DENTSPLY SIRONA Inc
For the period ended Mar 31, 2025. Filed May 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
XRAY$9.46-6.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000818479-24-000093
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000818479-25-000056
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 127 previous paragraphs and 103 current paragraphs.
44 unchanged; 33 reworded; 25 added; 47 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Segment Descriptions
Current report
A description of the products and services provided within each of the Company’s four reportable segments is provided below.
Current report
Recent tariff policies
Current report
As disclosed in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Form 10-K”), the Company’s business is subject to risks related to, among other factors, tariffs and other trade protection measures put in the place by the United States and other countries. The U.S. government has recently implemented or is in the process of implementing various tariffs on the importation of goods from certain countries, a number of which are applicable to the Company’s supply chain, operations, and sales. On April 2, 2025, the United States announced a baseline 10% tariff on all foreign goods and incremental tariff rates on goods imported from specified nations, including China and those in the European Union. The announced tariffs incremental to the baseline were subsequently suspended for a period of 90 days; however, China’s tariff rate was raised to 145%.
Current report
The tariffs enacted and proposed by the Trump Administration to date and retaliatory tariffs by other countries could make it significantly more difficult or costly for the Company to import certain products or materials to the United States, or export products or materials from the United States to other countries. Currently, a small portion of the products, materials, and components used in our products are imported from China, and a significant share of the dental equipment that we sell in the United States is manufactured in Europe. Europe is also a major market for our products, while sales in China represent less than 5% of the Company’s global sales on an annual basis. If the United States’ previously announced incremental tariffs imposed on member states of the European Union go into effect, or if member states of the European Union subsequently impose retaliatory tariffs on the United States, there may be a material impact on our business and results of operations. We continue to monitor and evaluate the ongoing and potential impacts of the tariffs and changes in trade policy, whether implemented or proposed, on our supply chain, costs, sales and profitability. We seek to implement strategies that would mitigate such impacts, including by reviewing competitive pricing strategies to offset tariffs and evaluating potential sourcing options that work with our vendors and merchants to seek to minimize products sourced from high tariff rate countries, both for existing products and for new product development. The impact that these tariffs and changes in trade policy will ultimately have on our financial results remains unclear, including the impact on demand for our products in certain markets if prices rise as a consequence of import tariffs. For additional information, see Part I, Item 1A, “Risk Factors” in our 2024 Form 10-K.
Current report
The impact of geopolitical conflicts
Current report
In 2025, geopolitical conflicts are expected to continue to shape market dynamics and pose general threats to financial stability in affected regions, including ongoing tensions from the Russia-Ukraine conflict and the conflict in the Middle East. Overall, the Company’s operations in Russia, Ukraine, and Israel have not been materially impacted by these conflicts.
Current report
The decrease in organic sales was driven by lower volumes in the Orthodontic and Implant Solutions segment as a result of the suspension of the sale and marketing of Byte aligner system and impression kits announced in October 2024, as well as lower volumes of implants and prosthetics products across all regions. These decreases were partially offset by growth in the Wellspect Healthcare segment.
Current report
The increase in organic sales was driven by growth in Europe and Rest of World, in part due to favorable pricing of restorative products, partially offset by lower volumes of endodontic and restorative products in the United States.
Current report
The decrease in organic sales was primarily due to the suspension of the sale and marketing of Byte aligner system and impression kits announced in October 2024. The decrease was also due to lower volumes for CAD/CAM equipment, implants products, and endodontic and restorative products. These decreases were partially offset by higher volumes for preventive products, imaging equipment, and Wellspect Healthcare products.
Current report
Organic sales of CAD/CAM were negatively affected by wholesale volumes for CAD/CAM products relative to the three months ended March 31, 2024 due in part to timing of distributor orders. Volumes for CAD/CAM products during the three months ended March 31, 2025 included a seasonal build of inventory held by distributors of approximately $4 million compared to a higher build of approximately $9 million for the three months ended March 31, 2024.
Current report
Distributor inventory levels for both CAD/CAM and imaging products at March 31, 2025 approximate historical averages.
Current report
The increase in organic sales was primarily due to higher volumes of imaging equipment and treatment centers within the Connected Technology Solutions segment, higher volumes and favorable pricing of restorative products in the Essential Dental Solutions segment, and higher volumes in the Wellspect Healthcare business, primarily driven by new product launches. These increases were partially offset by lower volumes of CAD/CAM equipment and implants and prosthetics products.
Current report
The increase in organic sales was primarily driven by higher volumes of treatment center and imaging products and growth in the Wellspect Healthcare segment. These increases were partially offset by lower volumes for endodontic products and CAD/CAM products, and unfavorable pricing for implants and prosthetics products.
Current report
Gross profit as a percentage of net sales for the three months ended March 31, 2025 showed a slight decline as the unfavorable absorption on lower volumes, foreign currency translation, and unfavorable mix of endodontic, CAD/CAM, and implants products were mostly offset by the impact of the one-time benefits to revenue noted above and a decrease in warranty costs.
Current report
The decrease in SG&A expenses for the three months ended March 31, 2025 was primarily driven by lower headcount costs for Byte and lower sales and advertising costs for Byte products after the suspension of the sale and marketing of Byte aligner systems and impression kits announced in October 2024. The decrease was also due to lower headcount costs as a result of restructuring activities.
Current report
The increase in segment adjusted operating income for the three months ended March 31, 2025 is due to lower headcount costs and professional service costs, favorable pricing particularly in Europe, and higher organic sales noted above.
Current report
The decrease in segment adjusted operating income for the three months ended March 31, 2025 is due to the lower organic sales for direct-to-consumer aligners and implants and prosthetics products noted above. The decreases were partially offset by lower headcount costs and professional service costs, as well as an adjustment to net sales for estimated customer refunds for the Byte aligner business as noted above.
Current report
Interest expense, net for the three months ended March 31, 2025 increased compared to the three months ended March 31, 2024 primarily due to a higher average carrying balance of short-term borrowings.
Current report
The effective tax rates for the three months ended March 31, 2025 and 2024 were 56.8% and 44.9%, respectively. The increase in effective tax rate is primarily driven by additional valuation allowance recorded in the three months ended March 31, 2025.
Current report
CRITICAL ACCOUNTING ESTIMATES
Current report
For the three months ended March 31, 2025, the Company considered qualitative and quantitative factors to determine whether any events or changes in circumstances had resulted in a more likely than not impairment of any of its goodwill or indefinite-lived intangible assets during the course of the quarter, and concluded there were no such indicators. As of March 31, 2025 the estimated fair value of the Implant & Prosthetic Solutions reporting unit within the Orthodontic and Implant Solutions segment exceeded its carrying value by less than 10%. The Company performed a hypothetical sensitivity analysis, based on the last impairment test performed as of December 31, 2024, by increasing the discount rate by 50 basis points. An increase of the discount rate by 50 basis points would result in a material impairment of the Implant & Prosthetic Solutions reporting unit, and therefore this reporting unit remains at-risk for future goodwill impairment. Additionally, the fair values of certain indefinite-lived intangible assets within the Orthodontic and Implant Solutions and Connected Technology Solutions segments continue to approximate carrying value. Any deviation in actual financial results compared to the forecasted financial results or valuation assumptions used in the annual or interim tests, a decline in equity valuations, increases in interest rates, or changes in the use of intangible assets, among other factors, could have a material adverse effect to the fair value of either the reporting units or intangible assets and could result in a future impairment charge. Goodwill associated with the Implant & Prosthetic Solutions reporting unit was $522 million at March 31, 2025, and the carrying values of the at-risk indefinite-lived intangible assets within the Orthodontic and Implant Solutions and Connected Technology Solutions segments were $83 million and $159 million, respectively, at March 31, 2025.
