Morning. My name is Jeff Johnson. I am one of the Senior Medical Technology Analysts at Baird. Our next presentation this morning is from DENTSPLY SIRONA, a leading manufacturer of dental consumables and equipment across the globe. With us today, we are very happy to have DENTSPLY SIRONA CEO, Dan Scavilla, CFO, John Fortson, and Chief Commercial Officer, Aldo Denti. Dan, I will give you 30 seconds if there is anything you want to say to start off or we can go straight into Q&A. Jeff, just very quickly. First of all, thanks for having us. It is great to be here and I am really excited to have both Jon and Aldo on stage. I am going to have them do some answers because I want the team, I want the investors to understand the strength of my team. Again, appreciate you letting me bring them up with me. Yeah, no, happy to have all of you here and thanks for making the effort. I will start first with you just because I think you have passed your one-year anniversary now, as CEO of DENTSPLY. What has gone better than you thought in that first year at the company and what maybe have you realized could be tougher than you thought when you first came in? Yeah, great question, Jeff. A couple things. I am really happy with the team I have recruited over the past year. My executive committee is rock solid and I am feeling very bullish with them. Pulling that level of talent in the face of the turnaround was actually better than I would have anticipated, super pleased with that. I like the progress we made bringing lean and Agile in as a way to discipline and drive, focus on the customer and make things move faster. That is going really well for us as well. Honestly, with Aldo's speed in verticalizing U.S. sales and investing in clinic, getting that done, all at or above where I want to be for right now. The headwinds that we did not see, that I struggle with, I think are the European exhaling of inventory through a lot of the dealers right there. That's created a little bit of a headwind for us. Even though people don't talk a lot about it, we're number one in a lot of the conflict areas, and that prolonged event of not only delayed sales but increased oil prices. Those things are adding pressure. We're not cutting off our spend, our investment, our return to growth. It's just extra pressure on all those things while the others are going well. Yeah. As you talk about, I don't have this in my Q&A, so Suzanne, sorry, I'm not going off script already. But when you talk about the quality of the management team, you've also made some pretty significant board changes that seem to really be helping or I guess TBD on helping, but it has strengthened the board. No, for sure. Listen, bringing someone in with the banking background that's going to help Jon and I with our capital allocation and approach to the game is fantastic. Having Don join, who's come from Patterson in the past and getting at that board level, the dealer perspective can really help us mature that. A couple of great finds in addition with former CFOs. So it's a very strong board. It's a very engaged board, and I think they're willing to share their network, their experience, that helps us move even faster. All right. That's great. So, one question I want to finish with, and then we'll maybe open it up here to Jon or Aldo. But when you first came in, I went back to some of the first couple transcripts and you talked about moving with urgency. I think you had a quote of, "This is a moment for bold change, decisive action rooted in urgency," things like that. I haven't heard you use that word "urgency" as much in the last quarter or two, and maybe I'm overreading things, but as you've dug in here, how are you thinking about the time to turn around and to really stabilize and return this business to growth? No, I got it. So listen, every answer hereafter is going to use the word "urgent. Now my transcript search will highlight this one. You're right. Honestly, nothing shifted. We really kicked off in January. We said that's the start. We've reported out through the first six months. Dropping the word probably is more something on my side I wasn't realizing. Yep. But I would say that the speed in which we recruited, that we did the transformation, that we brought lean in, as we're going after the cost reduction exercises, reinvestment exercises, they continue at an urgent pace. I probably would tell you I'm not signaling anything of a concern of, gosh, this is going to be deeper than I thought. Not really anything right now. I'm happy with where we are. Yep. Do I wish we could move faster? Of course. Yeah. Right? I think that would be true about a lot. But I am not concerned with what we have discovered or I have discovered the past year. I remain committed to being able to turn this around, as we said, within the 24-month time frame that we originally planned. All right. Great. Aldo, maybe, you have been what, six months at the company? Eight, nine months. Eight or nine. Okay. Eight or nine months. Obviously you have long history in med tech. Yeah a successful history in med tech. On the equipment and consumable side of the business, where do you see the biggest opportunity to change there? I think in implants, we know some of the medical education or clinical