BREA, Calif., May 1, 2024 /PRNewswire/ — Envista Holdings Corporation (NYSE: NVST) today announced results for the first quarter of 2024.
For the quarter ended March 29, 2024, reported sales were $623.6 million. Core sales in the quarter increased 0.4% over the corresponding quarter in 2023.
For the first quarter of 2024, net income was $23.6 million or $0.14 per diluted share. During the same period, adjusted net income was $45.8 million or $0.26 per diluted share compared to adjusted net income of $67.8 million or $0.38 per diluted share in the same period of 2023. Adjusted EBITDA for the first quarter of 2024 was $87.2 million compared to $114.0 million in the first quarter of 2023.
Amir Aghdaei, Chief Executive Officer, stated, “As expected, our first quarter results proved challenging as we continue to prioritize long-term investments to accelerate growth and drive profitability. While we have yet to reach an inflection point, we have made meaningful progress in the quarter. Our Spark business continues to perform growing double digits in the quarter, while expanding margins. Our value implant business returned to growth and we saw our consumables business stabilize. As we move through 2024, we remain focused on improving Spark margins, accelerating our North American implant business, and optimizing our operating structure using the Envista Business System.”
Mr. Aghdaei continued, “As previously announced, Paul Keel has been appointed as Envista’s new Chief Executive Officer effective later today, May 1, 2024. Paul is the right leader to drive the next phase of Envista’s development. I am proud of the progress we have made at Envista, creating a strategically differentiated and operationally capable company designed to digitize, personalize, and democratize the dental industry. I am committed to Envista’s long-term success and will remain a shareholder as well as a Senior Advisor to Envista.”
Paul Keel, incoming Chief Executive Officer, added, “I am excited to build on Envista’s strong foundation and look forward to working with the Envista team to serve all our stakeholders – patients, customers, colleagues, communities, and our shareholders.”
Envista will discuss its quarterly results during an investor conference call today starting at 2:00 P.M. PT. The call and an accompanying slide presentation will be webcast on the “Investors” section of Envista’s website, www.envistaco.com, under the subheading “Events & Presentations.” A replay of the webcast will be available in the same section of Envista’s website shortly after the conclusion of the presentation and will remain available until the next quarterly earnings call.
The conference call can be accessed by +1 800-225-9448 within the U.S. or +1 203-518-9708 outside the U.S. a few minutes before 2:00 PM PT and referencing conference ID #4678913. A replay of the conference call will be available shortly after the conclusion of the call. You can access the replay dial-in information on the “Investors” section of Envista’s website under the subheading “Events & Presentations.” Presentation materials relating to Envista’s results have been posted to the “Investors” section of Envista’s website under the subheading “Quarterly Earnings.”
ABOUT ENVISTA
Envista is a global family of more than 30 trusted dental brands, including Nobel Biocare, Ormco, DEXIS, and Kerr united by a shared purpose: to partner with professionals to improve lives. Envista helps its customers deliver the best possible patient care through industry-leading dental consumables, solutions, technology, and services. Its comprehensive portfolio, including dental implants and treatment options, orthodontics, and digital imaging technologies, covers a wide range of dentists’ clinical needs for diagnosing, treating, and preventing dental conditions as well as improving the aesthetics of the human smile. With a foundation comprised of the proven Envista Business System (EBS) methodology, an experienced leadership team, and a strong culture grounded in continuous improvement, commitment to innovation, and deep customer focus, Envista is well equipped to meet the end-to-end needs of dental professionals worldwide. Envista is one of the largest global dental products companies, with significant market positions in some of the most attractive segments of the dental products industry. For more information, please visit www.envistaco.com.
NON-GAAP MEASURES
All “Adjusted” amounts including core sales growth and free cash flow are non-GAAP items. Calculations of these measures, the reasons why we believe these measures provide useful information to investors, a reconciliation of these measures to the most directly comparable GAAP measures, and other information relating to these non-GAAP measures are included in the attached supplemental schedules. We do not reconcile forward looking non-GAAP measures to the comparable GAAP measures because of the inherent difficulty in predicting and estimating the future impact and timing of currency translation, acquisitions, discontinued products, and any other potential adjustments which would be reflected in any forecasted GAAP measure.
