Vik Chopra

Vik Chopra asked about the optimal mix of debt retirement and share repurchases following the dividend elimination, inquiring at what share price levels Dentsply Sirona views its stock as compelling. He also asked for the estimated revenue headwind from the new dealer inventory model, its expected timing in 2026, and whether it's a timing versus structural impact.

Answer

President and CEO Dan Scavilla explained that the company will prioritize debt retirement to maintain investment-grade status, views the current stock price as attractive, and aims to move into share buybacks later in the year after working through the Return-to-Growth plan. Regarding the dealer inventory model, Mr. Scavilla clarified the shift to a drop-ship model, estimating an approximate $30 million headwind from dealer inventory sell-through in the first half of 2026, with the goal of full drop-ship implementation by Q4.

Vik Chopra from Wells Fargo inquired about Dentsply Sirona's capital deployment strategy following the dividend elimination, specifically the optimal mix of debt retirement and share repurchases, and management's view on the stock's compelling price levels. He also asked for details on the estimated revenue headwind from the new dealer inventory model, its expected timing in 2026, and whether it's a timing or structural impact.

Answer

President and CEO Dan Scavilla stated that debt retirement would be prioritized first, especially for upcoming maturities, while maintaining investment-grade credit. He views the current stock price as attractive and aims to move into share repurchases later in the year, considering it a 'bargain price.' Regarding the dealer inventory model, Mr. Scavilla explained the shift to a drop-ship model, estimating an approximate $30 million revenue headwind from existing dealer inventories, expected to sell through in the first half of 2026, with the full drop-ship model implemented by Q4.

Vik Chopra from Wells Fargo asked new CEO Dan Scavilla about applicable lessons from his time at Globus Medical. He also requested more color on the double-digit decline in the implants and prosthetics business and its outlook.

Answer

CEO Dan Scavilla emphasized the importance of a 'hands-on' leadership approach, getting into the field with sales reps and taking direct accountability for execution. CFO Matt Garth reiterated the implant performance drivers: a slight decline in premium due to product transitions, a low-double-digit decline in value from Middle East volatility, and a double-digit decline in the lab business.

Vik Chopra asked about the upcoming ERP implementations in 2026, specifically if pull-forward buying, similar to the European implementation in 2025, should be considered. He also inquired about pricing expectations for 2026, both overall and across segments, following the ±1% range in Q4 2025.

Answer

CFO Wayde McMillan confirmed plans to complete 3M separation ERPs in 2026, with several waves underway, but stated no pull-forward buying is being planned for 2026 as it's difficult to predict. He reiterated that the company's focus for sustainable growth is on volume, with pricing expected to remain in the normalized ±1% range for 2026, not acting as an outsized driver.

Leah, calling in for Vik Chopra, asked for color on Solventum's expected margin expansion in 2026, considering it's also ahead of the LRP target. She also inquired about potential areas of interest for future deals and the expected timeline for such acquisitions.

Answer

CFO Wayde McMillan stated that Solventum expects continued top and bottom-line improvement in 2026, but noted that tariffs would be a greater headwind, pressuring operating margin expansion. He highlighted the 'Transform for the Future' program as an offset, aiming for a 10% EPS CAGR over the LRP period. CEO Bryan Hanson emphasized that programmatic savings, tariff mitigation, and the 'Transform for the Future' program are designed to ensure margin improvement in 2026 despite tariff impacts. Bryan Hanson reiterated that they are actively seeking tuck-in acquisitions under $1 billion in value, focusing on areas where they already operate to leverage existing commercial infrastructure, particularly in MedSurg, but also across all businesses.

Representing Wells Fargo, an analyst asked for clarification on tariff assumptions, specifically regarding the 10% EU tariff, and questioned whether the current year's tariff impact could be annualized to project the 2026 impact.

Answer

CEO Bryan Hanson confirmed their guidance assumes the 10% EU tariff remains in place. He strongly advised against annualizing the 2025 tariff impact of $80-$100 million for 2026, citing the dynamic nature of trade policies and the ongoing implementation of both short-term and long-term mitigation strategies, such as strengthening regional supply chains.

Vik Chopra inquired about the significant progress in free cash flow conversion in 2025, targeting 25% plus for 2026, and asked for details on specific operational improvements or working capital initiatives driving this step-up. He also followed up on the expected growth rate of ARVIS in 2026 and the launch timeline for the next-gen ARVIS.