Current report
On March 19, 2025, the Company entered into a 364-day term loan of $435 million with a maturity date of March 18, 2026 (the “Bridge Loan”). Borrowings under the Bridge Loan will bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) the forward-looking Secured Overnight Financing Rate (such borrowings, “Term Benchmark Loans”), or (ii) a base rate, plus, in each case, an applicable margin calculated based on the Company’s credit ratings from Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services at the time and, in the case of Term Benchmark Loans, an adjustment of 10 basis points. In the event that the Bridge Loan remains outstanding for more than 90, 180, or 270 days, the Company will be obligated to pay duration fees of 0.50%, 0.75% and 1.00%, respectively, of the principal amounts outstanding on such dates. The net proceeds were $432 million, net of issuance fees totaling $3 million. The proceeds are being used to repay borrowings under the commercial paper facility and for other general corporate purposes.
Current report
Cash provided by financing activities increased compared to the three months ended March 31, 2024 primarily as a result of the Company entering into the Bridge Loan. The increase in cash provided by financing activities was partially offset by repayments on the commercial paper facility.
Current report
Restructuring Plans
Removed paragraphs (47)
Previous report
The Company operates in four reportable segments as described below.
Previous report
The impact of the Israel-Hamas war
Previous report
The Company’s operations in Israel consist of two manufacturing facilities for implants products, with one site in northern Israel and one site in southern Israel, which together employ approximately 350 associates. These facilities remain open and continue to operate. We may, however, decide to discontinue production at these facilities for the safety of our employees, or we could face future production slowdowns or interruptions at either location due to the impacts of the war, including personnel absences as a number of our employees have been called to active military duty, or due to other resource constraints such as the inability to source materials for production.
Previous report
Additionally, we sell products from across our portfolio to distributors of dental products and direct to dental practices within Israel and its neighboring countries which may face reduced patient traffic and demand for our products in the near term. Net sales for products sold to our customers in Israel comprised approximately 1% of our consolidated net sales for the three months ended September 30, 2024.
Previous report
While Israel does not constitute a material portion of our business, a significant escalation or expansion of the conflict’s current scope and economic disruption could result in loss of sales and market position, disrupt our supply chain, broaden inflationary costs including energy prices, and have a material adverse effect on our results of operations, including impairment of the net assets in Israel or goodwill within the Implant & Prosthetic Solutions reporting unit.
Previous report
The impact of the war in Ukraine
Previous report
A significant escalation or expansion of economic disruption from the conflict could interrupt our supply chain, broaden inflationary costs, impair our assets located in Russia, result in a loss of sales, and have a material adverse effect on our results of operations.
Previous report
As explained further in the Results of Operations section below, the Company has partially offset elevated costs in certain areas of the business with price increases. Should the higher inflationary environment continue, we may be unable to raise the prices of certain products and services sufficiently or engage in other cost cutting measures commensurate with the rate of inflation, which could have a material adverse effect on our results of operations and financial condition.
Previous report
Suspension of Byte aligner shipments
Previous report
On October 24, 2024, we announced that as a precautionary measure, we were voluntarily suspending the sale and marketing of our direct-to-consumer Byte aligner systems and impression kits while we conduct a review of certain regulatory requirements related to these products. We expect this suspension of sales to have a material impact on our results of operations in future periods. The sales of Byte aligner systems and impression kits represented approximately 5% of our annual revenue for the year ended December 31, 2023. For additional information, see Note 15, Subsequent Events, in the Notes to the Unaudited Consolidated Financial Statements of this Form 10-Q and see also Part II, Item 1A, “Risk Factors” of this Form 10-Q.
Previous report
The increase in organic sales for the three months ended September 30, 2024 was led by the performance of the Essential Dental Solutions segment, driven by higher volume in preventive and restorative products, particularly in the United States as described below. The increase was partially offset by unfavorable pricing in the Connected Technology Solutions segment and lower volumes in the Orthodontic and Implant Solutions segment.
Previous report
The decrease in organic sales for the nine months ended September 30, 2024 was primarily due to weaker demand for products in Connected Technology Solutions, particularly outside the United States, partially offset by growth in the Wellspect Healthcare segment and orthodontics products. The organic sales decrease for the nine months ended September 30, 2024 was also driven by weaker demand for implant and prosthetic solutions, primarily in the United States and Europe.
Previous report
The increase in organic sales for the three months ended September 30, 2024 was driven by higher volumes of preventive and restorative products in the United States. As described below, the higher volumes of preventive and restorative products in the United States was driven by a shift in the timing of approximately $20 million in distributor orders from the fourth quarter into the third quarterin advance of a fourth quarter Enterprise Resource Planning (“ERP”) system deployment in the United States.
Previous report
The increase in organic sales for the nine months ended September 30, 2024 was primarily due to higher volumes of endodontic products in Rest of World, offset by lower overall demand in Europe.
Previous report
The increase in organic sales for the nine months ended September 30, 2024 was primarily driven by higher volumes of orthodontics products in all regions, coupled with an increase in demand for implants products in Rest of World. This was partially offset by lower volumes of implants and prosthetics products in the United States and Europe.
Previous report
Prior to the suspension of Byte aligner sales and shipments on October 24, 2024, as discussed under Note 15, Subsequent Events, in the Notes to the Unaudited Consolidated Financial Statements of this Form 10-Q, sales for our direct-to-consumer aligner business continued to be negatively impacted in the third quarter by changes made to our operating model in response to legislative trends. Beginning in the second quarter, legislative changes in Nevada required us to discontinue new patient recruitment for our current direct-to-consumer aligner business model in that state. Additionally, laws relating to teledentistry enacted in Florida and Illinois during the third quarter prompted us to make certain adjustments to our processes and workflow for engaging with customers and other parts of our direct-to-consumer aligner business model. Our response to these regulatory and legislative developments has resulted in reductions of sales of direct-to-consumer orthodontics products by approximately $15 million during the first nine months of 2024. We expect these adjustments would have continued to have a negative impact in the fourth quarter of 2024 and into 2025 prior to the suspension of sales as discussed under Note 15, Subsequent Events, in the Notes to the Unaudited Consolidated Financial Statements of this Form 10-Q. We are also monitoring potential legislative initiatives underway in additional states, which could result in rules similar to those imposed in Florida and Illinois being enacted in 2025. Future legislative changes at the state or federal level, or changes in the interpretation of existing legislation by regulators, may further impact the current business model and operations of our direct-to-consumer aligner business or require us to evaluate patient recruitment strategies in certain states. We continue to monitor these legal developments. For additional information, see Part I, Item 1, “Business - Regulation” and Part 1, Item 1A, “Risk Factors” in our 2023 Form 10-K as updated in Part II, Item 1A “Risk Factors” in this Form 10-Q.
