ZimVie Inc.

Good afternoon, and welcome to ZMV's fourth quarter and full year 2023 earnings conference call. Currently, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Marissa Beisch, Gilmartin Group, for introductory disclosures.

Great. Thank you all for joining today's call. Earlier today, CIMBY released financial results for the quarter and full year ended December 31, 2023. A copy of the press release is available on the company's website, cimby.com, as well as on sec.gov. Before we begin, I'd like to remind you that management will make comments during this call that include forward-looking statements. Actual results may differ materially from those indicated by the forward-looking statements due to a variety of risks and uncertainties. Please refer to the company's most recent periodic report filed with the SEC and subsequent SEC filings for a detailed discussion of these risks and uncertainties. In addition, the discussion on this call will include certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP financial measures are included within the earnings release issued today, which is found on the investor relations section of the company's website. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 28, 2024. ZMV disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. With that, I will turn the call over to Vasa Jamali, President and Chief Executive Officer of ZMV.

Good afternoon, and thank you for joining us. We had significant accomplishments in 2023. We invested to further differentiate our portfolio, which helped us make gains in the markets we served. As well, we improved our operating efficiency through restructuring and cost reduction initiatives. Most significantly, we executed an agreement to sell our spine business to HIG Capital with $375 million in total consideration, and we began to advance the necessary steps to complete that sale. We believe this sale addresses two major concerns we have heard. The lack of synergy between dental and spine businesses and an overly leveraged capital structure during a time of elevated interest rates. We believe we have quite elegantly addressed both of these concerns in one major move and now look very optimistically to 2024 as a pure play dental company with a comprehensive and industry leading portfolio. I could not be more excited about the future of this company as we continue to invest in differentiated solutions for patients and providers while optimizing our structure to drive value for shareholders. Let me start with a closer look at our ongoing portfolio action, specifically the spine sale. On December 18th, we entered into a definitive agreement to sell our spine business to HIG Capital for $375 million in total consideration. We remain confident in completing this sale within the first half of 2024. We appreciate having a great partner in HIG Capital as we both look towards an on-time transaction close. This sale will provide the opportunity for our company to reposition itself exclusively in one of our most attractive end markets, dental solutions, while also paying down a substantial portion of our outstanding debt. We are committed to having under $200 million of net debt by one year post-sales. Beyond the sale, we have a lot of work to do in right-sizing our cost profile, particularly given our corporate overhead and stranded costs, which are currently being reflected in our continuing operations profile. Therefore, we see both a need and an opportunity in taking costs out of our organization. We have already initiated the execution of concrete plans to address certain corporate expenses, and we remain committed to delivering a 15% plus adjusted EBITDA margin at one year post-sale, with improvements annually thereafter. As we continue through this portfolio optimization process, I would mostly like to thank all of our global Spine employees for their hard work. We appreciate your contributions and immense effort to improve the position of the business in the future, and wish you great success going forward. Moving to dental. As we transition to the sales spine, we are positioned to become a leaner, more focused, pure play dental company with market leading position in the $8 billion implant digital solutions and biomaterials markets. We are committed to offering the market's highest quality premium implants and a holistic portfolio to support every step of the implant process. This includes innovative biomaterial products, which build a strong foundation for the implant, and high efficiency, easy to use digital solutions for managing implant workflow. One of our top priorities for 2023 was to invest in this portfolio. And we are pleased to continue our strong cadence of hardware and software innovations into 2024. Most recently, we launched our next generation TSX implant in Japan, one of our largest international markets. We preceded that milestone with the launches of Biotivity and Azure in our biomaterials and lab-focused prosthetic and restorative solutions portfolios. Look for us to further drive innovation by bringing new products to market over the next year and focusing on opportunities that improve clinical workflow and complement our in-plant business. For an operational update, We plan to make several changes this year to achieve our desired size and scale as a company. Fortunately, this is an area our team has extensive experience in. Over the past two years, our team has delivered several operational improvements to get the business where it is today. Many of those improvements will focus on the spine business. As we move forward, we will take that same playbook to the dental business, including a focus on manufacturing automation, supply chain optimization, and improving the efficiency of our plants. Our dental business has always enjoyed an attractive margin profile. With a wholly focused management team and increased resources, we see room to grow that margin profile even further. We recognize the importance of innovation to our business, and we realize that we have commercial momentum behind our offering. Therefore, it should be clear that our efficiency improvements will not be reflected to reduce research and development or commercial costs. Instead, we'll be focused on taking significant corporate costs out of the business. Many of these costs will take several months to address, and we expect to see increased margin leverage as the year goes on. However, until the sale is complete, ZMV will bear the full corporate expense for both the continuing and discontinued operation. We will provide more detail on TSAs and ERPs associated with the sale around the time of closing. Now, before I turn the line over to Rich, I'd like to switch gears and take a moment to congratulate our team on the recent publication of our inaugural ESG report. We embrace being a responsible and accountable employer and business. Our global team is dedicated to championing initiatives across the entire ESG spectrum that further our mission of restoring daily lives while living our core values in accountability, authenticity, curiosity, and having a growth mindset. Our shared commitment spans our global sites as we work towards a common goal of establishing Zimby's reputation as a good corporate citizen, a destination workplace, and a true life sciences leader. I'll now turn the call over to Rich Schultz on our financial performance and guidance.