Envista Holdings Corporation

My name is David, and I'll be your conference facilitator this afternoon. At this time, I'd like to welcome everyone to the Invista Holdings Corporation's third quarter 2024 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 then two on your telephone keypad. I'll now turn the call over to Mr. Amit Bhagwat, Vice President of Strategy at Invest Holdings. Mr. Bhagwat, you may begin your conference call.

Good afternoon and thanks for joining Invista's third quarter 2024 earnings call. With me today are Paul Keel, our President and Chief Executive Officer, and Eric Hammes, our Chief Financial Officer. Before we begin, 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 Investors section of our website, www.investaco.com. The audio portion of this call will be archived on the Investors 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 third quarter of 2024, 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, and actual results might differ materially 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 as required by law. With that, I'd like to return the call over to Paul. Thank you, Amit.

Good afternoon and welcome, everyone. We appreciate you taking the time to join us today. In today's call, I'll kick it off with some opening thoughts on our third quarter performance, as well as what we're seeing from the broader market. Eric will then take us through the numbers in more detail. I will come back at the end with some closing remarks, and then we'll open it up for Q&A. Slide five summarizes Q3 performance. The headline is that results came in as expected. On our last earnings call, we said that we expected underlying performance in Q3 to be similar to Q2, although reported results would be lower, principally due to a larger impact from the change in SPARC revenue deferral that was detailed on our last call. This is indeed what transpired. Reported results for Q3 were lower than Q2, and this was principally driven by the larger deferral impact. while underlying results were about the same quarter over quarter. Our underlying growth in Q3 was similar to, or maybe a bit better, than the broader market, which was generally flat. We gained share in orthodontics and diagnostics and held share in consumables. We undergrew the market in implants, although the gap narrowed, providing early evidence that our growth investments are having a positive impact. We'll say more about this in just a moment. With Q3 coming in as expected, we are reconfirming our full year guidance of negative one to negative 4% reported core growth and 10 to 12% adjusted EBITDA margins. Consistent with what we shared last quarter, we expect Q4 to return to growth on a reported basis. I'll now touch on the dental market in Q3 and go a bit deeper into our relative performance. As I just mentioned, the overall market was generally flat. The implant segment, though, was up slightly in Q3, with single-tooth procedures again outpacing full arch. Our single-tooth volume grew mid-single digits globally, while our full arch volume was down low single digits. Overall growth accelerated modestly quarter-on-quarter in our implant business, with premium growth above Q2, and value posting a third consecutive quarter of positive growth. The orthodontic segment saw flat to slightly positive growth in the quarter, largely unchanged from Q2. Our underlying performance was a bit better than this, as we continued to gain share in clear aligners. Spark shipments, as well as the number of ordering doctors, were both up double digits in Q3, and Spark on Demand is generating good traction in the early stages post-launch. The diagnostic segment remained soft, down mid-single digits in Q3. On a worldwide basis, our business also contracted, although we again outgrew the market. North America, where we generate well over half of our diagnostic sales, was once again a relative bright spot, up low single digits with additional share gains. In support of this, we introduced a number of new offerings in the quarter, including a new CBCT platform, enhanced software for our DEXIS intraoral scanner, and additional surgical functionality in our DTX treatment planning platform. The consumable segment was flat to slightly positive on a sellout basis, and our performance was roughly the same. As discussed on our last earnings call, with global supply chains currently stable, Our strong operational capabilities allow us to deliver high service levels with lower channel inventory. This strengthens capital efficiency for our channel partners and improves operating stability for us. To summarize our Q3 performance, results came in as expected. We know we have plenty of work ahead of us, but I am encouraged by the enthusiasm for change and commitment to improvement that I see across our organizations. I'll now turn it over to Eric to take us through the details.