Previous report
Organic sales for the three months ended September 30, 2024 were flat as higher volumes from new product net sales and growth in Europe were offset due to timing of orders with a distributor in the United States.
Previous report
The increase in organic sales for the three months ended September 30, 2024 was driven by timing of orders for preventive and restorative consumable products in the United States, as distributors placed orders of approximately $20 million in advance of our fourth quarter deployment of a new ERP system. We expect distributor inventory levels of consumables products to return to historical averages by the end of the fourth quarter. The increase in organic sales was partially offset by lower volumes for Orthodontic and Implant Solutions.
Previous report
The increase in organic sales for the nine months ended September 30, 2024 was primarily due to an increase in demand for certain orthodontics products and CAD/CAM products, partially offset by a decrease in demand for implants and imaging products. Volumes for imaging products in the nine months ended September 30, 2024 included an increase in distributor inventory during the period of approximately $2 million compared to a build of approximately $15 million in the nine months ended September 30, 2023. Volumes for CAD/CAM products were positively affected by build in distributor inventory levels of approximately $28 million in the nine months ended September 30, 2024, compared to approximately $2 million in the nine months ended September 30, 2023.
Previous report
The decrease in organic sales for both the three and nine months ended September 30, 2024 was primarily due to lower demand for imaging products within the Connected Technology Solutions segment and lower demand for implants and prosthetics products, which was primarily a result of unfavorable market and macroeconomic trends. These decreases were partially offset by higher demand for orthodontics and Wellspect products.
Previous report
The increase in organic sales for the three months ended September 30, 2024 was primarily driven by an increase in demand for Essential Dental Solutions products, offset by lower demand for Connected Technology Solutions, particularly related to treatment centers and imaging.
Previous report
The decrease in organic sales for the nine months ended September 30, 2024 was primarily driven by unfavorable pricing for Connected Technology Solutions products, particularly in Japan, where there was lower volume due to competitive pressures. These decreases were partially offset by increased volumes for implants products. The local volume-based procurement program in China resulted in increased volumes for implants products during the first half of 2024, representing a marked improvement from the program's adverse impact in early 2023; however, volumes in China declined in the third quarter due to current macroeconomic conditions.
Previous report
Gross profit as a percentage of net sales for the three months ended September 30, 2024 decreased primarily due to unfavorable pricing and mix of CAD/CAM and implants products, as well as lower volumes of imaging products, which was offset by increased volumes in the Essential Dental Solutions segment for preventive and restorative products.
Previous report
Gross profit as a percentage of net sales for the nine months ended September 30, 2024 declined primarily due to lower volumes of imaging products, partially offset by improved pricing in Essential Dental Solutions.
Previous report
Higher manufacturing and input costs for the both the three and nine months ended September 30, 2024 were partially offset by a decrease in warranty costs.
Previous report
The increase in SG&A expenses for the three months ended September 30, 2024 was primarily driven by higher selling costs, particularly in Orthodontic and Implant Solutions, and costs related to a new global ERP system. The comparative three months ended September 30, 2023 included a gain from release of employee compensation accruals as a result of a settlement. These increases were partly offset by lower headcount costs as a result of restructuring activities.
Previous report
The decrease in SG&A expenses for the nine months ended September 30, 2024 was driven by lower headcount costs, travel costs, and professional service costs. The decrease was mostly offset by higher selling costs, particularly in Orthodontic and Implant Solutions.
Previous report
The increase in segment adjusted operating income for both the three and nine months ended September 30, 2024 is due to the higher organic sales noted above and favorable product mix, particularly in the three months ended September 30, 2024.
Previous report
The decrease in segment adjusted operating income for both the three and nine months ended September 30, 2024 is due to unfavorable geographic mix for implants products, higher distribution and manufacturing costs, an increase in advertising and selling costs, and higher headcount, primarily for key customer-facing roles in the orthodontics business. As noted above, operating income for the three months ended September 30, 2024 was unfavorably impacted by a decline in sales for implants and direct-to-consumer aligners.
Previous report
For the nine months ended September 30, 2024 these drivers were partially offset by the organic sales increase, primarily for orthodontics products.
Previous report
Segment adjusted operating income was flat for the three months ended September 30, 2024 due to the sales trend noted above, as well as stable margins and operating costs.
Previous report
Interest expense, net for the three months ended September 30, 2024 decreased compared to the three months ended September 30, 2023. Interest expense, net decreased for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, driven primarily by lower short-term and other borrowings.
Previous report
Foreign exchange (gains) losses include revaluation of intercompany payables and loans, as well as a benefit from our Swiss franc net investment hedge totaling $6 million and $17 million for the three and nine months ended September 30, 2024, respectively.
Previous report
The effective tax rates for the three months ended September 30, 2024 and 2023 were (3.3%) and (6.3%), respectively. For the nine months ended September 30, 2024 and 2023, the rates were (16.7%) and 12.1%, respectively. The effective tax rates for 2024 include discrete expenses resulting from implementing an internal reorganization. In contrast, the rates for 2023 were significantly affected by the partial release of the valuation allowance on net operating loss carryforwards.
Previous report
The Company performed an assessment to evaluate the new global minimum tax developed by the Organisation for Economic Co-operation and Development (“Pillar Two”), which involved analyzing the tax laws in each jurisdiction in which the Company operates and modeling the implications with the Pillar Two framework. The impact of Pillar Two on the Company was not significant. The Company included the impact of the top-up tax under the Income Inclusion Rule for those jurisdictions in which the Company failed the transitional safe harbor requirement in its full year 2024 effective tax rate.
Previous report
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Previous report
Goodwill
Previous report
Indefinite-Lived Intangible Assets
Previous report
The fair value of acquired trade names and trademarks is estimated using a relief from royalty method, which values an indefinite-lived intangible asset by estimating the royalties saved through the ownership of an asset. Under this method, an owner of an indefinite-lived intangible asset determines the arm’s length royalty that likely would have been charged if the owner had to license the asset from a third party. The royalty rate, which is based on the estimated rate applied against forecasted sales, is tax-effected and discounted at present value using a discount rate commensurate with the relative risk of achieving the cash flow attributable to the asset. Management judgment is necessary to determine key assumptions, including revenue growth rates, perpetual revenue growth rates, royalty rates, and discount rates. Other assumptions are consistent with those applied to goodwill impairment testing.
Previous report
Impairment Test Results
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Reworded paragraphs (33)
Previous wording
DENTSPLY SIRONA Inc. is the world's largest manufacturer of professional dental products and technologies, with a 137-year history of innovation and service to the dental industry and a vision of improving oral health and continence care globally. Dentsply Sirona develops, manufactures, and markets comprehensive solutions, including technologically advanced dental equipment supported by cloud software solutions as well as dental products and healthcare consumable products in urology and enterology under a strong portfolio of world class brands. Dentsply Sirona’s products provide innovative, high-quality, and effective solutions to advance patient care and deliver better, safer, and faster dentistry. Dentsply Sirona’s worldwide headquarters is located in Charlotte, North Carolina. The Company’s shares of common stock are listed in the United States on the Nasdaq stock market under the symbol XRAY.
