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What changed in DENTSPLY SIRONA Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of DENTSPLY SIRONA Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+598 added−586 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-29)

Top changes in DENTSPLY SIRONA Inc.'s 2024 10-K

598 paragraphs added · 586 removed · 434 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

72 edited+22 added−27 removed38 unchanged
Biggest changeByte aligner solutions include Byte Plus, with in-office intraoral scanning for treatment planning. The aligner offerings also include software technology that enables aligner treatment planning and seamless connectivity of digital workflows from diagnostics through treatment delivery.
Biggest changeThe 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 combination, these initiatives will improve organizational efficiency and better leverage our selling, general and administrative infrastructure. • Operate sustainably in everything we do: Take a thoughtful, proactive approach to creating a sustainable company through investments in our employees, customers, and the environment.
In combination, these initiatives will improve organizational efficiency and better leverage our selling, general and administrative infrastructure. • Operate sustainably in everything we do: We take a thoughtful, proactive approach to creating a sustainable company through investments in our employees, customers, and the environment.
Dentsply Sirona believes that its principal strengths include its well-established brand names, its end-to-end dental portfolio, its reputation for high quality and innovative products, its leadership in product development and manufacturing, its global sales force, the breadth of its distribution network, its commitment to customer satisfaction and support of the Company’s products by dental and medical professionals.
Dentsply Sirona believes that its principal strengths include its well-established brand names, its end-to-end dental portfolio, its reputation for high quality and innovative products, its leadership in product development and manufacturing, its global sales force, the breadth of its distribution network, its commitment to customer satisfaction and the support of the Company’s products by dental and medical professionals.
Future expansion of the program by the Chinese government could result in reduced margins on covered devices and products, required renegotiation of distributor arrangements, and incurrence of inventory-related charges. The Company is also subject to domestic and foreign laws, rules, regulations, self-regulatory codes, circulars and orders regarding anti-bribery and anti-corruption, including, but not limited to, the U.S.
Future expansion of the program by the Chinese government could also result in reduced margins on covered devices and products, required renegotiation of distributor arrangements, and incurrence of inventory-related charges. The Company is also subject to domestic and foreign laws, rules, regulations, self-regulatory codes, circulars and orders regarding anti-bribery and anti-corruption, including, but not limited to, the U.S.
We conduct our business in accordance with that goal using the following core operating principles: • Approach customers as one: The Company has an integrated approach to customer service, direct and indirect selling, and clinical education to strengthen relationships with customers and better serve customers’ needs. 3 • Create innovative solutions that customers love to use: A comprehensive R&D program that prioritizes strategic spending, builds the next generation of digital workflow technologies and service offerings, and results in impactful innovations that grow our business. • Think and act with positive intent and the highest integrity: Execute the business in a way that empowers our people, respects the communities in which we do business, and establishes trust with our partners and stakeholders. • Use size and global breadth to our advantage: We are focused on integrating our dental product portfolios to unlock operational efficiencies, and on enhancing our healthcare consumables product portfolio, with an emphasis on performance improvements in procurement, logistics, manufacturing, sales force and marketing programs, while at the same time simplifying our business on a worldwide scale.
We conduct our business in accordance with that goal using the following core operating principles: • Approach customers as one: The Company has an integrated approach to customer service, direct and indirect selling, and clinical education to strengthen relationships with customers and better serve customers’ needs. 3 • Create innovative solutions that customers love to use: We manage a comprehensive R&D program that prioritizes strategic spending, builds the next generation of digital workflow technologies and service offerings, and results in impactful innovations that grow our business. • Think and act with positive intent and the highest integrity: We execute our business in a way that empowers our people, respects the communities in which we do business, and establishes trust with our partners and stakeholders. • Use size and global breadth to our advantage: We are focused on integrating our dental product portfolios to unlock operational efficiencies, and on enhancing our healthcare consumables product portfolio, with an emphasis on performance improvements in procurement, logistics, manufacturing, sales force and marketing programs, while at the same time simplifying our business on a worldwide scale.
As part of this end-user “pull through” marketing strategy, the Company conducts extensive marketing programs with a combined approach that also engages DSOs and distributors. 7 Product Development While the Company enjoys market leadership in several of its product categories, continuous innovation and product development are critical for it to continue to grow its share in markets it serves.
As part of this end-user “pull through” marketing strategy, the Company conducts extensive marketing programs with a combined approach that also engages DSOs and distributors. Product Development While the Company enjoys market leadership in several of its product categories, continuous innovation and product development are critical for it to continue to grow its share in markets it serves.
Principal Products and Product Categories The worldwide professional dental industry encompasses the diagnosis, treatment and prevention of disease and ailments of the teeth, gums and supporting bone. The Company offers a broad suite of products which together provide digital workflows for dental practitioners to make the highest use of technological advancements throughout each stage of patient care.
Principal Products and Product Categories The professional dental industry encompasses the diagnosis, treatment and prevention of disease and ailments of the teeth, gums and supporting bone. The Company offers a broad suite of dental products which together provide digital workflows for dental practitioners to make the highest use of technological advancements throughout each stage of patient care.
Dentsply Sirona’s principal product categories are dental technology and equipment products, clear aligners, and dental consumable products. Additionally, the Company manufactures and sells healthcare consumable products for urological and enterological applications. As part of its technology and equipment solutions, the Company also offers an open, cloud-based platform for digital services, DS Core.
Dentsply Sirona’s principal dental product categories are dental technology and equipment products, dental implants, clear aligners, and dental consumable products. Additionally, the Company manufactures and sells healthcare consumable products for urological and enterological applications. As part of its dental technology and equipment solutions, the Company also offers an open, cloud-based platform for digital services, DS Core.
Dental and medical devices sold by the Company in the United States are generally classified by the FDA into a category that renders them subject to the same controls that apply to all medical devices, including regulations regarding alteration, misbranding, notification, record-keeping and good manufacturing practices.
Dental and medical devices sold by the Company in the United States are generally classified by the FDA into a category that renders them subject to the same controls that apply to all medical devices, including regulations regarding alteration, 9 misbranding, notification, record-keeping and good manufacturing practices.
These regulations also applied to all medical device manufacturers who market their medical devices in the EU and all such manufacturers had to perform significant upgrades to quality systems and processes including technical documentation and subject them to new certification under the EU MDR in order to continue to sell those products in the EU.
These regulations also applied to all medical device manufacturers who market their medical devices in the EU and all such manufacturers had to perform significant upgrades to quality systems and processes including technical documentation and subject them to certification under the EU MDR in order to continue to sell those products in the EU.
Despite the Company’s internal compliance program, policies and procedures may not always protect it from reckless or criminal acts committed by its employees or agents. Violations of these requirements are punishable by criminal or civil sanctions, including substantial fines and imprisonment.
Despite the Company’s internal compliance program, policies and procedures may not always protect it from negligent, reckless, or criminal acts committed by its employees or agents. Violations of these requirements are punishable by criminal and civil sanctions, including substantial fines and imprisonment.
Industry Growth Drivers The Company believes that the dental industry is attractive and will grow over the long-term based on the following factors: • Increasing worldwide population, including a shift towards aging demographics, which will require greater dental care. • Natural teeth are being retained longer - individuals with natural teeth are much more likely to visit a dentist than those without any natural teeth. • Increasing demand for aesthetic dentistry and the use of aligners as an orthodontic treatment. • Continued opportunities in emerging markets related to the rise in discretionary incomes making dental services an increasing priority. • Growing preference for single visit dentistry versus historical multi-visit procedure requirements, and for higher quality of patient care in terms of comfort and ease of product use and handling. • Increasing demand for earlier preventive care - dentistry has evolved from a profession primarily dealing with pain, infections, and tooth decay to one with increased emphasis on earlier diagnosis, preventive care, and the role oral health plays in overall health. • Increasing opportunity for digital collaboration between General Practitioners (“GPs”), specialists, labs, and patients is creating widening demand for fully integrated solutions such as cloud-based platforms and services facilitated by GPs. • Increasing demand for more efficiency and better workflow in the dental office, including digital tools such as diagnostic equipment enhanced through the power of 3D imaging.
Industry Growth Drivers The Company believes that the dental industry is attractive and will grow over the long-term based on the following factors: • Increasing worldwide population, including a shift toward aging demographics, which will require greater dental care. • Natural teeth are being retained longer - individuals with natural teeth are much more likely to visit a dentist than those without any natural teeth. • Increasing demand for aesthetic dentistry and the use of clear aligners as an orthodontic treatment. • Continued opportunities in emerging markets related to the rise in discretionary incomes making dental services an increasing priority. • Growing preference for single visit dentistry versus historical multi-visit procedure requirements, and for higher quality of patient care in terms of comfort and ease of product use and handling. 6 • Increasing demand for earlier preventive care - dentistry has evolved from a profession primarily dealing with pain, infections, and tooth decay to one with increased emphasis on earlier diagnosis, preventive care, and the role oral health plays in overall health. • Increasing opportunity for digital collaboration between General Practitioners (“GPs”), specialists, labs, and patients is creating widening demand for fully integrated solutions such as cloud-based platforms and services facilitated by GPs. • Increasing demand for more efficiency and better workflow in the dental office, including digital tools such as diagnostic equipment enhanced through the power of 3D imaging.
These investments in clinical education allow us to reinforce and develop relationships with dental professionals. We also annually support the achievements of dental students conducting innovative research through its Student Competition for Advancing Dental Research and its Application Awards program.
These investments in clinical education allow us to reinforce and develop relationships with dental professionals. We also annually support the achievements of dental students conducting innovative research through our Student Competition for Advancing Dental Research and its Application Awards program.
Competition in the industries for dental technology and equipment, dental consumables, and continence care products is based primarily upon product performance, quality, safety and ease of use, as well as price, customer service, innovation and acceptance by clinicians, technicians and patients.
Competition in the industries for dental technology and equipment, dental consumables, orthodontics and continence care products is based primarily upon product performance, quality, safety and ease of use, as well as price, customer service, innovation and acceptance by clinicians, technicians and patients.
Similarly, we believe that the healthcare consumables market for urology and enterology products will grow over the long-term based on the following: • Aging demographics, together with an increasing incidence of chronic diseases such as diabetes, requiring greater continence care. • An expansion of the population covered by medical insurance and the trend towards more supportive reimbursement policies by governments and insurers encouraging the use of continence care products and related therapies. • The growth in specialized care facilities, technical advancements pertaining to the identification and treatment of chronic renal ailments, and the increasing awareness of incontinence diseases.
Similarly, we believe that the healthcare consumables market for urology and enterology products will grow over the long-term based on the following: • Aging demographics, together with an increasing incidence of chronic diseases such as diabetes, requiring greater continence care. • An expansion of the population covered by medical insurance and the trend toward more supportive reimbursement policies by governments and insurers encouraging the use of continence care products and related therapies. • The growth in specialized care facilities, technical advancements pertaining to the identification and treatment of chronic renal ailments, and the increasing awareness of incontinence diseases.
The Company’s products in Europe bear the CE mark showing that such products comply with European regulations. The Company’s products classified by the EU MDD were mandated to be certified under the new MDR.
The Company’s products in Europe bear the CE mark showing that such products comply with European regulations. The Company’s products classified by the EU MDD were mandated to be certified under the MDR.
The AKS and similar fraud and abuse laws applicable in non-U.S. jurisdictions prohibit persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made under a health care program, such as, in the United States, Medicare or Medicaid. 10 The Company’s production and sales of products is further subject to regulations concerning the supply of conflict minerals, various environmental regulations such as the Federal Water Pollution Control Act (the “Clean Water Act”) and others enforced by the Environmental Protection Agency (“EPA”) or equivalent state agencies, and the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act (the “Health Care Reform Law”).
The AKS and similar fraud and abuse laws applicable in non-U.S. jurisdictions prohibit persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made under a health care program, such as, in the United States, Medicare or Medicaid. 10 The Company’s production and sales of products are further subject to regulations concerning the use of conflict minerals, various environmental regulations such as the Federal Water Pollution Control Act (the “Clean Water Act”) and others enforced by the Environmental Protection Agency (“EPA”) or equivalent state agencies, and the Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act (the “Health Care Reform Law”).
The rapid pace of digital technology adoption, including the digitization of clinical workflows, is becoming a category standard versus traditional manual processes. 6 • An accelerating trend, predominately in the United States, towards consolidation of dental practices into group affiliations, often called Dental Support Organizations (“DSOs”), which may expand access for underserved patient populations, remove administrative and capital burdens on providers, and allow more opportunities for investment in dental technology and patient care.
The rapid pace of digital technology adoption, including the digitization of clinical workflows, is becoming a category standard versus traditional manual processes. • An accelerating trend, predominately in the United States, toward consolidation of dental practices into group affiliations, often called Dental Support Organizations (“DSOs”), which may expand access for underserved patient populations, remove administrative and capital burdens on providers, and allow more opportunities for investment in dental technology and patient care.
During 2022, the Company unveiled its cloud solution, DS Core, an open platform developed in collaboration with Google Cloud that integrates digital dentistry workflows across its devices, services, and technologies. DS Core supports access of end users to case files, orders, and messages through a web browser regardless of the users’ location and without any software licenses.
During 2022, the Company unveiled its cloud solution, DS Core, an open platform developed in collaboration with Google Cloud that integrates digital dentistry workflows across its devices, services, and technologies. DS Core supports access of end users to case files, orders, and messages through a web browser without any software licenses.
As part of this objective, the Company remains committed to participation in clinical research demonstrating the efficacy of our products prior to market introduction, and in supporting the clinical education and technical training of dental professionals.
As part of this objective, the Company remains committed to participation in clinical research demonstrating the efficacy of its products prior to market introduction, and in supporting the clinical education and technical training of dental professionals.
The Company introduced the first dental electric drill approximately 132 years ago, the first dental X-ray unit approximately 100 years ago, the first hydrophilic catheter approximately 40 year ago, the first dental computer-aided design/computer-aided manufacturing (“CAD/CAM”) system approximately 30 years ago, and numerous other significant innovations including pioneering ultrasonic scaling to increase the speed, effectiveness and comfort of cleaning and revolutionizing both file and apex locater technology to make root canal procedures easier and safer.
The Company introduced the first dental electric drill approximately 133 years ago, the first dental X-ray unit approximately 100 years ago, the first hydrophilic catheter and the first dental computer-aided design/computer-aided manufacturing (“CAD/CAM”) system approximately 40 years ago, and numerous other significant innovations, including pioneering ultrasonic scaling to increase the speed, effectiveness and comfort of cleaning and revolutionizing both file and apex locater technology to make root canal procedures easier and safer.
Dentsply Sirona also owns and maintains more than 5,000 patents throughout the world and has also licensed a number of patents owned by others. Our policy is to protect its products and technology through patents and trademark registrations both in the United States and in significant international markets.
Dentsply Sirona also owns and maintains more than 5,000 patents throughout the world and has also licensed a number of patents owned by others. Our policy is to protect the Company’s products and technology through patents and trademark registrations in the United States and in significant international markets.
Item 1. Business Overview DENTSPLY SIRONA Inc. (“Dentsply Sirona” or the “Company”) is the world’s largest manufacturer of professional dental products and technologies, with a 137-year history of innovation and service to the dental industry, and a vision of improving oral health and continence care globally.
Item 1. Business Overview DENTSPLY SIRONA Inc. (“Dentsply Sirona” or the “Company”) is the world’s largest diversified manufacturer of professional dental products and technologies, with a 138-year history of innovation and service to the dental industry, and a vision of improving oral health and continence care globally.
In particular, the Company has continued to prioritize investments supporting digitally connected solutions and enhanced workflows through each stage of patient care, including imaging and scanning technologies used in diagnosis, treatment planning software, and products which are customizable and scalable.
