Good day, and thank you for standing by. Welcome to the Q4 2025 DENTSPLY SIRONA Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Wade Moody. Please go ahead. Thank you, everyone. Welcome to the DENTSPLY SIRONA Fourth Quarter 2025 Earnings Call. Joining me for today's call are Dan Scavilla, President and Chief Executive Officer; and Mike Pomeroy, Interim Chief Financial Officer. I'd like to remind you that an earnings press release and slide presentation related to the call are available on the Investors section of our website at www.dentsplysirona.com. Before we begin, please take a moment to read the forward-looking statements in our earnings press release. During today's call, we may make certain forward-looking statements that reflect our current views about future performance and financial results. We base these statements and certain assumptions and expectations on future events that are subject to risks and uncertainties. Our most recently filed Form 10-K and any updated information in subsequent Form 10-Q or other SEC filings list some of the most important risk factors that could cause actual results to differ from our predictions. On today's call, our remarks will be based on non-GAAP financial results. We believe that non-GAAP financial measures offer investors valuable additional insights into our business' financial performance, enable the comparison of financial results between periods where certain items may vary independently of business performance and enhance transparency regarding key metrics utilized by management and operating our business. Please refer to our press release for the reconciliation between GAAP and non-GAAP results. Comparisons provided are to the prior year quarter unless otherwise noted. A webcast replay of today's call will be available on the Investors section of the company's website following the call. And with that, I will now turn the call over to Dan.

Thanks, Wade, and good afternoon, everyone. 2025 was an important year for DENTSPLY SIRONA. We took meaningful steps to position the company for the future by building out a world-class board and leadership team, enhancing discipline and execution and aligning the organization around our Return to Growth action plan. Thanks to the hard work of our employees, we ended the year with strong momentum underfoot and financial results in line with our expectations. In 2026, we are fully focused on executing our return to growth action plan by putting the customer at the center of all we do. We are going deeper, moving faster and being bolder to drive sustained profitable growth. I'm confident in the path we've set and in our ability to deliver. The potential for DENTSPLY SIRONA has never been greater, and we have everything at our fingertips to achieve this. On today's call, Mike will review our fourth quarter and full year 2025 financial results. I will then provide an overview of the progress we've made over the past several months in advancing our return to growth initiatives and strengthening execution across the business. Several of these key developments are highlighted on Slide 3 of our online presentation. I will then outline this year's priorities and walk through our 2026 financial guidance. With that, I'll turn the call over to Mike.

