may contribute to improved gross margins, aiding quarter-over-quarter growth in Q2 [11] Group 4: Earnings Prediction Model - The current model does not predict an earnings beat for DENTSPLY SIRONA, with an Earnings ESP of -0.99% and a Zacks Rank of 2 [12][13]

Summary of Dentsply Sirona Conference Call Company Overview - Dentsply Sirona is a leading company in the dental market, with a global reach and significant international market presence [1] Key Financial Performance - Q1 2025 results exceeded guidance, with revenue down mid-single digits year-over-year primarily due to Byte [2][4] - EPS was well above guidance, indicating strong operational performance despite revenue challenges [2] Market Landscape - The overall dental market remains stable but has not returned to pre-COVID levels after five years [4][11] - Patient traffic is stable but still below pre-COVID levels, with slight degradation in customer sentiment noted [4][5] - Germany has shown decent performance and slight improvement in the last couple of quarters [7] Customer Sentiment and Behavior - Customer sentiment in the U.S. has shifted slightly from "not concerned" to "a little bit concerned," but this is more of a numerical shift than a significant change in behavior [5][9] - No significant changes in footfall or purchase intent reported by customers [10] Challenges in the Dental Market - Awareness around oral health and sensitivity to pricing are ongoing challenges affecting the dental market [12] - High interest rates have constrained capital equipment investments, particularly impacting the CTS (Capital Equipment) division [12][16] Division Performance and Growth Strategies - **CTS and Implants/Prosthetics**: Both divisions are expected to decline in 2025, accounting for nearly 50% of revenue. The company is focused on improving customer sentiment and investing in efficiency [14][16] - **DS Core Platform**: Significant investments have been made in the DS Core platform, with a 14% increase in users and a 25% increase in connected devices quarter-over-quarter [18][19] - **Implants**: The importance of the sales force in the implant community has been underestimated, and efforts are being made to improve sales rep training and customer engagement [20][21] - **Orthodontics**: Growth is expected to resume as the impact of the DSO loss is lapped, with double-digit growth reported in Europe for SureSmile [30][33] Margin and Expense Management - Despite negative revenue growth, all divisions reported year-over-year margin increases due to reduced expenditures and improved operational efficiency [35][36] - OpEx was down 14% year-over-year in Q1 2025, with expectations for continued reductions in the future [39][40] Future Outlook - The company aims to return to growth, with expectations for normalized growth in 2025 and acceleration into 2026 [42][44] - Continued focus on innovation and customer engagement is seen as critical for future success [44][46] Distributor Relationships - Ongoing discussions with key distributors, including Patterson, have deepened, with positive engagement noted [50][52] - The company is working to restore relationships with key distributors in Europe and the U.S. [51] Virtual Sales Force Initiative - A virtual sales force initiative has been launched, with approximately 100 reps making 2,000 calls daily and generating meaningful engagement with accounts [58][59] - The initiative aims to create demand independently of distributors and has already resulted in sales [64] Tariff Impact - The impact of U.S.-China tariffs on Dentsply Sirona is minimal, accounting for less than a couple of percentage points of revenue [67][68] - The company is taking proactive measures to mitigate potential tariff risks, including redistributing products to U.S. distribution sites [69][70]

Financial Data and Key Metrics Changes - In Q1, the company reported revenue of $879 million, representing a decline of 7.7% year-over-year, with organic sales down 4.4% due to a negative 4% BiTE impact [23][24] - Adjusted EPS for the quarter was $0.43, up 3.7% from the prior year, driven by higher adjusted EBITDA margins and a lower share count [25] - Adjusted EBITDA margins expanded by 220 basis points, benefiting from lower operating expenses and transformational savings [25] Business Line Data and Key Metrics Changes - Essential Dental Solutions segment saw organic sales increase by 0.4%, driven by growth in Europe and the rest of the world, despite lower volumes in the U.S. [27] - Orthodontic and Implant Solutions segment experienced a significant organic sales decline of 17.7%, primarily due to the loss of a DSO customer in the U.S. and lower lab volumes globally [28] - Connected Technology Solutions segment reported a slight organic sales decline of 0.5%, largely due to CADCAM declines in the U.S., although imaging performance showed growth across all regions [29] Market Data and Key Metrics Changes - U.S. organic sales declined by 14.9%, primarily impacted by a negative 9.8% from BiTE, while imaging growth was noted [31] - Europe saw organic sales increase by 1.1%, driven by strong performance in Germany, particularly in equipment and instruments [34] - Rest of World organic sales grew by 3.1%, with growth in imaging and WellSpec in China, offset by CADCAM declines [35] Company Strategy and Development Direction - The company is focused on driving reliable and sustainable performance, emphasizing customer-centric product innovation and operational efficiency [8][10] - The strategy includes enhancing the digital ecosystem through the DS Core platform, which has gained traction with over 42,000 unique users [14] - The company aims to improve customer engagement through revamped websites and a new e-commerce platform [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating global trade challenges and has developed plans to mitigate potential impacts from tariffs [7][12] - Despite a challenging macroeconomic environment, the company maintained its outlook for organic sales and adjusted EPS for 2025, while increasing reported sales expectations due to foreign currency translation changes [12][36] - Management noted stable patient volume and procedure utilization, although U.S. dentists expressed concerns about economic conditions affecting patient footfall [11] Other Important Information - The company is actively managing its balance sheet and has taken actions to strengthen its position, including entering into a bridge loan agreement [26] - The company has completed the closure of 10 manufacturing and distribution sites as part of its supply chain optimization efforts [23] Q&A Session Summary Question: Can you expand on the tariff impact? - Management indicated that tariffs have been factored into guidance, estimating an annualized impact of approximately $50 million, with about $0.10 impact on EPS [49][50] Question: Update on CFO search? - Management reported good progress in the CFO search, with candidates in the late phases of the process [52] Question: Insights on orthodontics and SureSmile? - Management acknowledged the need to reengage with the orthodontist community and improve user experience for SureSmile [58] Question: Clarification on EBIT margin? - Management noted that Q1 EBIT margin improvements are indicative of future performance, with a focus on judicious SG&A management [62] Question: Cash flow and CapEx expectations? - Management expects CapEx to decrease as ERP projects roll off, leading to improved free cash flow [108]

