SEGMENT AND GEOGRAPHIC INFORMATION

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

SEGMENT AND GEOGRAPHIC INFORMATION

The Company has four operating segments, organized primarily by product, which are also the Company’s reportable segments. These are (i) Connected Technology Solutions, (ii) Essential Dental Solutions, (iii) Orthodontic and Implant Solutions, and (iv) Wellspect Healthcare. They generally have overlapping geographical presence, customer bases, distribution channels, and regulatory oversight with the exception of Wellspect Healthcare, which has a more discrete market and regulatory environment specific to the medical device industry. These operating segments, which also form the Company’s reportable segments, are identified in accordance with how the Company’s chief operating decision maker (“CODM”) regularly reviews financial results and uses this information to evaluate the Company’s performance and allocate resources. The Company’s CODM is the Chief Executive Officer.

The CODM assesses performance of the segments based on the net sales and adjusted operating income. Segment adjusted operating income is defined as operating income before income taxes and before certain unallocated corporate costs, interest expense, net, other (income) expense, net, goodwill and intangible asset impairments, restructuring and other costs, amortization of intangible assets, other acquisition costs, and depreciation resulting from the fair value step-up of property, plant, and equipment from business combinations. Asset and other balance sheet information is not reported to the CODM.

The CODM uses both net sales and segment adjusted operating income for each segment during development of the annual operating plan and the regular forecasting process. Additionally, the CODM considers budget-to-actual variances for these measures on a quarterly basis as well as segment-specific forecasting when making decisions about the allocation of operating and capital resources to each segment.

A description of the products and services provided within each of the Company’s four reportable segments is provided below.

Connected Technology Solutions

This segment includes the design, manufacture and sales of the Company’s dental technology and equipment products. These products include the Equipment & Instruments and CAD/CAM product categories.

Equipment & Instruments

The Equipment & Instruments product category consists of basic and high-tech dental equipment such as imaging equipment, motorized dental handpieces, treatment centers, and other instruments for dental practitioners and specialists. Imaging equipment serves as a key point of entry to the Company’s digital workflow offerings and consists of a broad range of diagnostic imaging systems for 2D or 3D, panoramic, and intraoral applications, as well as cone-beam computed tomography systems (“CBCT”). Treatment centers comprise a broad range of products from basic dental chairs to sophisticated chair-based units with integrated diagnostic, hygienic and ergonomic functionalities, as well as specialist centers used in preventive treatment and for training purposes. This product group also includes other lab equipment, such as amalgamators, mixing machines and porcelain furnaces.

CAD/CAM

Dental CAD/CAM technologies are products designed for dental professionals to support numerous digital workflows for procedures such as dental restorations through integrations with DS Core, our cloud-based platform. This product category includes intraoral scanners, 3-D printers, mills, and certain software and services, as well as a full-chairside economical restoration of esthetic ceramic dentistry offering called CEREC, which enables dentists to practice same-day or single visit dentistry.

Essential Dental Solutions

This segment includes the development, manufacture and sales of the Company’s value-added endodontic, restorative, and preventive consumable products and small equipment used by dental professionals for the treatment of patients. Offerings in this segment also include specialized treatment products including products used in the creation of dental appliances.

Essential Dental Solutions products are designed to operate in an integrated system to provide solutions for high-tech dental procedures. The endodontic products include motorized endodontic handpieces, files, sealers, irrigation needles and other tools or single-use solutions which support root canal procedures. The restorative products include dental ceramics and other materials used in prosthetic restorations including crowns and veneers.

The preventive products include small equipment products such as curing light systems, dental diagnostic systems and ultrasonic scalers and polishers, as well as other dental supplies including dental anesthetics, prophylaxis paste, dental sealants and impression materials.

Orthodontic and Implant Solutions

This segment includes the design, manufacture, and sales of the Company’s various digital implant systems and innovative dental implant products, digital dentures and dental professional-directed aligner solutions. Offerings in this segment also include application of our digital services and technology, including those provided by DS Core, our cloud-based platform.