Thanks, Dan, and good afternoon, and thank you all for joining us. Overall, we had a solid finish to the year in Q4 2025, in line with revenue, adjusted EBITDA margin and adjusted EPS expectations that were provided on Q3 earnings call. Let's begin on Slide 4. Our fourth quarter revenue was $961 million, representing a reported sales increase of 6.2% and constant currency growth of 2.5% against the lower prior year comp that included a onetime Byte customer refund and distributor pre-buys related to our ERP implementation. Foreign currency positively impacted sales by 370 basis points compared to the prior year quarter. The onetime customer refund and distributor pre-buy impacts were an approximately 570 basis points of tailwind on constant currency growth in the quarter. Adjusted EBITDA margins declined 10 basis points to 14.1%, resulting from a 300 basis point decline in gross profit, driven by lower volume, change in sales mix and tariff impacts. Tariffs had an approximately $15 million impact to gross profit in the quarter. This was partially offset by the benefit from Byte comparable in the prior year quarter. Adjusted EPS in the quarter was $0.27, up $0.01 or 4.9% from the prior year. During the quarter, we recorded a $144 million noncash net of tax charge related to the impairment of goodwill and other intangible assets within the CTS and OIS segments. This impairment was primarily driven by the impacts of tariffs and volume declines partially reflecting competitive pressures. In the fourth quarter, operating cash flow was $101 million, and we generated $60 million of free cash flow. We finished the quarter with cash and cash equivalents of $326 million. Net debt-to-EBITDA ratio was 3.0, consistent with the prior quarter. During the quarter, we paid $32 million in dividends, bringing total dividends returned to shareholders to $128 million for the full year of 2025. Now let's turn to fourth quarter segment performance on Slide 4. Starting with the CTS segment. Constant currency sales declined 1.9% due to lower sales in CAD/CAM in Rest of World and Europe. This was partially offset by solid performance in the U.S. with high single-digit growth across equipment, instruments and CAD/CAM. The U.S. distributor inventory levels remain low relative to historical averages. Turning to the EDS segment, which includes Endo Resto preventative products. Sales on a constant currency basis increased 4% with growth in Rest of World in each product category. Growth was led by preventative, which increased 17% with strong performance in the U.S. and the Rest of World. Moving to OIS. Sales in constant currency increased 6.9% with the issuance of customer refunds for Byte in Q4 2024, accounting for the increase against the comparable quarter. IPS declined high single digits in the quarter driven by lower implant volumes across all 3 regions. We saw single-digit growth of the implants in China in the first half of the year and a double-digit decline in the second half of the year expectation as expectations for the second phase of volume-based procurement in 2026 shifted buying behavior in the region. Premium implants declined and value implants were slightly down, primarily due to China and partially offset by 11% growth in Europe. SureSmile, our clear aligner offering declined low single digits in the quarter with a 10% decline in the U.S., partially offset by 15% growth in Europe. Wrapping up the segments with Wellspect HealthCare, constant currency sales increased 1.9%, including 15% growth in the U.S. and continued strength in Rest of World, partially offset by Europe. Now let's turn to Slide 6 to cover our full year 2025 performance. Sales for the full year were $3.68 billion, representing a reported sales decline of 3% and a 4.3% on a constant currency basis. Byte negatively impacted constant currency by 1.9% on a full year basis. Foreign currency positively impacted sales by 130 basis points due to a weaker dollar versus most major currencies. The largest challenges we saw in 2025 were lower volumes for CAD/CAM and implants across all regions. Key highlights for the year included EDS growth in Rest of World across all 3 product categories, high single-digit growth of imaging in Europe and Rest of World and double-digit growth of SureSmile in Europe and growth for Wellspect Healthcare across all 3 regions. EBITDA margins expanded 150 basis points to 18.1% and primarily driven by lower SG&A, partially offset by the decline in gross profit due to geographical mix and tariffs. Tariffs represented $23 million of headwind to gross profit across the balance of 2025. Adjusted EPS was $1.60 for the year, down $0.07 or negative 4.6% year-on-year, driven by a higher tax rate. Full year EPS includes approximately $0.13 of income from Byte. As we wind down the Byte business in the first quarter of 2026, income from Byte will not recur and will represent a headwind going forward. Adjusted EBITDA margins of greater than 18% and adjusted EPS of $1.60 were in line with guidance provided on the Q3 call. And finally, full year operating cash flow was $235 million and free cash flow was $104 million. Overall, our fourth quarter results demonstrate early progress as we enter 2026 with a very clear strategy, improved execution and focused investment priorities. With that, I will turn it over to Dan to share further business updates and our 2026 financial guidance.