Current wording
DENTSPLY SIRONA Inc. is the world’s largest diversified manufacturer of professional dental products and technologies, with a 138-year history of innovation and service to the dental industry, and a vision of improving oral health and continence care globally. Dentsply Sirona develops, manufactures, and markets comprehensive solutions, including technologically advanced dental equipment supported by cloud-enabled solutions, dental products, and healthcare consumable products in urology and enterology under a strong portfolio of world-class brands. Dentsply Sirona’s innovative products provide high-quality, effective, and connected solutions to advance patient care and deliver better, safer, and faster dentistry. Dentsply Sirona’s worldwide headquarters is located in Charlotte, North Carolina, and its shares of common stock are listed in the United States on Nasdaq under the symbol XRAY.
Previous wording
This segment includes the design, manufacture, and sales of the Company’s dental technology and equipment products. These products include the Equipment & Instruments and CAD/CAM product categories. Dental CAD/CAM technologies are products designed for dental offices to support numerous digital workflows for procedures such as dental restorations through integrations with DS Core, our cloud-based platform.
Current wording
This segment includes the design, manufacture, and sales of the Company’s dental technology and equipment products. These products include the Equipment & Instruments and CAD/CAM product categories. Dental CAD/CAM technologies are products designed for dental professionals to support numerous digital workflows for procedures such as dental restorations through integrations with DS Core, our cloud-based platform.
Previous wording
This segment includes the development, manufacture, and sales of the Company’s value-added endodontic, restorative, and preventive consumable products and small equipment used in dental offices for the treatment of patients. Offerings in this segment also include specialized treatment products including products used in the creation of dental appliances.
Current wording
This segment includes the development, manufacture, and sales of the Company’s value-added endodontic, restorative, and preventive consumable products and small equipment used by dental professionals for the treatment of patients. Offerings in this segment also include specialized treatment products including products used in the creation of dental appliances.
Previous wording
This segment includes the design, manufacture, and sales of the Company’s innovative continence care solutions for both urinary and bowel management. This category consists mainly of urology catheters and other healthcare-related consumable products.
Current wording
This segment includes the design, manufacture, and sales of the Company’s innovative continence care solutions for both urinary and bowel management. Wellspect is one of the world’s leading manufacturers of intermittent urinary catheters, with LoFric as its most known brand. To help those with chronic or severe constipation, Wellspect also offers an advanced irrigation system, Navina, which combines a high degree of user convenience, clinical effectiveness and connectivity into one smart system.
Previous wording
Markets in several regions, particularly Europe, continue to experience varying degrees of recessionary pressures and face concerns about the systemic impacts of adverse economic conditions and geopolitical issues. Changes in economic conditions, supply chain constraints, higher energy costs, labor shortages, the conflict in Ukraine, and geopolitical tensions in the Middle East, have all contributed to a period of higher inflation across the industry and the regions in which the Company operates. As a result, the Company has experienced higher prices for certain raw materials, including electronic components, which consequently have led to a negative impact on margins. We expect a continuation of inflationary pressure on the cost of both raw materials and wages through the remainder of 2024, the effect of which will depend on our ability to successfully mitigate and offset the related impacts.
Current wording
Various headwinds are expected to weigh on global growth throughout the remainder of 2025, due in large part to increasing uncertainties related to global trade policy and inflation. A number of key macroeconomic forecasts were sharply lowered in April 2025 in response to the potential for a severe escalation in global trade barriers and competition. Weaker overall growth in the United States and narrowing interest rate differentials suggest the potential for further depreciation of the U.S. dollar and heightened risk of recession. Markets in several other regions, including Europe, have continued to experience varying degrees of pressures inhibiting growth and face concerns about the systemic impacts of adverse economic conditions and geopolitical events. Changes in trade policy, supply chain constraints, higher energy costs, labor shortages, and geopolitical tensions in the Middle East and Ukraine have all contributed to the risk of higher inflation and general economic uncertainty across the industry and the regions in which the Company operates. In recent years the Company has experienced higher prices for certain raw materials, including electronic components, which have led to a negative impact on margins. Although the rate of inflation showed signs of slowing at the start of 2025, prices for both raw materials and wages are expected to remain high through the remainder of the year, and prices may potentially increase if trade conflicts deepen. The Company may not be successful in its efforts to fully mitigate or offset the impacts of cost inflation.
Previous wording
The challenging macroeconomic conditions have also negatively impacted demand for the Company’s products and may continue to do so in the future. Specifically, higher interest rates have put pressure on the ability and willingness of our customers to obtain financing for equipment purchases, which affects volumes for these products. The higher cost of borrowing has also reduced patient demand for elective dental procedures, which affects sales of the Company’s offerings more broadly. The Company has also faced additional competitive pressure for lower-priced options for investments in new equipment by dental practices, in particular for imaging products. While the Company has taken steps to address competitive pressures, such as the reintroduction of its Orthophos SL 2D and 3D products, these trends may continue. While patient volumes have largely remained stable in the United States, the impact of macroeconomic declines and high interest rates has been particularly apparent in Germany, which represented 10% of the Company’s sales for the nine months ended September 30, 2024. Germany was in a recession for most of 2023, largely due to persistent high inflation and falling household spending. Although conditions, including inflation, appeared to improve marginally in the first half 2024, demand for investments in new dental equipment continues to be weak, and economic forecasts by the German government now project there will be no growth through the end of 2024. The Company therefore believes the challenging macroeconomic and market conditions in Germany are likely to persist and negatively impact sales of equipment in the fourth quarter.
Current wording
The challenging macroeconomic conditions have also negatively impacted demand for the Company’s products and may continue to do so in the future. These conditions include a steep decline in measures of consumer confidence in the United States since the start of the year. Additionally, higher interest rates have put pressure on the ability and willingness of our customers to obtain financing for equipment purchases, which adversely affects volumes for these products. The higher cost of borrowing has also reduced patient demand for elective dental procedures, which affects sales of the Company’s offerings more broadly. The Company has also faced additional competitive pressure from dental practices for lower-priced options for equipment and other products, in particular imaging products and implants. While the Company has taken steps to address competitive pressures, such as the reintroduction of its Orthophos SL 2D and 3D products, these trends may continue. While patient volumes have largely remained stable in the United States, the impact of macroeconomic declines and high interest rates has been particularly apparent in Germany, which represented 11% of the Company’s sales for the three months ended March 31, 2025. Germany was in a recession for most of 2023, largely due to persistent high inflation and falling household spending. Although conditions, including inflation, marginally improved in 2024, economic forecasts by the German government project limited growth in 2025. The Company anticipates that the challenging macroeconomic and market conditions in Germany are likely to persist and may negatively impact sales of equipment in 2025, despite moderate growth in the first quarter.
