ZimVie (ZIMV) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $117 million, reflecting a decrease of 1.5% in reported rates and a modest decline of 0.4% in constant currency [11][12] - Adjusted EBITDA for Q2 2024 was$ 16.1 million, representing a margin of 13.8% [14] - Adjusted earnings per share for Q2 2024 was $0.13 on a fully diluted share count of 27.4 million shares [14] Business Line Data and Key Metrics Changes - The dental implant portfolio saw strong traction with new products, contributing to market share gains [4][5] - Biomaterials offerings experienced modest growth, outpacing market growth, indicating potential future growth for implant offerings [7] - The digital portfolio grew high single digits, driven by over 20% growth in the Implant Concierge service [8][10] Market Data and Key Metrics Changes - U.S. third-party net sales for Q2 2024 were$ 69.3 million, a slight increase of 0.1% [11] - Outside the U.S., third-party net sales were $47.5 million, a decrease of 3.8% on a reported basis [12] - The Asia Pacific market showed a reported decline of 6.9%, but grew 1.1% in constant currency, indicating stability in certain regions like Japan and India [39] Company Strategy and Development Direction - The company aims to enhance its premium dental implant market position while expanding its digital capabilities [20] - Focus on innovation in product offerings, including the introduction of GenTek Restorative Components and partnerships with Medit for imaging solutions [6][9] - The strategy includes improving operational efficiency and achieving a 15% plus adjusted EBITDA margin by April 2025 [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution and resilience of the portfolio despite market challenges [10][18] - The outlook for Q3 2024 anticipates a sequential decline in revenue due to seasonal impacts, with expected adjusted EBITDA margins around 12% [16][26] - Management remains cautious about market recovery, indicating that underlying challenges persist [26] Other Important Information - The company finalized the sale of its Spine business on April 1, 2024, which is reflected in discontinued operations [11] - Cash as of the end of Q2 2024 was$ 78.6 million, with gross debt approximately $235 million [15] Q&A Session Summary Question: Company positioning within dental market - Management highlighted the unique assets and premium positioning in the dental implant market, focusing on organic growth and potential complementary product categories [19][20] Question: Impact of iTero Lumina's restorative launch delay - Management acknowledged the delay's impact on 2024 projections, attributing missed digital sales primarily to scanner sales [22][23] Question: Q3 revenue guidance and market demand - Management indicated that Q3 is expected to be lower due to seasonal trends, with cautious optimism about patient demand stabilizing [25][26] Question: Insights from planning software and market trends - Management noted growth in guided surgery and biomaterials as leading indicators of market stabilization [32][33] Question: Strategic considerations regarding potential partnerships - Management emphasized the importance of maintaining differentiation and open strategies in the market, while being prepared for future opportunities [35][36] Question: Capacity and performance in Asia - Management reported minimal exposure to China, with positive growth in other Asia Pacific markets like India and Australia [38][39]