With 2025 behind us, it's time to move forward with urgency. Our 24-month plan aims to return to growth by restoring momentum, strengthening execution, and delivering sustainable profitable growth. This is not just a short-term fix; it’s a focused transformation that emphasizes going deeper, moving faster, and taking bolder actions. The plan is based on five pillars: first, adopting a customer-centric mindset, placing customers at the heart of every decision to enhance their experience, service, and loyalty; second, focusing on sustainable growth by sharpening our portfolio and accelerating innovation in markets where we can succeed; third, empowering performance by promoting accountability, productivity, and commercial excellence throughout the organization; fourth, scaling our operations by simplifying processes to boost speed and efficiency; and fifth, enhancing financial strength by improving margins, optimizing capital allocation, and increasing cash generation to support returns to shareholders. Each pillar contains clear actions that will lead to measurable milestones and outcomes. Together, they form a roadmap to enhance performance and unlock DENTSPLY SIRONA's full potential. Let me provide more detail on our focus areas and the progress we're making in each. A customer-centric mindset is essential. I've discovered that when we prioritize customers, we achieve success. While this might seem obvious, certain areas of our company can serve customers more effectively than others, which has limited our overall growth. We consider customers to be any practitioner who uses our products, whether they buy directly through a dental service organization or through a dealer. All of them are our customers, and we will continue to partner with dental service organizations and dealers to ensure they receive timely, consistent, and high-quality support. Last quarter, I shared that we established a global customer service and technical service organization aimed at providing high-quality worldwide support while remaining nimble to meet local market demands. As we build this capability, we are also taking additional customer-centric actions. We are creating strategic dentist and lab advisory councils within each business segment to collaborate directly with the DENTSPLY SIRONA leadership team on innovation and strategy development. We are increasing our investment in clinical education by 50% starting this year. We believe that peer-to-peer education grounded in clinical data is one of the most effective ways to collaborate with our customers and fully leverage our offerings. We are also investing in comprehensive sales training focusing on dentist workflow and connected dentistry to enhance the value we offer through our representatives. The field team is already a strength of our company and will increasingly become a key competitive advantage. Reigniting sustained growth is crucial. Innovation and execution will define our future. In the last six months, we have entered a new market with the launch of the Wellspect Surity female external catheter, a new non-invasive solution supporting women with severe urinary incontinence. We've also improved workflow efficiency by integrating CEREC onto the DENTSPLY SIRONA platform and introducing new products in our EDS and IPS portfolios. In 2026, we plan to increase R&D investment by double digits to accelerate DENTSPLY SIRONA's core capabilities, advance connected dentistry, and drive innovation in EDS, implants, and ortho. We aim to maintain and expand this elevated investment level. Simultaneously, restoring our U.S. business’s health is a top priority. We have a comprehensive plan to reignite growth and strengthen our commercial foundation, positioning us to compete and win more effectively in this critical market. We have made significant progress in the past three months in our U.S. business. We have reorganized and unified our commercial teams to better compete in our markets. This realignment has been well received by our sales force and is already yielding strong field engagement. We hired Mark Bezjak to lead our North America sales force. He comes to us from Zimmer Biomet, where he led high-performing teams and drove sustained growth through disciplined execution and customer focus. Mark has quickly made a positive impact. We also enhanced U.S. commercial leadership with a combination of competitive external hires and internal promotions, bringing deep expertise in implants, orthodontics, endodontics, and connected dentistry solutions. We are encouraged by our ability to attract top talent who align with our strategy and portfolio. These leaders have extensive dental experience. Recently, we entered into new or expanded agreements with key partners, including Benco, Patterson, Burkhart, and A-dec, while continuing discussions with other dealers. Reengaging the dealer channel is a critical lever to broaden our reach and improve go-to-market effectiveness in the U.S., and our sales teams are excited about the opportunities this presents. This multichannel approach allows us to maintain a strong direct presence in specialty segments while expanding our dealer network in CTS to facilitate growth and market penetration. We are #1 or #2 in all categories except for implants and ortho, which we are initially concentrating on in our Return to Growth plan, leveraging our wide range of best-in-class implants to address customer needs, supported by our extensive clinical data and our enhanced clinical education and sales training programs. For our comprehensive ortho offerings, our initial focus will be on modernizing our software. We are strengthening our organizational foundation by aligning leadership, sharpening priorities, and selectively adding expertise to accelerate our progress. We have established a transformation office responsible for coordinating the Return to Growth action plan. This team will also oversee our enterprise AI strategy and lean operating principles, fundamentally improving our operations. The transformation office is committed to delivering cross-functional improvements that enhance efficiency and agility. We continue our search for the right CFO for DENTSPLY SIRONA. Mike has been an excellent partner in his interim role, allowing us to carefully evaluate candidates while we pursue our 2026 priorities and financial outlook. We have also bolstered our board by creating a new Growth and Value Creation Committee and appointing three new independent directors: Jim Forbes, former Vice Chairman of Investment Banking at Morgan Stanley; Brian McKeon, former CFO of IDEXX Laboratories; and Don Zurbay, former CEO of Patterson. These additions will enhance our governance and strategic capabilities. In line with the Board's ongoing refreshment process, Willie Deese has expressed his intention to retire and not stand for reelection at this year's Annual Shareholders Meeting. Willie has been an invaluable member of the Board, and we thank him for his leadership and contributions. Scaling the organization is also a priority. To fund our investments, we are initiating a restructuring program to streamline functions, boost efficiency, and support a more competitive cost structure. This program is anticipated to unlock approximately $120 million annually across the P&L, which will be reinvested in the Return to Growth action plan. We expect to incur nonrecurring charges totaling about $55 million to $65 million, mostly expensed and paid in cash in 2026 and 2027. We are building a faster, more scalable, and profitable manufacturing and distribution network. This includes consolidating resources, standardizing packaging, and implementing advanced planning and forecasting capabilities to positively influence working capital and reduce product costs. The fifth pillar focuses on enhancing our financial profile and driving shareholder returns. As such, we are changing our capital allocation strategy. After a strategic review, we have decided to eliminate our dividend. These funds will now be redirected toward debt repayment and share buybacks. I want to stress that this decision is based on optimizing our capital deployment strategy and feedback from many of our shareholders. We remain committed to maintaining investment-grade credit metrics by prioritizing debt reduction and gradually using excess free cash flow for disciplined share buybacks. For 2026, we project net sales in the range of $3.5 billion to $3.6 billion, indicating a negative operational growth of 3% to 1%. While we do not provide quarterly guidance, we expect positive sequential sales momentum in the second half of this year. Operational growth excludes a negative 2.1% impact from the 2025 Byte headwind and a one-time dealer capital equipment inventory sell-through in 2026 as we adjust inventory models alongside our dealer partners. We anticipate adjusted earnings per share to be between $1.40 and $1.50, reflecting our increased investments in innovation, clinical education, market penetration for Wellspect, and commercial investments aimed at driving sustained profitable growth globally as we progress. In closing, we've acted swiftly and achieved a great deal to better position the company for stronger execution in 2026 and beyond. I want to reiterate that the opportunities before us are significant. This is a moment for bold change and decisive action grounded in accountability and urgency. With our Board's full support, we are confident in our ability to unlock the company's full potential. Before moving to Q&A, I want to acknowledge and express our respect for Don Casey, former CEO of DENTSPLY SIRONA, who sadly passed away last week. Don and I worked together for many years at Johnson & Johnson, and I will always be grateful for his leadership and mentorship. DENTSPLY SIRONA employees will remember him for his passion for improving health care. We extend our condolences to Don's family and loved ones. Now, I'll hand it over to the operator to start the Q&A session. Thank you.