Previous wording
•Implementing cost-containment measures, as well as intensifying continuous improvement and restructuring programs in our manufacturing and distribution facilities and other areas of our business, including the most recent restructuring plan approved by the Board of Directors on July 29, 2024;
Current wording
•Implementing cost-containment measures, as well as intensifying continuous improvement and restructuring programs in our manufacturing and distribution facilities and other areas of our business, including the most recent restructuring plan approved by our Board of Directors on July 29, 2024;
Previous wording
For the three months ended September 30, 2024, net sales of products produced at these sites comprised approximately 3% of consolidated net sales and 12% of the net sales of the Orthodontic and Implant Solutions segment. Net assets within Israel total $179 million as of September 30, 2024, consisting primarily of acquired technology, property, plant and equipment, cash, and inventory associated with our operations in country. Overall, the Company’s operations in Israel have not been materially impacted by the conflict, and consequently, the Company has not recorded any allowance for doubtful accounts, inventory reserves, or fixed asset impairments through the nine months ended September 30, 2024 due to the conflict. The Company continues to monitor developments and prepare contingency plans to limit potential disruption to its operations.
Current wording
The Company’s operations in Israel consist of two manufacturing facilities for implants products, with one site in northern Israel and one site in southern Israel, both of which remain open and continue to operate normally. For the three months ended March 31, 2025, net sales of products produced at these sites comprised approximately 4% of our consolidated net sales and 15% of the net sales of the Orthodontic and Implant Solutions segment. Net assets within Israel totaled $153 million as of March 31, 2025, consisting primarily of acquired technology, property, plant and equipment, inventory, and cash associated with our operations in the country.
Previous wording
The terrorist attacks by Hamas militants crossing the border from Gaza to Israel in October 2023 and the subsequent military response by the Israeli government in Gaza has resulted in significant unrest and uncertainty within that region. During the course of 2024, the state of Israel has also been a target of coordinated missile and drone attacks launched by the Republic of Iran and by Iran’s terrorist proxy organization in Lebanon. These events have heightened the possibility that escalating violence and involvement of other terrorist groups or foreign powers in the region may further impact our employees and operations. Additionally, in May 2024, in response to ongoing military actions, the government of Turkey implemented restrictions on the import of goods manufactured within Israel for sale in the Turkish market. Sales of our products made in Israel and sold in Turkey represent less than 2% of our global sales of Implant & Prosthetic Solutions, but this product category is an area of relatively high potential growth. It is not clear when these restrictions will be lifted or if other countries will institute similar restrictions.
Current wording
In May 2024, in response to ongoing military actions by Israel in the Gaza strip, the government of Turkey implemented restrictions on the import of goods manufactured within Israel for sale in the Turkish market, which were still in effect as of March 31, 2025. Sales of our products made in Israel and sold in Turkey have historically represented approximately 1% of our global sales of the Implant & Prosthetic Solutions reporting unit, but this product category is an area of relatively high potential growth. The loss of sales to Turkey in 2024 was partially offset by sales of implants produced outside of Israel. It is not clear when these restrictions will be lifted or if other countries will institute similar restrictions.
Previous wording
For the three months ended September 30, 2024, net sales in Russia and Ukraine were approximately 3% of our consolidated net sales, and net assets in these countries were $68 million as of September 30, 2024. These net assets include $40 million of cash and cash equivalents held within Russia as of September 30, 2024, as well as inventory and trade accounts receivable. Due to currency control measures imposed by the Russian government, which include restrictions on the ability of companies to repatriate or otherwise remit cash from their Russian-based operations to locations outside of Russia, we continue to be limited in our ability to transfer this cash balance out of Russia without incurring substantial costs. Additionally, beginning in September 2024, as a result of further restrictions by European financial institutions on receiving payments from Russia, our capacity to receive intercompany payments for the delivery of our products into Russia has been partially reduced, which further limits our ability to use cash received from sales in Russia for our general purposes. It is unclear whether the remaining financial institutions which the Company relies upon for bank transfers from Russia will ultimately be able to continue facilitating payments, or for how long. If these restrictions on cash transfers from Russia worsen, or if we are not able to obtain long-term relief from these restrictions, we may need to take additional actions, including potential suspension of our business in Russia.
Current wording
In February 2022, because of the invasion of Ukraine by Russia, economic sanctions were imposed by the United States, the European Union, and certain other countries on Russian financial institutions and businesses. Due to the medical nature of our products, the current sanctions have not materially restricted our ability to continue selling many of our products to customers located in Russia. For the three months ended March 31, 2025, net sales in Russia and Ukraine were approximately 2% of our consolidated net sales, and net assets in these countries were $87 million as of March 31, 2025. These net assets include $49 million of cash and cash equivalents held within Russia as of March 31, 2025, as well as inventory and trade accounts receivable. Due to currency control measures imposed by the Russian government, which include restrictions on the ability of companies to repatriate or otherwise remit cash from their Russian-based operations to locations outside of Russia, we continue to be limited in our ability to transfer this cash balance out of Russia without incurring substantial costs. Additionally, beginning in September 2024, as a result of further restrictions by European financial institutions on receiving payments from Russia, our capacity to receive intercompany payments for the delivery of our products into Russia has been partially reduced, which further limits our ability to use cash received from sales in Russia for our general purposes. It is unclear whether the remaining financial institutions which the Company relies upon for bank transfers from Russia will ultimately be able to continue facilitating payments, or for how long. If these restrictions on cash transfers from Russia worsen, or if we are not able to obtain long-term relief from these restrictions, we may need to take additional actions, including potential suspension of our business in Russia.
Previous wording
In July 2024, the Company delivered a one-year notice of non-renewal in connection with its non-exclusive distribution agreements with Patterson Companies, Inc. (“Patterson”) for the distribution of dental equipment in the United States and Canada. It is anticipated that Patterson will continue to be one of the Company’s two largest distributors as a percentage of the Company’s global revenue during the one-year notice period. The Company intends to engage in discussions for new distribution agreements with Patterson. However, failure to successfully renegotiate the distribution agreements or secure potential new agreements with another distributor could have a material adverse effect on the Company’s business, operating results and financial condition. The Company does not anticipate a charge against earnings related to non-renewal of the distribution agreements. For additional information, see Part 1, Item 1A, “Risk Factors” in our 2023 Form 10-K.
Current wording
In July 2024, the Company delivered a one-year notice of non-renewal in connection with its non-exclusive distribution agreements with Patterson Companies, Inc. (“Patterson”) for the distribution of dental equipment in the United States and Canada. It is anticipated that Patterson will continue to be one of the Company’s two largest distributors as a percentage of the Company’s global revenue during the one-year notice period. The Company intends to continue to engage in discussions for new distribution agreements with Patterson. However, failure to successfully renegotiate the distribution agreements or secure potential new agreements with another distributor could have a material adverse effect on the Company’s business, operating results and financial condition. The Company has not incurred any charges against earnings to date related to non-renewal of the distribution agreements. For additional information, see Part I, Item 1A, “Risk Factors” in our 2024 Form 10-K.