In particular, the Company has continued to prioritize investments supporting digitally connected solutions and enhanced workflows through each stage of patient care, including software for improved collaboration and treatment planning, imaging and scanning technologies used in diagnosis, and products which are customizable and scalable.
The Company sources the necessary raw materials from various suppliers, and no single supplier accounts for more than 10% of our supply requirements. Intellectual Property Products manufactured by Dentsply Sirona are sold primarily under its own tradenames and trademarks.
The Company sources the necessary raw materials from various suppliers, and no single supplier accounts for more than 10% of our supply requirements. Intellectual Property Products manufactured by Dentsply Sirona are sold primarily under its own trade names and trademarks.
These products and solutions are produced by the Company globally and are distributed throughout the world under some of the most well-established brand names and trademarks in these industries, including but not limited to: AH PLUS, ANKYLOS, AQUASIL ULTRA, ARTICADENT, ASTRA TECH, ATLANTIS, AXANO, AXEOS, BYTE, CALIBRA CEMENTS, CAULK, CAVITRON, CELTRA, CERAMCO, CERCON, CEREC, CEREC TESSERA, CEREC MCX, CITANEST, CONFORM FIT, DAC, DELTON, DENTSPLY, DETREY, DS CORE, DYRACT, ENERGO, ESTHET.X, FRIOS, IMPLANT EV, INLAB, INTEGO, IPN, LOFRIC, LUCITONE, MAILLEFER, MIDWEST, MIS, MTM, NAVINA, NUPRO, OMNICAM, OMNITAPER EV, ORAQIX, ORIGO, ORTHOPHOS, OSSEOSPEED, OSSIX, OSSIX AGILE, PALODENT, PRIME & BOND, PROFILE, PRIMEMILL, PRIMEPRINT, PRIMESCAN, PRIMESCAN CONNECT, PRIMETAPER EV, PROGLIDER, PROTAPER ULTIMATE, RECIPROC, PUREVAC, SANI-TIP, SCHICK, SDR FLOW+, SIDEXIS, SIMPLANT, SINIUS, SIROLASER, SIRONA, SLIMLINE, SMARTLITE PRO, SPECTRA ST, STYLUS, SULTAN, SURESMILE, SYMBIOS, T1, T2, T3, T4, TENEO, THERMAFIL, TRIODENT, TRUBYTE, TRUNATOMY, VDW, VIPI, WAVEONE, WELLSPECT, XENO, XIVE, X SMART PRO, XYLOCAINE and ZHERMACK. 4 The Company conducts business through four reportable segments: (1) Connected Technology Solutions, (2) Essential Dental Solutions, (3) Orthodontic and Implant Solutions, and (4) Wellspect Healthcare.
These products and solutions are produced by the Company globally and are distributed throughout the world under some of the most well-established brand names and trademarks in these industries, including but not limited to: AH PLUS, ANKYLOS, AQUASIL ULTRA, ARTICADENT, ASTRA TECH, ATLANTIS, AXANO, AXEOS, BYTE, CALIBRA, CAULK, CAVITRON, CELTRA, CERAMCO, CERCON, CEREC, CITANEST, CONFORM FIT, DAC, DELTON, DENTSPLY, DETREY, DS CORE, DYRACT, ENERGO, ESTHET.X, FRIOS, HELIODENT, EV, INLAB, INTEGO, IPN, LOFRIC, LUCITONE, MAILLEFER, MIDWEST, MIS, NAVINA, NUPRO, OMNITAPER, ORAQIX, ORIGO, ORTHOPHOS, OSSEOSPEED, OSSIX, PALODENT, PRIME & BOND, PROFILE, PRIMEMILL, PRIMEPRINT, PRIMESCAN, PRIMESCAN CONNECT, PRIMETAPER, PROGLIDER, PROTAPER, RECIPROC, PUREVAC, SCHICK, SDR FLOW+, SIDEXIS, SIMPLANT, SINIUS, SIROLASER, SIRONA, SLIMLINE, SMARTLITE, SPECTRA ST, STYLUS, SULTAN, SURESMILE, SYMBIOS, T1, T2, T3, T4, THERMAFIL, TRIODENT, TRUBYTE, TRUNATOMY, VDW, VIPI, WAVEONE, WELLSPECT, XENO, XIOS, X SMART, XYLOCAINE and ZHERMACK. 4 The Company conducts business through four reportable segments: (1) Connected Technology Solutions, (2) Essential Dental Solutions, (3) Orthodontic and Implant Solutions, and (4) Wellspect Healthcare.
Byte contracts with an expansive nationwide network of independent licensed dentists and orthodontists for the provision of clinical services, including the oversight and control of each customer’s clinical treatment in order to comply with these regulations and ensure that the business does not violate rules pertaining to the corporate practice of dentistry.
Byte has historically contracted with an expansive nationwide network of independent licensed dentists and orthodontists for the provision of clinical services, including the oversight and control of each customer’s clinical treatment in order to comply with these regulations and to ensure that the business does not violate rules pertaining to the corporate practice of dentistry.
Dentsply Sirona develops, manufactures, and markets comprehensive solutions, including technologically advanced dental equipment supported by cloud software solutions as well as dental products and healthcare consumable products in urology and enterology under a strong portfolio of world class brands. Dentsply Sirona’s products provide innovative, high-quality, and effective solutions to advance patient care and deliver better, safer and faster dentistry.
Dentsply Sirona develops, manufactures, and markets comprehensive solutions, including technologically advanced dental equipment supported by cloud-enabled solutions, dental products, and healthcare consumable products in urology and enterology under a strong portfolio of world-class brands. Dentsply Sirona’s innovative products provide high-quality, effective, and connected solutions to advance patient care and deliver better, safer and faster dentistry.
Orthodontics The Orthodontics product category includes SureSmile, an aligner solution provided through clinician offices, and Byte, a direct-to-consumer aligner solution.
Orthodontics The Orthodontics product category includes SureSmile, a clear aligner solution provided through clinician offices and Byte, a direct-to-consumer clear aligner solution.
Compensation and Benefits As part of our total rewards philosophy, we offer competitive compensation and benefit programs designed to attract, retain, and motivate top talent. We are committed to providing and administering these programs in a way that treats our employees at all levels fairly and equitably.
Compensation and Benefits As part of our total rewards strategy, we offer competitive compensation and benefit programs designed to attract, retain, and reward top talent. We are committed to providing and administering these programs in a way that treats our employees at all levels fairly and equitably.
The Company is subject to domestic and foreign laws, rules, regulations, self-regulatory codes, circulars and orders governing data privacy and transparency, including, but not limited to, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (the “HITECH Act”), the California Consumer Privacy Act, the European General Data Protection Regulation (the “GDPR”), China’s Personal Information Protection Law, the Physician Payments Sunshine Provisions of the Patient Protection and Affordable Care Act, EU Directive 2002/58/EC (and implementing and local measures adopted thereunder), France’s Data Protection Act of 1978 (rev. 2004) and France’s Loi Bertrand, certain rules issued by Denmark’s Health and Medicines Authority, and similar international laws and regulations.
The Company is subject to domestic and foreign laws, rules, regulations, self-regulatory codes, circulars and orders governing data privacy and transparency, including, but not limited to, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (the “HITECH Act”), the California Consumer Privacy Act, the California Privacy Rights Act, the European General Data Protection Regulation (“GDPR”), China’s Personal Information Protection Law (“PIPL”), Brazil’s Lei Geral de Protecäo de Dados (“LPGD”), the Physician Payments Sunshine Provisions of the Patient Protection and Affordable Care Act, EU Directive 2002/58/EC (and implementing and local measures adopted thereunder), France’s Data Protection Act of 1978 (rev. 2004) and France’s Loi Bertrand, certain rules issued by Denmark’s Health and Medicines Authority, and similar international laws and regulations.
For the year ended December 31, 2023, the Company’s net sales of each reportable segments and the product categories of these reportable segments as a percent of worldwide net sales were as follows: Connected Technology Solutions This segment includes the design, manufacture and sales of the Company’s dental technology and equipment products.
For the year ended December 31, 2024, the Company’s net sales of each reportable segments and the product categories of these reportable segments as a percent of total net sales were as follows: Connected Technology Solutions This segment includes the design, manufacture and sales of the Company’s dental technology and equipment products.
R&D investments include activities to accelerate product and clinical innovation and discipline and develop potential improvements to the manufacturing process. These investments also support engineering efforts that incorporate customer feedback into continuous improvement for current and next-generation products, with the objective to achieve more frequent development and release cycles.
Research and Development (“R&D”) investments include activities to accelerate product and clinical innovation and discipline and to develop potential improvements to the manufacturing process. These investments also support engineering efforts that incorporate customer feedback into continuous improvement for current and next-generation products, with the objective to achieve more frequent development and release cycles.
In 2023, the Company began a rigorous portfolio management process to simplify and optimize our suite of product offerings, gain efficiencies through optimized product life-cycle management, and improve overall customer experience.
In 2024, the Company continued a rigorous portfolio management process to simplify and optimize our suite of product offerings, gain efficiencies through optimized product life-cycle management, and improve overall customer experience.
The Orthodontics product category also includes a High Frequency Vibration technology device known as VPro or HyperByte, within Byte’s product offering, as well as the new SureSmile Simulator, which uses intraoral scanners and our DS Core platform to create a 3D visualization of patient outcomes. SureSmile aligner solutions include whitening kits and retainers.
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 DS Core digital platform is designed to enable more precise and simplified cloud storage, optimize diagnostic capabilities, and streamline existing workflows and collaborations with laboratory partners and specialists.
The DS Core digital platform is designed to enable simplified cloud storage, optimize diagnostic capabilities, and streamline existing workflows with laboratory partners.
The Company is well positioned to navigate macroeconomic challenges and execute on its strategy of enabling dentists to utilize superior integrated workflows through our robust market offerings in all key areas of dental procedures (implants, endodontic, restorative and aligners) as well as digital infrastructure (CAD/CAM and imaging) utilized in dental practices around the globe.
The Company remains focused on its strategy of enabling dentists to utilize superior integrated workflows through our robust market offerings in all key areas of dental procedures (implants, endodontic, restorative and aligners) as well as digital infrastructure (CAD/CAM and imaging) utilized in dental practices around the globe.
The program launched with an initial focus on endodontic and restorative consumable products with potential to expand in 2024 and future years, including a goal of achieving additional efficiency from optimizing our geographic footprint. Dentsply Sirona distributes approximately two-thirds of its dental consumable and technology and equipment products through third-party distributors.
The program, which has the potential to be expanded in future years, had an initial focus on endodontic and restorative consumable products, including a goal of achieving additional efficiency from optimizing our geographic footprint. Dentsply Sirona distributes approximately two-thirds of its dental consumable and technology and equipment products through third-party distributors.
Food, Drug, and Cosmetic Act (the “FDCA”), Council Directive 93/42/EEC on Medical Devices (“MDD”) (1993) in the European Union (“EU”), which was updated to the EU Medical Device Regulation (“MDR”) in 2021 (and implementing and local measures adopted thereunder) and similar international laws and regulations.
Food, Drug, and Cosmetic Act (the “FDCA”), Council Directive 93/42/EEC on Medical Devices (“MDD”) in the European Union (“EU”), which was updated to the EU Medical Device Regulation (“MDR”), and similar international laws and regulations.
In the sale, delivery and servicing of the Company’s products to other countries, it must also comply with various domestic and foreign export control and trade embargo laws and regulations, including those administered by the Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the Department of Commerce’s Bureau of Industry and Security (“BIS”) and similar international governmental agencies, which may require licenses or other authorizations for transactions relating to certain countries and/or with certain individuals identified by the respective government.
In the manufacture, sale, delivery and servicing of the Company’s products internationally, the Company must also comply with various domestic and foreign import and export control and economic sanctions, laws, and regulations, including those administered by the Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the Department of Commerce’s Bureau of Industry and Security (“BIS”) and similar foreign governmental agencies, which may require licenses or other authorizations for transactions relating to certain products, certain countries and regions, and/or with certain individuals and entities identified by the respective government.
Although a significant portion of the Company’s sales are made to distributors and importers, Dentsply Sirona focuses much of its marketing efforts on the dentists, dental hygienists, dental assistants, dental laboratories and dental schools which are the end-users of its products.
N/A 10 % N/A 12 % 7 Although a significant portion of the Company’s sales are made to distributors, Dentsply Sirona focuses much of its marketing efforts on the orthodontists, dentists, dental specialists, dental hygienists, dental assistants, dental laboratories and dental schools which are the end-users of its products.
Dentsply Sirona also makes available free of charge through the investor section of its website at www.dentsplysirona.com its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such materials are filed with or furnished to the SEC.
Available Information Dentsply Sirona maintains a primary website, www.dentsplysirona.com, and makes available free of charge through the investor section of its website the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as soon as reasonably practicable after such materials are filed with or furnished to the SEC.
Sales and Distribution As of December 31, 2023, Dentsply Sirona employed approximately 5,100 highly trained, sales and technical staff specialized in each of our various products and solutions to provide comprehensive marketing, sales, and technical support services to meet the needs of our distributors and end-users.
Sales and Distribution As of December 31, 2024, Dentsply Sirona employed approximately 4,600 hi ghly trained, sales and technical staff specialized in each of our various products and solutions to provide comprehensive marketing, sales, and technical support services to meet the needs of our distributors and end-users.
N/A 10 % N/A 12 % For the year ended December 31, 2021, no customer accounted for 10% or more of consolidated net sales or consolidated accounts receivable.
For the year ended December 31, 2024, no customer accounted for 10% or more of consolidated net sales or consolidated accounts receivable.
This also includes completion of certified quality management systems by May 26, 2024. The Company remains focused on ensuring that all its products that are considered to be medical devices will be fully certified as required by the EU MDR dates and timelines.
The Company completed required certifications of its quality management systems in 2024. The Company remains focused on ensuring that all its products that are considered to be medical devices will be fully certified as required by the EU MDR dates and timelines.
The Physician Payments Sunshine Provisions of the Patient Protection and Affordable Care Act require the Company to record all transfers of value to physicians and teaching hospitals and to report this data to the Centers for Medicare and Medicaid Services for public disclosure.
Privacy laws also require the reporting of certain breaches of individually identifiable information. The Physician Payments Sunshine Provisions of the Patient Protection and Affordable Care Act require the Company to record all transfers of value to physicians and teaching hospitals and to report this data to the Centers for Medicare and Medicaid Services for public disclosure.
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.
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 academies offer hands-on teaching, live lectures, and on-demand webinars and courses which are taught by a diverse range of internationally known experts in all fields of dentistry. In 2023, we delivered more than 9,200 training courses to dental professionals through in-person, online, and hybrid formats.
The academies offer hands-on teaching, live lectures, and on-demand webinars and courses which are taught by a diverse range of internationally recognized experts in all fields of dentistry. In 2024, we partnered in the delivery of thousands of training courses to dental professionals through in-person, online, and hybrid formats.
The following sections describe some, but not all, of the significant regulations that apply to the Company. For a description of the risks related to the regulations that the Company is subject to, please refer to Item 1A, “Risk Factors,” of this Form 10-K.
For a description of the risks related to the regulations that the Company is subject to, please refer to Item 1A, “Risk Factors,” of this Form 10-K.
Although the backlog on products is generally not material to the financial statements due in part to the Company’s efforts to maintain short lead times within its manufacturing, levels can fluctuate and affect sales in certain periods due to supply chain disruption and unavailability of required inputs. 13 Securities Exchange Act Reports The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers, including the Company, that file electronically with the SEC.
Although the backlog on products is generally not material to the Company’s financial statements due in part to the Company’s efforts to maintain short lead times within its manufacturing, levels can fluctuate and affect sales in certain periods due to supply chain disruption and unavailability of required inputs.