Our first question comes from Vik Chopra from Wells Fargo.

Maybe just two for me. You've talked about the dividend elimination freeing up $128 million annually for capital deployment. Dan, maybe just talk about the optimal mix of debt retirement and share repurchases and at what share price levels do you view the stock as compelling? And then I had a quick follow-up, please.

Thanks, Vik. So a couple of things. We do have debt that is coming up to be retired. And I think we want to take advantage of that. I also want to make sure that we don't cross the line and move below investment grade. So right now, we do have our eyes focused on that. I will tell you, I think that we are an attractive stock price right now with the potential that I see. And so my goal is to really work through this return to growth plan, free up the cash, execute that restructuring plan and get as much cash as we can. But first out of the gate is going to be just controlling the debt. But then as soon as we can in this year, if all works well, I want to move into actually getting into buying back shares. I really can't say when exactly. I've got to work through some of the plan, but that's my targets. And then just ongoing, I may not have a structured cadence. But at these prices, I want to move into next year to really remove shares at what I consider a bargain price.

Great. And just a quick follow-up, if I can. You called out the impact of the new dealer inventory model for products in your operational growth. Can you just talk about the estimated revenue headwind when we should expect this in 2026? And how much of this is timing versus structural?

Yes. It's a great question, Vik. And I really didn't elaborate, but what we're doing is rather than selling into dealer inventory like we've done in the past, we're going into a drop-ship model. And so in particular, with the vendors who do have capital, we expect them to sell that through. My guess is within the first half of the year. That's really what I would think would occur. And it's in the range of about $30 million approximately that we think is in the inventories they would sell through before we move to a drop-ship model. My goal as a company is to be into that full drop-ship with all vendors by the time we're walking into the fourth quarter.

