Envista Holdings Corporation

My name is David, and I will be your conference call facilitator this afternoon. At this time, I'd like to welcome everyone to Invista Holdings Corporation's fourth quarter 2023 earnings results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, press star, then the number one on your keypad. If you would like to withdraw your question, please press star and 2 on your telephone keypad. I will now turn the call over to Mr. Stephen Keller, Principal Financial Officer of Invista Holdings. Mr. Keller, you may begin your conference call.

Good afternoon, and thanks for joining the call. With me today is Amir Agday, our President and Chief Executive Officer. I want to point out that our earnings release, the slide presentation supplementing today's call, and the reconciliations and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are all available on the investor section of our website, www.mvistaco.com. The audio portion of this call will be archived on the investor section of our website later today under the heading Events and Presentations. It will remain archived until our next quarterly call. During the presentation, we will describe some of the more significant factors that impacted year-over-year performance. The supplemental materials describe additional factors that impacted year-over-year performance. Unless otherwise noted, references in these remarks to company-specific financial metrics relate to the fourth quarter of 2023. And references to period-to-period increases or decreases in financial metrics are year-over-year. During the call, we may describe certain products and devices that have applications submitted and pending certain regulatory approvals or are available only in certain markets. We will also make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we believe, anticipate, or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings. Actual results might differ in material from any forward-looking statements that we make today. These forward-looking statements speak only as of the date that they are made, and we do not assume any obligation to update any forward-looking statements except where it's required by law. With that, I'd like to turn the call over to Amir.

Thank you, Stephen. Good afternoon, and welcome to Invista's fourth quarter 2023 earnings call. We appreciate you taking the time to join us today. Despite a volatile macro backdrop, we are making progress against our long-term strategic priorities. In line with our expectations, we finished 2023 with a modest sales decline for the full year and delivered an adjusted EBITDA margin of 18.1%. We improved our free cash flow generation in 2023 and delivered greater than $220 million while continuing to invest in our strategic priorities to accelerate our long-term growth and enhance our margin. Before we reflect on our performance in 2023, as well as our future outlook, I think it is important to provide some context about the current operating environment, as well as the underlying demand for dental solutions. Globally, the market remains dynamic with macro uncertainty and geopolitical risks continuing to create a challenging operating environment. Conflicts in the Middle East and the Ukraine, as well as cybersecurity attacks impacting the North America distribution channel, created volatility in 2023. While our team has navigated, each of these challenges will collectively they have moderated or near-term performance. As we move into 2024, we believe we are well positioned to navigate potential short-term uncertainties while executing a long-term value creation model. While we continue to see resilient patient traffic throughout 2023, we did see a weakening of demand for higher-end dental procedures, including both adult orthodontic cases and full-arch implant restorations. Private practice clinicians and DSOs remain thoughtful about near-term investments in both equipment and clinic-level inventories. While this has created pressure in the short term, longer term we are confident that patients will prioritize dental care and that clinicians will proactively invest in areas that help them digitize their practice, making them more productive and ensuring they can provide the high quality personalized care. Despite the volatility seen throughout 2023, the INVISA team has focused on driving our key initiatives And we continued our progress to drive long-term growth, accelerate margins, and transform our portfolio.