Previous wording
RESULTS OF OPERATIONS: THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 COMPARED TO THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023
Current wording
RESULTS OF OPERATIONS, THREE MONTHS ENDED MARCH 31, 2025 COMPARED TO THREE MONTHS ENDED MARCH 31, 2024
Previous wording
The Company presents net sales comparing the current year periods to the prior year periods. In addition, the Company also presents the changes in net sales on an organic sales basis, which is a Non-GAAP measure. The Company defines “organic sales” as the reported net sales adjusted for: (1) net sales from acquired and divested businesses recorded prior to the first anniversary of the acquisition or divestiture; (2) net sales attributable to discontinued product lines in both the current and prior year periods; and (3) the impact of foreign currency changes, which is calculated by translating current period net sales using the comparable prior period’s currency exchange rates.
Current wording
The Company presents net sales comparing the current year periods to the prior year periods. In addition, the Company also presents changes in net sales on an organic sales basis, which is a Non-GAAP measure. The Company defines “organic sales” as the reported net sales adjusted for: (1) net sales from acquired and divested businesses recorded prior to the first anniversary of the acquisition or divestiture; (2) net sales attributable to discontinued product lines in both the current and prior year periods; and (3) the impact of foreign currency changes, which is calculated by translating current period net sales using the comparable prior period’s currency exchange rates.
Previous wording
The decrease in organic sales for both the three and nine months ended September 30, 2024 was primarily due to lower volumes of imaging equipment and treatment centers across all three regions, driven in part by competitive pressures including pricing as well as unfavorable economic conditions. The organic sales decrease for the three months ended September 30, 2024 was lower than the decrease for the nine months ended September 30, 2024 as a result of higher volumes of treatment centers sold in Europe and higher volumes of CAD/CAM equipment sold in the United States and Rest of World during the three months ended September 30, 2024.
Current wording
The decrease in organic sales was primarily due to lower volumes of CAD/CAM products across all three regions, driven in part by lower demand and competitive pressures including pricing. The decrease was partially offset by higher volumes of imaging products across all three regions, as well as higher sales of treatment centers, which was primarily due to the timing of fulfilling a one-time order in Europe during the quarter.
Previous wording
The decrease in organic sales for the three months ended September 30, 2024 was primarily driven by a decrease in volume for implants and prosthetics products across all regions and weaker demand in the United States for orthodontics, as sales for our direct-to-consumer aligner business were negatively impacted by legislative trends as described below. The decrease was partially offset by growth in Europe and Rest of World for orthodontics products.
Current wording
The decrease in organic sales was primarily driven by weaker sales of aligners in the United States, which were negatively impacted by the suspension of the sale and marketing of Byte aligner system and impression kits announced in October 2024, as well as a decrease in volume for implants and prosthetics products across all three regions. The decrease was partially offset by higher volumes of orthodontic products in Europe. Additionally, during the three months ended March 31, 2025, the Company refined its estimate of expected customer refunds for the Byte aligner business, resulting in an $8 million favorable adjustment to net sales.
Previous wording
The increase in organic sales for the nine months ended September 30, 2024 was driven by higher volumes in all regions, particularly in Europe, primarily driven by new product launches.
Current wording
The increase in organic sales was due to higher volumes across all regions, particularly in Europe and the United States, driven in part by new product launches.
Previous wording
Volumes for imaging products in the three months ended September 30, 2024 were positively impacted by a higher seasonal build in distributor inventory of approximately $13 million, compared to a build of approximately $8 million in the three months ended September 30, 2023. Similarly, volumes for CAD/CAM products were positively affected by a build in distributor inventory levels of approximately $35 million in the three months ended September 30, 2024, compared to approximately $20 million in the three months ended September 30, 2023, due in part to distributor stocking of our new intraoral scanner, as well as lower than expected retail demand in the third quarter. Levels of distributor inventory for CAD/CAM products at September 30, 2024 are approximately $24 million higher than the levels at September 30, 2023. We expect levels to return to historical averages by the end of the fourth quarter.
Current wording
Volumes for imaging products in the three months ended March 31, 2025 were positively impacted by a build in distributor inventory of approximately $6 million, compared to a decrease of approximately $7 million in the three months ended March 31, 2024, while retail sales during the quarter were comparatively lower.
Previous wording
For the three and nine months ended September 30, 2024, R&D expenses decreased as the Company continues to prioritize a disciplined approach with ongoing investments in digital workflow solutions, product development initiatives, and software development, including clinical application suite and cloud deployment. The Company expects to continue to maintain a level of investment in R&D that is at least 4% of annual net sales.
Current wording
For the three months ended March 31, 2025, R&D expenses decreased as the Company continues to prioritize a disciplined approach with ongoing investments in digital workflow solutions, product development initiatives, and software development, including clinical application suite and cloud deployment. The Company expects to continue to maintain a level of investment in R&D that is at least 4% of annual net sales.
Previous wording
For the three months ended September 30, 2024, the Company recorded pre-tax goodwill impairment charges of $504 million for the Orthodontic Aligner Solutions and Implant & Prosthetic reporting units, both within the Orthodontic and Implant Solutions segment. The charge for the Orthodontic Aligner Solutions reporting unit was driven by adverse impacts from legislative trends pertaining to the Company’s direct-to-consumer aligner business, specifically the Company’s experience of slower than expected improvements in conversion rates for new aligner customers in the third quarter as the Company continued to modify its operating model in response to those trends. The charge for the Implant & Prosthetic Solutions reporting unit was driven by weakened demand, particularly in North American and European markets, in conjunction with competitive pressures and adverse impacts of ongoing global conflicts in certain markets, as well as lower long-term expectations for volumes of lab materials. These factors contributed to reduced forecasted revenues, lower operating margins, and reduced expectations for future cash flows in the near term for the two reporting units within the Orthodontic and Implant Solutions segment. For the nine months ended September 30, 2024, the Company also recorded an intangible asset impairment charge of $6 million. The charge was related to indefinite-lived imaging product trade names within the Connected Technology Solutions segment. For further information see Note 13, Goodwill and Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements of this Form 10-Q.
Current wording
For the three months ended March 31, 2025, no goodwill or intangible asset impairment charges were recorded. For the three months ended March 31, 2024, the Company recorded an intangible asset impairment charge of $6 million. The charge was related to indefinite-lived imaging product trade names within the Connected Technology Solutions segment. For further information see Note 13, Goodwill and Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements of this Form 10-Q.
Previous wording
For the three and nine months ended September 30, 2024, the Company recorded $23 million and $45 million, respectively, of restructuring and other costs, and for the three and nine months ended September 30, 2023, the Company recorded $6 million and $70 million, respectively. The expenses in 2023 consisted primarily of severance costs in conjunction with the restructuring plan announced in February 2023 (the “2023 Plan”). On July 31, 2024, the Company announced a new restructuring plan (the “2024 Plan”). The expenses in 2024 primarily consist of severance costs in conjunction with the 2023 Plan and the 2024 Plan. For further details refer to Material Trends in Capital Resources below, and Note 8, Restructuring and other costs, in the Notes to Unaudited Consolidated Financial Statements of this Form 10-Q.
