Dylan Finley

Dylan Finley of UBS Group, on behalf of Kevin Caliendo, asked for an update on tariff cost assumptions and mitigation efforts. He also inquired about any financial adjustments related to BiTE and the performance of SureSmile in the U.S. market.

Answer

CFO Matt Garth clarified that the annualized tariff impact estimate has increased from $50 million to approximately $80 million, though the 2025 impact remains around $25 million. He noted a $4 million adjustment for BiTE in Q2 but anticipates no further changes. Regarding SureSmile, he reported 3.3% overall growth but acknowledged some softness in the U.S., which is being addressed through new education programs.

Dylan Finley, on for Kevin Caliendo, questioned the sustainability of the Orthodontic and Implant Solutions (OIS) segment's EBIT margin and asked for context on the second-quarter EPS guidance, which seems to imply a softer back half of the year.

Answer

CEO Simon Campion indicated that the Q1 adjusted EBITDA margin performance is a reasonable indicator for the rest of the year, driven by disciplined SG&A management. He attributed the Q2 EPS outlook to normal seasonality and noted that a larger portion of the tariff impact is expected in the second half of the year.

Dylan Finley of B. Riley Securities inquired about the drivers behind the April uptick in implant unit sales and the current pricing dynamics within the dental portfolio, including the capacity to offset tariff impacts with price increases.

Answer

Vafa Jamali, an executive, explained that the sales improvement was primarily driven by better same-store sales and strong initial performance from the new immediate molar implant system. Regarding pricing, Jamali noted that the premium implant market is less competitive on price. He stated that ZimVie would be highly selective about price increases to offset tariffs, using market segmentation to raise prices on certain products while avoiding competitive disadvantages on others.