Our next question comes from Allen Lutz from Bank of America.

Dan, I appreciate the Return-to-Growth action plan, a lot of great details in there. My first question, how do you think about the timing around some of the recent announcements you made, the expansion with Patterson, Benco, Burkhart, is there any way to size or provide commentary on the size or timing? And is any of that benefit included in the guide?

Yes, it's a great question. Not a major part is in the guidance. It is built in a Return-to-Health plan for certain, Allen. What I would tell you is just a logical thought, we're signing people up early in the year, call it first quarter. We have the reps to train and get on board for the most part and bring them up to speed. And then they've got to go out with the customers and start building a natural pipeline for capital, which you know is out there. So for me, activity now in the first quarter and into the second quarter, I think, should bear fruit closer at late third quarter, early fourth quarter. I don't really have a breakout in dollars to give you. It's just a natural flow from having sold capital for so long that I don't think this comes out of the gate in the first quarter or the first half. I think it's more of a later second half story where we really see the lift of signing all of these good folks on.

Okay. And then for my follow-up, around the EPS guide, $1.40 to $1.50. As we think about everything you talked about, accelerated investments in innovation, commercial investments, clinical education, should we think about 2026 being the peak year for those investments? Or would you expect those investments to ramp up over the next couple of years as we think about the cadence of your SG&A over the next couple of years?

Yes. Again, a really good question. I think that this is a strong year to do it. I would think it's about the same, not meaningfully different in 2027, and then really, I'm looking at that point from a lift in the health of the business to become self-funding. And I want to see something, quite frankly, outpacing EPS growth as we get back to top line growth.

Our next question comes from Elizabeth Anderson from Evercore ISI.

I heard you mention an increase in R&D spending by double digits to support DENTSPLY SIRONA's core, EDS, and ortho segments. You've also launched several new products recently, as we observed in Chicago last week. Can you share your thoughts on the timeline for setting new development cycles? Should we anticipate new products emerging a couple of years from now? Are there existing projects in progress that this increase will help accelerate, possibly leading to launches in late '26 or '27? Please help us understand your overall R&D strategy and when we might see these advantages begin to contribute to your growth plans.

You got it, Elizabeth. So you almost answered it with your question, so it is multifaceted. So bear with me. DS core is an amazing platform and one of the long-term potentials of this company. Part of that funding will go in to accelerate some of those applications. So we talk about moving into implants or into ortho or deeper into endo, we're going to go do that at almost a simultaneous rate and bring those functionalities into our customers at a faster rate. I'm not going to commit to dates just yet because as you know, some things require FDA approval. But nonetheless, to accelerate funding can bring us further along the curve. At the same time, there are several things in our EDS portfolio that we were funding at a slower rate or even possibly outside that we can now bring in and accelerate as well as products go that way. We also have some interesting opportunities within our implant business that having this funding will bring those in, I would arguably say 1 year sooner than planned in this approach. I really can't lay out the cadence of it I think, but part of it is going to be an acceleration in pull forward in the software and creating that environment while we come up and have stronger product offers for our customers. Some of them are brand new, some of them are acceleration and some of them are things that were delayed that we can bring back. So it's really the mixed bag based on your question.

Great. And maybe as a follow-up, you talked about obviously reorganizing the commercial team. Is that done now? Or is that sort of still in process and sort of should we think about it in terms of the benefits of that? I think you mentioned we're just starting, but we should think about those happening over sort of 2 to 3 quarters before they really start ramping. Is that a fair way to think about it in this circumstance as well?

Again, good question. I'll be honest with you. I am amazed at the speed and professional approach the team took in designing and reorganizing itself quickly. It is done. And they're out there now, forming up at the end of the first quarter. And they're going to be active in these new structures really, honestly into March and April that soon. And again, to me, it further flexes the potential of this company and the capability of it once you put the right focus on it.

Our next question comes from Michael Cherny from Leerink Partners.