Current wording
For the three months ended March 31, 2025 and March 31, 2024, the Company recorded restructuring and other costs of $9 million and $1 million, respectively. The expenses in 2025 primarily consist of costs in connection with various restructuring initiatives. The expenses in 2024 consisted primarily of severance costs in conjunction with the restructuring plan announced in February 2023. For further details refer to Material Trends in Capital Resources below, and Note 8, Restructuring and other costs, in the Notes to Unaudited Consolidated Financial Statements of this Form 10-Q.
Previous wording
The decrease in segment adjusted operating income for both the three and nine months ended September 30, 2024 is due to the lower organic sales noted above, unfavorable manufacturing leverage from lower volumes, and unfavorable product mix as a result of lower sales for certain higher margin CAD/CAM equipment products. These decreases were partially offset by lower headcount-related costs and product warranty and return costs.
Current wording
The increase in segment adjusted operating income for the three months ended March 31, 2025 is due to improved margins primarily as a result of lower product warranty costs. The increase was partially offset by the lower organic sales noted above.
Previous wording
The increase in segment adjusted operating income for the nine months ended September 30, 2024 was due to the increase in sales noted above, as well as margin improvement due to the favorable manufacturing leverage of higher volumes.
Current wording
The increase in segment adjusted operating income for the three months ended March 31, 2025 is due to the increase in organic sales noted above, as well as margin improvement due to the favorable manufacturing leverage from higher volumes.
Previous wording
Other (income) expense, net for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 is as follows:
Current wording
Other (income) expense, net for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 is as follows:
Previous wording
Indefinite-lived intangible assets consist of trade names, trademarks, and in-process R&D and are not subject to amortization; instead, they are tested for impairment annually at April 1 or more frequently if events or circumstances indicate that the carrying value of indefinite-lived intangible assets may be impaired or if a decision is made to sell a business. A significant amount of judgment is involved in determining if an indicator of impairment has occurred during the year. Such indicators may include a decline in expected cash flow, unanticipated competition, increased interest rates, or slower growth rates, among others. It is important to note that fair values that could be realized in an actual transaction may differ from those used to evaluate the impairment of indefinite-lived assets.
Current wording
Goodwill represents the excess cost over the fair value of the identifiable net assets of business acquired and is allocated among the Company's reporting units. Indefinite-lived intangible assets consist of trade names, trademarks, and in-process R&D. Neither goodwill nor indefinite-lived intangible assets are amortized; instead, they are tested for impairment annually at April 1 or more frequently if events or circumstances indicate that the carrying value may be impaired, or if a decision is made to sell, discontinue, or divest a business. Judgment is involved in determining if an indicator of impairment has occurred during the year. Such indicators may include a decline in expected cash flows, unanticipated competition, increased interest rates, or slower growth rates, among others.
Previous wording
Refer to Part I, Item 1, Note 13, Goodwill and Intangible Assets, in the Notes to the Unaudited Consolidated Financial Statements of this Form 10-Q for further discussion of the Company's annual and interim goodwill impairment testing.
Current wording
For further information see Note 13, Goodwill and Intangible Assets, in the Notes to Unaudited Consolidated Financial Statements of this Form 10-Q, and Critical Accounting Estimates in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2024 Form 10-K.
Previous wording
Cash provided by operating activities increased compared to the nine months ended September 30, 2023, primarily as a result of changes in working capital, including higher collections on accounts receivable due largely to timing of customer remittances, management of inventory levels during the current period compared to an increase in the prior year, and lower payments to vendors during the current period due to timing. Cash provided by operating activities for the first nine months of 2024 also includes receipt of a $42 million foreign income tax refund. At September 30, 2024, the number of days for sales outstanding in accounts receivable increased by 3 days to 62 days as compared to 59 days at December 31, 2023, and the number of days of sales in inventory was 126 days at both September 30, 2024 and December 31, 2023.
Current wording
Cash provided by operating activities decreased compared to the three months ended March 31, 2024, primarily as a result of changes in working capital, including higher accounts receivable due largely to timing of sales and customer remittances and higher build of inventory during the current period, partially offset by lower payments to vendors during the current period due to timing. At March 31, 2025, the number of days for sales outstanding in accounts receivable increased by 4 days to 59 days as compared to 55 days at December 31, 2024, and the number of days of sales in inventory increased by 8 days to 132 days at March 31, 2025 as compared to 124 days at December 31, 2024.
Previous wording
The cash used in investing activities increased compared to the nine months ended September 30, 2023, due to higher capital expenditures of $20 million and lower net cash proceeds on settlement of derivatives of $51 million. The Company estimates capital expenditures to be in the range of approximately $170 million to $200 million for the full year 2024 and expects these investments to include additional implementation expenses for the Company’s new global ERP system, equipment upgrades, and capacity expansion to support product innovation and consolidate operations for enhanced efficiencies.
Current wording
The cash used in investing activities decreased compared to the three months ended March 31, 2024, due to lower capital expenditures of $15 million and no cash paid on the settlement of derivatives, compared to $9 million paid for the interest rate swap closure in the prior year. The Company estimates capital expenditures to be in the range of approximately $160 million to $190 million for the full year 2025 and expects these investments to include expenses for the ongoing implementation of a new global Enterprise Resource Planning (“ERP”) system, equipment upgrades, and capacity expansion to support product innovation and consolidate operations for enhanced efficiencies.
Previous wording
On November 7, 2023, the Board of Directors approved an increase to the authorized share repurchase program of $1.0 billion. At September 30, 2024, the Company had $1.19 billion of authorization remaining available for share repurchases. Additional share repurchases, if any, may be made through open market purchases, Rule 10b5-1 plans, accelerated share repurchases, privately negotiated transactions, or other transactions in such amounts and at such times as the Company considers appropriate based upon prevailing market and business conditions and other factors. At September 30, 2024, the Company held 65.7 million shares of treasury stock.
Current wording
On November 7, 2023, the Board of Directors approved an increase to the authorized share repurchase program of $1.0 billion. At March 31, 2025, the Company had $1.19 billion of authorization remaining available for share repurchases. Additional share repurchases, if any, may be made through open market purchases, Rule 10b5-1 plans, accelerated share repurchases, privately negotiated transactions, or other transactions in such amounts and at such times as the Company considers appropriate based upon prevailing market and business conditions and other factors. The Company is restricted from making share repurchases during the duration of the Bridge Loan. At March 31, 2025, the Company held 65.2 million shares of treasury stock.
Previous wording
At September 30, 2024, the Company had $394 million of borrowings available under lines of credit, including lines available under its short-term arrangements and revolving credit facility. The Company’s borrowing capacity includes a $700 million multi-currency credit facility which expires in May 2028. The Company also has access to an aggregate $500 million under a U.S. dollar commercial paper facility. The $700 million revolver serves as a back-up to the commercial paper facility, thus the total available credit under the commercial paper facility and the multi-currency revolving credit facility in the aggregate is $700 million. The Company had $331 million outstanding borrowings under the commercial paper facility at September 30, 2024 resulting in $369 million remaining available under the revolving credit and commercial paper facilities. The Company also has access to $38 million in uncommitted short-term financing under lines of credit from various financial institutions, the availability of which is reduced by other short-term borrowings. The lines of credit have no major restrictions and are provided under demand notes between the Company and the lending institutions. At September 30, 2024, the Company had $13 million outstanding under short-term borrowing arrangements.