The business is conducted in the United States of America (“U.S.” or “United States”), as well as in over 150 foreign countries, principally through its foreign subsidiaries. Dentsply Sirona has a long-established presence in the European market, particularly in Germany, Sweden, France, the United Kingdom (“UK”), Switzerland and Italy.
Dentsply Sirona’s headquarters and principal operations are located in the United States of America (“U.S.” or “United States”) and the Company sells products globally through its foreign subsidiaries to customers in approximately 150 countries. Dentsply Sirona has a long-established presence in the European market, particularly in Germany, Sweden, France, the United Kingdom (“UK”), Italy, and Switzerland.
We are also looking to increasingly utilize an enterprise approach to funding that employs a returns-based mindset with the goal of allocating R&D spending to those areas with the highest return. In addition to internal product development, the Company also pursues external R&D opportunities, including acquisitions, licensing, or other arrangements with third parties.
We are also looking to increasingly utilize an enterprise approach to funding that employs a returns-based mindset with the goal of allocating R&D spending to those areas with the highest return.
During 2022, the Company also introduced its premium EV Implants System for providing implants that are harmonized, simplified and digitally enabled, as well as its enhanced orthodontic offering SureSmile Solutions, inclusive of a whitening kit, retainers, and the VPro orthodontic device, which uses high-frequency vibration to reduce discomfort in aligner treatment.
During 2022, the Company also introduced its premium EV Implants System for providing implants that are simplified and digitally enabled and introduced SureSmile Solutions, an enhanced orthodontic offering that includes a whitening kit, retainers, and the VPro orthodontic device.
The information contained on, or that may be accessed through, the Company’s website is not incorporated by reference into, and is not a part of, this report.
The information contained on, or that may be accessed through, the Company’s website is not incorporated by reference into, and is not a part of, this report. All filings with the Securities and Exchange Commission (“SEC”) are also available at the SEC’s website, www.sec.gov. 13
Initiatives to support clinical education also include partnerships with research institutions and dental and medical schools, and the offering of education tracks at our premier DS World trade and professional education events, which hosted approximately 7,000 participants in 2023 in Las Vegas, Nevada, Spain, Italy and the United Arab Emirates.
Initiatives to support clinical education also include partnerships with research institutions and dental and medical schools. The Company offers education tracks at its premier DS World trade and professional education events, which hosted over 7,000 participants at six DS World events across the globe in 2024.
Due in part to its direct-to-consumer model, the Company’s Byte aligner business in the United States is subject to various state laws, rules and policies which govern the practice of dentistry within such state.
The Company’s Byte aligner business in the United States is subject to various state laws, rules and policies which govern the practice of dentistry within such states, particularly based on the direct-to-consumer model that leverages teledentistry, which is no longer a model applicable to products offered to new patients as of October 24, 2024.
The continued development of these areas is a critical step in meeting the Company’s strategic goal to be a leader in defining the future of dentistry and preparing the next generation of dental practitioners. Operating and Technical Expertise Dentsply Sirona believes that its manufacturing capabilities are important to its success.
The continued development of these areas is a critical step in meeting the Company’s strategic goal to be a leader in defining the future of dentistry and preparing the next generation of dental practitioners. Competition The Company conducts its global operations under highly competitive market conditions.
Our continence care products are primarily sold to distributors of medical supplies, with the remaining sales being made directly to patients and medical providers.
Certain products such as endodontic instruments and materials, dental implants and orthodontic aligners and appliances are often sold directly to dental laboratories or dental professionals in some markets. Our continence care products are primarily sold to distributors of medical supplies, with the remaining sales being made directly to patients and medical providers.
There are many companies that produce some of the same types of products as those produced by the Company, but no single competitor produces the breadth of products that are produced by the Company. 9 Regulation The development, manufacture, sales and distribution of the Company’s products are subject to comprehensive governmental regulation both within and outside the United States.
The size and number of the Company’s competitors vary by product line and from region to region. There are many companies that produce some of the same types of products as those produced by the Company, but no single competitor produces the breadth of products that are produced by the Company.
A full-chairside offering 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 in dental offices for the treatment of patients.
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.
Additional information regarding certain risks related to our intellectual property is included in Item 1A “Risk Factors” of this Form 10-K and is incorporated herein by reference. 11 Human Capital Our employees are core to our Company, and their contributions enable the success of our business.
Additional information regarding certain risks related to our intellectual property is included in Item 1A, “Risk Factors” of this Form 10-K and is incorporated herein by reference. 11 Human Capital Every day, our people create innovative solutions that transform lives. Our inclusive, agile & high-performance culture equips us to build, grow, and win as one.
We continued deployment of our Emerging Talent program focused on attracting early-career employees through strategic partnerships with Historically Black Colleges and Universities and local trade schools. The comprehensive program provides rotational assignments, on-the-job experiences, networking events, development sessions and executive interactions.
We offer Emerging Talent programs focused on attracting early-career employees through university relationships, including partnerships with Historically Black Colleges and Universities and local trade schools. These programs provide options for apprenticeships, rotational assignments, on-the-job experiences, networking, development, and executive interactions. New employees participate in our custom Enterprise Orientation module that introduces our culture and instills pride in what we do.
CAD/CAM Dental CAD/CAM technologies are products designed for dental offices 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.
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.
Wellspect Healthcare This segment includes the design, manufacture, and sales of the Company’s innovative continence care solutions for both urinary and bowel management. This category consists mainly of urology catheters and other healthcare-related consumable products.
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.
The DS Core platform was expanded to allow integration with select third-party equipment. Also in 2023, the Company released expanded milling and printing materials to enhance the Primeprint and Primemill Solutions and workflows for patient-specific nightguards and splints.
The DS Core Communication Canvas allows for communication with patients through images and scans along with annotations by the dentist. DS Core’s lab connectivity features enable digital collaboration between dentists and their preferred lab. Also in 2023, the Company released expanded milling and printing materials to enhance the Primeprint and Primemill Solutions and workflows for patient-specific nightguards and splints.
Our actions are in line with EHS frameworks and certifications such as OHSAS 18001 and ISO 45001. We also have a Corporate Crisis Management Team, prepared to respond to crisis situations with which we may be confronted on a global scale in a prompt and efficient manner.
We also have a corporate Crisis Management Team and a newly implemented crisis response platform which prepare us to respond in a prompt and efficient manner to crisis situations which we may face on a local or global scale.
To keep employees connected, engaged and informed, we continued to hold virtual town halls and live video chats. These events provide multiple opportunities for our global workforce to submit questions to our executive leadership team. Employee feedback is an important element of our culture.
Employees can choose to participate in group discussions where internal volunteers share experiences on varying topics to generate awareness. We keep employees connected, engaged, and informed through regular town hall meetings and live video chats. These events provide multiple opportunities for our global workforce to submit questions and interact with our executive leadership team.
All executive leaders create annual action plans and progress is reviewed quarterly. Employee Health & Safety Matters The health and safety of our employees are of utmost importance to us. We have a dedicated Employee Health & Safety (“EHS”) program that provides global processes and trainings and monitors our progress against set goals.
We have a dedicated Employee Health & Safety (“EHS”) program that provides global processes and trainings and monitors our progress against set goals. Our actions are in line with EHS frameworks and certifications such as OHSAS 1800 and ISO 45001.
In particular, the Company continues to prioritize ongoing investments in software development for improved collaboration, cloud connectivity of devices, and a clinical application suite. 8 Clinical Education In 2023, the Company expanded its investments in clinical education as a key value driver to leverage its global footprint, enhance digital content, and strengthen our clinical network.
In addition to internal product development, the Company also pursues external R&D opportunities, including acquisitions, licensing, or other arrangements with third parties. 8 Clinical Education In 2024, the Company continued its investments in clinical education as a key value driver to leverage its global footprint, enhance digital content, and strengthen its clinical network.
HIPAA, as amended by the HITECH Act, the GDPR and similar data-privacy laws applicable in non-U.S. jurisdictions, restrict the use and disclosure of personal health information, mandate the adoption of standards relating to the privacy and security of individually identifiable health information and require us to report certain breaches of unsecured, individually identifiable health information.
Applicable privacy laws around the world restrict the use and disclosure of personal information, and mandate the adoption of standards relating to the privacy and security of individually identifiable information such as data minimization, access control, providing transparent notice of our privacy practices, and respecting data subject rights.
As of December 31, 2023, our organization and its subsidiaries employed approximately 15,000 employees across the globe. Of these employees, approximately 3,500 were employed in the United States. Some employees outside of the United States, particularly in Europe, are covered by collective bargaining agreements, union contracts, worker councils or other similar programs.
Together, we are shaping the future and delivering value to customers and patients. As of December 31, 2024, our organization and its subsidiaries employed approximately 14,000 employees globally. Of these employees, approximately 3,000 were employed in the United States.
The Company also introduced the Midwest Energo series of electric handpiece instruments, as well as Ossix Agile, an innovative pericardium based membrane delivering long-lasting barrier effect and predictable results to periodontic procedures. Additionally, the Company continued to expand its offering of leading continence care with the Navina Mini and LoFric Origo Flexible.
The Company continued to expand its innovative endodontic solutions with the X-Smart Pro+ motor, the Midwest Energo series of electric handpiece instruments, and the Ossix Agile, an innovative, pericardium-based membrane for periodontic procedures. During 2024, the Company introduced additional key offerings in digital dentistry with Primescan 2 and further updates to DS Core.
Removed
Certain products such as endodontic instruments and materials, orthodontic aligners and appliances, and dental implants are often sold directly to dental laboratories or dental professionals in some markets. Additionally, the Company’s Byte business produces aligners which are sold directly to patients based on personalized treatment plans prescribed by dental professionals.
Added
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.
Removed
The newly introduced DS Core Communication Canvas expands the digital platform’s tools for communication with patients through images and scans along with annotations by the dentist. DS Core’s lab connectivity features enable digital collaboration between dentists and their preferred lab by inviting them to the platform, or dentists can discover new specialists offering services tailored to their needs.
Added
In January 2025, the Company subsequently announced it will no longer offer the Byte direct-to-consumer clear aligner solution to new patients, and it 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.
Removed
The Company continued to expand its innovative endodontic solutions with the X-Smart Pro+ motor with an integrated apex locator designed for responsive control and precision in root canal procedures.
Added
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.
Removed
The manufacturing processes of the Company’s products require substantial and varied technical expertise. Complex materials technology and processes are necessary to manufacture the Company’s products. The Company endeavors to automate its global manufacturing operations in the interest of improving product quality and lowering costs.
Added
Primsescan 2 is the next generation of intraoral scanners and features a cloud-native and wireless design. The new technology performs scans, which are then captured directly on the DS Core cloud platform, enabling dental professionals additional mobility when treating patients.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

200 edited+81 added−73 removed36 unchanged
Biggest changeAlthough these material weaknesses have all been remediated as of December 31, 2023, should they recur, or if we experience additional material weaknesses in the future, we may be unable to accurately and timely report financial results or comply with the requirements for public companies, which could cause the price of our common stock to decline or limit our access to the capital markets. • We may be subject to additional litigation and regulatory examinations, investigations, proceedings or court orders as a result of or relating to the 2022 internal investigation which included certain financial reporting matters, which is now complete, and if any of these items are resolved adversely against us, it could harm our business, financial condition and results of operations. • Lack of global standardized processes, centralization of transaction management and/or failures to execute could result in control deficiencies and adversely impact management’s assertions and financial reporting. • We rely heavily on information and technology to operate both our businesses and our technology dependent product solutions portfolios, and any cyber incidents with respect to our information and technology infrastructure, whether by deliberate attacks or unintentional events, could harm our operations and have a material impact on our business and financial results. • Evolving governmental oversight of the use of personal information, cross-border data transfer restrictions and the use of AI, as well as other technology regulations, may adversely affect our business. • We may be unable to develop innovative products and solutions to stimulate customer demand. • Damage to our reputation or brand could negatively impact our business, financial condition or results of operations. • Our ongoing business operations may be disrupted for a significant period of time, resulting in material operating costs and financial losses. • We may be unable to execute key strategic initiatives due to competing priorities and strategies of our distribution partners and other factors, which may result in financial losses and operational inefficiencies. • The success of our business depends in part on achieving our strategic objectives, including through acquisitions, dispositions, and strategic investments and initiatives. • We may fail to realize the expected benefits of our strategic initiatives, including recently executed or potential future restructuring and other business transformation efforts. • We have recognized substantial goodwill and indefinite-lived intangible asset impairment charges and may be required to recognize additional goodwill and indefinite-lived intangible asset impairment charges in the future. • Our failure to protect our proprietary technology could have an adverse impact on our competitive position. • Our financial results may be adversely impacted if our products are found to infringe upon the intellectual property rights of others. • Changes in our credit ratings or macroeconomic impacts on credit markets may increase our cost of capital and limit financing options. • A breach of the covenants under our debt instruments outstanding from time to time could result in an event of default under the applicable agreement. • We may not be able to repay our outstanding debt if we do not generate sufficient cash flow to service our debts and cross default provisions may be triggered due to a breach of covenants under our existing indebtedness. • Our foreign currency hedging and cash management transactions may be ineffective or only partially mitigate the impact of exchange rate fluctuations, exposing us to unexpected volatility. • Due to the global nature of our business, including increasing exposure to markets outside of the United States, political or economic changes or other factors could harm our business and financial performance. • Changes in or interpretations of tax rules, operating structures, transfer pricing regulations, country profitability mix and regulations may adversely affect our effective tax rate. • We may be unable to obtain necessary product approvals and marketing clearances. • Our doctor-directed, direct to customer clear aligner business could be adversely affected by challenges to our business model or by new state actions restricting our ability to provide our products and services in certain states. • Inadequate levels of reimbursement from governmental or other third-party payors for procedures using our products may cause our revenue to decline. • Challenges may be asserted against our products due to real or perceived quality, health or environmental issues. 15 • If we fail to comply with laws and regulations relating to health care fraud, we could suffer penalties or be required to make significant changes to our operations, which could adversely affect our business. • Our business is subject to extensive, complex and changing domestic and foreign laws, rules, regulations, self-regulatory codes, directives, circulars and orders which, if not complied with, subjects us to civil or criminal penalties or other liabilities. • The market price for our common stock may continue to be volatile as a result of a number of factors, including quarterly operating results. • Certain provisions in our governing documents, and of Delaware law, may make it more difficult for a third party to acquire us. • Our business may be adversely affected by changes in global economic conditions, including inflation, rising interest rates, and supply chain shortages. • Talent gaps and failure to manage and retain top talent may impact our ability to manage our operations, execute strategic initiatives and grow the business. • We face the inherent risk of legal actions, including litigation, product liability claims, and other regulatory or compliance matters. • Climate change and related natural disasters could negatively impact our business and financial results. • Expectations relating to environmental, social and governance considerations may expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.