Great. This is Dan Clark on for Mike. Dan, just wanted to ask about how you're thinking about the pacing of the sales improvement here as the different pieces of the Return-to-Growth action plan get implemented? I mean it sounds like we should start to see sequential growth starting in the back half of the year. How should we think about first half, second half weighting of sales? And then should we expect to see more sequential acceleration as we think about the early parts of 2027?

Yes. So Dan, I'll stay away from '27 because that is so far off in the distance given what's in front of us right now. What I would tell you and what I'm trying to signal out is this doesn't change overnight. And I think most people respect that. I think we have a consistent velocity perhaps in Q1 and Q2. I want to start seeing a noticeable change with what we're putting in place in that third quarter. And I really want to see at least the U.S. come out with a plus sign in front of it, albeit small in the fourth quarter. So we do set the stage correctly for 2027. That's where we're aimed right now. It's early innings, but I'm just telling you that's the way I'm looking at it as I drive this plan.

Our next question comes from Jeff Johnson from Baird.

Hoping I could ask 1 kind of clarifying question that doesn't count as my question then 1 other question. But on the clarifying front, to your SG&A answer, I just want to make sure I understand what you're saying. SG&A as a percentage of revenue up this year, but did you think you can start to kind of grow it just more in line or even below sales going forward? And I think at JPMorgan, you had talked about R&D going from 4%, maybe even pushing up towards 6%, feels like with what you're saying you'll maybe get towards 5% this year. So should we still expect that R&D ramp kind of eventually getting up to that 6% range or so?

Yes, you got it. So a couple of things just to point to clarify. I think SG&A will have some influx. It shouldn't be a large pop. Going forward, one of our rules as we control expense and really look to free up cash flow is probably to grow some of our expenses at half the rate of sales growth. And so again, I don't see G&A growing big and suddenly getting bigger. That's not really the intent. The majority of the spend back to your point, Jeff, is really going into R&D. And we're hovering around 4% in 2025 and earlier, I would expect that to be up around 5%. And as we are successful with this plan, I'll put even more in this year. I'm not saying the target is up to 6%, but that is in the sights. And so what I would think even naturally is a lift this year and the lift next year in R&D, while we continue to get growth and we have to obviously have the rest of the plan working in order to make that second piece happen.

Our next question comes from Jon Block from Stifel.

Great. Dan, when we think about 2026 versus 2025, which of the 4 revenue segments do you think are maybe call it poised to see the biggest year-over-year improvements or strength versus the segments that just might take some more time and investment to go ahead in turn when we look at further out?

Yes. Great question. I mean if you think about it by signing on the dealers and getting that active, I would lean towards CTS is the one that I'm thinking is the first mover. At the same time, as you know, we've got great products in EDS and we're launching those things out both in Chicago and what we're investing in, I think that should be growth and maintaining strength there as probably secondarily. The focus, as I said in my script as well is, we don't like where we are with implants, and we have the best implants in the market. We have to do a better job in how to bring them out through education and application. So I think that would kind of fall third in line. Ortho will take longer because we're going to spend our time this year modernizing the software. I think that's a longer play outside of this calendar that I would expect to see.

Okay. Very helpful. A lot of detail. And then maybe if I could just ask as a follow-up. You get a lot of great color. One thing that I haven't heard you elaborate much on to date is the company's DSO strategy. And obviously, those DSOs are really important to the industry and are fast growing. And DENTSPLY SIRONA, I feel has always lagged a bit on penetrating the DSOs. And maybe part of that is just due to the company's higher end product portfolio. So maybe if you can touch on how you can get better traction with the DSOs despite arguably the higher ASP? And can you prove out the favorable returns to these DSOs in order to get the traction?

Yes, you got it. And again, really honestly, a great question. And the answer is I am looking there. The reason I didn't call that out yet is I'm not really in a position to talk about it further. We're in exploratory thoughts, but I will talk about it further. We can go on and fill out an entire suite with everything we have, and we can offer them hundreds of suites to be filled out. So we're in a position to truly partner with them in a meaningful way for all of the capital needs they have in addition to providing the disposables. So all I would tell you is we're in talks, you can figure out with all of them who they are, and we're looking at what our plans are as part of that return to health. I don't think there's a meaningful '26 move, but you're taking some of my thunder away for that '27, '28 years based on where we're headed.

