Q3 2022 ZimVie Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Good afternoon, and welcome to <unk> third quarter 2022 earnings Conference call.
Currently all participants are in a listen only mode.
We'll be facilitating a question and answer session towards the end of today's call.
As a reminder, this call is being recorded for replay purposes.
I would now like to turn the call over to Marisa botched bomb, Joe Martin Group Investor Relations for a few introductory comments.
Thank you all for joining today's call earlier today.
Financial results for the quarter ended September 32022.
A copy of the press release is available on the company's website at <unk> dot com as well as on the SEC doghouse.
Before we begin I'd like to remind you that management will make comments. During this call that include forward looking statements.
Actual results may differ materially from those indicated by the forward looking statements due to a variety of risks and uncertainties. Please.
Please refer to the company's 2021 Form 10-K, and subsequent SEC filings for a detailed discussion of these risks and uncertainties.
Additionally, the discussion on this call will include certain non-GAAP financial measures reconcile.
Reconciliations of these measures to the most directly comparable GAAP financial measures are included within the earnings release or the Investor deck issued today found on the Investor Relations section of the company's website then be dot com.
This conference call contains time sensitive information and is accurate only as of the live broadcast today November nine 2022.
<unk> disclaims any intention or obligation except as required by law.
Date, or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.
And with that I will turn the call over to Molly <unk>, President and Chief Executive Officer of MB.
Good afternoon, and thank you all for joining us on the call today with Richard <unk>, Our Chief Financial Officer.
To kick off our Colbert wanting an update on the operational progress we've made post separation and then reviewing our financial performance for the quarter ended September 32022.
Early days for Us every year.
We're very pleased with the progress we've made on both the operational and organizational fronts in the short period of time.
Despite a challenging macro environment.
Negative technical pressure to our shares as a function of post spin trading dynamics.
We remain confident in executing the long range turnaround plan that we instituted earlier this year and see significant opportunity ahead.
During our Investor day in February we identified three key priorities to building a strong foundation for the future of Sandy first we committed to establishing a world class leadership team with the right talent across the organization to drive long term growth.
Today, our team has a track record to vision and experience to drive value for <unk> its employees and its patients.
Second we committed to optimizing systems and operations to this end, we successfully separated operating sparkling apparent you've acquired.
We've also identified the greatest opportunities facing sustained operational excellence.
We are now implementing work streams to capitalize on this opportunity.
Areas of focus include inventory management facility consolidation and factory excellence and creating a nimble organizational structure.
Our third priority is to create a portfolio of innovation to drive sustained growth across both our spine and dental portfolios on this front, we have already launched several new and next generation products in the market all in a short period of time since the spin off.
Last week, we launched our next generation <unk> dermal implant designed for immediate extraction and loading protocols as well as placement predictability and primary stability of the soft and desk phone.
We're hearing strong early feedback and engagement trends from the field.
This launch comes in off the heels of our Q3 pro and encoder mergers launches in June both of which have seen strong demand in the first few months of availability. These.
These products offer an optimized implant experience with both dentists and patients and we are excited to share that we will have additional iterations of our product portfolio into 2023 and beyond.
We also recently announced the launch of an exciting new innovation in our spine business. The <unk> navigation system, which allows the navigation of bone preparation instruments and polyestrous crews in the sport is compatible with commercially available navigation systems.
This compatibility with third party navigation system supports our desire to be more active in the minimally invasive.
Procedures.
We believe innovation can help improve overall patient outcomes.
We will continue to evolve our spine portfolio innovating on and around our existing solutions such as our differentiated motion preservation devices like our mobi C cervical disc to improve physician experience and workflow while building our long standing track record of excellent patient outcomes.
This includes exploring opportunities to expand our presence of compatibility in the ASC setting, enabling technology remains an area of significant interest to us.
See a real unmet need and substantial opportunity to drive pull through of our current correspond portfolio and our differentiated motion preservation solutions and we hope to provide additional updates here in the future.
Turning to our performance in the third quarter, we delivered $213 3 million and total third party net sales declining 11% on a reported basis and 7% on a constant currency basis.
Our results in the quarter were impacted to an extent by a stronger than typical summer seasonality and the July and August months, partially offset by more favorable September volume.
Rich will provide greater detail on our quarterly performance shortly.
Before I turn over the line I want to reemphasize, our steadfast dedication to innovating and executing across our business segments to drive future growth.