Current wording
At March 31, 2025, the Company had $584 million of borrowings available under lines of credit, including lines available under its short-term arrangements and revolving credit facility. The Company’s borrowing capacity includes a $700 million multi-currency credit facility which expires in May 2028. The Company also has access to an aggregate $700 million under a U.S. dollar commercial paper facility. The $700 million revolver serves as a back-up to the commercial paper facility, thus the total available credit under the commercial paper facility and the multi-currency revolving credit facility in the aggregate is
Previous wording
On July 29, 2024, the Board of Directors of the Company approved an additional plan to restructure the Company’s business to improve operational performance and drive shareholder value creation (the “2024 Plan”). In connection with the 2024 Plan, the Company anticipates a net reduction in the Company’s global workforce of approximately 2% to 4%. The Company anticipates that the 2024 Plan will be substantially completed by the end of 2025 and result in $80 million to $100 million in annual cost savings. The proposed changes are subject to co-determination processes with employee representative groups in countries where required.
Current wording
On July 29, 2024, the Board of Directors of the Company approved a plan to restructure the Company’s business to improve operational performance and drive stockholder value creation (the “2024 Plan”). In connection with the 2024 Plan, the Company anticipates a net reduction in the Company’s global workforce of approximately 2% to 4%. The Company anticipates that the 2024 Plan will be substantially completed by the end of 2025 and result in $80 million to $100 million in annual cost savings. The proposed changes are subject to co-determination processes with employee representative groups in countries where required.
Previous wording
As of September 30, 2024, in conjunction with the 2024 Plan, the Company has incurred $24 million in restructuring charges from inception, primarily related to employee transition, severance payments and employee benefits, which are expected to be expensed and paid in cash in 2024 and 2025. Actions taken under the 2024 Plan will seek to further streamline the Company’s operations and global footprint, as well as improve alignment of the Company’s cost structure with its strategic growth objectives. The Company expects to incur between $40 million and $50 million in non-recurring restructuring charges under the 2024 Plan.
Current wording
As of March 31, 2025, in connection with the 2024 Plan, the Company has incurred $30 million in restructuring charges from inception, primarily related to employee transition, severance payments and employee benefits, which are expected to be expensed and paid in cash in 2024 and 2025. Actions taken under the 2024 Plan will seek to streamline the Company’s operations and global footprint, as well as improve alignment of the Company’s cost structure with its strategic growth objectives. In total, including the charges already incurred, the Company expects to incur between $35 million and $50 million in non-recurring restructuring charges under the 2024 Plan.
Previous wording
On February 14, 2023, the Board of Directors of the Company approved a plan to restructure the business through a new operating model with five global business units, optimize central functions and overall management infrastructure, and implement other efforts aimed at cost savings (the “2023 Plan”). The Company estimated a reduction in its global workforce of approximately 8% to 10% and annual cost savings of approximately $200 million pursuant to the 2023 Plan. The target for cost savings has been substantially met, with the benefits mostly offset in the short term by additional investments in sales personnel, the Company’s new global ERP system, and other transformation initiatives.
Current wording
On February 14, 2023, the Board of Directors of the Company approved a plan to restructure the Company’s business through a new operating model with five global business units, optimize central functions and overall management infrastructure, and implement other efforts aimed at cost savings (the “2023 Plan”). The Company estimated a reduction in its global workforce of approximately 8% to 10% and annual cost savings of approximately $200 million pursuant to the 2023 Plan. The target for cost savings has been substantially met, with the benefits mostly offset in the short term by additional investments in sales personnel, the Company’s new global ERP system, and other transformation initiatives. During the course of 2023 and 2024, the Company incurred $86 million in restructuring charges in conjunction with the 2023 Plan, primarily related to employee transition, severance payments, employee benefits, and facility closure costs, and $20 million in other non-recurring costs related to restructuring activities which mostly consist of consulting, legal and other professional service fees. Remaining restructuring charges attributable to the 2023 Plan are not expected to be material.
Previous wording
Refer to Part I, Item 1, Note 1, Business and Basis of Presentation, to the Unaudited Consolidated Financial Statements of this Form 10-Q for a discussion of recent accounting pronouncements.
Current wording
Refer to Part I, Item 1, Note 1, Business and Basis of Presentation, in the Notes to Unaudited Consolidated Financial Statements of this Form 10-Q for a discussion of recent accounting pronouncements.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
$700 million. The Company had $140 million outstanding borrowings under the commercial paper facility at March 31, 2025 resulting in $560 million remaining available under the revolving credit and commercial paper facilities. The Company also has access to $33 million in uncommitted short-term financing under lines of credit from various financial institutions, the availability of which is reduced by other short-term borrowings. The lines of credit have no major restrictions and are provided under demand notes between the Company and the lending institutions. At March 31, 2025, the Company had $9 million outstanding under short-term borrowing arrangements.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
In February 2022, because of the invasion of Ukraine by Russia, economic sanctions were imposed by the United States, the European Union, and certain other countries on Russian financial institutions and businesses. Due to the medical nature of our products, the current sanctions have not materially restricted our ability to continue selling many of our products to customers located in Russia. The Company also sources certain raw materials and components from Russia and Ukraine and has taken actions to minimize any adverse impacts from disrupted supply chains related to these items. The Company’s operations in Ukraine consist primarily of R&D activities, which continue from locations that focus on the safety of employees. Overall, the Company’s operations in Russia and Ukraine have not been materially impacted by the conflict, and consequently, the Company has not recorded any allowance for doubtful accounts, inventory reserves, or asset impairments through the nine months ended September 30, 2024 as a result of the conflict.
Previous report — wording carried elsewhere
Goodwill represents the excess cost over the fair value of the identifiable net assets of business acquired and is allocated among the Company's reporting units. Goodwill is not amortized; instead, it is tested for impairment at the reporting unit level annually at April 1 or more frequently if events or circumstances indicate that the carrying value of goodwill may be impaired, or if a decision is made to sell a business. Judgment is involved in determining if an indicator of impairment has occurred during the year. Such indicators may include a decline in expected cash flows, unanticipated competition, increased interest rates, or slower growth rates, among others. When testing goodwill for impairment, the Company may assess qualitative factors for its reporting units to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount including goodwill. Alternatively, the Company may bypass this qualitative assessment and perform the quantitative goodwill impairment test. It is important to note that fair values which could be realized in an actual transaction may differ from those used to evaluate the impairment of goodwill.
Previous report — wording carried elsewhere
As of September 30, 2024, in conjunction with the 2023 Plan, the Company incurred $86 million in restructuring charges, from inception, primarily related to employee transition, severance payments, employee benefits, and facility closure costs, and $20 million in other non-recurring costs related to restructuring activities which mostly consist of consulting, legal and other professional service fees. Remaining restructuring charges attributable to the 2023 Plan are not expected to be material.