Biggest changeRisk Factors Summary The following is a summary of the significant risk factors that could materially impact our business, financial condition or future results, including risks related to our businesses, our international operations, our regulatory environments, ownership of our common stock, and other general risks: • We rely heavily on information and technology to operate our businesses and product portfolios, and any cyber incidents could harm our operations and have a material impact on our business and financial results. • Evolving governmental oversight of the use of personal information, cross-border data transfer restrictions and the use of emerging technologies, including AI, as well as other technology regulations, may adversely affect our business. • We may be unable to develop innovative products and solutions to stimulate customer demand. • Damage to our reputation or brand could negatively impact our business, financial condition or results of operations. • Our ongoing business operations may be disrupted for a significant period of time, resulting in material operating costs and financial losses. • We may be unable to execute key strategic initiatives due to competing priorities and strategies of our distribution partners and other factors, which may result in financial losses and operational inefficiencies. • Our acquisitions, exiting of businesses, divestitures or strategic investments may result in financial results that are different than expected and create certain risks for our business and operations. • We may fail to realize the expected benefits of our strategic initiatives, including executed, announced, or potential future restructuring and other business transformation efforts. • We have recognized substantial goodwill and indefinite-lived intangible asset impairment charges and may be required to recognize additional goodwill and indefinite-lived intangible asset impairment charges in the future. • Our failure to protect our proprietary technology could have an adverse impact on our competitive position. • Our financial results may be adversely impacted if our products or services are found to infringe upon the intellectual property rights of others. • Changes in our credit ratings or macroeconomic impacts on credit markets may increase our cost of capital and limit financing options. • Our indebtedness could adversely affect our financial condition and prevent us from fulfilling our debt or contractual obligations. • Our foreign currency hedging and cash management transactions may be ineffective or only partially mitigate the impact of exchange rate fluctuations, exposing us to unexpected volatility. • Due to the global nature of our business, including increasing exposure to markets outside of the United States, political or economic changes or other factors could harm our business and financial performance. • Management previously identified material weaknesses in our internal control over financial reporting, some of which resulted in errors in previously issued financial statements.
Such provisions include, among others, a provision allowing the Board of Directors to issue preferred stock having rights senior to those of the common stock and certain requirements which make it difficult for stockholders to amend our By-laws and prevent them from calling special meetings of stockholders.
Such provisions include, among others, a provision allowing the Board of Directors to issue preferred stock having rights senior to those of our common stock and certain requirements which make it difficult for stockholders to amend our By-laws and prevent them from calling special meetings of stockholders.
Any of the above factors could individually or in combination have a material adverse effect on our operating results, financial condition and liquidity. Talent gaps and failure to manage and retain top talent may impact our ability to manage our operations, execute strategic initiatives and grow the business.
Any of the above factors could individually or in combination have a material adverse effect on our operating results, financial condition and liquidity. Talent gaps and failure to manage and retain top talent may impact our ability to manage our operations, execute strategic initiatives and grow our business.
We experience significant fluctuations in quarterly sales and earnings due to several factors, some of which are substantially outside of our control, including but not limited to: • general economic conditions, as well as those specific to the healthcare industry and related industries; • changes in income tax laws and incentives that could create adverse tax consequences; • the execution of restructuring plans; • the complexity of our organization; • our ability to supply products to meet customer demand; • the timing of new product introductions by us and our competitors; • the timing of industry trade shows; • changes in customer inventory levels; • developments in government or third party payor reimbursement policies; • changes in customer preferences and product mix; • fluctuations in manufacturing costs; • competitors’ sales promotions; and • fluctuations in currency exchange rates.
We may experience significant fluctuations in quarterly sales and earnings due to several factors, some of which are substantially outside of our control, including but not limited to: • general economic conditions, as well as those specific to the healthcare industry and related industries; • changes in income tax laws and incentives that could create adverse tax consequences; • the execution of restructuring plans; • the complexity of our organization; • our ability to supply products to meet customer demand; • the timing of new product introductions by us and our competitors; • the timing of industry trade shows; • changes in customer inventory levels; • developments in government or third-party payor reimbursement policies; • changes in customer preferences and product mix; • fluctuations in manufacturing costs; • competitors’ sales promotions; and • fluctuations in currency exchange rates.
Specifically, the Chinese government has implemented a volume-based procurement process designed to decrease prices for medical devices and other products, which has in the past resulted in, and could in the future result in, reduced margins on covered devices and products, required renegotiation of distributor arrangements, or an incurrence of inventory-related charges. For further information, please see Part 1.
Specifically, the Chinese government has implemented a volume-based procurement process designed to decrease prices for medical devices and other products, which has in the past resulted in, and could in the future result in, reduced margins on covered devices and products, required renegotiation of distributor arrangements, or an incurrence of inventory-related charges. For further information, see Part 1.
Delaware law imposes some restrictions on mergers and other business combinations between us and any “interested stockholder” with beneficial ownership of 15% or more of our outstanding common stock. 32 GENERAL RISKS Our business may be adversely affected by changes in global economic conditions, including inflation, rising interest rates, and supply chain shortages.
Delaware law imposes some restrictions on mergers and other business combinations between us and any “interested stockholder” with beneficial ownership of 15% or more of our outstanding common stock. GENERAL RISKS Our business may be adversely affected by changes in global economic conditions, including inflation, rising interest rates, and supply chain shortages.
The Company has sought to offset the elevated costs resulting from raw material cost inflation with annual price increases but has been only partially successful. Should the higher inflationary environment continue, we may not be able to increase the prices of our offerings sufficiently to keep up with the rate of inflation.
The Company has sought to offset the elevated costs resulting from raw material cost inflation with annual price increases but has been only partially successful. Should the higher inflationary environment continue, we may not be able to increase the 32 prices of our offerings sufficiently to keep up with the rate of inflation.
Our foreign currency hedging and cash management transactions may be ineffective or only partially mitigate the impact of exchange rate fluctuations, exposing us to unexpected volatility. Due to the global nature of our business, movements in foreign exchange rates may impact our consolidated statements of operations, consolidated balance sheets and cash flows.
Our foreign currency hedging and cash management transactions may be ineffective or only partially mitigate the impact of exchange rate fluctuations, exposing us to unexpected volatility. Due to the global nature of our business, movements in foreign exchange rates may impact our consolidated statements of operations, consolidated balance sheets and consolidated statement of cash flows.
Further, such organizational challenges may make it difficult to maintain our culture, resulting in employees not adhering to the desired values of the organization. 33 We face the inherent risk of legal actions, including litigation, product liability claims, and other regulatory or compliance matters.
Further, such organizational challenges may make it difficult to maintain our culture, resulting in employees not adhering to the desired values of the organization. We face the inherent risk of legal actions, including litigation, product liability claims, and other regulatory or compliance matters.
Fines for noncompliance with the GDPR can amount to up to €20 million or 4% of the total worldwide annual sales from the preceding financial year (whichever is higher) and may be imposed in conjunction with the exercise of the authority’s investigatory and corrective powers.
Fines for noncompliance can amount to up to €20 million or 4% of the total worldwide annual sales from the preceding financial year (whichever is higher) and may be imposed in conjunction with the exercise of the authority’s investigatory and corrective powers.
The increased emphasis on ESG matters has resulted in, and may continue to result in, the adoption of laws and regulations, including additional reporting requirements, leading to increased compliance costs, as well as increased scrutiny regarding our ESG activities and disclosures, which may lead to increased litigation risks.
The increased emphasis on ESG matters has resulted in, and may continue to result in, the adoption of laws and regulations, including additional reporting requirements, leading to increased compliance costs, as well as increased scrutiny regarding our ESG activities and disclosures, which may lead to increased litigation.
Additionally, the rapid pace of technological advancements may accelerate amortization faster than we anticipated or impair investments in our software technology, which could negatively impact our results. 20 Damage to our reputation or brand could negatively impact our business, financial condition or results of operations.
Additionally, the rapid pace of technological advancements may accelerate amortization faster than we anticipated or impair investments in our software technology, which could negatively impact our results. Damage to our reputation or brand could negatively impact our business, financial condition or results of operations.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected in a timely basis.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
In addition, many of these laws are vague or indefinite and have not been interpreted by the courts and have been subject to frequent modification and varied interpretation by prosecutorial or regulatory authorities, increasing compliance risks.
In addition, many of these laws are vague or indefinite and have not been interpreted by courts, and have been subject to frequent modification and varied interpretation by prosecutorial and regulatory authorities, increasing compliance risks.
Our selected disclosure framework may need to be changed from time to time due to evolving standards and practices, which may result in a lack of consistent or meaningful comparative data from period to period.
Our disclosure framework may need to be changed from time to time due to evolving standards and practices, which may result in a lack of consistent or meaningful comparative data from period to period.
Company management may be required to divert their focus to managing these disruptions, and implementation may require the agreement of third parties, such as labor unions or works councils.
Company management may be required to divert their focus to these disruptions, and implementation may require the agreement of third parties, such as labor unions or works councils.
Increasing natural disasters in connection with climate change could also impact our third-party vendors, service providers or other stakeholders, including disruptions in supply chains, information technology or other necessary services for our Company. 34 Expectations relating to environmental, social and governance considerations may expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.
Increasing natural disasters in connection with climate change could also impact our third-party vendors, service providers or other stakeholders, including disruptions in supply chains, information technology or other necessary services for our Company. 33 Expectations relating to environmental, social and governance considerations may expose us to potential liabilities, increased costs, reputational harm, and other adverse effects on our business.
Alternatively, we may dispose of a business at a valuation or on terms that are less favorable than we had anticipated, or with the exclusion of select assets. Dispositions may also involve continued involvement in a divested business, such as through continuing equity ownership, transition service agreements, guarantees, indemnities or other current or contingent financial obligations.
Alternatively, we may dispose of a business at a valuation or on terms that are less favorable than we had anticipated, or with the exclusion of select assets. Dispositions may also involve continued involvement in a divested business, such as through continuing equity ownership, transition service agreements, guarantees, indemnities or other financial obligations.
Additionally, we seek to maintain insurance coverage for risks associated with cybersecurity, but such insurance has become increasingly difficult to secure and, in some cases, policies may not provide adequate coverage for possible losses. Further, as cybersecurity risks evolve, such insurance may not be available to us on commercially reasonable terms or at all.
Additionally, we seek to maintain insurance coverage for cybersecurity risks, but such insurance has become increasingly difficult to secure and, in some cases, policies may not provide adequate coverage for possible losses. Further, as cybersecurity risks evolve, such insurance may not be available to us on commercially reasonable terms, or at all.
Despite our training and compliance programs, we cannot provide assurance that our internal policies and procedures will always protect us from violation of such anti-corruption laws committed by our employees or affiliated entities or their respective officers, directors, employees and agents.
Despite our training and compliance programs, we cannot provide assurance that our internal policies and procedures will always protect us from violations of such anti-corruption laws committed by our employees or affiliated entities or their respective officers, directors, employees and agents.
We may not be able to identify and integrate alternative sources of supply in a timely fashion or at all. Any transition to alternate suppliers may result in delays in shipment and increased expenses and may limit our ability to deliver products to customers.
We may not be able to identify and integrate alternative sources of supply in a timely fashion, or at all. Any transition to alternate suppliers may result in delays in shipment, increase expenses and limit our ability to deliver products to customers.
Operating internationally is subject to uncertainties, including, but not limited to, the following: • economic and political instability; • import or export licensing requirements; • additional compliance-related risks; • trade restrictions and tariffs; • product registration requirements; • longer payment cycles; • changes in regulatory requirements and tariffs, including recent restrictions in China on the proportion of certain medical equipment which can be imported; • potentially adverse tax consequences; and • trade policy changes.
Operating internationally is subject to uncertainties, including, but not limited to, those related to, the following: • economic and political instability; • import or export licensing requirements; • compliance-related risks; • trade restrictions and tariffs; • product registration requirements; • longer payment cycles; • changes in regulatory requirements and tariffs, including restrictions in China on the proportion of certain medical equipment which can be imported; • potentially adverse tax consequences; and • trade policy changes.
As there are a limited number of alternative suppliers for these products, any disruption at a particular Company manufacturing facility could lead to delays, increased expenses, and may damage our business and results of operations.
As there are a limited number of alternative third-party suppliers for these products, any disruption at a particular Company manufacturing facility could lead to delays and increased expenses and may damage our business and results of operations.
Any inability, or perceived inability, to adequately address privacy and data protection concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to us or our officers, damage our reputation, inhibit sales, and otherwise adversely affect our business.
Any inability, or perceived inability, to adequately address privacy and data protection concerns or to comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations (including at newly acquired companies) could result in additional cost and liability to us or our officers, damage our reputation, inhibit sales, and otherwise adversely affect our business.
Any failure, or perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state or international ESG laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business, reputation, results of operations, financial condition and stock price.
Any failure, or perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with ESG laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and could materially adversely affect our business, reputation, results of operations, financial condition and stock price.
With approximately two-thirds of our sales located outside the United States, our consolidated net sales are impacted negatively by the strengthening or positively by the weakening of the U.S. dollar as compared to certain foreign currencies.
With approximately two-thirds of our sales located outside the United States, our consolidated net sales are impacted negatively by the strengthening and positively by the weakening of the U.S. dollar as compared to certain foreign currencies.
Such laws, rules, regulations, self-regulatory codes, circulars and orders are complex and are subject to change. The FCPA generally prohibits companies and their affiliates from making improper payment to non-U.S. officials for the purpose of obtaining or retaining business, and also includes certain books and records and internal accounting controls requirements.
Such laws, rules, regulations, self-regulatory codes, circulars and orders (“Applicable Laws”) are complex and are subject to change. The FCPA generally prohibits companies and their affiliates from making improper payment to non-U.S. officials for the purpose of obtaining or retaining business, and also includes books and records and internal accounting controls requirements.
Moreover, global regulation related to the provision of services on the Internet is increasing, as federal, state and foreign governments continue to adopt new laws and regulations addressing data privacy and the collection, processing, storage and use of personal information. Such laws and regulations are subject to new and differing interpretations and may be inconsistent among jurisdictions.
Moreover, global regulation related to the provision of services on the Internet is increasing, as governments continue to adopt new laws and regulations addressing data privacy and the collection, processing, storage and use of personal information. Such laws and regulations are subject to new and differing interpretations and may be inconsistent among jurisdictions.
Moreover, there can be no assurance that the review or approval process for these products by the FDA or any other applicable governmental authority will occur in a timely fashion, if at all, or that additional regulations will not be adopted or current regulations amended in such a manner as will adversely affect us.
Moreover, there can be no assurance that the review or approval process for these products by the FDA or any other governmental authority will occur in a timely fashion, if at all, or that additional regulations will not be adopted or current regulations amended in a manner that will adversely affect us.
Failure to comply with health care fraud laws, rules, regulations, self-regulatory codes, circulars and orders could result in significant civil and criminal penalties and costs, including the loss of licenses and the ability to participate in federal and state health care programs, and could have a material adverse impact on our business.
Failure to comply with these rules, regulations, self-regulatory codes, circulars, and orders could result in significant civil and criminal penalties and costs, including the loss of licenses and the ability to participate in federal and state health care programs, and could have a material adverse impact on our business.
Some of these proposals include a two-pillar approach to global taxation, focusing on global profit allocation and a global minimum tax rate (“Pillar Two”). On December 12, 2022, the European Union member states agreed to implement the OECD’s global corporate minimum tax rate of 15%, to be effective as of January 2024.
Some of these proposals include a two-pillar approach to global taxation, focusing on global profit allocation and a global minimum tax rate (“Pillar Two”). On December 12, 2022, the European Union member states agreed to implement the OECD’s global corporate minimum tax rate of 15%, which became effective as of January 2024.
Risks associated with these actions and other workforce management issues include delays in implementation of anticipated workforce reductions, additional unexpected costs, changes in restructuring plans that increase or decrease the number of employees affected, negative impact on our relationship with labor unions or works councils, adverse effects on employee morale, and the failure to meet operational targets due to the loss of employees, any of which may impair our ability to achieve anticipated cost reductions or may otherwise harm our business, and could have a material adverse effect on our sales growth and other results of operations, cash flows or financial condition, or competitive position.
Risks associated with these actions and other workforce management issues include delays in workforce reductions, additional unexpected costs, changes in restructuring plans that modify the number of employees affected, negative impacts on our relationship with labor unions or works councils, adverse effects on employee morale, and failure to meet operational targets due to the loss of employees, any of which may impair our ability to achieve anticipated cost reductions or may otherwise harm our business, and could have a material adverse effect on our sales growth and other results of operations, cash flows or financial condition, or competitive position.
