Envista Holdings Corporation

Hello, my name is Chloe and I will be your conference call facilitator this afternoon. At this time, I would like to welcome everyone to Invista Holdings Corporation's second quarter 2026 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, please press star to the number one on your keypad. If you would like to withdraw your question, please press the star and the number two. I will now turn the call over to Mr. Jim Gustafson, Vice President of Investor Relations at Invista Holdings. Mr. Gustafson, you may begin your conference.

Good afternoon. Thanks for joining Invista's second quarter 2026 earnings call. We appreciate your interest in our company. With me today are Paul Keel, our President and Chief Executive Officer, and Eric Hammes, our Chief Financial Officer. Before I 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 available on the investor section of our website, www.investico.com. The audio portion of this call will be archived in the investor section of our website later today under the heading Events and Presentations. 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 our results. Unless otherwise noted, references in these remarks to company-specific financial metrics relate to the second quarter of 2026. and references to period-to-period increases and decreases in financial metrics are year-over-year. During the call, we may describe certain products and solutions 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 and 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 may 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'll turn the call over to Paul.

Thank you, Jim. Good afternoon and welcome, everyone. On today's call, I'll kick us off with a summary of our Q2 performance. Eric will then take us through the numbers in more detail, and I'll wrap things up with some closing thoughts before opening it up for Q&A. In the second quarter, we continued our momentum in executing on our growth and operational plans, delivering a strong first half to the year with core growth of just over 7%. The dental market continued to show its characteristic resilience. as patient demand for dental care remained stable despite macro pressures. For the second quarter, Invista posted a 5% core growth, delivering balanced growth across both reporting segments and all major geographies. SPARC once again grew double digits. Consumables and diagnostics were up high single digits, and implants and total ortho were up low single digits. Our continued growth and focus on operational excellence led to another quarter of both gross and EBITDA margin expansion, up 70 and 230 basis points respectively. A strong top line converted to even stronger earnings growth, with adjusted EBITDA up 28% and EPS growing 58%. We also had strong free cash flow conversion in the quarter, coming in at 158%. Alongside this, we purchased 2.4 million additional shares in Q2. And rounding out slide four, based on our strong first half performance and continued momentum, we're raising our full year guidance. Our updated 2026 expectations are now for core growth to grow 3.5 to 4.5%, adjusted EBITDA to grow 11 to 14%, and adjusted EPS of $1.50 to $1.55. Let's now turn to progress we made in the quarter in support of our three core priorities of growth, operations, and people. Starting with growth, we delivered continued broad-based performance across the portfolio, with balanced contributions coming from both reporting segments, all major geographies, and volume and price. In terms of segment performance, core growth in equipment and consumables was 8.5%, as both diagnostics and consumables were of high single digits. Core growth in specialty products and technologies was up over 3%, with Spark again growing double digits, but brackets and wires down high single digits, impacted by a strong prior year comp that benefited from customers buying ahead of announced tariff and price activity. Implants grew low single digits in line with the markets. Geographically, North America, Europe, APAC, and Latin America all grew nicely, with new products continuing to play an important role, and I'll provide further detail on this in just a moment. Turning to operations, we continue to see widespread benefits from our InVista business system. Improving manufacturing productivity helped drive our gross margin expansion, and when combined with sustained G&A productivity, adjusted EBITDA margin expanded by 230 basis points. We further reduced our effective tax rate in Q2, contributing to the very strong EPS growth that I mentioned earlier. And with respect to people, we continue to advance our high-performing continuous improvement culture through numerous customer, employee, and charitable events around the world. I had the good fortune to participate in several of these, including an InVista Smile project mission to the Dominican Republic where we treated approximately 1,500 patients, continuing to live our long-standing purpose of partnering with clinicians around the world to improve patients' lives. Now coming back to the central role that new product innovation is playing in our growth, slide six touches on three of the new product launches we had during the quarter. We covered some implants and diagnostics new products on the Q1 call, so we'll focus on consumables and ortho today. We had two important launches in our consumables business, one in endodontics and one in general dentistry. Zenseal Probe is an all-in-one bioceramic endodontic sealer. The product category is used in most root canal procedures, which are the largest segment within the billion-dollar-plus endodontic category. This solution is used to close gaps between filling material and the canal wall, and this particular product is novel in two respects. First, the flowable bioceramic formulation creates an alkaline environment that helps block bacterial formation, a central objective of the procedure. Second, the product is delivered through specially engineered tips that improve access in complex anatomies while also reducing material waste by roughly a third. resulting in improvements in both clinical efficacy as well as efficiency. DemiPro is a lightweight cordless curing light. Curing lights are broadly used across many restorative dental procedures. This solution is ergonomically designed to reduce fatigue while also improving access by way of a 360 degree rotatable tip. Our consumables business has been consistently gaining share across the last several quarters. and we expect these two innovations to further build on that momentum. In our orthodontics business, we've spoken a fair bit about how we've been leveraging our digital capabilities to consistently take share in clear aligners. Wormco Digital Bonding, or ODB, uses much of the same technology, but on the bracket and wire side. When we first launched this platform in 2023, we did so with our market-leading Stamen Ultima system, In Q2 of this year, we expanded coverage of ODB to all of our bracket systems, further solidifying our position as the only scaled player in the market, offering complete solutions in both aligners and fixed orthodontics. New product innovation has long been a hallmark of Invista, having created numerous important categories in dentistry across the years, such as dental implants, passive self-wagging brackets, and digital treatment planning. Over the last two years, we've materially ramped investments in new product development and commercialization. It's exciting to see the positive impact that these investments are making for all our stakeholders, customers, colleagues, our communities, and our shareholders. Having provided an overview of the quarter, I'll turn the call over to Eric to walk us through the numbers in more detail.