Our mission is to advance clinical technologies foundational restoring daily life, and we will continue to bring innovative products to market to drive our top line and create shareholder value.
Dressing real patient needs in the dental and spine markets I will now hand over the line to rich App install our chief financial Officer.
Thanks, Beth and good afternoon, everyone.
I'll begin by reviewing our third quarter 2022 results and we will then close by providing commentary on our outlook for the full year 2022.
Beginning with sales.
Total third party net sales for the third quarter of 2022 with $213 3 million a decrease of 10, 6% on a reported basis and a decrease of six 8% in constant currency.
Excluding the negative impact of foreign exchange third party net sales revenue were $222 4 million.
Shifting onto our key segments.
Global Dental <unk> third party net sales were $105 1 million.
Representing a three 9% decrease on a reported basis and a one 6% increase in constant currency as compared to the prior year period.
Our performance was primarily driven by growth in implants, and biomaterials offset by a decline in capital sales and foreign currency exchange headwinds, primarily net sales denominated in euro.
Q3 sales were also negatively impacted by approximately $1 million equating to roughly one percentage point of growth in the quarter due to a one day shutdown of our Palm Beach Gardens facility during hurricane.
In the U S. Dental third party net sales of $66 $7 million decreased by one 1% hampered by the loss of one shipping day from the Hurricane as mentioned earlier.
Outside of the U S sales of $38 $4 million decreased by eight 4% on a reported basis, but increased five 8% in constant currency.
Our outside the U S. Net sales also grew sequentially. Following a weaker Q2 as we saw a bounce back in procedure volumes in September following a prolonged vacation season in July and August .
Global spine third party net sales were $108 $2 million.
A 16, 4% decrease on a reported basis and a 13, 9% decrease in constant currency when compared to the prior year period.
The decrease in spine sales was driven by the exit of certain unprofitable markets in late 2021.
Discontinuation from our brand rationalization program the impact of the net sales retained by Zimmer Biomet until we complete our separation activities in certain markets.
Moderately greater procedure seasonality in July and August and continued competitive pressures.
When adjusting for the exit of certain unprofitable markets in late 2021, the discontinuation of products as part of brand rationalization and the net sales retained by Zimmer Biomet spine sales decreased by 10, 3% and seven 7% on a reported and constant currency basis, respectively.
Adjusted gross profit was 155.0 million.
<unk> to $153 7 million in the prior year period.
Adjusted gross margin was 72, 7% an increase of 830 basis points when compared to 64, 4% in Q3 of 2021.
The increase in gross margin versus prior year is driven by an overall reduction in year over year inventory charges as we continue to operationalize the business and the release in the current quarter of a spin related contingency with Zimmer biomet.
Although we are pleased with the progress we have made spend to date on our operational initiatives and optimizing inventory management is a key component of our margin expansion objectives.
There is also a lot of work for us to be done for us to realize their objectives and to normalized volatility.
As of today, we continue to expect 2022 gross margins to be in the mid sixties.
Adjusted research and development expenses of $12 1 million.
Our five 7% as a percentage of third party sales in line with five 8% in the prior year period.
Adjusted selling general and administrative expenses of $128 $8 million.
64% in the third party net sales was roughly flat year over year in dollar terms and higher by 610 basis points as a percentage of sales.
Lower variable selling expenses from lower net sales and the favorable impact of organizational realignment initiatives undertaken at the end of Q2 were offset by higher discretionary spending as COVID-19 restrictions were lifted and higher information technology spending to support decoupling initiative.
In the quarter.
Adjusted EBITDA of $29 4 million or 13, 8% of third party sales reflects an increase of 390 basis points from nine 9% in the prior year.
The increase was primarily due to higher gross margin.
Partially offset by higher selling general and administrative expenses as a percentage of revenue as previously discussed.
Adjusted earnings per share was <unk> 49 on a fully diluted weighted average share count of $26 2 million shares due to higher year over year profitability, a lower tax rate from a change in jurisdictional profit mix, partially offset by higher interest expense.
Touching on working capital and liquidity, we continue to make progress on capitalizing on the strength of the assets on our balance sheet with a focus on optimizing the allocation of capital and the monetization of certain assets to drive cash and thus increased financial flexibility.
Our efforts have resulted in a reduction in net inventory of $22 6 million since December 2021, and a significant reduction of approximately $20 million and the planned amount of capital spent on spine instruments now expected to be $15 million for the full year 2022.