The FDA currently allows the use of BPA in dental materials, medical devices, and food packaging. Nevertheless, public reports and concerns regarding the potential hazards of BPA could contribute to a perceived safety risk for our products that contain mercury or BPA.
The FDA currently allows the use of BPA in dental materials, medical devices, and food packaging. Nevertheless, public reports and concerns regarding the potential hazards of BPA could contribute to a perceived safety risk for our products that contain BPA or other substances.
We are exposed to the risk of cyber incidents, which can result from deliberate attacks or unintentional events, in the normal course of business. We use web-enabled and other integrated information and technology systems to manage our business, and deliver products and services to customers.
We are exposed to the risk of cyber incidents, which can result from deliberate attacks or unintentional events, in the normal course of business. We use integrated information and technology systems to manage our business and deliver products and services to customers.
We cannot provide assurances that, although past cybersecurity incidents have not had a material effect on our business or operations to date and despite our efforts to ensure the integrity of our systems and the measures that we or our service providers take to anticipate, detect, avoid or mitigate such threats, a future cyberattack would not result in material harm to us or our business and results of operations.
Although past cybersecurity incidents have not had a material effect on our business or operations, and although we and our service providers take efforts to ensure the integrity of our systems and anticipate, detect, avoid or mitigate such threats, we cannot provide assurances that a future cyberattack would not result in material harm to our business and results of operations.
If product demand decreases, or if our newly introduced products are not accepted by our customers, our revenue and profit could be negatively impacted.
If product demand or sales effectiveness decreases, or if our newly introduced products are not accepted by our customers, our revenue and profit could be negatively impacted.
Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance considerations (“ESG”) relating to businesses, including climate change and greenhouse gas emissions, human and civil rights, and diversity, equity and inclusion.
Many governments, regulators, investors, and other stakeholders are increasingly focused on environmental, social and governance (“ESG”) considerations relating to businesses, including climate change, pollution, greenhouse gas emissions, human and civil rights, and diversity, equity and inclusion.
As there are a limited number of suppliers for these products, there can be no assurance that we will be able to obtain an adequate supply of these products and raw materials in the future.
As there are a limited number of suppliers for these products, there can be no assurance that we will be able to obtain an adequate supply of these products and raw materials in the future at acceptable prices.
The length, impact, and outcome of this ongoing military conflict is highly unpredictable and could lead to significant market and other disruptions, which, along with the spillover effect of ongoing civil, political and economic disturbances on surrounding areas, may significantly devalue currencies utilized by us or have other adverse impacts including increased costs of raw materials and inputs, manufacturing or shipping delays or increases in inflation rate, cyberattacks and supply chain challenges.
The length, impact, and outcome of this ongoing military conflict is highly unpredictable and could lead to significant market and other disruptions, which, along with the spillover effect of ongoing civil, political, and economic disturbances on surrounding areas, may significantly devalue currencies we use or have other adverse impacts, including increased costs of raw materials, manufacturing or shipping delays or increases in inflation rate, cyberattacks and supply chain challenges.
If adverse laws or regulations are adopted or any such claims are successful, and we were unable to adapt our business model accordingly, our operations in such states would be disrupted, which could have a material adverse effect on our business, financial condition, and results of operations.
If adverse laws or regulations are adopted or any such claims are successful, and we were unable to adapt our business model accordingly, our current operations in such states would be disrupted, which could have a material adverse effect o n our business, financial condition, and results of operations.
Any delays in delivery of or shortages in these products could interrupt and delay manufacturing of our products and result in the cancellation of orders for these products. In addition, these suppliers could discontinue the manufacture or supply of these products to us at any time or supply products to competitors.
Any delays in delivery of or shortages in these products could interrupt and delay manufacturing of our products and result in the cancellation of orders. In addition, these suppliers could discontinue the manufacture or supply of these products to us or supply products to competitors.
Failure to comply with the FCPA and other laws governing the conduct of business with government entities (including local laws), will subject us to criminal and civil penalties and other remedial measures, which could have a material adverse impact on our business, financial condition, results of operations and liquidity.
Failure to comply with the FCPA and other laws governing the conduct of business with government entities, may subject us to criminal and civil penalties and other remedial measures, which could have a material adverse impact on our business, financial condition, results of operations and liquidity.
The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our products, our costs, our customers and our suppliers, which in turn could adversely impact our business, financial condition and results of operations.
The adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to trade policies has the potential to impact demand for our products, our costs, our customers and our suppliers, which could adversely impact our business, financial condition and results of operations.
Disaster recovery plans, where in place, might not adequately protect us in the event of a system failure. Further, we currently do not have excess or standby computer processing or network capacity everywhere in the world to avoid disruption in the receipt, processing and delivery of data in the event of a system failure.
Disaster recovery plans, where in place, might not adequately protect us in the event of a system failure. Further, we currently do not have excess or standby computer processing or network capacity everywhere in the world to avoid disruption in the event of a system failure.
Successful product warranty claims brought against us could reduce our profits and/or impair our financial condition and damage our reputation. Climate change and related natural disasters could negatively impact our business and financial results. We have sales or operations in more than 150 countries and our suppliers’ manufacturing facilities are in multiple locations around the world.
Successful product warranty claims brought against us could reduce our profits and/or impair our financial condition and damage our reputation. Climate change and related natural disasters could negatively impact our business and financial results. We have sales or operations in approximately 150 countries and our suppliers’ manufacturing facilities are in many locations around the world.
Evolving governmental oversight of the use of personal information, cross-border data transfer restrictions and the use of AI, as well as other technology regulations, may adversely affect our business. We collect personally identifiable information (“PII”) and other data as part of our business processes and activities.
Evolving governmental oversight of the use of personal information, cross-border data transfer restrictions and the use of emerging technologies, including AI, as well as other technology regulations, may adversely affect our business. We collect and process personally identifiable information (“PII”) and other data as part of our business processes and activities.
Some of these laws, referred to as “false claims laws,” prohibit the submission or causing the submission of false or fraudulent claims for reimbursement to federal, state and other health care payors and programs.
Some of these laws, referred to as “false claims laws,” prohibit the submission, or causing the submission, of false or fraudulent claims for reimbursement to health care payors and programs.
As a result, we will increasingly be exposed to risks inherent in the development, integration and operation of the evolving information and technology supporting our product platforms, as well as our own internal infrastructure, including: 17 • security breaches, viruses, cyberattacks, ransomware or other malware or other failures or malfunctions; • disruption, impairment or failure of data centers or hardware, telecommunications facilities or other infrastructure platforms; • failures during the process of upgrading or replacing software, databases or components contained in the information and technology infrastructure; • the compromise or unauthorized disclosure of sensitive or proprietary information related to our business and customers; • excessive costs, excessive delays or other deficiencies in systems development and deployment; and • an unintentional event that involves a third-party gaining unauthorized access to our systems or proprietary information.
As a result, we will increasingly be exposed to risks inherent in the development, integration and operation of the evolving information and technology supporting our product platforms, as well as our own internal infrastructure, including: • security breaches, viruses, cyberattacks, ransomware or other malware or other failures, cyber incidents or malfunctions; • disruption, impairment or failure of data centers or hardware, telecommunications facilities or other infrastructure, including due to natural disasters; • failures during the process of upgrading or replacing software, databases or components; • the compromise or unauthorized disclosure of sensitive, personal, proprietary or intellectual property information related to our business and customers; • excessive costs, excessive delays or other deficiencies in systems development and deployment; and • an unintentional event that involves a third party gaining unauthorized access to our systems or proprietary information.
Successful promotion of our brand depends on multiple factors, including our marketing efforts and our ability to deliver a superior customer experience, develop innovative products, and successfully differentiate our offerings from those of our competitors. Additionally, the strength of our brand relies on continued effective use of our distribution network and customer service platforms.
We seek to maintain our reputation, and successful promotion of our brand depends on multiple factors, including our marketing efforts and our ability to deliver a superior customer experience, develop innovative products, and differentiate our offerings from those of our competitors. Additionally, the strength of our brand relies on continued effective use of our distribution network and customer service platforms.
We have identified the development of new technologies and products as an important part of our growth strategy. There is no assurance that entirely new technology or approaches to dental treatment or competitors’ new products will not be introduced that could render our products obsolete, and there is no assurance that capital allocated to R&D will yield expected benefits.
While we have identified the development of new technologies and products as an important part of our growth strategy, there is no assurance that new technology, products or approaches to dental treatment will not render our products obsolete, and there is no assurance that capital allocated to R&D will yield expected benefits.
For the year ended December 31, 2023, net sales of products manufactured at these sites comprised approximately 3% of our consolidated net sales and 13% of the net sales attributed to our Orthodontic and Implant Solutions segment.
For the year ended December 31, 2024, net sales of products produced at these sites comprised approximately 3% of our consolidated net sales and 13% of the net sales attributed to our Orthodontic and Implant Solutions segment.
We expect that the breadth and complexity of our information and technology systems will increase as we expand the services enabled by the DS Core platform and further develop our ERP systems and product offerings to utilize artificial intelligence (“AI”) and analytics.
The breadth and complexity of our information and technology systems have increased and we expect that they will continue to increase as we expand the services enabled by DS Core and further develop our ERP systems and product offerings to utilize artificial intelligence (“AI”) and analytics.
Additionally, the advancement of AI and large language models has given rise to additional vulnerabilities and potential entry points for cyber threats. With generative AI tools, threat actors may have additional tools to automate breaches or persistent attacks, evade detection, or generate sophisticated phishing emails.
Additionally, the advancement of AI and large language models has given rise to additional vulnerabilities and potential entry points for cyber threats; threat actors may have additional tools to automate breaches or persistent attacks, evade detection, generate sophisticated phishing emails, or impersonate employees or senior management.
Additionally, while we cannot estimate our potential exposure to these matters at this time, we have already expended a significant amount of time and resources investigating the claims underlying and defending these matters and expect to continue to expend our resources to conclude these matters.
Additionally, while we cannot estimate our potential exposure to these matters at this time, we have already expended a significant amount of time and resources investigating and defending against the claims underlying these matters and expect to continue to do so.
The failure to attract and retain such employees to fill key roles may adversely affect our business performance, competitive position and future prospects. We also must retain a pipeline of team members to provide for continuity of succession for senior executive positions.
The failure to attract and retain such employees to fill key roles, or to upskill employees to fill any potential skill gaps, may adversely affect our business performance, competitive position, and future prospects. We also must retain a pipeline of team members to provide for continuity of succession for senior executive positions.
Increased and varied focus and activism related to ESG may hinder our ability to attract or retain employees and access to capital, as investors may reconsider their capital investment because of their assessment of our ESG practices. In addition, some stakeholders may disagree with our goals and initiatives.
Increased and varied focus and activism related to ESG may hinder our access to capital, as investors may reconsider their capital investment because of their assessment of our ESG practices. In addition, some stakeholders may disagree with our goals and initiatives.
Export controls implemented as part of sanctions could also restrict the sale of equipment or products containing U.S. developed software and technology into Russia. 27 For the year ended December 31, 2023, net sales in Russia and Ukraine were approximately 2% of our consolidated net sales, and net assets in these countries were $78 million.
Export controls implemented as part of sanctions could also restrict the sale of products containing U.S.-developed software and technology into Russia. For the year ended December 31, 2024, net sales in Russia and Ukraine were approximately 2% of our consolidated net sales, and net assets in these countries were $64 million.
Responding to these ESG considerations and implementation of these goals and initiatives involves risks and uncertainties, may require investments, and depends in part on third-party performance or data that is outside our control which we have not independently verified or which cannot be independently verified.
Responding to these ESG considerations and implementing these goals and initiatives involves risks and uncertainties, may require investments, and depends in part on third-party performance or data that is outside our control which may not be independently verified.
Also, these regulations may be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that could require us to make changes in operations or incur substantial defense and settlement expenses. Even unsuccessful challenges by regulatory authorities or private regulators could result in reputational harm and the incurring of substantial costs.
Also, these regulations may be interpreted in a manner that requires us to make changes in operations or incur substantial defense expenses. Even unsuccessful challenges by regulatory authorities or private regulators could result in reputational harm and the incurring of substantial costs.
In addition, it may be necessary to participate in one or more interference proceedings declared by the U.S. Patent and Trademark Office, the European Patent Office or other foreign patent governing authorities, to determine the priority of inventions, which could result in substantial costs.
In addition, it may be necessary to participate in proceedings declared by the U.S. Patent and Trademark Office, the European Patent Office or other foreign patent offices to determine the priority of inventions, which could result in substantial costs.
In addition, the legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain including in the areas of intellectual property, cybersecurity, and privacy and data protection. For example, there is uncertainty around the validity and enforceability of intellectual property rights related to the use, development, and deployment of AI by us and by our business partners.
In addition, the legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, especially in the areas of intellectual property, cybersecurity, and privacy and data protection. For example, there is uncertainty around the validity and enforceability of intellectual property rights related to the use, development, and deployment of AI.
Net assets within Israel totaled $197 million as of December 31, 2023, consisting primarily of acquired technology, cash, inventory, and property, plant and equipment associated our operations in country.
Net assets within Israel totaled $180 million as of December 31, 2024, consisting primarily of acquired technology, property, plant and equipment, cash and inventory associated with our operations in country.
Tightening of credit in financial markets has also adversely impacted our customers’ and suppliers’ ability to obtain financing for significant purchases and operations with acceptable terms and could result in additional or worsening impacts in the future, including a decrease in or cancellation of orders for our products and services, inability of our customers to make payments, and increased risk of supplier financial distress.
Tightening of credit in financial markets has adversely impacted our customers’ and suppliers’ ability to obtain financing and could result in additional impacts in the future, including a decrease in or cancellation of orders for our products and services, inability of customers to make payments, and increased risk of supplier financial distress.
Despite any precautions we take, damage from fire, floods, hurricanes, power loss, telecommunications failures, computer viruses, break-ins, human error or similar events at our various computer facilities could result in interruptions in the flow of data to our servers, although we have not yet experienced such an interruption.
Despite any precautions we take, damage from natural disasters, telecommunications failures, computer viruses, break-ins, human error or similar events at our computer facilities could result in interruptions in the flow of data to our servers, although we have not yet experienced such an interruption.
We may be unable to execute our key strategic activities and investments due to operation disruptions impacting our distributors or the competing priorities of our distribution partners which may introduce additional competing private label, generic, or low-cost products that compete with our products at lower price points.
We may be unable to execute our key strategic activities and investments due to operational disruptions impacting our distributors or the competing priorities of our distribution partners, which may introduce additional products that compete with our products at lower price points.
In addition, our interpretation of reporting frameworks or standards may differ from those of others and such frameworks or standards may change over time, any of which could result in significant revisions to our goals or reported progress in achieving such goals. Further, we cannot guarantee that we will achieve our ESG goals and initiatives.
In addition, our interpretation of reporting frameworks or standards may differ from those of others and such frameworks or standards may change over time, either of which could revise our goals or reported progress in achieving such goals. Further, we cannot guarantee that we will achieve our ESG goals and initiatives.
The goodwill and indefinite-lived intangible asset impairment analyses are sensitive to changes in key assumptions used, such as discount rates, revenue growth rates, perpetual revenue growth rates, royalty rates, and operating margin percentages of the business as well as current market conditions affecting the dental and medical device industries in both the United States and globally.
The goodwill and indefinite-lived intangible asset impairment analyses are sensitive to changes in key assumptions used, such as discount rates, revenue growth rates, perpetual revenue growth rates, operating margin percentages, and net working capital assumptions of the business as well as current market conditions affecting the dental and medical device industries.
