Envista Holdings Corp

Previous wording

For the three months ended March 28, 2025, sales derived from customers outside of the United States were 51.5% compared to the three months ended March 29, 2024 of 52.8%. As a global provider of dental consumables, equipment and services, our operations are affected by worldwide, regional and industry-specific economic and political factors. Given the broad range of dental products, software and services provided and geographies served, we do not use any indices other than general economic trends to predict our overall outlook. Our individual businesses monitor key competitors and customers, including to the extent possible their sales, to gauge relative performance and the outlook for the future.

Current wording

For the three and six months ended June 27, 2025, sales derived from customers outside of the United States were 53.6% and 52.6%, respectively, compared to 52.8% for both the three and six months ended June 28, 2024. As a global provider of dental consumables, equipment and services, our operations are affected by worldwide, regional and industry-specific economic and political factors. Given the broad range of dental products, software and services provided and geographies served, we do not use any indices other than general economic trends to predict our overall outlook. Our individual businesses monitor key competitors and customers, including to the extent possible their sales, to gauge relative performance and the outlook for the future.

Previous wording

Increasing protectionism and economic nationalism may lead to further changes in trade policies and regulations, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in, or restrict our access to certain markets. In particular, trade tensions between the U.S. and China have led to increased tariffs and trade restrictions. The U.S. has recently significantly increased tariffs on products imported from China into the U.S. and implemented new tariffs on imports into the U.S. from other countries, particularly from Canada and Mexico. In response to these proposed tariffs, some foreign countries, including China, have instituted retaliatory tariffs, which impact our products, while other countries have threatened retaliatory tariffs on certain U.S. products. It is difficult to predict what further trade-related actions governments may take, which may include trade restrictions and additional or increased tariffs and export controls imposed on short notice. We expect to largely offset the impact of the existing tariffs with mitigating actions including supply chain adjustments, pricing strategies, and managing costs. To the extent that we are unable to offset the tariffs or if the tariffs or our countermeasures negatively impact demand, our business, financial condition, results of operations or cash flows would be adversely affected. Any future tariffs and trade restrictions may also adversely affect our business, financial condition, results of operations or cash flows.

Current wording

Increasing protectionism and economic nationalism may lead to further changes in trade policies and regulations, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in, or restrict our access to certain markets. For example, trade tensions between the U.S. and China have led to increased tariffs and trade restrictions. The U.S. has significantly increased tariffs on products imported from China into the U.S. and implemented new tariffs on imports into the U.S. from other countries, particularly from Canada, Mexico, and the European Union. In response to these proposed tariffs, some foreign countries, including China, have instituted retaliatory tariffs, which impact our products, while other countries have threatened retaliatory tariffs on certain U.S. products. It is difficult to predict what further trade-related actions governments may take, which may include trade restrictions and additional or increased tariffs and export controls imposed on short notice. We expect to largely offset the impact of the existing tariffs with mitigating actions including supply chain adjustments, pricing strategies, and cost management. To the extent that we are unable to offset the tariffs or if the tariffs or our countermeasures negatively impact demand, our business, financial condition, results of operations or cash flows would be adversely affected. Any future tariffs and trade restrictions may also adversely affect our business, financial condition, results of operations or cash flows.

Previous wording

On a period-over-period basis, currency exchange rates negatively impacted reported sales by 1.4% for the three months ended March 28, 2025, compared to the comparable period of 2024, primarily due to the strengthening U.S. dollar against major currencies. Any future strengthening of the U.S. dollar against major currencies would adversely impact our sales and results of operations for the remainder of the year, and any weakening of the U.S. dollar against major currencies would positively impact our sales and results of operations for the remainder of the year.

Current wording

On a period-over-period basis, currency exchange rates positively impacted reported sales by 1.9% and 0.4% for the three and six months ended June 27, 2025, respectively, compared to the comparable periods of 2024, primarily due to the weakening U.S. dollar against major currencies. Any future weakening of the U.S. dollar against major currencies would positively impact our sales and results of operations for the remainder of the year, and any strengthening of the U.S. dollar against major currencies would adversely impact our sales and results of operations for the remainder of the year.