FORWARD-LOOKING STATEMENTS
Certain statements in this press release are “forward-looking” statements within the meaning of the federal securities laws. There are a number of important factors that could cause actual results, developments and business decisions to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include, among other things, the conditions in the U.S. and global economy, the impact of inflation and increasing interest rates, international economic, political, legal, compliance and business factors, the markets served by us and the financial markets, the impact of our debt obligations on our operations and liquidity, developments and uncertainties in trade policies and regulations, contractions or growth rates and cyclicality of markets we serve, risks relating to product manufacturing, commodity costs and surcharges, our ability to adjust purchases and manufacturing capacity to reflect market conditions, reliance on sole or limited sources of supply, disruptions relating to war, terrorism, climate change, widespread protests and civil unrest, man-made and natural disasters, public health issues and other events, security breaches or other disruptions of our information technology systems or violations of data privacy laws, fluctuations in inventory of our distributors and customers, loss of a key distributor, our relationships with and the performance of our channel partners, competition, our ability to develop and successfully market new products and services, our ability to attract, develop and retain our key personnel, the potential for improper conduct by our employees, agents or business partners, our compliance with applicable laws and regulations (including regulations relating to medical devices and the health care industry), the results of our clinical trials and perceptions thereof, penalties associated with any off-label marketing of our products, modifications to our products that require new marketing clearances or authorizations, our ability to effectively address cost reductions and other changes in the health care industry, our ability to successfully identify and consummate appropriate acquisitions and strategic investments, our ability to integrate the businesses we acquire and achieve the anticipated benefits of such acquisitions, contingent liabilities relating to acquisitions, investments and divestitures, our ability to adequately protect our intellectual property, the impact of our restructuring activities on our ability to grow, risks relating to currency exchange rates, changes in tax laws applicable to multinational companies, litigation and other contingent liabilities including intellectual property and environmental, health and safety matters, risks relating to product, service or software defects, the impact of regulation on demand for our products and services, and labor matters. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our Annual Report on Form 10-K for fiscal year 2023 and our Quarterly reports on Form 10-Q. These forward-looking statements speak only as of the date of this press release and except to the extent required by applicable law, we do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
CONTACT
Stephen Keller
Principal Financial Officer
Envista Holdings Corporation
200 S. Kraemer Blvd., Building E
Brea, CA 92821
Telephone: (714) 817-7000
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ENVISTA HOLDINGS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) ($ and shares in millions, except per share amounts) |
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Three Months Ended |
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March 29, 2024 |
March 31, 2023 |
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Sales |
$ 623.6 |
$ 627.2 |
|
|
Cost of sales |
267.3 |
264.5 |
|
|
Gross profit |
356.3 |
362.7 |
|
|
Operating expenses: |
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|
Selling, general and administrative |
284.9 |
266.1 |
|
|
Research and development |
23.3 |
24.5 |
|
|
Operating profit |
48.1 |
72.1 |
|
|
Nonoperating income (expense): |
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Other income, net |
0.1 |
0.3 |
|
|
Interest expense, net |
(12.9) |
(16.7) |
|
|
Income before income taxes |
35.3 |
55.7 |
|
|
Income tax expense |
11.7 |
11.9 |
|
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Net Income |
$ 23.6 |
$ 43.8 |
|
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Earnings per share: |
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Earnings – basic |
$ 0.14 |
$ 0.27 |
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Earnings – diluted |
$ 0.14 |
$ 0.25 |
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Average common stock and common equivalent shares outstanding: |
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Basic |
171.9 |
163.6 |
|
|
Diluted |
173.4 |
177.4 |
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ENVISTA HOLDINGS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) ($ in millions, except share amounts) |
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As of |
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March 29, 2024 |
December 31, 2023 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ 948.5 |
$ 940.0 |
|
|
Trade accounts receivable, less allowance for credit losses of $19.8 and $17.3, respectively |
413.0 |
407.5 |
|
|
Inventories, net |
267.4 |
258.8 |
|
|
Prepaid expenses and other current assets |
143.0 |
137.4 |
|
|
Total current assets |
1,771.9 |
1,743.7 |
|
|
Property, plant and equipment, net |
306.2 |
309.6 |
|
|
Operating lease right-of-use assets |
125.3 |
125.1 |
|
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Other long-term assets |
174.4 |
180.5 |
|
|
Goodwill |
3,259.8 |
3,292.2 |
|
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Other intangible assets, net |
918.7 |
954.0 |
|
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Total assets |
$ 6,556.3 |
$ 6,605.1 |
|
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Short-term debt |
$ 115.5 |
$ 115.3 |
|
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Trade accounts payable |
174.7 |
179.5 |
|
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Accrued expenses and other liabilities |
458.6 |
455.7 |
|
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Operating lease liabilities |
32.5 |
30.3 |
|
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Total current liabilities |
781.3 |
780.8 |
|
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Operating lease liabilities |
107.5 |
109.9 |
|
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Other long-term liabilities |
136.7 |
142.4 |
|
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Long-term debt |
1,390.5 |
1,398.1 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, $0.01 par value, 15.0 million shares authorized; no shares issued or outstanding at March 29, 2024 and December 31, 2023 |
— |
— |
|