Due to the complexities inherent in implementing these types of cost reduction and restructuring activities, and the timing of strategic investments, we may fail to realize expected efficiencies and benefits, such as the goals for net sales growth or operating margins, or may experience a delay in realizing such efficiencies and benefits, and our operations and business could be disrupted.
Due to the complexities inherent in implementing these types of cost reduction and restructuring activities, and the timing of strategic investments, we may fail to realize expected efficiencies and benefits or may experience a delay in realizing such efficiencies and benefits, and our operations and business could be disrupted.
Further, defending our intellectual property rights could result in the expenditure of significant financial and managerial resources. Litigation may be necessary to assert claims against other parties, enforce patents owned by or licensed to us from another party, protect our trade secrets or know-how, or determine the enforceability, scope and validity of our proprietary rights.
Further, defending or enforcing our intellectual property rights could result in the expenditure of significant resources. Litigation may be necessary to assert claims against others, enforce patents owned by or licensed to us, protect our trade secrets or know-how, or determine the enforceability, scope, and validity of our proprietary rights.
Failure to comply with U.S. and international technology laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties and injunctive relief), private litigation and/or adverse publicity and could have a material adverse impact on our business, financial condition or results of operations.
Failure to comply with technology laws and regulations could result in enforcement actions (which could include substantial penalties), private litigation and/or adverse publicity and could have a material adverse impact on our business, financial condition or results of operations.
Our use of AI and the use of AI by our business partners may lead to novel and urgent cybersecurity risks, which could have a material adverse effect on our operations and reputation as well as the operations of any of our business partners.
Our use of AI in our products and processes and the use of AI by our business partners may lead to novel cybersecurity, legal and regulatory risks, which could have a material adverse effect on our operations and reputation as well as the operations of our business partners.
We cannot assure you that any of our patents, any of the patents of which we are a licensee or any patents which may be issued to us or which we may license in the future, will provide us with a competitive advantage or afford us protection against infringement by others, or that the patents will not be successfully challenged or circumvented by third parties, including our competitors.
We cannot assure you that any of our patents, the patents we license or any patents which we receive or license in the future will provide us with a competitive advantage or afford us protection against infringement, or that the patents will not be successfully challenged or circumvented by third parties.
If we fail to innovate existing technologies or develop new technologies through our research and development process consistent with changing consumer preferences or to differentiate our products relative to our competition, our technology or products may become obsolete and cause us to lose market share and revenue.
If we fail to innovate existing technologies or develop new technologies consistent with changing consumer preferences and security requirements or fail to differentiate our products from our competition, our technology or products may become obsolete and cause us to lose market share and revenue.
Risks and uncertainties that we face with respect to our patents and patent applications include the following: • the pending patent applications that we have filed, or to which we have exclusive rights, may not result in issued patents or may take longer than we expect to result in issued patents; • the allowed claims of any patents that are issued may not provide meaningful protection; • other companies may challenge patents licensed or issued to us; • disputes may arise regarding inventions and corresponding ownership rights in inventions and know-how resulting from the joint creation or use of intellectual property by us and our respective licensors; and • other companies may design around the technologies patented by us. 24 Our financial results may be adversely impacted if our products are found to infringe upon the intellectual property rights of others.
Risks and uncertainties that we face with respect to our patents and patent applications include the following: • pending patent applications may not result in issued patents or may take longer than we expect to result in issued patents; • the allowed claims of any patents that are issued may not provide meaningful protection; • other companies may challenge patents licensed or issued to us; • disputes may arise regarding inventions and corresponding ownership rights in inventions and know-how resulting from the joint creation or use of intellectual property by us and our respective licensors; and 22 • other companies may design around the technologies patented by us.
If our incident response, disaster recovery and business continuity plans do not resolve these issues in an effective and timely manner, such events could result in an interruption in our operations and could cause material negative impacts to our product availability and sales, the efficiency of our operations and our financial results.
If our incident response, disaster recovery and business continuity plans do not resolve these issues in an effective and timely manner, such events could result in an interruption in our operations and could cause material negative impacts on our business, financial condition or results of operations.
After reaching an agreement with a seller for the acquisition or buyer for the disposition of assets or a business, the transaction may remain subject to necessary regulatory and governmental approvals on acceptable terms as well as the satisfaction of pre-closing conditions, which may prevent us from completing the transaction in a timely manner, or at all.
After reaching an agreement for the acquisition or disposition of assets or a business, the transaction may remain subject to regulatory and governmental approvals and the satisfaction of pre-closing conditions, which may prevent us from completing a given transaction in a timely manner, or at all.
Failure to comply with applicable laws, rules, regulations, self-regulatory codes, circulars or orders could result in a range of governmental enforcement actions, including fines or penalties, injunctions and/or criminal or other civil proceedings.
Failure to comply with Applicable Laws could result in a range of governmental enforcement actions, including fines or penalties, injunctions and/or criminal or other civil proceedings.
Potential events such as extreme weather, natural disasters, regional epidemics or global pandemics, worker strikes and social and political actions, such as trade wars, regional wars or conflicts or other events beyond our control, could impact our ongoing business operations, including potential critical third-party vendor disruptions or failure to adhere to contractual obligations affecting our supply chain and manufacturing needs or the loss of critical information technology and telecommunications systems.
Potential events such as extreme weather, natural disasters, regional epidemics or global pandemics, worker strikes and social and political actions, such as trade wars, regional wars or conflicts or other events beyond our control, could impact our ongoing business operations, including due to disruptions at critical third-party vendors or the loss of critical information technology and telecommunications systems.
Additionally, several securities class action lawsuits were filed against us following our announcement on May 10, 2022 of the Audit and Finance Committee’s internal investigation.
Several securities class action lawsuits were filed against us following our announcement on May 10, 2022 of the AFC’s internal investigation.
These and any other unfavorable economic conditions could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us.
These and other unfavorable economic conditions could increase our funding costs, limit our access to the capital markets or cause lenders not to extend credit to us.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company provides security awareness education and training for all employees and consultants, conducts monthly internal “phishing” testing and mandatory training for “clickers,” and publishes periodic cybersecurity newsletters to highlight any emerging or urgent security threats.
Biggest changeWe also conduct cyber awareness training and simulate responses to cybersecurity incidents and use the findings to improve our practices, procedures, and technologies. The Company provides security awareness education and training for all employees and consultants, conducts monthly internal “phishing” testing and mandatory training for “clickers,” and publishes periodic cybersecurity newsletters to highlight any emerging or urgent security threats.
We share threat intelligence and collaborate with organizations across different industries to share best practices, fight cybercrime, enhance privacy, discuss new technologies, better understand the evolving regulatory environment, and advance capabilities in these areas. Additionally, the Company has a third-party risk management program that assesses risks from vendors and suppliers.
We share threat intelligence and collaborate with organizations across different industries to share best practices, fight cybercrime, enhance privacy, discuss new technologies, better understand the evolving regulatory environment, and advance capabilities in these areas. Additionally, the Company uses a third-party risk management program that assesses risks from vendors and suppliers.
In response to these assessments, we have developed contingency plans for business continuity if our vendors are subject to a cyberattack that impacts our use of their systems. 36 Our Information Security team conducts annual information security awareness training for employees involved in our systems and processes that handle customer data and audits of our systems and enhanced training for specialized personnel.
In response to these assessments, we have developed contingency plans for business continuity if our vendors are subject to a cyberattack that impacts our use of their systems. 35 Our Information Security team conducts annual information security awareness training for employees involved in our systems and processes that handle customer data and audits of our systems and conducts enhanced training for specialized personnel.
Our CISO is a member of multiple professional organizations, and holds professional certifications from leading information, compliance, and privacy organizations. His in-depth knowledge and experience are instrumental in developing and executing our cybersecurity strategies. Our CISO oversees our governance programs, tests our compliance with standards, remediates known risks, and leads our employee training program.
Our CIO is a member of multiple professional organizations, and holds professional certifications from leading information, compliance, and privacy organizations. His in-depth knowledge and experience are instrumental in developing and executing our cybersecurity strategies. Our CIO oversees our governance programs, tests our compliance with standards, remediates known risks, and leads our employee training program.
At the management level, our IT security team regularly monitors alerts and meets to discuss threat levels, trends and remediation, and the CISO is also continually informed about any developments in cybersecurity, including potential threats and industry techniques for risk management to address those threats.
At the management level, our IT security team regularly monitors alerts and meets to discuss threat levels, trends and remediation, and the CIO is also continually informed about any developments in cybersecurity, including potential threats and industry techniques for risk management to address those threats.
The role of the CISO includes implementation and oversight of effective processes to monitor our information systems, including the deployment of advanced security measures and regular system audits to identify potential vulnerabilities. The CISO regularly reports to senior management on our cybersecurity risks and actions taken to mitigate that risk.
The role of the CIO includes implementation and oversight of effective processes to monitor our information systems, including the deployment of advanced security measures and regular system audits to identify potential vulnerabilities. The CIO regularly reports to senior management on our cybersecurity risks and actions taken to mitigate that risk.
These include risks relating to disruption of business operations or financial reporting systems, intellectual property theft, exposure to fraud or extortion, harm to employees or customers, violation of privacy laws or other regulatory and compliance lapses, reputational risk, and inability to consistently deliver digital business solutions.
These include risks relating to disruption of business operations or financial reporting systems, intellectual property theft, exposure to fraud or extortion, harm to employees or customers, violation of privacy laws or other regulatory and compliance lapses, reputational risk, and inability to consistently deliver digital technologies.
We identify risks from various sources, including vulnerability scans, penetration tests, vendors risk assessments, product and services audits, internal compliance assessments and threat-hunting operations. We monitor our infrastructure and applications to identify evolving cyber threats, scan for vulnerabilities and mitigate risks.
We identify risks from various sources, including vulnerability scans, penetration tests, vendor risk assessments, product and services audits, internal compliance assessments and threat-hunting operations. We monitor our infrastructure and applications to identify evolving cyber threats, scan for vulnerabilities and mitigate risks.
Our CISO also regularly engages with cross-functional teams at the Company and partners with our dedicated technology risk management and privacy teams, and collaborates with our internal audit department to review information technology-related internal controls as part of the overall internal controls process.
Our CIO also regularly engages with cross-functional teams at the Company and partners with our dedicated technology risk management and privacy teams and collaborates with our internal audit department to review information technology-related internal controls as part of the overall internal controls process.
With oversight from our Board of Directors, the Company has formally adopted and annually updates a Security Incident Response Plan which coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents.
With oversight from our Board of Directors, the Company has formally adopted and annually updates a Security Incident Response Plan which coordinates the activities we undertake to prepare for, detect, respond to and recover from cybersecurity incidents.
The CISO also promptly informs and updates the Board about any information security incidents that may pose significant risk to the Company. Our guidelines require that any significant cybersecurity matters including strategic risk management decisions are escalated to the Board of Directors to ensure that they have comprehensive oversight.
The CIO also promptly informs and updates the Company’s Board of Directors about any information security incidents that may pose significant risk to the Company. Our guidelines require that any significant cybersecurity matters including strategic risk management decisions are escalated to the Board of Directors to ensure that they have comprehensive oversight.
Our incident response plan establishes a framework for measuring the severity of security incidents and provides for a post-market response program including protocols for coordination and communication between security response teams, designated leaders within the Company, internal and outside legal counsel, and the Audit and Finance Committee in responding to any such incidents.
Our incident response plan establishes a framework for measuring the severity of security incidents and provides for a post-market response program including protocols for coordination and communication between security response teams, designated leaders within the Company, internal and outside legal counsel, and the Audit and Finance Committee (“AFC”) of the Company’s Board of Directors in responding to any such incidents.
This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework. 37
This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework. 36
These include processes to triage, assess severity of, escalate, contain, investigate, and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.
These activities include processes to triage, assess the severity of, escalate, contain, investigate, and remediate incidents, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.
Governance Management’s Role Managing Risk The cybersecurity risk management processes described above are managed by our CISO who reports directly to our Chief Financial Officer. Our CISO has over 25 years of experience in matters of cybersecurity and information systems including senior roles at other global publicly traded companies in various industries.
Governance Management’s Role Managing Risk The cybersecurity risk management processes described above are managed by our CIO who reports directly to our Chief Executive Officer. Our CIO has over 20 years of experience in matters of cybersecurity and information systems including senior roles at other global publicly traded companies in various industries.
Board of Directors Oversight Our Board of Directors is committed to mitigating data privacy and cybersecurity risks and recognizes the importance of these issues as part of our risk management framework. The Audit and Finance Committee is charged with oversight of data privacy and cybersecurity risks.
Board of Directors Oversight Our Board of Directors is committed to mitigating data privacy and cybersecurity risks and recognizes the importance of these issues as part of our risk management framework. The AFC is charged with oversight of data privacy and cybersecurity risks.
The Audit and Finance Committee conducts an annual review of the company’s cybersecurity posture and the effectiveness of its risk management strategies. As part of this review, the Company’s cybersecurity program is periodically evaluated by external experts, and the results of those reviews are reported to the Board.
The AFC conducts an annual review of the Company’s cybersecurity posture and the effectiveness of its risk management strategies. As part of this review, the Company’s cybersecurity program is periodically evaluated by external experts, and the results of those reviews are reported to the Company’s Board of Directors.
Our CISO provides updates to either the Audit and Finance Committee or to the full Board of Directors on a quarterly basis on our cybersecurity risks and actions taken to mitigate that risk.
Our CIO provides updates to either the AFC or to the full Board of Directors on a quarterly basis on our cybersecurity risks and actions taken to mitigate that risk.
Our Chief Information Security Officer (“CISO”), who reports directly to the Chief Financial Officer, oversees the Company’s approach to managing cybersecurity and digital risk.
Our Chief Information Officer (“CIO”), who reports directly to the Chief Executive Officer, oversees the Company’s approach to managing cybersecurity and digital risk.
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We also conduct cyber awareness training and simulate responses to cybersecurity incidents, and use the findings to improve our practices, procedures, and technologies.
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In 2024, as part of upcoming enhancements to security preparedness, members of senior management are scheduled to participate in tabletop exercises led by third-party experts on cyber incident response best practices to apply their learnings to the Company’s business continuity management program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe conduct research and development across various locations around the world including at our Innovation Center located in Charlotte, North Carolina. We also lease our worldwide headquarters located in Charlotte, North Carolina. We believe that our properties and facilities are well maintained and are generally suitable and adequate for the purposes for which they are used. 38
Biggest changeWe conduct research and development across various locations around the world, including at our leased Innovation Center located in Charlotte, North Carolina. We also lease our worldwide headquarters located in Charlotte, North Carolina and our shared service center in Bratislava, Slovakia.
Properties The following is a listing of Dentsply Sirona’s principal manufacturing and distribution locations: Location Function Leased or Owned United States: Milford, Delaware (2) Manufacture of dental consumable products Owned Sarasota, Florida (2) (3) Manufacture of orthodontic accessory products and dental consumable products Owned Waltham, Massachusetts (3) Manufacture and distribution of dental implant products Leased Long Island City, New York (1) Manufacture of dental equipment products Leased Lancaster, Pennsylvania (5) Distribution of dental consumable and dental equipment products Leased York, Pennsylvania (1) Distribution of dental equipment products Owned Johnson City, Tennessee (2) Manufacture and distribution of endodontic instruments and materials Leased Foreign: Pirassununga, Brazil (2) Manufacture and distribution of artificial teeth Owned Bensheim, Germany (1) Manufacture and distribution of dental equipment Owned Hanau, Germany (2) (3) Manufacture and distribution of precious metal dental alloys, dental ceramics and dental implant products Owned Konstanz, Germany (2) Manufacture and distribution of dental consumable products Owned Munich, Germany (2) Manufacture and distribution of endodontic instruments and materials Owned Bar Lev Industrial Park, Israel (3) Manufacture and distribution of dental implant products Owned/Leased Badia Polesine, Italy (2) Manufacture and distribution of dental consumable products Owned/Leased Venlo, Netherlands (5) Distribution of dental consumable products Leased Mölndal, Sweden (3) (4) Manufacture and distribution of dental implant products and healthcare consumable products Owned Ballaigues, Switzerland (2) Manufacture and distribution of endodontic instruments, plastic components and packaging material Owned Ankara, Turkey (4) Manufacture and distribution of healthcare consumable products Owned Mexicali, Mexico (3) Manufacture of orthodontic products Leased San Jose Province, Costa Rica (3) Manufacture of orthodontic products Leased (1) These properties are included in the Connected Technology Solutions segment.