Previous wording

Russia’s invasion of Ukraine and the global response to this invasion, including sanctions imposed by the U.S. and other countries, could have an adverse impact on our business, including our ability to market and sell products in the affected regions, potentially heightening our risk of cyber security attacks, impacting our ability to enforce our intellectual property rights in Russia, creating disruptions in the global supply chain, and potentially having an adverse impact on the global economy, financial markets, energy markets, currency rates and otherwise. While we are experiencing volatility in sales from this region, Russia’s invasion of Ukraine did not have a material impact on our overall financial position or results of operations as of and for the three months ended March 28, 2025 and March 29, 2024.

Current wording

Russia’s invasion of Ukraine and the global response to this invasion, including sanctions imposed by the U.S. and other countries, could have an adverse impact on our business, including our ability to market and sell products in the affected regions, potentially heightening our risk of cyber security attacks, impacting our ability to enforce our intellectual property rights in Russia, creating disruptions in the global supply chain, and potentially having an adverse impact on the global economy, financial markets, energy markets, currency rates and otherwise. While we are experiencing volatility in sales from this region, Russia’s invasion of Ukraine did not have a material impact on our overall financial position or results of operations as of and for the three and six months ended June 27, 2025 and June 28, 2024.

Previous wording

In response to the attacks in Israel and the related hostilities and despite the recent ceasefire agreement and hostage deal, we continue to monitor the social, political, and economic environment in Israel and in the region for any impact to our operations. We maintain a production facility in Israel related to our Alpha-Bio Tech Implant brand. While we have experienced some volatility in the region, the Israel-Hamas War and related hostilities have not had a material impact on our business.

Current wording

In response to the attacks in Israel and the related hostilities, we continue to monitor the social, political, and economic environment in Israel and in the region for any impact to our operations. We maintain a production facility in Israel related to our Alpha-Bio Tech Implant brand. While we have experienced some volatility in the region, the Israel-Hamas War and related hostilities have not had a material impact on our business.

Previous wording

All comparisons, variances, increases or decreases discussed below are for the three months ended March 28, 2025, compared to the three months ended March 29, 2024.

Current wording

All comparisons, variances, increases or decreases discussed below are for the three and six months ended June 27, 2025, compared to the three and six months ended June 28, 2024.

Previous wording

The increase in cost of sales and the decrease in gross profit margin during the three months ended March 28, 2025 as compared to the comparable period in 2024, was primarily driven by higher costs due to unfavorable foreign currency exchange rates and unfavorable product mix, partially offset by a 1.0% increase in sales price and higher period-over-period savings associated with productivity improvements.

Current wording

The increase in cost of sales during the three and six months ended June 27, 2025 as compared to the comparable periods in 2024, was driven primarily by higher sales volume, higher costs due to the unfavorable impact of foreign currency exchange rates, partially offset by the absence of impairment related to certain long-lived assets from the comparable prior periods.

Previous wording

The decrease in SG&A expenses as a percentage of sales for the three months ended March 28, 2025 as compared to the comparable period of 2024, was primarily due to lower general and administrative costs, including lower amortization expense on intangible assets, and bad debt.

Current wording

The decrease in SG&A expenses as a percentage of sales for the three and six months ended June 27, 2025 as compared to the comparable periods of 2024, was primarily due to lower bad debt, amortization of intangible assets, legal settlement costs, and general and administrative costs; partially offset by higher compensation costs and our continuing investment in our long-term growth initiatives.

Previous wording

R&D expenses as a percentage of sales for the three months ended March 28, 2025, was consistent with the comparable period in 2024.

Current wording

R&D expenses as a percentage of sales for the three and six months ended June 27, 2025, increased as compared to the comparable periods in 2024, primarily due to increased R&D activity.

Previous wording

Interest costs were $9.3 million and $12.9 million for the three months ended March 28, 2025 and March 29, 2024, respectively. The decrease in interest expense was primarily due to lower debt balances and interest rates.