We ended the third quarter with approximately $116 million of cash and equivalents a reduction of $14 million from $130 million.
June 2022.
The reduction in cash from prior quarter is due to the impact of foreign exchange translation on our euro denominated cash balances payments to purchase certain assets retained by Zimmer biomet at spin and a reduction in related party and accounts payable balances our cash balance at quarter end includes approximately <unk> <unk>.
<unk> million dollars of.
Cash earmarked to settle certain post spin related transactions and to fund ERP implementations to decouple from our prior parent company down from $22 million at June 30.
I'll now turn to our full year outlook for 2022.
We are maintaining our full year 2022, total net sales guidance of $915 million to $930 million.
Please note that based on current trends in our business, we expect to end the year near the lower end of this range due to macroeconomic pressures, including ongoing foreign exchange headwinds and uncertainty around procedural volumes.
We are also maintaining our full year 2022, adjusted EBITDA margin guidance of 13, 1% to 13, 6% and expect to be towards the higher end of this range.
Adjusted earnings per share guidance of $1 80 to $2 per share.
<unk> the same as previously guided.
Before I close and hand back over to Pat I want to reiterate that we continue to make progress executing on our disciplined financial framework and our initiatives to operationalize the business by controlling expenses rationalizing, our real estate and geographic footprint.
<unk> capital investment in monetizing the underlying strength of assets on our balance sheet we.
We look forward to continuing to update you on our progress in upcoming quarters.
That I will now turn the call back over to backup.
Thank you very much rich in summary, we are very pleased to be doing what we committed to do from kind of our spin which is to ensure that we have the right team in place to drive value for stakeholders.
To optimize our systems as a standalone entity and operate the company with greater efficiency, while leveraging our differentiated therapies and innovating around our core.
Set the stage for future growth.
This remains our priority as we continue our mission transform patient lives with.
Got.
I would like to thank you for your time and open it up for any questions.
Operator.
Thank you, ladies and gentlemen to ask a question you will need to press star one one on your telephone keypad.
Gander Star one to ask a question.
One moment, please while we compile the Q&A roster.
I'm showing we have a question coming from the line of Robbie Marcus with Jpmorgan. Your line is open.
Hi, This is actually Lili on for Robbie Thanks for taking the question.
Sure.
So you came ahead on both EPS and EBITDA reiterated the guide, which implies a slightly softer fourth quarter. So are there any sort of headwinds or dynamics that we should be keeping in mind for the fourth quarter.
Yes.
Not necessarily.
What we are seeing is in the fourth quarter around EPS I'll address that one first.
Obviously with that with the fed continuing to raise interest rates interest rates continued to be a little bit higher and then in the third quarter. We did have kind of that ongoing tax benefit from from the from the from the benefit that we realized in Q2 realm.
Relative to EBITDA.
What I would say there is.
Do you expect to be at the higher end of the range. What we're still seeing is as we continue through the year that there is a fair amount of choppiness in the in the income statement as evidenced in Q3, as we look to decouple from Zimmer Biomet and so we are reaffirming the full year EBITDA guidance is expected to be at the top end of that range, but there's just some cleanup.
And some choppiness that we still need to kind of continue to work through but but are on track to our objectives.
Got it Thats helpful.
So I guess, we're about a month into fourth quarter. So can you talk about how youre seeing some of the dynamics like macro headwinds staffing and volume trends.
Progressing to the end of the year. Thanks, so much.
Sure. So the summer was was affected and start for the year and September got a lot more predictable and we're seeing that continue through the truth.
The balance of the year.
Staffing hasnt been.
Quite a bit better than in the past.
I think that we're getting to be too much more predictable business is much more predictable theres still.
Some on the dental side of things I think we're seeing that there is some.
Scrutiny, a little bit around what does what does the macroeconomic environment mean for dental implant so far.
Implants have shown to be more resilient as far as we see it.
Less elective than some of the other other.
Categories that better within dental so overall, we're feeling a lot more predictable lot more comfortable about.
The fourth quarter.
Great. Thank you.
Right.
Thank you and I'm showing no further questions at this time.
I would like to call the call turn the call back over to Bob <unk> for any closing remarks.
Thanks, very much for listening to the.
This quarters earnings report, we look forward to continuing to show progress for resumed.
And we appreciate the questions. Thanks.
Okay.
Ladies and gentlemen that does conclude conference for today. Thank you for your participation you may now disconnect.
The.
Conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Good afternoon, and welcome Jim <unk> third quarter 2022 earnings Conference call.
Currently all participants are in a listen only mode.
We will be facilitating a question and answer session towards the end of today's call.
As a reminder, this call is being recorded for replay purposes.
I would now like to turn the call over to Marisa Flash from Joe Martin Group Investor Relations for <unk>.
The introductory comments. Thank you all for joining today's call.
Today <unk> released financial results for the quarter ended September 32022.
Copy of the press release is available on the Companys web site <unk> dot com as well as on Etsy Dot Gov.
Before we begin I would like to remind you that management will make comments. During this call that include forward looking statements.
<unk> results may differ materially from those indicated by the forward looking statements.
To a variety of risks and uncertainties. Please refer to the company's 2021 Form 10-K, and subsequent SEC filings for a detailed discussion of these risks and uncertainties.
Neely the discussion on this call will include certain non-GAAP financial measures.
Conciliations of these measures to the most directly comparable GAAP financial measures are included within the earnings release or the Investor deck issued today found on the Investor Relations section of the Companys Web site <unk> Dot com.
The conference call contains time sensitive information and is accurate only as of the live broadcast today November nine 2022.
<unk> disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward looking statements.
Because of new information future events or otherwise.
And with that I will turn the call over to <unk>, President and Chief Executive Officer of Dnb.
Good afternoon, and thank you all for joining us on the call today with rich <unk>, our Chief Financial Officer.
I'd like to kick off our call by providing an update on the operational progress. We've made post separation and then reviewing our financial performance for the quarter ended September 32022.
It remains early days for heavy and we're very pleased with the progress we've made on both the operational and organizational fronts in the short period of time.
Despite a challenging macro environment.
Significant technical pressure to our shares as a function of post spin trading dynamics.
We remain confident in executing the long range turnaround plan that we instituted earlier this year and see significant opportunity ahead.
During our Investor day in February we identified three key priorities to building a strong foundation for the future of Zombie first we committed to establishing a world class leadership team with the right talent across the organization to drive long term growth.
Today, our team isn't Cadbury collective vision and experience to drive value for <unk> its employees and its patients.
Second we committed to optimizing systems and operations.
And we successfully separate operating sparkling apparent <unk> Brian .
We've also identified the greatest opportunities facing sustained operational excellence.
We are now implementing work streams to capitalize on this opportunity.
Are your areas of focus here include inventory management facility consolidation and factory excellence and creating a nimble organizational structure.
Our third priority is to create a portfolio of innovation to drive sustained growth across both our spine and dental portfolio on this front, we have already launched several new and next generation products in the market.
All in the short period of time since the spinoff.
Last week, we launched our next generation <unk> dermal implant designed for immediate extraction and loading protocols.
Placement predictability and primary stability in the soft and deaths bone, we're hearing strong early feedback and engagement trends from the field.
This launch comes in off the heels of our Q3 pro and encoder mergers launches in June both of which have seen strong demand in the first few months of availability.
These products offer an optimized implant experience for both dentists and patients and we are excited to share that we will have additional iterations of our product portfolio into 2023 and beyond.
We also recently announced the launch of an exciting new innovation, our spine business. The Verizon navigation system, which allows the navigation of bone preparation instruments and polyaxial screws in the spine is compatible with commercially available navigation systems.
This compatibility with third party navigation system supports our desire to be more active in the minimally invasive procedures.
Procedures.
We believe innovation can help improve overall patient outcomes.
We will continue to evolve our spine portfolio innovating on and around our existing solutions such as our differentiated motion preservation devices like our mobi C cervical disc to improved physician experience and workflow while building on our long standing track record of excellent patient outcomes.
This includes exploring opportunities to expand our presence of compatibility in the ASC setting, enabling technology remains an area of significant interest to us and you see a real unmet need and substantial opportunity to drive pull through of our current core spine portfolio and our differentiated motion preservation solutions and we hope to provide additional updates here in the future.
Turning to our performance in the third quarter, we delivered $213 3 million and total third party net sales declining 11% on reported basis and 7% on a constant currency basis.
Our results in the quarter were impacted to an extent by a stronger than typical summer seasonality in the July and August months, partially offset by a more favorable September volume.
Rich will provide greater detail on our quarterly performance shortly.
Before I turn over the line I want to reemphasize, our steadfast dedication to innovating and executing across our business segments to drive future growth our.