Financial Data and Key Metrics Changes - In Q1 2025, the company's revenue was $879 million, representing a decline of 7.7% year-over-year. Organic sales decreased by 4.4%, impacted by a negative 4% BiTE effect [23][24]. - Adjusted EBITDA margins expanded by 220 basis points, benefiting from lower operating expenses and transformational savings [25]. - Adjusted EPS for the quarter was $0.43, up 3.7% from the prior year, primarily due to higher adjusted EBITDA margins and a lower share count [25]. Business Line Data and Key Metrics Changes - Essential Dental Solutions segment saw organic sales increase by 0.4%, driven by growth in Europe and the rest of the world, despite lower volumes in the U.S. [26]. - Orthodontic and Implant Solutions segment experienced a significant organic sales decline of 17.7%, largely due to a negative BiTE impact and a loss of a DSO customer in the U.S. [27]. - Connected Technology Solutions segment had a slight organic sales decline of 0.5%, primarily due to CADCAM declines in the U.S., although imaging performance grew across all regions [28]. Market Data and Key Metrics Changes - U.S. organic sales declined by 14.9%, primarily due to a negative 9.8% impact from BiTE, while imaging growth was noted [30]. - Europe saw organic sales increase by 1.1%, driven by strong performance in Germany, which posted growth for the second consecutive quarter [33]. - The Rest of World segment experienced organic sales growth of 3.1%, with notable growth in imaging and WellSpec in China [34]. Company Strategy and Development Direction - The company is focused on driving reliable and sustainable performance, emphasizing customer-centric product innovation and operational efficiency [7][10]. - The strategy includes enhancing the digital ecosystem through the DS Core platform, which has gained traction with over 42,000 unique users [14]. - The company aims to improve customer engagement and experience through revamped websites and a new e-commerce platform [19][20]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by global trade situations and tariffs but expressed confidence in the company's ability to navigate these risks [6]. - The outlook for 2025 remains unchanged for organic sales and adjusted EPS, with reported sales revised to reflect foreign currency changes [12][35]. - Management noted stable patient volume and procedure utilization, despite some concerns among U.S. dentists regarding economic conditions [11]. Other Important Information - The company is actively managing its balance sheet and has taken steps to strengthen its position, including entering into a bridge loan agreement [25]. - The company has completed the closure of 10 manufacturing and distribution sites as part of its supply chain optimization efforts [23]. Q&A Session Summary Question: Can you expand on the tariff impact? - Management indicated that tariffs have been factored into guidance, estimating a $0.10 impact, with an annualized exposure of about $50 million [47][48]. Question: Update on the CFO search? - Progress is being made with several candidates in the late phases of the process [50]. Question: Insights on the orthodontics side? - Management noted the need to reengage with the orthodontist community and improve user experience with SureSmile [56]. Question: Context behind EBIT margin? - The improvement in Q1 EBIT margin is seen as a reasonable run rate for the rest of the year, with a focus on judicious SG&A management [62]. Question: Cash flow and CapEx expectations? - CapEx is expected to improve as ERP projects roll off, leading to better free cash flow [107].

Financial Performance - Q1 2025 reported sales decreased by (7.7%) to $879 million compared to $953 million in Q1 2024 [17, 18] - Q1 2025 organic sales decreased by (4.4%) driven by an expected (4.0%) Byte impact [7] - Q1 2025 adjusted EBITDA margin expanded by 220 bps to 19.0% compared to 16.8% in Q1 2024 [7, 19] - Q1 2025 adjusted EPS increased by 3.7% to $0.43 compared to $0.42 in Q1 2024 [21, 22] - Q1 2025 operating cash flow decreased by (72%) to $7 million compared to $25 million in Q1 2024 [23, 24] Segment Performance - Essential Dental Solutions (EDS) reported a sales decrease of (2.7%), but organic sales increased by 0.4% to $353 million [26] - Orthodontic and Implant Solutions (OIS) reported a sales decrease of (20.0%), with organic sales down (17.7%) to $217 million, including a ~$40 million Byte impact [26] - Connected Technology Solutions (CTS) reported a sales decrease of (4.7%), with organic sales down (0.5%) to $235 million [26] - Wellspect Healthcare reported a sales increase of 3.4%, with organic sales up 8.0% to $74 million [26] Regional Performance - U S net sales decreased, with organic sales down (14.9%) due to a Byte impact of approximately ($40M) [28, 29] - Europe net sales decreased, with organic sales up 1.1% [28] - Rest of World net sales decreased, with organic sales up 3.1% [28] 2025 Outlook - The company maintains its FY25 outlook for organic sales at (4.0%) to (2.0%) [7, 30] - The company increases its FY25 outlook for reported sales to $3.60 billion - $3.70 billion due to F/X changes [7, 30] - The company maintains its FY25 outlook for adjusted EPS at $1.80 - $2.00 [7, 30]