Current wording

Interest costs were $8.0 million and $11.7 million for the three months ended June 27, 2025 and June 28, 2024, respectively, and $17.3 million and $24.6 million for the six months ended June 27, 2025 and June 28, 2024, respectively. The decrease in interest expense was primarily due to lower debt balances and interest rates.

Previous wording

Our effective tax rate of 37.9% for the three months ended March 28, 2025 differed from the comparable periodin 2024 primarily due to a shift in the geographical mix of earnings and the relative impact of the valuation allowance against certain U.S. interest carryforwards.

Current wording

Our effective tax rate of 35.1% and 36.3% for the three and six months ended June 27, 2025 differed from the comparable periods in 2024 primarily due to a shift in the geographical mix of earnings and the impact of nondeductible impairment charges for goodwill and intangible assets in the comparable periods in 2024.

Previous wording

Operating profit margin was 9.4% for the three months ended March 28, 2025, as compared to an operating profit margin of 10.8% for the comparable period of 2024. The decrease in operating profit margin was primarily due to lower sales, unfavorable product mix, higher costs due to unfavorable foreign exchange rates and our investment in our long-term growth initiatives, partially offset by lower bad debt expense and higher period-over-period savings associated with productivity improvements.

Current wording

Operating profit margin was 10.2% for the three months ended June 27, 2025, as compared to an operating profit margin of 1.4% for the comparable period of 2024. Operating profit margin was 9.8% for the six months ended June 27, 2025, as compared to an operating profit margin of 6.1% for the comparable period of 2024. The increase in operating profit margin for the three and six months ended June 27, 2025, was primarily due to higher sales volume and sales price, lower bad debt expense, and the absence of impairment of certain long-lived assets from the comparable prior periods, partially offset by higher costs due to impact of unfavorable foreign exchange rates, and our continuing investment in our long-term growth initiatives.

Previous wording

Sales and core sales growth for the three months ended March 28, 2025 increased 0.8%, and 1.7%, respectively, compared to the comparable period in 2024. Price positively impacted sales by 1.7% on a period-over-period basis while geographically, the increase in sales for the three months ended March 28, 2025 is primarily due to higher demand from North America, partially offset by lower demand in China and Europe.

Current wording

Sales and core sales growth for the three months ended June 27, 2025 increased 8.7%, and 7.3%, respectively, compared to the comparable period in 2024, driven primarily by an increase in sales volume of 4.5% on a period-over-period basis, coupled with an increase in sales price of 2.8%. Geographically, the increase in sales for the three months ended June 27, 2025 is primarily due to higher demand from North America and Europe, partially offset by lower demand in China.

Previous wording

Operating profit margin was 14.7% for the three months ended March 28, 2025, as compared to an operating profit margin of 16.6% for the comparable period of 2024. The decrease in operating profit margin for the three months ended March 28, 2025 was primarily due to unfavorable product mix, higher costs due to unfavorable foreign exchange rates, partially offset by favorable sales price and a decrease in amortization of intangibles.

Current wording

Operating profit margin was 15.2% for the three months ended June 27, 2025, as compared to an operating profit margin of 12.2% for the comparable period of 2024. Operating profit margin was 15.0% for the six months ended June 27, 2025, as compared to an operating profit margin of 14.3% for the comparable period of 2024. The increase in operating profit margin for the three and six months ended June 27, 2025 was primarily due to higher sales volume and sales price, and a decrease in amortization of intangibles, partially offset by higher costs due to the impact of unfavorable foreign exchange rates.

Previous wording

Net cash provided by operating activities was $0.3 million during the three months ended March 28, 2025, as compared to net cash provided by operating activities of $40.3 million for the comparable period of 2024. The decrease in cash provided by operating activities during the three months ended March 28, 2025 is primarily due to lower net income, timing of vendor payments and higher incentive compensation payments.

Current wording

Net cash provided by operating activities was $89.0 million during the six months ended June 27, 2025, as compared to net cash provided by operating activities of $133.4 million for the comparable period of 2024. The decrease in cash provided by operating activities during the six months ended June 27, 2025 is primarily due to timing of cash collections and vendor payments, and higher incentive compensation payments; partially offset by higher net income.