education stuff that needs to be done. Ortho we will get into a little bit. But in the core kind of bread and butter of DENTSPLY equipment and consumables, what needs to be done there to get that back to growth? Yeah, as you can imagine, being a global business, there is no one select answer. But in the U.S., as you have seen, we have selectively expanded our dealer network. And the reason we have done that is because we want to be in more doors, and we want to open up the aperture of our ability to sell our equipment. So that has been very choiceful. We have done that same in Canada. So that is because we feel like we can increase the level of penetration. The penetration of CEREC has, as you know, been somewhat stalled out for some period of time, and we see a great opportunity, especially as single-visit dentistry becomes more popularized, and that is a place where I think we can double down. So selectively we have done that. In other markets, we have tried different business model approaches. Like in Australia, we have successfully tried some new ways of operating when it comes to our capital equipment, and we are seeing the rewards of that. So that continues to be sort of what we are doing. So that is on the capital equipment side. On the consumable side, look, we are, and remain, number one. We are reinvesting in the verticalization of the sales force. So part of what we have done is we had a theme of generalists, and we do not believe that is a successful way forward in the marketplace. So what we have done is verticalized by clinical specialty. In this case, a clinical specialty would be endo, implants, consumables. So we have brought in new leadership in the U.S. that has that dental background for every single one of those clinical specialty areas. We have doubled down on our training capabilities. Now what we're doing is obviously trying to ramp up how we go to market in terms of accelerating our penetration. The way we're doing that is by investing in clinical education. We're imminently going to have a DS World in the U.S. and concurrently running DS Worlds in Europe and select countries like the U.K. We had one in Germany, Italy, Spain. So you see an effort to put our company back in clinical education terms. Then the other thing we're doing is investing in R&D, which we hadn't done for quite some time. So those combined efforts are what we think is going to yield the results that we expect, both on the capital equipment side and on the consumable side. The last thing I'd say on capital equipment, in particular when it comes to CEREC, is we do believe that we have a very powerful tool in DS Core, and the combination of DS Core plus the milling capability and the restoration capability is a very powerful way to drive efficiency in a single dentistry visit. We believe that's something that we can lean on heavily, and we're going to do that. Okay, so your expectation on the CEREC side would be, I think penetration, I'll bet for a decade, maybe has been upper teens to low 20s. 20s. Yeah. 20s. Low 20s, something like that. 20s, yeah. Mm-hmm. But I'll bet it hasn't changed a whole lot in the past decade. Mm-mm. You think there is a path to- I do to re-accelerating that penetration rate. I do. or moving that higher over time? I do. Why do I say that? If you've ever gone through a visit and you've had a crown put in, single visit dentistry is something that patients just simply don't know exists. There's an opportunity to educate the patient base to demand a single visit dental appointment where you can, if you've ever done it, right now it takes 2, 3 weeks to get a crown. You can do all of that in a day. There's a premium you can command for that, and we believe there's an opportunity to extract value from that awareness. Jeff, I think we're not saying, "Hey, it's just more of the same. We're going to keep trying. Yep. I think we realize the potential here, how we create that awareness through clinical education, through rep training, through all those things, will matter. We do think we can go beyond that 20%. We think the market's ready for it, especially with the digital flow and all that occurring. But it requires us attacking it differently to get better awareness. Usually, when you talk to patients, they're aware of it, they rave about it. But till this point, most folks don't know it exists. Sure. I think the other thing, just to finish on that point is- Yep We had obviously a limited penetration up until now. What's going to change? Why is there going to be a dramatic shift? Well, there's the digital workflow. Makes a much more efficient, much more streamlined process. The addition of DS Core on top of the mill is a capability that we're building out. We've barely finished on that workflow. It's really just now getting to a point where it's stabilized, and it's got the right componentry to it to make it seamless. We feel that's an opportunity. All right. Fair enough. How important is innovation on the consumable side of the business? It is something that seems to be lacking across the industry, probably over the last 5-7 years or something. Starting to see a little bit of that come back, but how important is innovation in consumables? I think innovation that can create an unmet