Our next question comes from Michael Sarcone from Jefferies.

I guess, Dan, you mentioned, and I think this is a reiteration that you'd hope to see a positive sign in front of the growth for the U.S. business in 4Q. I think you had previously mentioned you could get there without any turn in the market. Is that still the case or the thought? And I guess if you could just quickly comment on what you're seeing in the underlying markets, that would be great.

Yes. I do think it's regardless of the market. One of the things I was saying before and at JPM is our return to health is not market-dependent. We need to do a better job in what we have and executing what we have. And I think with that we should be capable of doing that. That said, the market to me does not look radically different. I think it's fairly stable. I think similar to what our counterparts have said, I would agree with those comments that they've made with it. And while there's some increasing optimism, I'm not seeing a spike of any notes. And again, just to reiterate, we're not hoping or praying for that market to suddenly spike up in order to get to our point. We have to do that on our own. Should that occur, that's an additional benefit.

Our next question comes from Brandon Vazquez from William Blair.

I wanted to revisit the increased spending on R&D and the emphasis on speeding up innovation. It seems like this is a crucial element for sustaining interest and demand. Could you clarify the timing of this investment? Will we start seeing returns only in '27 or '28, or are some developments expected sooner? Specifically, what new products can we anticipate in 2026, and what longer-term projects are included in the R&D plans?

Yes, Brandon, it's a good question. So a couple of things. The spending that we are accelerating today would not meaningfully pull anything into 2026. So I would tell you that a historical one. It's a matter of actually closing the gap once you get into '27 and '28. That's really probably the first part of it that way. New product launches that we have out there or planned out there, given that we don't have approvals, I'm probably not going to comment on. I would just tell you that once we reach FDA approval, we start talking about things. So while they are out there, and we have them scheduled, given the fact that we don't have the approvals needed, I'm going to refrain from saying here's what I think and when I think it. But nonetheless, we have products planned. We just have to get through the FDA and regulatory requirements to get out there. And this lift in spending that I'm doing, I think, is something that is a bit longer term outside of the '26 calendar year.

Okay. Maybe as a quick follow-up. Another quarter in now just kind of getting your feet here into the portfolio. Any noticeable gaps that you're noticing that you think you need to fill? Or I mean, portfolio rationalization as well, but I feel like we've talked about that. But any gaps that you need to either launch products or acquire?

Yes. I would say no significant gaps right now. I look at our portfolio, and it's very abundant. How we organize the portfolio and strengthen our brands and focus clinical education and rep education on those are, I think, what's needed more than new widgets. I think the transitional move from selling implants or other products into a dentist workflow through connected dentistry. I think that's something that we have, and that's one of the things we're spending our money on. And so I think the journey is really about the digitization, which I can't say is out into the dentists to go drive it that way.

Our next question comes from David Saxon from Needham & Company.

Great for us. I wanted to ask about the commercial team. Your previous firm obviously made a very strong competitive hire. Is that a strategy you can implement this year, or do you need to focus on establishing a solid foundation and approach before that becomes a viable option for execution?

I would say we may have the potential later this year. We've got to get the teams formed and functioning first. But it's on the list for Otto and Mark to actually look at it that way in the U.S. in particular. And that you're right, we are going to take from that playbook and use that in a great way. I just don't know if I can do it as soon as the second half. Certainly, as we exit the year, that's going to be a key for us.

Our next question comes from Lily Lozada from JPMorgan.

In the prepared remarks, you referenced BBP and ortho and implants this year. So can you talk through how you're thinking about that? To what extent is that factored into the guidance? And do you see it being a net negative or potentially a positive to revenues, ultimately, if you can get volumes to offset price?

Are you talking about the accelerated R&D where we're going to focus, I just want to make sure I answer it the right way.

No. China BBP.

