Financial Data and Key Metrics Changes - The company expects gross margins to decline by approximately 300 basis points in 2025, an increase from the previously expected decline of 200 basis points [15][17][36] - The tariff impact was lowered from $22 million to about $30 million for 2025 due to tariff implementation delays and identification of additional products eligible for exemptions [18][19] Business Line Data and Key Metrics Changes - In the Codman Specialty Surgical segment, mid-single-digit growth rates were achieved despite supply constraints, indicating strong underlying demand [39][40] - The ENT segment faced challenges due to reimbursement market pressures, particularly in balloon sinuplasty, but the company is working with payers to address these issues [42][43] Market Data and Key Metrics Changes - The company anticipates growth in 2026 compared to 2025, driven by improvements in quality management and supply reliability [34] - The demand for products remains strong, with the company focusing on stabilizing supply to meet this demand [65] Company Strategy and Development Direction - The company is focused on building foundational capabilities to improve operational execution and reliability [3][5] - A profitability initiative has been launched, aiming for annualized savings of $25 million to $30 million over the next 12 to 18 months, with a focus on operational efficiencies and cost management [23][24][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledges operational and execution challenges but emphasizes the importance of prioritization and disciplined execution to drive improvements [7][9] - The company expects 2025 to represent the peak year for ship hold impacts, with a recovery anticipated in 2026 [34] Other Important Information - The company has completed the first phase of its margin improvement plan, which is expected to contribute $25 million to $30 million by 2026 [5][23] - The focus on international market expansion and innovation is seen as critical for sustainable growth [66] Q&A Session Summary Question: What surprised you to the upside and downside since taking over as CEO? - Management noted strengths in brand and commercial execution but recognized deeper operational challenges than anticipated [2][3] Question: Can you discuss the variables affecting guidance for the back half of the year? - Faster execution of remediation plans could help reach the high end of guidance, while delays could lead to the lower end [10][11] Question: What are the specific areas targeted for the profitability initiative? - The initiative focuses on operational efficiencies and optimizing operating expenses [23][24] Question: What are the company's capital allocation priorities? - The primary focus remains on debt reduction in the near term [58] Question: What are the top growth drivers for the next two to three years? - Stabilizing supply, international market penetration, and category expansion through innovation are identified as key growth drivers [65][66]