need, solve, right? Going at that is always a good thing. I do not think there is a point where you stop investing and driving it. Now, revolutionary versus evolutionary innovation is something we have to look at. Some of these markets are mature enough that we can look for those things. But you will see what we will do over time is probably, even in some of those more commoditized areas, we are looking for some disruptors. We will probably see some increases next year in R&D spend that will help us go look at ways to go find that. Okay. One question I just thought of, going back to the CEREC commentary, is just as you think about that penetration moving up over time, would it still be on a milling basis as opposed to a 3D printing basis? Both. I think it is both. I think you have the ability for mill to go beyond the 20%. I think there is also a rise in 3D that could be as high as 30%, call it that way. So one would think within the next 3-5 years, at least half of the dental practices, I believe, could or should have milling or printing or both. For full resto crown. Depends on the development. There's a lot that has to occur still in 3D printing. Yep. You won't get, at least currently, 3D printing to be as strong as milling. There's a lot of reasons why you can't. Sure. The aesthetics, the matching, the things like that, there's still a long way to go. Will they get there over five years? Could, possibly. I'm not of the mindset that 3D printing will obsolete milling. I've worked in manufacturing. I've done both. There's always a need to do both. Okay, fair enough. On the implant side of the business, is it all about clinical education and doc training? It sounds like you're fairly comfortable or comfortable with the implants that you have themselves. So what's it take to get that business if the market's been growing, let's say, close to mid-single digits Yeah. Mm-hmm. plus or minus, to get back there? Yeah. Listen, I think we have to dissect that a little bit further, right? Because implants, there's a couple of things we should discuss. The first one is premium and value are not made the same. You've probably seen the numbers. The value segment is growing, is driving the growth, as are DSOs. So for us to be successful, number one, we've got to invest in our value sales force, which we have done to limited effect, in a sense. We haven't really invested all that much in the past years. Now we are taking a new lens, and we're wanting to invest. That goes both for Europe and for the U.S. To do that, you have to have a qualified sales force. First step is we have brought down the rate of turnover in our premium sales force, and we have recertified the entire U.S. sales force to a new standard. 100% certification. Step two, expand into value. Step three, build our DSO channel. We had very limited DSO selling capabilities. We have built out that capability. The combination of DSO plus supercharging our value segment, plus clinical education, plus sales training, is the recipe to succeed. As you can imagine, conversion cycles in implants take a bit longer. That is going to take some time to manifest, but the fundamentals are starting to come together there. Okay. On the Challenger side, that is mainly your MIS business. Correct And you have everything you need there. Absolutely From a product standpoint? The LINX product line is extraordinarily competitive. Listen, whether you look at Astra Tech Implant System Premium, whether you look at MIS Implants Technologies, then you add the custom abutment capabilities of Atlantis, and you add our Regent portfolio, we have everything we need to succeed. What I would offer on top of that is the next step is then to make the digital workflow seamless. Right. To add implants on DS Core, just like we did CEREC on DS Core, the next step is to make that process seamless so that the planning capability of ingesting the image, going into the planning software, and then doing the execution can all be done with a digital workflow that is much more efficient than it is today. Yeah. It doesn't matter what competitor you look at, people have to jump in and out of four, five, six softwares to get that done. Yeah. We'll continue to put innovation into the products themselves as well, and we see some differentiation capabilities. We're exploring that now to further push that along. All right. On the building out the value or the Challenger implant sales force. How much bigger does your sales force need to get from here on the implant side? Yeah. We don't typically disclose size of sales force. Sure Because that's. Sure What I would tell you is we are going to make a substantial investment to build out that channel, because we also know that to get to the penetration levels that we expect, we're going to need more people. Okay. That effort is underway. Those would mainly be, John, 2027 investments? Or Dan? Well, they're underway right now. They're underway. They're going to continue through 2027, for sure. Yeah, okay. Yeah, Jeff, what I would think of is waves, right? We're not going to go out and suddenly have this massive type of thing, right? Think about concentric circles. We'll continue to hire, focus, and go, and I would think that even beyond 2027, we'll be looking to recruit and expand