Properties The following is a listing of Dentsply Sirona’s principal manufacturing and distribution locations: Location Function Leased or Owned United States: Milford, Delaware (2) Manufacture of dental consumable products Owned Sarasota, Florida (2) (3) Manufacture of orthodontic accessory products and dental consumable products Owned Waltham, Massachusetts (3) Manufacture and distribution of dental implant products Leased Long Island City, New York (1) (6) Manufacture of dental equipment products Exited Lancaster, Pennsylvania (5) Distribution of dental consumable and dental equipment products Leased York, Pennsylvania (1) (2) Manufacture and distribution of dental equipment products Owned Johnson City, Tennessee (2) Manufacture and distribution of endodontic instruments and materials Leased Foreign: Pirassununga, Brazil (3) Manufacture and distribution of artificial teeth Owned Bensheim, Germany (1) Manufacture and distribution of dental equipment Owned Hanau, Germany (3) Manufacture and distribution of precious metal dental alloys, dental ceramics and dental implant products Owned Konstanz, Germany (2) Manufacture and distribution of dental consumable products Owned Munich, Germany (2) Manufacture and distribution of endodontic instruments and materials Owned Bar Lev Industrial Park, Israel (3) Manufacture and distribution of dental implant products Owned/Leased Badia Polesine, Italy (2) Manufacture and distribution of dental consumable products Owned/Leased Venlo, Netherlands (5) Distribution of dental consumable products Leased Mölndal, Sweden (3) (4) Manufacture and distribution of dental implant products and healthcare consumable products Owned Ballaigues, Switzerland (2) Manufacture and distribution of endodontic instruments, plastic components and packaging material Owned Ankara, Turkey (4) Manufacture and distribution of healthcare consumable products Owned Mexicali, Mexico (3) Manufacture of orthodontic products Leased San Jose Province, Costa Rica (3) Service provider of orthodontic products Leased (1) These properties are included in the Connected Technology Solutions segment.
(2) These properties are included in the Essential Dental Solutions segment. (3) These properties are included in the Orthodontic and Implant Solutions segment. (4) These properties are included in the Wellspect Healthcare segment. (5) These properties are distribution warehouses not managed by named segments.
(2) These properties are included in the Essential Dental Solutions segment. (3) These properties are included in the Orthodontic and Implant Solutions segment. (4) These properties are included in the Wellspect Healthcare segment. (5) These properties are distribution warehouses not managed by named segments. (6) This property was closed during the three months ended December 31, 2024.
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We believe that our properties and facilities are well maintained and are generally suitable and adequate for the purposes for which they are used. 37

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThese legal matters primarily involve claims for damages arising out of the use of our products and services and claims relating to intellectual property matters including patent infringement, employment matters, tax matters, commercial disputes, competition and sales and trading practices, personal injury and insurance coverage.
Biggest changeThese legal matters primarily involve stockholder derivative suits, claims for damages arising out of the use of our products and services and claims relating to intellectual property matters including patent infringement, employment matters, tax matters, commercial disputes, competition and sales and trading practices, personal injury and insurance coverage.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the three months ended December 31, 2023, the Company had the following activity with respect to the share repurchase program: (in millions, except per share amounts) Total Number of Shares Purchased Average Price Paid Per Share Total Cost of Shares Purchased Dollar Value of Shares that May be Purchased Under the Stock Repurchase Program Period October 1, 2023 to October 31, 2023 — $ — $ — $ 590 November 1, 2023 to November 30, 2023 3.1 29.91 93 1,497 December 1, 2023 to December 31, 2023 1.8 32.15 57 1,440 4.9 $ 30.73 $ 150 For the year ended December 31, 2023, we repurchased approximately 8.8 million shares at a cost of $300 million for an average price of $34.20. 40 Performance Graph The information contained in the Performance Graph section shall not be deemed to be filed as part of this Annual Report and does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent we specifically incorporate the graph by reference.
Biggest changeFor the year ended December 31, 2024, we repurchased approximately 9.4 million shares at a cost of $250 million for an average price of $26.65. 39 Performance Graph The information contained in the Performance Graph section shall not be deemed to be filed as part of this Annual Report and does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent we specifically incorporate the graph by reference.
In addition, we estimate, based on information supplied by our transfer agent, that there are 208 holders of record of our common stock. Stock Repurchase Program On November 7, 2023, the Board of Directors approved an increase to the authorized share repurchase program of $1.0 billion.
In addition, we estimate, based on information supplied by our transfer agent, that there are 199 holders of record of our common stock. Stock Repurchase Program On November 7, 2023, the Board of Directors approved an increase to the authorized share repurchase program of $1.0 billion.
The graph tracks the performance of a $100 investment in DENTSPLY SIRONA’s Inc.’s common stock and in each index (with the reinvestment of all dividends) from December 31, 2018 to December 31, 2023. The S&P 500 Index and the S&P Health Care Index are included for comparative purposes only.
The graph tracks the performance of a $100 investment in DENTSPLY SIRONA’s Inc.’s common stock and in each index (with the reinvestment of all dividends) from December 31, 2019 to December 31, 2024. The S&P 500 Index and the S&P Health Care Index are included for comparative purposes only.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded on the Nasdaq National Market under the symbol “XRAY.” Approximately 97,108 holders of our common stock are in “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is traded on the Nasdaq stock market under the symbol “XRAY.” Approximately 70,848 holders of our common stock are in “street name” or beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.
At December 31, 2023, the Company had authorization to repurchase $1.44 billion in shares of common stock remaining under this program.
At December 31, 2024, the Company had authorization to repurchase $1.2 billion in shares of common stock remaining under this program.
They do not necessarily reflect management’s opinion that such indices are an appropriate measure of the relative performance of the stock involved, and they are not intended to forecast or be indicative of possible future performance of the Company’s common stock. 12/18 12/19 12/20 12/21 12/22 12/23 DENTSPLY SIRONA Inc. 100.00 152.87 142.74 153.19 88.67 100.63 S&P 500 100.00 131.49 155.68 200.37 164.08 207.21 S&P Health Care 100.00 120.82 137.07 172.89 169.51 172.99 41
They do not necessarily reflect management’s opinion that such indices are an appropriate measure of the relative performance of the stock involved, and they are not intended to forecast or be indicative of possible future performance of the Company’s common stock. 12/19 12/20 12/21 12/22 12/23 12/24 DENTSPLY SIRONA Inc. 100.00 93.38 100.21 58.01 65.83 36.01 S&P 500 100.00 118.40 152.39 124.79 157.59 197.02 S&P Health Care 100.00 113.45 143.09 140.29 143.18 146.87
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During the three months ended December 31, 2024, the Company had no repurchases of common stock under the stock repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNM - Not meaningful Interest expense, net Net interest expense for the year ended December 31, 2023 increased as compared to the year ended December 31, 2022, driven primarily by higher interest rates on short-term and other borrowings. 50 Other expense (income), net Other expense (income), net for the year ended December 31, 2023 compared to the year ended December 31, 2022 was as follows: Year Ended December 31, (in millions) 2023 2022 $ Change Loss on sales or disposal of non-core businesses $ — $ 3 $ (3) Foreign exchange (gains) losses (a) (3) 6 (9) Loss from equity method investments 4 36 (32) Defined benefit pension plan expenses 7 7 — Other non-operating loss 1 1 — Other expense (income), net $ 9 $ 53 $ (44) (a) Foreign exchange (gains) losses are primarily related to the revaluation of intercompany payables and loans.
Biggest changeNM - Not meaningful Interest expense, net Net interest expense for the year ended December 31, 2024 decreased as compared to the year ended December 31, 2023, driven primarily by lower short-term and other borrowings. 50 Other (income) expense, net Other (income) expense, net for the year ended December 31, 2024 compared to the year ended December 31, 2023 was as follows: Year Ended December 31, (in millions) 2024 2023 $ Change Foreign exchange gains (a) (21) (3) (18) Loss from equity method investments — 4 (4) Defined benefit pension plan expenses 8 7 1 Other non-operating loss 1 1 — Other (income) expense, net $ (12) $ 9 $ (21) (a) Foreign exchange gains include a benefit from our Swiss franc net investment hedge totaling $22 million, offset by revaluation of short-term intercompany receivables and payables of $1 million.
If there are unfavorable changes in these assumptions, particularly changes in the Company’s discount rates, revenue growth rates, and operating margins, the Company may be required to recognize impairment charges. In particular, the determination of fair value involves uncertainties around the forecasted cash flows as it requires management to make assumptions and apply judgment to estimate future business expectations.
If there are unfavorable changes in these assumptions, particularly changes in the Company’s discount rates, revenue growth rates, and operating margins, the Company may be required to recognize impairment charges. The determination of fair value involves uncertainties around the forecasted cash flows as it requires management to make assumptions and apply judgment to estimate future business expectations.
Due to the medical nature of our products, the current sanctions have not materially restricted the Company’s ability to continue selling many of our products to customers located in Russia. The Company also sources certain raw materials and components from Russia and Ukraine, and has taken actions to minimize any adverse impacts from disrupted supply chains related to these items.
Due to the medical nature of our products, the current sanctions have not materially restricted our ability to continue selling many of our products to customers located in Russia. The Company also sources certain raw materials and components from Russia and Ukraine and has taken actions to minimize any adverse impacts from disrupted supply chains related to these items.
Changes in economic conditions, supply chain constraints, higher energy costs, labor shortages, the conflict in Ukraine, and geopolitical tensions in the Middle East, have all contributed to a period of higher inflation across the industry and the regions in which the Company operates.
Changes in economic conditions, supply chain constraints, higher energy costs, labor shortages, the conflict in Ukraine, and geopolitical tensions in the Middle East and Russia, have all contributed to a period of higher inflation across the industry and the regions in which the Company operates.
Under these consignment arrangements, the financial institutions own the precious metal, and, accordingly, the Company does not report this consigned inventory as part of its inventory on the Consolidated Balance Sheets.
Under these consignment arrangements, the financial institutions own the precious metal, and, accordingly, the 57 Company does not report this consigned inventory as part of its inventory on the Consolidated Balance Sheets.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The following Management’s Discussion and Analysis of Financial Conditions and Results of Operations (“MD&A”) is intended to help the reader understand the Company’s operations and business environment.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the Company’s operations and business environment.
The royalty rate, which is based on the estimated rate applied against forecasted sales, is tax-affected and discounted at present value using a discount rate commensurate with the relative risk of achieving the cash flow attributable to the asset. Management judgment is necessary to determine key assumptions, including revenue growth rates, perpetual revenue growth rates, royalty rates, and discount rates.
The royalty rate, which is based on the estimated rate applied against forecasted sales, is tax-effected and discounted at present value using a discount rate commensurate with the relative risk of achieving the cash flow attributable to the asset. Management judgment is necessary to determine key assumptions, including revenue growth rates, perpetual revenue growth rates, royalty rates, and discount rates.
At December 31, 2023, the Company was in compliance with these covenants. The Company expects on an ongoing basis to be able to finance operating cash require ments, capital expenditures, and debt service from the current cash, cash equivalents, cash flows from operations and amounts available under its existing borrowing facilities.
At December 31, 2024, the Company was in compliance with these covenants. The Company expects on an ongoing basis to be able to finance operating cash require ments, capital expenditures, and debt service from the current cash, cash equivalents, cash flows from operations and amounts available under its existing borrowing facilities.
These rates are developed based on market participant data, which included assumptions regarding the Company’s weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the reporting unit’s ability to execute on the projected cash flows.
These rates are developed based on market participant data, which include assumptions regarding the Company’s weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the reporting unit’s ability to execute on the projected cash flows.
The most restrictive of these covenants are: a ratio of total debt outstanding to total capital not to exceed 0.6, and a ratio of operating income excluding depreciation and amortization to interest expense of not less than 3.0 times, in each case, as such terms are defined in the relevant agreement.
The most restrictive of these covenants are: (1) a ratio of total debt outstanding to total capital not to exceed 0.6, and (2) a ratio of operating income excluding depreciation and amortization to interest expense of not less than 3.0 times, in each case, as such terms are defined in the relevant agreement.
RESULTS OF OPERATIONS 2023 Compared to 2022 Net Sales and Key Performance Measurements The Company presents net sales comparing the current year periods to the prior year periods. In addition, the Company also presents the changes in net sales on an organic sales basis, which is a Non-GAAP measure.
RESULTS OF OPERATIONS 2024 Compared to 2023 Net Sales and Key Performance Measurements The Company presents net sales comparing the current year periods to the prior year periods. In addition, the Company also presents the changes in net sales on an organic sales basis, which is a Non-GAAP measure.
During fiscal year 2023, both net sales and gross profit were adversely impacted due to the significant strengthening of the U.S. dollar against foreign currencies. The continued strength of the U.S. dollar could continue to adversely impact the Company’s results.
During fiscal year 2024, both net sales and gross profit were adversely impacted due to the significant strengthening of the U.S. dollar against foreign currencies. The continued strength of the U.S. dollar could continue to adversely impact the Company’s results.
The discounted cash flow model uses five- to ten- year forecasted cash flows plus a terminal value based on capitalizing the last period’s cash flows using a perpetual growth rate.
The discounted cash flow model uses ten-year forecasted cash flows plus a terminal value based on capitalizing the last period’s cash flows using a perpetual growth rate.
These costs totaled approximately $61 million for the year ended December 31, 2022, with additional costs of $19 million incurred for the year ended December 31, 2023. The costs in 2023 were offset by a $17 million gain from release of employee compensation accruals resulting from a settlement in the three months ended September 30, 2023.
For the year ended December 31, 2022, these costs totaled approximately $61 million. For the year ended December 31, 2023, these costs totaled $19 million. The costs in 2023 were offset by a $17 million gain from release of employee compensation accruals resulting from a settlement in the three months ended September 30, 2023.
We may, however, determine to discontinue production for the safety of our employees, or we could face future production slowdowns or interruptions at either location due to the impacts of the war including personnel absences as a number of our employees have been called to active military duty, or due to other resource constraints such as the inability to source materials for production.
We may, however, decide to discontinue production at these facilities for the safety of our employees, or we could face future production slowdowns or interruptions at either location due to the impacts of the war, including personnel absences as a number of our employees have been called to active military duty, or due to other resource constraints such as the inability to source materials for production.
Our measure of organic sales may differ from those used by other companies and should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with U.S. GAAP.
Our measure of organic sales may differ from those used by other companies and should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with US GAAP.
The deterioration in macroeconomic conditions has also negatively impacted demand for the Company’s products and may continue to do so in the future. Specifically, higher interest rates have put pressure on the ability and willingness of our customers to obtain financing for equipment purchases, which affects volumes for these products.
The challenging macroeconomic conditions have also negatively impacted demand for the Company’s products and may continue to do so in the future. Specifically, higher interest rates have put pressure on the ability and willingness of our customers to obtain financing for equipment purchases, which adversely affects volumes for these products.
(a) See Note 6, Segment and Geographic Information, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for a reconciliation from segment adjusted operating income to consolidated U.S. GAAP income.