Thank you. I'll tell you, we have our eye on China. Certainly interested. We understand the strategic impact there. But to be honest with you, the return to health plan right now is focused on first getting the U.S. up and on its feet, going through these processes first this year. We'll pay attention to China, make no doubt about it. We have an interest in it. But if you look at where that falls currently, even in our overall sales, it really evolves into low single digits as a percent of our total pie. And so we're just, I would say, prioritizing more of the U.S. Health first, keeping feeding Europe as it is EMEA, I mean by that second and then we'll take a look and see as the news evolves to China, what our best move is. We are evaluating things. I don't want to sound like we're in have plans. We have 2 or 3. We just haven't really made a conclusion yet as to which direction we want to go in there.

Our next question comes from Michael Petusky from Barrington Research.

Thanks for the question, Dan. Again, I think it was in November on the third quarter conference call, you've sort of called out some of the things you want to do in implants to sort of turn that business around and that you talked about adding more reps, better training, adjustments in branding, leveraging infrastructure, et cetera. And I'm just curious, have you been able to sort of implement any aspects of some of the steps you feel like you need to take to turn that business around?

Yes. The answer is yes. And so treating the focused sales force from top to bottom within implants is one of the other things we're talking about within our commercial engine, and we have that done. The expansion of clinical education because I think that's a very viable part and needed part that's out there. That's number two. A pull forward of some of the innovations that we're doing with R&D as part of that funding that's up there as well. And where we are currently working on and not yet ready to talk about is just our brand strategy and how we put everything that we have together and come out with all of the power of not only the implants but our assortment of abutments and how best to use them with the crowns, whether it be chairside or through our labs and so that piece is really working through, and I expect to have a better answer in the second quarter. We're just in mid-stride finishing that up yet. But we have all of the firepower of the team, the education now. We just have to finish up some of these other modes to get it active.

Our next question comes from Glen Santangelo from Barclays.

Dan, I wanted to follow up on the free cash flow question. I understand you prefer not to commit to a specific free cash flow number. However, by suspending the dividend, it appears that you will free up around $130 million. If we estimate free cash flow to be in that range, it suggests a starting cash amount might be approximately $250 million. In your release, you mentioned charges in the $55 million to $65 million range. Given that, is it reasonable to anticipate having close to $200 million available for capital deployment across investments, debt repayment, and share repurchases? Additionally, in your prepared remarks, you indicated that there was specific debt due this year. Could you clarify any of those numbers so we can better understand how the capital structure might evolve in 2026?

Yes. You got it, Glen. Listen, I think that might be an after-hour call thing just because there's a lot of math that's out there. What I would tell you is the dividend elimination is going to be repurposed into both debt retirement and share repurchases, right? That's really the main gist that we just know that we can have an increased total shareholder return, applying the cash that way versus the dividend. And so we can factor that out. But just back to your point, even if you took the math, the $130 million with that being eliminated, we're going to turn it around to these other areas. We're not looking to build up the cash that way just yet. So I'll leave it there. And like I said, those other puts and takes we could take a look at your model offline and figure that out.

Our next question comes from Steven Valiquette from Mizuho Securities.

Yes. Just had a question just around the renewal and/or expansion of the Patterson agreement. I definitely appreciate you can't go into details on new contract terms, et cetera. But I guess, at a high level, do the new contract terms move the needle materially for you one way or the other just for 2026? I mean on the one hand, you might have a little bit lower pricing, but maybe more volume? Also you cited 3 other renewals as well, just curious if any of those are equally important versus the Patterson renewal?

Yes, you got it, Steven. So a couple of things. It really is a new contract with Patterson. It's not a renewal. There are many different terms in there that actually benefit both parties. To be honest with you, it was a great conversation with the team, and I think this will come out well for both parties. For us, it's going to be favorable just again, because they know us, they know our products well. They're key, especially with our CEREC systems. And I think what excites me is the ability to get the training of their team and opening those doors with them. I do think that can be a meaningful lift coming out with that new contract with them. I believe with the other vendors, these existing or these new contracts will be even more beneficial because you're getting all of that expanded feet on the street while you're creating your new vertical sales force teams to focus on specialty. And so I just feel like it's a faster way to penetrate the market going through that pathway.

I'm showing no further questions at this time. So this concludes the question-and-answer session. Thank you for attending today's conference. This does conclude the program, and you may now disconnect.