Orthodontics

The Orthodontics product category includes SureSmile, a clear aligner solution provided through clinician offices, and Byte, a direct-to-consumer clear aligner solution. The Orthodontics product category includes a High Frequency Vibration technology device known as VPro, as well as the SureSmile Simulator which uses intraoral scanners and our DS Core platform to create a 3D visualization of patient outcomes and SureSmile aligner solutions, which include whitening kits and retainers. The aligner offerings also include software technology that enables aligner treatment planning and the seamless connectivity of a digital workflow from diagnostics through treatment delivery. Byte operations were significantly reduced after October 24, 2024 and limited to supporting patients already undergoing treatment, following a decision to voluntarily suspend sales and marketing of Byte aligners and impression kits. In January 2025, the Company subsequently announced it will no longer offer the Byte direct-to-consumer clear aligner solution and has decided to leverage technologies developed by Byte elsewhere in the aligners portfolio to create orthodontic demand, support a digital clinical workflow, enhance the customer experience, and improve patient monitoring.

Implants & Prosthetics

The Implants & Prosthetics product category includes technology to support the Company’s digital workflows for implant systems, a portfolio of innovative dental implant products, digital dentures, crown and bridge porcelain products, bone regenerative and restorative solutions, treatment planning software and educational programs. The Implants & Prosthetics product category is supported by key technologies including custom abutments, advanced tapered immediate load screws and regenerative bone growth factor. Offerings in this category also include dental prosthetics such as artificial teeth and precious metal dental alloys.

Wellspect Healthcare

This segment includes the design, manufacture, and sales of the Company’s innovative continence care solutions for both urinary and bowel management. Wellspect Healthcare is a leading global provider of innovative medical devices that help people suffering from urinary retention or chronic constipation. Wellspect is one of the world’s leading manufacturers of intermittent urinary catheters, with LoFric as the most known brand. To help those with chronic or severe constipation, Wellspect also offers an advanced irrigation system, Navina, which combines a high degree of user convenience, clinical effectiveness and connectivity into one smart system.

The Company’s segment financial information was as follows:

	Year Ended December 31,
	2024
(in millions)	Connected Technology Solutions	Essential Dental Solutions	Orthodontic and Implant Solutions	Wellspect Healthcare	Total
Net sales	1,062	1,454	973	304	3,793
Adjusted cost of products sold (a)	602	565	407	117
Adjusted selling expenses (b)	242	313	301	52
Adjusted G&A expenses (b)	74	74	133	27
Adjusted R&D expenses (c)	74	23	52	10
Segment adjusted operating income	70	479	80	98	727
Reconciling items (income) expense:
Unallocated corporate costs (d)					320
Interest expense, net					69
Other (income) expense, net					(12)
Goodwill and intangible asset impairments					1,014
Restructuring and other costs					53
Amortization of intangibles					216
Depreciation resulting from the fair value step-up of property, plant, and equipment from business combinations					3
Loss before income taxes					(936)

(a) Adjusted cost of products sold represents expenses adjusted to exclude intangible amortization expense, step-up depreciation expense, and other restructuring costs.

(b) Adjusted selling and adjusted G&A expenses represent expenses adjusted to exclude intangible amortization expense, other acquisition costs, step-up depreciation expense, and other restructuring costs.

(c) Adjusted R&D expenses represent expenses adjusted to exclude other restructuring costs.

(d) Unallocated corporate costs consist of general corporate expenses including corporate headcount costs, depreciation and amortization, unallocated professional service fees, and other operating costs which are not assigned to a specific segment.

	Year Ended December 31,
	2023
(in millions)	Connected Technology Solutions	Essential Dental Solutions	Orthodontic and Implant Solutions	Wellspect Healthcare	Total
Net sales	1,169	1,468	1,040	288	3,965
Adjusted cost of products sold (a)	645	560	402	114
Adjusted selling expenses (b)	264	313	305	51
Adjusted G&A expenses (b)	77	94	119	25
Adjusted R&D expenses (c)	82	23	58	11
Segment adjusted operating income	101	478	156	87	822
Reconciling items (income) expense:
Unallocated corporate costs (d)					319
Interest expense, net					81
Other (income) expense, net					9
Goodwill and intangible asset impairments					307
Restructuring and other costs					67
Amortization of intangibles					211
Depreciation resulting from the fair value step-up of property, plant, and equipment from business combinations					3
Loss before income taxes					(175)

(a) Adjusted cost of products sold represents expenses adjusted to exclude intangible amortization expense, step-up depreciation expense, and other restructuring costs.