Our mission is to advance clinical technologies foundational restoring daily life, and we will continue to bring innovative products to market to drive our top line and create shareholder value.
Dressing real patient needs in the dental and spine markets I will now hand over the line to rich App install our chief financial Officer.
Thanks, Beth and good afternoon, everyone.
Begin by reviewing our third quarter 2022 results and we will then close by providing commentary on our outlook for the full year 2022.
Beginning with sales.
<unk> third party net sales for the third quarter of 2022 with $213 3 million.
A decrease of 10, 6% on a reported basis and a decrease of six 8% in constant currency.
Excluding the negative impact of foreign exchange <unk> third party net sales revenue for $222 1 million.
Shifting onto our key segments.
Global Dental <unk> third party net sales were $105 1 million.
Representing a three 9% decrease on a reported basis and a one 6% increase in constant currency as compared to the prior year period.
Our performance was primarily driven by growth in implants, and biomaterials offset by a decline in capital sales and foreign currency exchange headwinds, primarily net sales denominated in euro.
Q3 sales were also negatively impacted by approximately $1 million equating to roughly one percentage point of growth in the quarter due to a one day shutdown of our Palm Beach Gardens facility during hurricane.
In the U S. Dental third party net sales of $66 $7 million decreased by one 1% hampered by the loss of one shipping day from the Hurricane as mentioned earlier.
Outside of the U S sales of $38 $4 million decreased by eight 4% on a reported basis, but increased five 8% in constant currency.
Our outside the U S. Net sales also grew sequentially. Following a weaker Q2 as we saw a bounce back in procedure volumes in September following a prolonged vacation season in July and August .
Global spine third party net sales were $108 2 million.
A 16, 4% decrease on a reported basis and a 13, 9% decrease in constant currency when compared to the prior year period.
The decrease in spine sales was driven by the exit of certain unprofitable markets in late 2021.
Discontinuation from our brand rationalization program the impact of the net sales retained by Zimmer Biomet until we complete our separation activities in certain markets.
Moderately greater procedure seasonality in July and August and continued competitive pressures.
When adjusting for the exit of certain unprofitable markets in late 2021 with discontinuation of products as part of brand rationalization and the net sales retained by Zimmer Biomet spine sales decreased by 10, 3% and seven 7% on a reported and constant currency basis, respectively.
Adjusted gross profit was 155.0 million.
<unk> to $153 $7 million in the prior year period.
Adjusted gross margin was 72, 7% an increase of 830 basis points when compared to 64, 4% in Q3 of 2021 the.
The increase in gross margin versus prior year is driven by an overall reduction in year over year inventory charges as we continue to operationalize the business.
And the release in the current quarter of a spin related contingency with Zimmer biomet.
Although we are pleased with progress we have made spent to date on our operational initiatives and optimizing inventory management is a key component of our margin expansion objectives.
There is also a lot of work for us to be done for us to realize their objectives and to normalized volatility.
As of today, we continue to expect 2022 gross margins to be in the mid sixties.
Adjusted research and development expenses of $12 1 million.
Our five 7% as a percentage of third party sales in line with five 8% in the prior year period.
Adjusted selling general and administrative expenses of $128 8 million.
64% in the third party net sales was roughly flat year over year in dollar terms and higher by 610 basis points as a percentage of sales.
Lower variable selling expenses from lower net sales and <unk>.
Favorable impact of organizational realignment initiatives undertaken at the end of Q2 were offset by higher discretionary spending as COVID-19 restrictions were lifted and higher information technology spending to support decoupling initiatives in the quarter.
Adjusted EBITDA of $29 4 million or 13, 8% of third party sales reflects an increase of 390 basis points from nine 9% in the prior year.
Increase was primarily due to higher gross margin.
Partially offset by higher selling general and administrative expenses as a percentage of revenue as previously discussed.
Adjusted earnings per share was <unk> 49 on a fully diluted weighted average share count of $26 2 million shares.
The higher year over year profitability, a lower tax rate from a change in jurisdictional profit mix, partially offset by higher interest expense.
Touching on working capital and liquidity, we continue to make progress on capitalizing on the strength of the assets on our balance sheet with a focus on optimizing the allocation of capital and the monetization of certain assets to drive cash and thus increased financial flexibility.
Our efforts have resulted in a reduction in net inventory of $22 6 million since December 2021, and a significant reduction of approximately $20 million in the planned amount of capital spend on spine instruments now expected to be $15 million for the full year 2022.