in those areas. I don't see it as a drag on the P&L. Okay. I think there's ways to fund that, I think that's kind of the path we're headed. Yeah. That said, we will hire as fast as we can for the sake of speeding this up. Yeah. Here's what I can tell you, because I think I can provide some clarity. When it comes to value implants, you have to make sure that your productivity, rep productivity is there. To do that, we can concentrate on high-density geographies, and we can start with that. We don't need to go everywhere. We can go to the places where we have the most volume that we can achieve, and we can work our way backwards from that. So that's kind of the lens we're looking at. Geographically, would that start U.S. Yes Europe? Both. Both. Both. In Europe, we're a little further down the track. Yep. In U.S., we have work to do. All right. I also think it's important, Jeff, this is a game of resource reallocation and prioritization, right? Dan has given the company, and Aldo, very clear marching orders that the focus is on the customer, right? That might be where the company has struggled because it's such a big, broad, diffuse, global organization, right? We are going to take resources from other cost centers to take that money to invest in this, right? It's not additive in terms of overall numbers. I think that's important, what Dan was trying to say. You're going to see a shift in where we're allocating those resources. Okay. Where do some of those resources come out of? Anything customer-facing at all, anything It will not come out of customer-facing. There are some customer service support, shared services, back office areas that we will streamline, make those processes more efficient, so that we can take that money and divert it to Aldo's sales force. But it will always be done with the lens of how do we improve and enhance the customer experience because it is more than just making the sale, right? You have to service that customer. You have to make sure the equipment gets there on time. You have to make sure that they have payment methods that make sense. All those processes, as we make those more efficient, that frees up money and time and resources for Yeah. I think, look our customers We've talked about it before. Diffusion is the enemy of success. When you're so broadly diffused across geographies globally, across so many different product lines, it's going to be very difficult to be successful everywhere. Part of what we're doing is looking at where do we have the right to win? Where do we over invest, even if we have to, and extract maximum value and shock, like every other med tech company, our sales are coming from limited amount of geographies and limited amount of product lines. That's the lens we're going to take a look at. One of the things that all of us have done in the past is centralize and leverage out support departments. Right. DENTSPLY SIRONA has been a collection of acquisitions never integrated, so there's a lot for us to go out to go get the funds to put into the customer-facing. That's really what we're executing right now. Yeah. All right. That makes a ton of sense. All right. Let's get through the orthodontics business and touch on Wellspect. I want to wrap it all up with how we put this together over the next year or 2 and over the next 5 years. Okay. Something like that. All right? Ortho, a lot can be said about your ortho business over the years. From tsunamis to maybe poorly timed DTC acquisitions at the peak of valuation cycles back a few years ago. Yeah. Things like that. Most of that has been cleaned up at this point. You've got a SureSmile business that has a very good reputation in moving teeth accurately and consistently. But it's only about 5% of the clear aligner global market. Right 2, 3% of the global ortho market in general. You don't really have much of a sales force. You don't have, anymore, a presence in brackets and wires, which always helps with cross-selling and relationships. So what do you do with that ortho business, and how does it, one, make sense as part of Dentsply? and two, is it a long-term growth area? Yeah. It's a great question. A couple things, right? You have the robotically bent wires, which are a major driver and are very key to actually speeding up the whole procedure and actually improving the outcome. So we're still in the robotically bent, which is the main thing. The SureSmile's a great product. Literally, this is my commercial. I'm wearing it now as we speak. I'm using it. It's great. It's easy to use. So we recognize that to do this right, we need to modernize software, increase sales force, go into the clinical education spending. The debate we're having is could we do that? Should we do that with everything else or not? And we haven't made that decision fully. It is a great asset. It's one that we could develop and gain more than 5% share. As we weigh through all of our choices we're making to get into the second phase of return to growth, we're trying to decide, is that one we invest in or not? Don't have that answer for you yet, but we recognize that there's value in it, whether it's in our hands or for the shareholders, maybe somewhere else. Okay. Yeah, that makes sense. Let's see if I have anything else. Would it ever