(b) Adjusted selling and adjusted G&A expenses represent expenses adjusted to exclude intangible amortization expense, other acquisition costs, step-up depreciation expense, and other restructuring costs.

(c) Adjusted R&D expenses represent expenses adjusted to exclude other restructuring costs.

(d) Unallocated corporate costs consist of general corporate expenses including corporate headcount costs, depreciation and amortization, unallocated professional service fees, and other operating costs which are not assigned to a specific segment.

	Year Ended December 31,
	2022
(in millions)	Connected Technology Solutions	Essential Dental Solutions	Orthodontic and Implant Solutions	Wellspect Healthcare	Total
Net sales	1,219	1,427	1,006	270	3,922
Adjusted cost of products sold (a)	631	540	370	109
Adjusted selling expenses (b)	251	301	285	48
Adjusted G&A expenses (b)	80	94	124	27
Adjusted R&D expenses (c)	96	25	34	13
Segment adjusted operating income	161	467	193	73	894
Reconciling items (income) expense:
Unallocated corporate costs (d)					318
Interest expense, net					65
Other (income) expense, net					53
Goodwill and intangible asset impairments					1,287
Restructuring and other costs					14
Amortization of intangibles					209
Depreciation resulting from the fair value step-up of property, plant, and equipment from business combinations					3
Loss before income taxes					(1,055)

(a) Adjusted cost of products sold represents expenses adjusted to exclude intangible amortization expense, step-up depreciation expense, and other restructuring costs.

(b) Adjusted selling and adjusted G&A expenses represent expenses adjusted to exclude intangible amortization expense, other acquisition costs, step-up depreciation expense, and other restructuring costs.

(c) Adjusted R&D expenses represent expenses adjusted to exclude other restructuring costs.

(d) Unallocated corporate costs consist of general corporate expenses including corporate headcount costs, depreciation and amortization, unallocated professional service fees, and other operating costs which are not assigned to a specific segment.

Depreciation and Amortization	Year Ended December 31,
(in millions)	2024		2023		2022
Connected Technology Solutions	$	175	$	176	$	172
Essential Dental Solutions	35		33		31
Orthodontic and Implant Solutions	98		97		90
Wellspect Healthcare	19		18		21
All Other (a)	22		19		14
Total	$	349	$	343	$	328

(a) Includes unallocated corporate costs for depreciation and amortization

Geographic Information

The following tables set forth information about the Company’s significant operations by geographic areas, for the years ended December 31, 2024, 2023, and 2022. Net sales reported below represent revenues from external customers in those respective countries based on the destination of shipments.

	Year Ended December 31,
(in millions)	2024		2023		2022
Net sales
United States	$	1,348	$	1,437	$	1,393
Germany	410		431		447
Other Foreign	2,035		2,097		2,082
Total net sales	$	3,793	$	3,965	$	3,922

Property, plant and equipment, net, represents those long-lived assets held by the operating businesses located in the respective geographic areas.

	Year Ended December 31,
(in millions)	2024		2023		2022
Property, plant, and equipment, net
United States	$	210	$	194	$	174
Germany	230		260		275
Sweden	101		105		98
Other Foreign	225		241		214
Total property, plant, and equipment, net	$	766	$	800	$	761

Product and Customer Information

For information on the Company’s net sales by product category comprising each of the reportable segments, see Note 2, Revenue Recognition.

Concentration Risk

For the year ended December 31, 2024, no customer accounted for 10% or more of consolidated net sales or consolidated accounts receivable.

Customers that accounted for 10% or more of net sales or accounts receivable for the years ended December 31, 2023 and 2022 were as follows:

	Year Ended December 31,
	2023				2022
	% of net sales		% of accounts receivable		% of net sales		% of accounts receivable
Henry Schein, Inc.	14	%	11	%	11	%	15	%
Patterson Companies, Inc.	N/A		10	%	N/A		12	%