We ended the third quarter with approximately $116 million of cash and equivalents a reduction of $14 million from $130 million at June 2022.
The reduction in cash from prior quarter is due to the impact of foreign exchange translation on our euro denominated cash balances payments to purchase certain assets retained by Zimmer Biomet spin and a reduction in related party and accounts payable balances our cash balance at quarter end includes approximately 60.
<unk> million dollars of.
Cash earmarked to settle certain post spin related transactions and the fun ERP implementations to decouple from our prior parent company down from $22 million at June 30.
I'll now turn to our full year outlook for 2020.
We are maintaining our full year 2022, total net sales guidance of $915 million to $930 million.
Please note that based on current trends in our business, we expect to end the year near the lower end of this range due to macroeconomic pressures, including ongoing foreign exchange headwinds and uncertainty around procedural volumes.
We are also maintaining our full year 2022, adjusted EBITDA margin guidance at 13, 1% to 13, 6% and expect to be toward the higher end of this range.
Adjusted earnings per share guidance of one dollar.
80 to $2 per share remains the same as previously guided.
Before I close and hand back over to Bob I want to reiterate that we continue to make progress executing on our disciplined financial framework and our initiatives to operationalize the business by controlling expenses rationalizing, our real estate and geographic footprints scrutinizing capital investment and monetize in the underlying stress.
Assets on our balance sheet we.
We look forward to continuing to update you on our progress in upcoming quarters.
That I will now turn the call back over to backup.
Thanks, very much rich in summary, we are very pleased to be doing what we committed to do from kind of our spin which is to ensure that we have the right team in place to drive value for stakeholders.
Optimize our systems as a standalone entity and operate the company with greater efficiency, while leveraging our differentiated therapies and innovating around our core.
Set the stage for future growth.
This remains a priority as we continue our mission to transform patient lives with that.
Like to thank you for your time and open it up for any questions.
Operator.
Thank you, ladies and gentlemen to ask a question you will need to press star one one on your telephone keypad.
Gander Star one to ask a question one moment. Please while we compile the Q&A roster I'm showing we have a question coming from the line of Robbie Marcus with Jpmorgan. Your line is open.
Hi, This is actually Lili on for Robbie Thanks for taking the question.
So you came ahead on both EPS and EBITDA reiterated the guide, which implies a slightly softer fourth quarter. So are there any sort of headwinds or dynamics that we should be keeping in mind for the fourth quarter.
Yes.
Not necessarily.
What we are seeing is in the fourth quarter around EPS I'll address that one first is obviously with that with the fed continuing to raise interest rates interest rates continued to be a little bit higher and then in the third quarter. We did have kind of that ongoing tax benefit from from the from.
And the benefit we realized in Q2 relative.
Relative to EBITDA.
I would say there is.
Do you expect to be at the higher end of the range. What we're still seeing is as we continue through the year that there is a fair amount of choppiness in the in the income statement as evidenced in Q3, as we look to decouple from Zimmer Biomet and so we are reaffirming the full year EBITDA guidance, we expect to be at the top end of that range, but there's just some cleanup.
Some choppiness that we still need to kind of continue to work through but but are on track to our objectives.
Got it Thats helpful.
So I guess, we're about a month into fourth quarter. So can you talk about how youre seeing some of the dynamics like macro headwinds staffing and volume trends.
Progressing to the end of the year. Thanks, so much.
Sure. So the summer was what's affected and staffing here and September got a lot more predictable and we're seeing that continue through the trees.
The balance of the year.
Staffing hasnt been it has been.
Quite a bit better than in the past.
So I think that we're getting to a point, where we're much more predictable business is much more predictable theres still.
Some on the on the dental side of things I think we're seeing that there is some.
Scrutiny, a little bit around what does what does the macroeconomic environment mean for dental implant so far.
Implants have shown to be more resilient as far as we see it.
Less elective than some of the other other.
Categories that better within dental so overall, we're feeling a lot more predictable lot more comfortable about.
The fourth quarter great. Thank you.
Thank you and I'm showing no further questions at this time.
I'd now like to call the call turn the call back over to Bob <unk> for any closing remarks.
Thanks, very much for listening to the.
This quarters earnings report, we look forward to continuing to show progress for us in the <unk>.
We appreciate the questions. Thanks, ladies and gentlemen that does conclude conference for today. Thank you for your participation you may now disconnect.