make sense then with that robotic business to scale up in the brackets and wires side- Yeah in core ortho, and are there external ways to do that? Yeah, there are. Like I said, our thing right now was let's go stabilize the U.S. Let's go put the building blocks in place. How do you actually get this back into where you're not shrinking? That's really what this past, well, out of those 8 months, my year have been with that. The next chapter is, okay, what do we do with the assets to go deeper to create more focus? What I'm signaling isn't something mystic, it's just we have a strategic plan we're developing. We'll have that done probably by the end of the year. We'll come out and say, "This is where we're going to go take this company as a next step." It's just in play right now. But you could go deeper in the robotic and bent wires. You can invest in the ortho itself. There's a lot there, and I think that's really the great thing is this can be an amazing asset. We just have to decide which direction do we want to go in. Okay. Yeah, look, I think one of the things. So in the meantime, what have we done? Because it's not we just stood still. We have verticalized the business. We've brought a new leader in that has experience in aligners. We've done that. We have retrained our sales force that we have, but we've also pivoted away from a focus on GPs to specialists. Why? Because the hybrid treatment that Dan references is best suited in the hands of a specialist that can do a hybrid brace and then an aligner coupled with the software that is, as you said, very good. Does it need some work? Yeah, it needs some work. So right now, as we are deciding where to put our focus, we've said, "Okay, let's focus on the specialist. Let's also bring in some clinical implementation specialists that can sit with that specialist and walk through the procedure. That's how we're choosing to tackle the market right now. It's selective, but it's also taking advantage of where we think our product and our footprint can maximize the return. Do you have many white label, DSO-focused GP SureSmile contracts still active? As you kind of shift that focus to specialty, do we need to think over the next 4 to 6 to 8 quarters of working out of those relationships? With the numbers you quoted, not really a large penetration. Remember, our penetration in DSOs, we didn't really have a very effective organization to chase DSOs, so we don't have a very large footprint. Yeah That we have to retro out of. The answer is that's not really a concern of ours. The numbers are relatively small. Yeah. The other thing, Jeff, I'd add too is we're not signaling that we're walking away from the generalist. No. We're actually expanding into the specialist. Okay. Okay? That makes more sense. Yeah. Okay. I got that. On Wellspect, just real quickly, it's only about 10% of your global revenue, but it's one of your more consistent, better growing parts of your business. LoFric and Navina, is it? What's the other product? Surity. Surity, yeah. Surity. Are well thought of brands out there for sure. You've tried to run a process a couple of times, have never pulled the trigger on selling that part of the business. Is that something that becomes a bigger than 10% part of the business over time through organic or inorganic, or do you revisit selling it someday? Just where's the long-term Wellspect fit? Yeah, it's a great question. I stopped the sale. I felt like the offers were below the intrinsic value. Having seen what was invested, not only in manufacturing and cost out capabilities but product launches, it was clear that there was a longer runway for Wellspect. So holding that and signaling growth to that is really what I wanted to do. Now, to your point, it's a cash flow generator, so not only can we invest very well into them, but we can use that to accelerate DENTSPLY SIRONA. For me, it can become a much bigger part than 10% over the next five years. It has in its path great growth capabilities. I think you'll see that as we talk more third, fourth quarter next year, and they penetrate the U.S. market and go. Should an incredible offer come up that is the best to do for the company and the shareholders, of course, we'll consider that. But short of that, I would rather really build this up, make it part of a diverse company, not a dental-focused company, and it's a pathway for us to do that. Okay. And just as I think about the second half model, maybe we'll talk very high level about 2027, but on the second half of this year, the goal has been to get back to U.S. organic growth. Slight growth in the fourth quarter. Is that still an achievable goal, number 1? And number 2, I think, third quarter, we were still thinking, coming out of the second quarter, a pretty low EPS figure on a lot of these investments we're talking about. Just walk us through where we get that sequential jump from 3Q to 4Q on the EPS side as well. Yeah. Just to answer the question sequentially, move through each of those. You are correct. There is going to be a sequential step-up between Q3 to Q4. Nothing has changed sitting here today from what we said in the last earnings call. We still got four more months to run. We are working hard. I would tell you to your first comment, there is