Answer

Ben Berry, Chief Financial Officer, attributed the free cash flow improvement to stepping down integration-related costs and reduced European Medical Device Regulation remediation investments, while acknowledging working capital headwinds from the shift towards Recon. Damien McDonald, Chief Executive Officer, expressed excitement for the ARVIS rollout at AAOS, emphasizing a flexible business model focused on driving implant utilization rather than capital sales, with domestic rollout in 1H and international in 2H.

Vik Chopra from Wells Fargo inquired about the operational improvements and working capital initiatives driving Enovis's significant step up in free cash flow conversion, targeting 25% plus for 2026. He also asked about the expected growth trajectory and launch plans for ARVIS in 2026.

Answer

Ben Berry (CFO) explained that free cash flow improvements are driven by leveraging the business system, stepping down integration costs, and reducing European Medical Device Regulation remediation expenses, while offsetting Recon's working capital headwinds with productivity. Damien McDonald (CEO) detailed ARVIS's phased rollout in 2026, emphasizing a flexible business model focused on driving implant utilization rather than just capital sales.

Vik Chopra from Wells Fargo asked new CEO Damien McDonald about key lessons from his prior roles that he can apply at Enovis. He also inquired about the company's M&A strategy and the balance between debt paydown and potential tuck-in deals.

Answer

CEO Damien McDonald explained he will apply discipline to customer segmentation, account acquisition, and innovation. He emphasized expanding the EGX business system across the entire enterprise to improve capital efficiency and cash generation. Regarding capital allocation, McDonald was unequivocal that the immediate priority is debt reduction, with M&A or share buybacks only to be considered once the company's financial foundation is stronger.

Vik Chopra asked about the variables supporting the 3-4% revenue growth guidance for 2026 and whether this range is conservative. He also requested an update on the percentage of sales from the DSO channel and plans for further partnership expansion.

Answer

CFO John Morici stated that the 3-4% guidance reflects current numbers and strategic actions, including international growth, increased orthodontic utilization (via products like NoAA, Invisalign First, MAOB), enhanced GP engagement (scanning, visualization, financing), and brand leverage. He clarified that DSOs account for approximately 25% of Align's business volume and are key partners due to their digital mindset and Align's ability to provide scalable technology and operations.

Vik Chopra asked about the variables supporting Align Technology's 3-4% revenue growth guidance for 2026 and whether this range is conservative. He also requested an update on the percentage of sales from the DSO channel and plans for further expanding these partnerships.

Answer

CFO John Morici stated that the guidance reflects strategic priorities including international growth, increased orthodontic utilization (driven by products like NoAA, Invisalign First, MAOB), accelerated GP engagement (scanning, visualization, financing), and brand leverage. He confirmed that DSOs represent about 25% of Align's volume and that the company aims to expand these partnerships by providing scale, technology, and brand support to digitally-minded DSOs, while also supporting retail doctors.

Vik Chopra of Wells Fargo asked what gives management confidence that the planned restructuring actions will successfully achieve their goals and help counter the soft macroeconomic environment.

Answer

CFO John Morici explained that confidence stems from the actions' dual benefits of driving productivity and moving closer to customers. Regionalizing manufacturing reduces freight costs and cycle times, while new equipment boosts efficiency. He stated that the resulting cost savings will be reinvested to help doctors improve case conversion at the practice level.

Vik Chopra questioned why GE HealthCare's 2026 organic growth guidance of 3-4% (3.5% midpoint) aligns with 2025 performance, despite earlier expectations for faster growth. He also asked for the timing of orders and sales for photon counting and other new product introductions (NPIs).

Answer

Jay Saccaro (VP and CFO) and Peter Arduini (President and CEO) affirmed the guidance is consistent with prior statements, supported by a $2 billion increase in backlog and a robust orders funnel, while maintaining a pragmatic view on China. Peter Arduini confirmed NPI timelines are on track, with major contributions expected in 2027 due to typical 6-9 month order cycles, but some impact is anticipated later in 2026.

Vik Chopra inquired about the expected cadence for the remainder of the year, including any selling day differences, and asked for an update on the CFO search and the desired qualities for the new CFO.

Answer

Todd Garner, Executive Vice President and Chief Financial Officer, stated there were no significant selling day differences and anticipated normal MedTech seasonality. Patrick Beyer, President and Chief Executive Officer, confirmed an active CFO search, seeking a candidate focused on shareholder value, strong teamwork, and stewardship of CONMED's shareholders.

