On August 7, 2024, Envista Holdings Corp (NVST, Financial) released its 8-K filing for the second quarter of 2024. Envista Holdings Corp is a dental products company that develops, manufactures, and markets portfolios of dental consumables, equipment, and services to dental professionals. The company's business consists of two segments: Specialty Products and Technologies, and Equipment and Consumables.
Performance Overview
For the quarter ended June 28, 2024, Envista Holdings Corp reported sales of $633.1 million, falling short of the estimated revenue of $646.92 million. Core sales in the quarter declined by 3.2% compared to the same period in 2023. The company reported a net loss of $1,151.6 million or $6.69 per share, primarily due to a $1,153.8 million non-cash charge related to the impairment of goodwill and intangible assets. Adjusted net income was $18.5 million or $0.11 per diluted share, missing the analyst estimate of $0.15 per share.
Financial Achievements and Challenges
Despite the challenges, Envista Holdings Corp achieved an adjusted EBITDA of $63.0 million, although this was a significant decrease from $126.2 million in the second quarter of 2023. The company's Specialty Products & Technologies segment reported sales of $415.1 million, while the Equipment & Consumables segment reported sales of $218.0 million.
Paul Keel, Chief Executive Officer, stated, “Our performance in Q2 does not reflect the full capabilities of Envista. As such, we took important steps to begin repositioning Envista for improved performance in the future. We hired a permanent CFO as well as Presidents for our two largest businesses. We mitigated risks in critical parts of our Company. And we made much-needed growth investments in our highest-margin businesses. While these actions negatively impact near-term results, they are essential for longer-term value creation.”
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Sales | $633.1 million | $662.4 million |
| Gross Profit | $326.6 million | $378.6 million |
| Net (Loss) Income | $(1,151.6) million | $51.9 million |
| Adjusted EBITDA | $63.0 million | $126.2 million |
Balance Sheet and Cash Flow
As of June 28, 2024, Envista Holdings Corp reported cash and cash equivalents of $1,036.2 million, an increase from $940.0 million at the end of 2023. The company's total assets stood at $5,438.1 million, down from $6,605.1 million at the end of 2023, primarily due to the goodwill impairment. Net cash provided by operating activities was $133.4 million for the first six months of 2024, compared to $78.2 million in the same period of 2023.
Analysis and Outlook
Envista Holdings Corp's Q2 2024 results highlight significant challenges, particularly the substantial goodwill impairment. However, the company's strategic initiatives, including leadership changes and growth investments, aim to reposition it for future success. The dental products industry remains attractive, and Envista's strong market positions and operational capabilities provide a solid foundation for recovery.
For the full year 2024, Envista expects core sales to decline between 1% and 4% and adjusted EBITDA margins of between 10% and 12%. The company anticipates further decline in Q3 before returning to growth in Q4.
For more detailed information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Envista Holdings Corp for further details.