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Common stock, $0.01 par value,$500.0 million shares authorized; $173.8 million shares issued and $171.9 million shares outstanding at March 29, 2024; $173.3 million shares issued and $171.5 million shares outstanding at December 31, 2023 |
1.7 |
1.7 |
|
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Additional paid-in capital |
3,767.4 |
3,758.2 |
|
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Retained earnings |
654.8 |
631.2 |
|
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Accumulated other comprehensive loss |
(283.6) |
(217.2) |
|
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Total stockholders’ equity |
4,140.3 |
4,173.9 |
|
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Total liabilities and stockholders’ equity |
$ 6,556.3 |
$ 6,605.1 |
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ENVISTA HOLDINGS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ($ in millions) |
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Three Months Ended |
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March 29, 2024 |
March 31, 2023 |
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Cash flows from operating activities: |
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Net income |
$ 23.6 |
$ 43.8 |
|
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Noncash items: |
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Depreciation |
9.5 |
8.5 |
|
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Amortization |
22.6 |
27.9 |
|
|
Allowance for credit losses |
4.5 |
2.0 |
|
|
Stock-based compensation expense |
11.0 |
15.0 |
|
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Restructuring charges |
(0.2) |
0.1 |
|
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Impairment charges |
0.8 |
0.3 |
|
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Amortization of right-of-use assets |
7.3 |
6.5 |
|
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Amortization of debt discount and issuance costs |
1.2 |
1.0 |
|
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Change in trade accounts receivable |
(16.3) |
(8.5) |
|
|
Change in inventories |
(12.2) |
(7.1) |
|
|
Change in trade accounts payable |
(2.7) |
(38.1) |
|
|
Change in prepaid expenses and other assets |
(3.8) |
1.3 |
|
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Change in accrued expenses and other liabilities |
4.3 |
(41.3) |
|
|
Change in operating lease liabilities |
(9.3) |
(8.3) |
|
|
Net cash provided by operating activities |
40.3 |
3.1 |
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Cash flows from investing activities: |
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Payments for additions to property, plant and equipment |
(11.0) |
(17.5) |
|
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All other investing activities, net |
0.3 |
(4.5) |
|
|
Net cash used in investing activities |
(10.7) |
(22.0) |
|
|
Cash flows from financing activities: |
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Proceeds from stock option exercises |
1.3 |
4.6 |
|
|
Tax withholding payment related to net settlement of equity awards |
(3.3) |
(6.1) |
|
|
All other financing activities |
(0.6) |
— |
|
|
Net cash used in financing activities |
(2.6) |
(1.5) |
|
|
Effect of exchange rate changes on cash and cash equivalents |
(18.5) |
(1.3) |
|
|
Net change in cash and cash equivalents |
8.5 |
(21.7) |
|
|
Beginning balance of cash and cash equivalents |
940.0 |
606.9 |
|
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Ending balance of cash and cash equivalents |
$ 948.5 |
$ 585.2 |
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ENVISTA HOLDINGS CORPORATION SUMMARY OF FINANCIAL METRICS (Unaudited) ($ in millions, except per share amounts) |
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|
GAAP |
|||
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Three Months Ended |
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|
March 29, 2024 |
March 31, 2023 |
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|
Gross Profit |
$ 356.3 |
$ 362.7 |
|
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Operating Profit |
$ 48.1 |
$ 72.1 |
|
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Net Income |
$ 23.6 |
$ 43.8 |
|
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Diluted Earnings Per Share |
$ 0.14 |
$ 0.25 |
|
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Operating Cash Flow |
$ 40.3 |
$ 3.1 |
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NON-GAAP * |
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Three Months Ended |
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|
March 29, 2024 |
March 31, 2023 |
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Adjusted Gross Profit |
$ 358.0 |
$ 364.2 |
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Adjusted Operating Profit |
$ 77.6 |
$ 105.2 |
|
|
Adjusted Net Income |
$ 45.8 |
$ 67.8 |
|
|
Adjusted Diluted EPS |
$ 0.26 |
$ 0.38 |
|
|
Adjusted EBITDA |
$ 87.2 |
$ 114.0 |
|
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Free Cash Flow |
$ 29.3 |
$ (14.4) |
|
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* |
For information on non-GAAP measures see “Reconciliation of GAAP to Non-GAAP Financial Measures” below. Also see the accompanying “Notes to Reconciliation of GAAP to Non-GAAP Financial Measures.” |
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ENVISTA HOLDINGS CORPORATION SEGMENT INFORMATION (Unaudited) ($ in millions) |
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Three Months Ended |
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|
March 29, 2024 |
March 31, 2023 |
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Sales |
|||
|
Specialty Products & Technologies |
$ 408.7 |
$ 410.0 |
|
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Equipment & Consumables |
214.9 |
217.2 |
|
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Total |
$ 623.6 |
$ 627.2 |
|
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Operating Profit |
|||
|
Specialty Products & Technologies |
$ 44.2 |
$ 71.1 |
|
|
Equipment & Consumables |
35.6 |
32.5 |
|
|
Other |
(31.7) |
(31.5) |
|
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Total |
$ 48.1 |
$ 72.1 |
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Operating Margins |
|||
|
Specialty Products & Technologies |
10.8 % |
17.3 % |
|
|
Equipment & Consumables |
16.6 % |
15.0 % |
|
|
Total |
7.7 % |
11.5 % |
|
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ENVISTA HOLDINGS CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED) ($ in millions, except per share amounts) |
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Adjusted Gross Profit and Adjusted Gross Margin |
|||
|
Three Months Ended |
|||
|
March 29, 2024 |
March 31, 2023 |
||
|
Gross Profit |
$ 356.3 |
$ 362.7 |
|
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Restructuring costs and asset impairments A |
1.7 |
1.5 |
|
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