Vik Chopra asked about the expected cadence for the rest of the year following Q1 guidance, any selling day differences, and an update on the CFO search.

Answer

Todd Garner, EVP and CFO, stated there were no selling day differences and expected normal med tech seasonality for the rest of the year. Patrick Beyer, President and CEO, confirmed an active CFO search, seeking a candidate focused on shareholder value, teamwork, and stewardship.

Analysts on behalf of Vik Chopra asked incoming CEO Pat Beyer about his top priorities for 2025 and inquired about the impact of hurricane-related IV fluid shortages on surgical procedures.

Answer

Incoming CEO Pat Beyer stated his immediate priorities are engaging with customers, employees, and shareholders to continue the company's growth trajectory. EVP and CFO Todd Garner confirmed that procedure deferrals from IV shortages were seen in October and are factored into the Q4 guidance, which assumes a continuation of the October status quo.

Vik Chopra from Wells Fargo & Company questioned whether the preliminary data from the NAUTILUS trial had created any negative commercial impact or tainted physicians' views of the RNS System. He also asked the new CFO, Patrick Williams, for his perspective on the achievability of the company's long-range plan (LRP) targets.

Answer

CEO Joel Becker stated there has been "absolutely no" negative commercial impact from the NAUTILUS data. He noted that investigators close to the trial are enthusiastic, as they recognize the primary endpoint miss was due to a statistical analysis method and that the secondary endpoints show highly statistically significant and clinically meaningful seizure reduction. CFO Patrick Williams expressed high conviction in achieving the LRP's target of 20%+ CAGR for the core RNS business, even without new indications. Becker added that the business is already delivering this growth and has the potential to do more.

Vik Chopra of Wells Fargo requested an update on the progress and launch timeline for Masimo's new hemodynamic monitoring technology and asked if there was any lingering impact from the recent cybersecurity incident.

Answer

CEO Katie Szyman confirmed that a next-generation monitor with enhanced hemodynamics technology is planned for launch in the second half of 2026, with pilots of current technology ongoing. CFO Micah Young and Szyman both stated the company is fully operational after the cyber attack with no material impact expected, adding that systems were fortified during the recovery process.

Vik Chopra asked for an explanation of the variables driving the 2025 guidance range and what specific factors would push results toward the low or high end.

Answer

CFO Eric Hammes explained that the high end of the guidance would be driven by continued outperformance in Spark, new product traction, and a stronger macro environment. Conversely, the low end would be defined by a deterioration in the stable dental market or an inability to fully mitigate tariff impacts. He stated that the midpoint of the guidance is a reasonable expectation given current conditions.

Vik Chopra asked for guidance on modeling Q3 and the remainder of the year following the strong quarter, and requested an update on the robot launch timeline, including whether it would be showcased at NASS.

Answer

CFO Todd Koning advised that a normal sequential revenue step-down from Q2 to Q3 is typical, but the full-year guidance was raised by $10 million since the start of the year. Chairman & CEO Pat Miles confirmed the robot is on track for a 2026 market influence, with combined navigation/robotic cases starting by year-end 2025, and affirmed it will be seen at NASS.

Vik Chopra of Wells Fargo inquired about the potential impact of the CMS's proposed 2026 reimbursement changes for skin substitutes and sought clarification on the drivers behind the significant Q4 EPS step-up implied by the full-year guidance.

Answer

President and CEO Mojdeh Poul stated that while most of Integra's business is in the acute care setting and not immediately impacted, the company is encouraged by the proposed changes long-term as they favor products with strong clinical evidence. EVP & CFO Lea Daniels Knight explained the Q4 revenue and EPS step-up is driven by normal seasonality (60%) and supply recovery from previous ship holds (40%), noting the revenue lift will also improve gross margin and overall EPS.

An analyst on behalf of Vik Chopra from Wells Fargo asked for an update on the recent FDA warning letter, including its resolution timeline and commercial impact, and for the outlook on the capital equipment environment for Q4 and 2025.

Answer

President & CEO Dan Scavilla stated the warning letter concerned internal complaint handling processes, not product safety, and that they have submitted corrective actions to the FDA, aiming for a resolution faster than the typical year-plus timeline. COO & CFO Keith Pfeil added that the capital environment remains healthy with a strong pipeline for Q4, and the company is focused on its best-in-class technology to compete in 2025.