Previous wording

Net cash used in investing activities was $8.8 million for the three months ended March 28, 2025, as compared to net cash used in investing activities of $10.7 million for the comparable period in 2024. The decrease in net cash used was primarily due to lower net payments for purchases of property, plant and equipment, partially offset by certain investing activities.

Current wording

Net cash used in investing activities was $25.9 million for the six months ended June 27, 2025, as compared to net cash used in investing activities of $16.6 million for the comparable period in 2024. The increase in net cash used was primarily due to higher spend on certain investing activities.

Previous wording

Net cash used by financing activities was $17.6 million for the three months ended March 28, 2025 compared to net cash used in financing activities of $2.6 million for the comparable period of 2024. The increase in net cash used was primarily due to the repurchase of our stock.

Current wording

Net cash used by financing activities was $104.0 million for the six months ended June 27, 2025 compared to net cash used in financing activities of $2.3 million for the comparable period of 2024. The increase in net cash used was primarily driven by stock repurchases and the repayment of the 2025 Convertible Notes which matured on June 1, 2025, partially offset by the borrowings under the Revolving Credit Facility.

Previous wording

As of March 28, 2025, we held $1,077.3 million of cash and cash equivalents that were held on deposit with financial institutions. Of this amount, $444.2 million was held within the United States and $633.1 million was held outside of the United States. We will continue to have cash requirements to support working capital needs, capital expenditures and acquisitions, pay interest and service debt, pay taxes and any related interest or penalties, fund our restructuring activities as required and support other business needs. We generally intend to use available cash, internally generated funds and our revolving credit facility to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions, we may need to enter into new credit facilities or access the capital markets. We may also access the capital markets from time to time to take advantage of favorable interest rate environments or other market conditions. However, there is no guarantee that we will be able to obtain alternative sources of financing on commercially reasonable terms or at all. See “Item 1A. Risk Factors—Risks Related to Our Business” in our 2024 10-K.

Current wording

As of June 27, 2025, we held $1,110.6 million of cash and cash equivalents that were held on deposit with financial institutions. Of this amount, $392.0 million was held within the United States and $718.6 million was held outside of the United States. We will continue to have cash requirements to support working capital needs, capital expenditures and acquisitions, pay interest and service debt, pay taxes and any related interest or penalties, fund our restructuring activities as required and support other business needs. We generally intend to use available cash, internally generated funds and our revolving credit facility to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions, we may need to enter into new credit facilities or access the capital markets. We may also access the capital markets from time to time to take advantage of favorable interest rate environments or other market conditions. However, there is no guarantee that we will be able to obtain alternative sources of financing on commercially reasonable terms or at all. See “Item 1A. Risk Factors—Risks Related to Our Business” in our 2024 10-K.

Previous wording

On February 5, 2025, our Board of Directors authorized a stock repurchase program, allowing us to purchase up to $250 million of our outstanding common stock through December 31, 2026. Stock repurchases made in connection with this program totaled approximately $18.9 million or 1.1 million shares during the three months ended March 28, 2025. Refer to Part II, Item 2 “Unregistered Sales of Equity Securities and Use of Proceeds” in this Quarterly Report on Form 10-Q for more details. The cash outflows associated with the Company’s stock repurchase are classified in financing activities in the accompanying Condensed Consolidated Statements of Cash Flows.

Current wording

On February 5, 2025, our Board of Directors authorized a stock repurchase program, allowing us to purchase up to $250 million of our outstanding common stock through December 31, 2026. Stock repurchases made in connection with this program totaled approximately $81.6 million or 4.8 million shares and $100.4 million or 5.9 million shares during the three and six months ended June 27, 2025, respectively. Refer to Part II, Item 2 “Unregistered Sales of Equity Securities and Use of Proceeds” in this Quarterly Report on Form 10-Q for more details. The cash outflows associated with the Company’s stock repurchases are classified in financing activities in the accompanying Condensed Consolidated Statements of Cash Flows.