definitely a sense of urgency in the company. You may not talk about it, but there is a sense of urgency in the company right now. One of the things, we have studied this. When you look at our historical numbers over the last couple of years in the fourth quarter, it is always a pretty strong quarter. It gets distorted by noise. There has been a number of, whether it is ERP or Byte or other things that have kind of made adjustments in that, but it is doable. We need to see some of the green shoots begin to yield fruit for that to happen, but that is what we are shooting for right now. I will tell you, though, and I think Dan has been very upfront, and I share his philosophy on this, we are not going to try to hit individual. We are going to do what is right for DENTSPLY SIRONA over the long haul, and if things have to move around from one quarter to the next, we are going to do the right thing Yeah to get this company on the right trajectory. If it ends up being a Q1 thing, so be it. But we are right now sitting here tracking. We are not changing our position. Yeah, we feel good about it. So another way to answer that is all of the dealers that Aldo and team put in place in the first, second quarter, get trained, get up to speed, build a pipeline, come into the fourth quarter, which is a heavy capital. We think that is a lift that was not there historically. The clinical spend that we have done and are investing heavier in the third quarter will ease off a little bit holiday seasons and things like that. So you see that natural lift. You have got Aldo's trained sales force that he mentioned, and the team stabilizing from verticalization. All of these tend to come into that. There is not really a Hail Mary pass like we are going. It is not even that far off historical norms if you look at what that EPS needs to be. Yeah. It's really about executing. As John said, we're going to invest in the long-term health. We think we're in good shape now, but should we find that there's additional pressures, I'd probably miss the bottom line a little bit and continue to spend for long-term health than to do anything foolish and cut it. Yeah. I think the other thing to take into consideration is we're imminently going to go to DS World in the U.S. We have concurrent meetings running in Europe, in the U.K., in Spain. Yeah in Italy. All this quarter. All of them are happening right now, this month. All of that obviously has impact. As Dan said, the dealers are coming online. It was all mapped to sort of align to the third and fourth quarter. Yep. All right. That makes sense. Let's say you end up in that $140 million to $150 million range for the year. With the investments that are continuing as we talked about, can the next 12 or 18 months be EPS growth and global revenue growth? Or should we be thinking kind of more flattish for a time before we can start to see return to growth? Yeah, I'll answer a couple ways, Rick, because we haven't gone through yet to give you rough- Sure 2027 guidance. But I did announce with the return to growth that it was a 24-month plan. Right? I don't think we exit this year and declare victory. I think we declare we're on track or slightly ahead, slightly off. I would think right now looking at flattish into the year wouldn't be the craziest thought to go into. More data when we get into the first quarter and know where we are. Yeah. Think about flattish being kind of an organic revenue and an EPS kind of not crazy range to think about for 2027 is what you You got it. meant by that. Yeah. You got it. That kind of fits, I think, with where we are at in our model. I think Street has a little bit of EPS growth next year, but it is hard to tell who is building off that tariff refund or not. Right. You got it. Maybe that needs to be cleaned up a little bit, I think. Yeah in sell side models. Longer term, Dan, in the last minute and a half here, I will just leave the question to you, where do you see DENTSPLY? I know you haven't put LRP targets out there. This wouldn't be an LRP, but if market, I don't know, 3%-4%, something like that for the global dental markets over time is that something you aspire to be? Is that something you aspire to be above? Just how to think about Yeah the long-term health. No, thanks, Jeff. We are actually doing LRP and strat plan currently. We will come out early next year and kind of share that in a thing. My vision always for this company has been to grow at or slightly above market on the top line, be a strong cash flow generator, and grow the bottom line greater than the top, whether that be through leverage and cost reductions and share repurchases. That is really key where I see de-leverage this thing for the breathability and flexibility. It is one of John's biggest things. Over the next several years, I want to be in a very different spot from cash, from leverage, from growth than where we are as we entered in 2026. Yep. Perfect. Well, I think your timing is perfect. Our time is up. There you go. Please join me in thanking DENTSPLY for a great overview here of the company. Thank you. Thank you. Thank you. Our next presentation is set to begin. I do not have in my notes here, so we will just leave it at that. Leave it there. All right. Thank you. Thank you. Thanks