(a) See Note 6, Segment and Geographic Information, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for a reconciliation from segment adjusted operating income to consolidated US GAAP income.
The Company can repatriate cash to the United States, which could result in an adjustment to the tax liability for foreign withholding taxes, foreign and/or U.S. state income taxes, and the impact of foreign currency movements.
The Company has the ability to repatriate cash to the United States, which could result in an adjustment to the tax liability for foreign withholding taxes, foreign and/or U.S. state income taxes, and the impact of foreign currency movements.
The Company expects that it will continue to incur legal defense costs into 2024 pertaining to the matters described in Note 21, Commitments and Contingencies, in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. 59 NEW ACCOUNTING PRONOUNCEMENTS Refer to Note 1, Significant Accounting Policies, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for a discussion of recent accounting guidance and pronouncements.
The Company expects that it will continue to incur such costs into 2025 pertaining to the matters described in Note 21, Commitments and Contingencies, in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K. 59 NEW ACCOUNTING PRONOUNCEMENTS Refer to Note 1, Significant Accounting Policies, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K for a discussion of recent accounting guidance and pronouncements.
The Company has expanded the use of technology as well as process improvement initiatives to enhance global efficiency. In addition, management continues to evaluate the worldwide consolidation and simplification of operations and functions to further reduce costs.
The Company has expanded the use of technology and has undertaken process improvement initiatives to enhance global efficiency. In addition, management continues to evaluate the worldwide consolidation and simplification of operations and functions to further reduce costs.
The fair value of acquired tradenames and trademarks is estimated using a relief from royalty method, which values an indefinite-lived intangible asset by estimating the royalties saved through the ownership of an asset.
The fair value of acquired trade names and trademarks is estimated using a relief from royalty method, which values an indefinite-lived intangible asset by estimating the royalties saved through the ownership of an asset.
For additional discussion of associated risks, refer to Part I, Item 1A, “Risk Factors” - Risks Related to Our International Operations.
For additional discussion of associated risks, refer to Part I, Item 1A, “Risk Factors” - Risks Related to Our Global Operations.
At December 31, 2023, $1,440 million of authorization remains available for future share repurchases. Additional share repurchases, if any, may be made through open market purchases, Rule 10b5-1 plans, accelerated share repurchases, privately negotiated transactions, or other transactions in such amounts and at such times as the Company considers appropriate based upon prevailing market and business conditions and other factors.
At December 31, 2024, $1.2 billion of authorization remains available for future share repurchases. Additional share repurchases, if any, may be made through open market purchases, Rule 10b5-1 plans, accelerated share repurchases, privately negotiated transactions, or other transactions in such amounts and at such times as the Company considers appropriate based upon prevailing market and business conditions and other factors.
The Company’s reporting units are either an operating segment or one level below its operating segments, as determined in accordance with U.S. GAAP. 54 The quantitative evaluation of impairment involves comparing the current fair value of each reporting unit to its net book value, including goodwill.
The Company’s reporting units are either an operating segment or one level below its operating segments, as determined in accordance with US GAAP. 52 The quantitative evaluation of impairment involves comparing the current fair value of each reporting unit to its net book value, including goodwill.
The lines of credit have no major restrictions and are provided under demand notes between the Company and the lending institutions. At December 31, 2023, the Company has $20 million outstanding under these short-term borrowing arrangements. The Company’s multi-currency revolving credit facility, term loans and senior notes contain certain covenants relating to the Company’s operations and financial condition.
The lines of credit have no major restrictions and are provided under demand notes between the Company and the lending institutions. At December 31, 2024, the Company has $11 million outstanding under these short-term borrowing arrangements. The Company’s revolving credit facility, term loans and senior notes contain certain covenants relating to the Company’s operations and financial condition.
Diluted loss per share was $0.62 per share compared to diluted loss per share of $4.41 in the prior year. • Cash from operations was $377 million, as compared to $517 million in the prior year. Company Profile DENTSPLY SIRONA Inc.
Diluted loss per share was $4.48 compared to diluted loss per share of $0.62 in the prior year. • Cash from operations was $461 million, as compared to $377 million in the prior year. Company Profile DENTSPLY SIRONA Inc.
For further information on our annual and interim tests, see Note 11, Goodwill and Intangible Assets, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K. Income Taxes Income taxes are determined using the liability method of accounting for income taxes.
For further information, see Note 11, Goodwill and Intangible Assets, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K. Income Taxes Income taxes are determined using the liability method of accounting for income taxes.
Overall, the Company’s operations in Russia and Ukraine have not been materially impacted by the conflict, and consequently, the Company has not recorded any allowance for doubtful accounts, inventory reserves, or asset impairments through the year ended December 31, 2023 as a result of the conflict.
Ov erall, the Company’s operations in Russia and Ukraine have not been materially impacted by the conflict, and consequently, the Company has not recorded any allowance for doubtful accounts, inventory reserves, or asset impairments for the year ended December 31, 2024 as a result of the conflict.
At December 31, 2023, the Company has a valuation allowance of $863 million against the benefit of certain deferred tax assets of foreign and domestic subsidiaries. The Company’s tax positions are subject to ongoing examinations by the tax authorities.
At December 31, 2024, the Company has a valuation allowance of $1,503 million against the benefit of certain deferred tax assets of foreign and domestic subsidiaries. The Company’s tax positions are subject to ongoing examinations by the tax authorities.
A change in any of these estimates and assumptions used in the annual test, as well as unfavorable changes in the overall markets served by these reporting units, among other factors, could have a negative material impact to the fair value of the reporting units and indefinite-lived intangible assets and could result in a future impairment charge.
A change in any of the estimates and assumptions used in the Company’s annual goodwill impairment test as described below or unfavorable changes in the overall markets served by the Company’s reporting units, among other factors, could have a negative material impact to the fair value of the Company’s reporting units and indefinite-lived intangible assets and could result in a future impairment charge.
As of December 31, 2023, in conjunction with this plan the Company has incurred $66 million in restructuring charges primarily related to employee transition, severance payments, employee benefits, and facility closure costs and $20 million in other non-recurring costs related to restructuring activities which mostly consist of consulting, legal and other professional service fees.
As of December 31, 2024, in conjunction with the 2023 Plan, the Company incurred $87 million in restructuring charges, from inception, primarily related to employee transition, severance payments, employee benefits, and facility closure costs, and $20 million in other non-recurring costs related to restructuring activities, which mostly consist of consulting, legal and other professional service fees.
The impact of global economic conditions Markets in several regions, particularly Europe, continue to experience varying degrees of recessionary pressures and face concerns about the systemic impacts of adverse economic conditions and geopolitical issues.
The impact of global economic conditions Markets in several regions, particularly Europe, continue to experience varying degrees of pressures inhibiting growth and face concerns about the systemic impacts of adverse economic conditions and geopolitical events.
The Company’s operations in Ukraine consist primarily of R&D activities, which continue uninterrupted from other locations to focus on the safety of employees.
The Company’s operations in Ukraine consist primarily of R&D activities, which continue from locations that focus on the safety of employees.
Indefinite-Lived Intangible Assets Indefinite-lived intangible assets consist of tradenames, trademarks and in-process R&D and are not subject to amortization; instead, they are tested for impairment annually or more frequently if events or circumstances indicate that the carrying value of indefinite-lived intangible assets may be impaired or if a decision is made to sell a business.
Indefinite-Lived Intangible Assets Indefinite-lived intangible assets consist of trade names, trademarks, and in-process R&D and are not subject to amortization; instead, they are tested for impairment annually at April 1 or more frequently if events or circumstances indicate that the carrying value of indefinite-lived intangible assets may be impaired or if a decision is made to discontinue or divest a business.
Net sales were negatively impacted by approximately 1.1% due to the strengthening of the U.S. dollar over the prior year period. • Net loss was $132 million as compared to net loss of $950 million for the prior year primarily due to lower goodwill and intangible asset impairment charges of $307 million compared to $1,287 million in the prior year.
Net sales were negatively impacted by approximately 0.8% due to the strengthening of the U.S. dollar over the prior year period. • Net loss was $910 million as compared to net loss of $132 million for the prior year primarily due to higher goodwill and intangible asset impairment charges of $1,014 million compared to $307 million in the prior year.
Essential Dental Solutions A reconciliation of net sales to organic sales for the year ended December 31, 2023 is as follows: Year Ended December 31, (in millions, except percentages) 2023 2022 $ Change % Change Net sales $ 1,468 $ 1,427 $ 41 2.8 % Unfavorable foreign exchange impact (0.8 %) Organic sales 3.6 % Percentages are based on actual values and may not recalculate due to rounding.
Essential Dental Solutions A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows: Year Ended December 31, (in millions, except percentages) 2024 2023 $ Change % Change Net sales $ 1,454 $ 1,468 $ (14) (0.9 %) Unfavorable foreign exchange impact (0.8 %) Organic sales (0.1 %) Percentages are based on actual values and may not recalculate due to rounding.
Restructuring and Other Costs During the year ended December 31, 2023, we recorded net expense of $67 million of Restructuring and other costs which consist primarily of charges associated with the restructuring plan announced in February 2023.
Restructuring and Other Costs During the year ended December 31, 2024, we recorded net expense of $53 million of restructuring costs which consist primarily of charges associated with the restructuring plans announced in February 2023 and July 2024.
The Company estimates capital expenditures to be in the range of approximately $170 million to $200 million for the twelve months ending December 31, 2024 and expects these investments to include implementation expenses for a new global Enterprise Resource Planning (“ERP”) system, equipment upgrades, and capacity expansion to support product innovation and consolidate operations for enhanced efficiencies.
The Company estimates capital expenditures to be in the range of appr oximately $160 million to $190 million for the twelve months ending December 31, 2025 and expects these investments to include expenses for the ongoing implementation of a new global Enterprise Resource Planning (“ERP”) system, equipment upgrades, and capacity expansion to support product innovation and consolidate operations for enhanced efficiencies.
Rest of World A reconciliation of net sales to organic sales for the year ended December 31, 2023 is as follows: Year Ended December 31, (in millions, except percentages) 2023 2022 $ Change % Change Net sales $ 978 $ 971 $ 7 0.7 % Unfavorable foreign exchange impact (4.4 %) Organic sales 5.1 % Percentages are based on actual values and may not recalculate due to rounding.
Rest of World A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows: Year Ended December 31, (in millions, except percentages) 2024 2023 $ Change % Change Net sales $ 927 $ 978 $ (51) (5.1 %) Unfavorable foreign exchange impact (3.6 %) Organic sales (1.5 %) Percentages are based on actual values and may not recalculate due to rounding.
During the year ended December 31, 2023, the Company repurchased approximately 8.8 million shares under its open market share repurchase plan for a cost of $300 million at a volume-weighted average price of $34.20. On November 7, 2023, the Board of Directors approved an increase to the authorized share repurchase program of $1.0 billion.
During the year ended December 31, 2024, the Company repurchased approximately 9.4 million shares under its open market share repurchase plan for a cost of $250 million at a volume-weighted average price of $26.65. On November 7, 2023, the Board of Directors approved an increase to the authorized share repurchase program of $1.0 billion.
Europe A reconciliation of net sales to organic sales for the year ended December 31, 2023 is as follows: Year Ended December 31, (in millions, except percentages) 2023 2022 $ Change % Change Net sales $ 1,550 $ 1,559 $ (9) (0.6 %) Unfavorable foreign exchange impact (0.4 %) Organic sales (0.2 %) Percentages are based on actual values and may not recalculate due to rounding.
Europe A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows: Year Ended December 31, (in millions, except percentages) 2024 2023 $ Change % Change Net sales $ 1,518 $ 1,550 $ (32) (2.1 %) Favorable foreign exchange impact 0.1 % Organic sales (2.2 %) Percentages are based on actual values and may not recalculate due to rounding.
On an organic basis (a Non-GAAP measure as defined under the heading “Key Performance Measurements” below) net sales increased 2.2% for the year ended December 31, 2023 compared to the prior year.
On an organic basis (a Non-GAAP measure as defined under the heading “Key Performance Measurements” below) net sales decreased 3.5% for the year ended December 31, 2024 compared to the prior year.
For the year ended December 31, 2023, the number of days for sales outstanding in accounts receivable increased by 4 days to 59 days at December 31, 2023 as compared to 55 days at December 31, 2022, and the number of days of sales in inventory decreased by 11 days to 126 days at December 31, 2023 as compared to 137 days at December 31, 2022.
For the year ended December 31, 2024, the number of days for sales outstanding in accounts receivable decreased by 4 days to 55 days at December 31, 2024 as compared to 59 days at December 31, 2023, and the number of days of sales in inventory decreased by 2 days to 124 days at December 31, 2024 as compared to 126 days at December 31, 2023.
Net assets within Israel total $197 million as of December 31, 2023, consisting primarily of acquired technology, cash, inventory, and property, plant and equipment associated with our operations in country.
Net assets within Israel totaled $180 million as of December 31, 2024, consisting primarily of acquired technology, property, plant and equipment, cash, and inventory associated with our operations in the country.
The Company assessed the goodwill of the new reporting units and its indefinite-lived intangible assets for impairment as of April 1, 2023. Based on this test, it was determined that the fair values of its reporting units and indefinite-lived intangible assets more likely than not exceeded their carrying values, resulting in no impairment.
Based on the Company's April 1 impairment test, it was determined that the fair values of its reporting units and indefinite-lived intangible assets more likely than not exceeded their carrying values, resulting in no impairment.
Income Taxes and Net Loss Year Ended December 31, (in millions, except per share data and percentages) 2023 2022 $ Change Benefit for income taxes $ (43) $ (105) $ 62 Effective income tax rate 24.8 % 9.9 % Net loss attributable to Dentsply Sirona $ (132) $ (950) $ 818 Net loss per common share - diluted $ (0.62) $ (4.41) Percentages are based on actual values and may not recalculate due to rounding.
Income Taxes and Net Loss Year Ended December 31, (in millions, except per share data and percentages) 2024 2023 $ Change Benefit for income taxes $ (26) $ (43) $ 17 Effective income tax rate 2.8 % 24.8 % Net loss attributable to Dentsply Sirona $ (910) $ (132) $ (778) Net loss per common share - diluted $ (4.48) $ (0.62) Percentages are based on actual values and may not recalculate due to rounding.
The Company discloses changes in organic sales to allow investors to evaluate the performance of the Company’s operations exclusive of the items listed above that may impact the comparability of results from period to period and may not be indicative of past or future performance of the normal operations of the Company.
The performance of the Company is measured on this metric along with other performance metrics. 45 The Company discloses changes in organic sales to allow investors to evaluate the performance of the Company’s operations exclusive of the items listed above that may impact the comparability of results from period to period and may not be indicative of past or future performance of the normal operations of the Company.
A reconciliation of net sales to organic sales for the year ended December 31, 2023 is as follows: Year Ended December 31, (in millions, except percentages) 2023 2022 $ Change % Change Net sales $ 3,965 $ 3,922 $ 43 1.1 % Unfavorable foreign exchange impact (1.1 %) Organic sales 2.2 % Percentages are based on actual values and may not recalculate due to rounding.
A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows: Year Ended December 31, (in millions, except percentages) 2024 2023 $ Change % Change Net sales $ 3,793 $ 3,965 $ (172) (4.3 %) Unfavorable foreign exchange impact (0.8 %) Organic sales (3.5 %) Percentages are based on actual values and may not recalculate due to rounding.
Those future expectations include, but are not limited to, distribution channel changes, impact from competition, and new product developments for these reporting units. The Company also considers the current and projected market and economic conditions for dental and medical device industries, both in the United States and globally, when determining its assumptions.
Those future expectations relate to, among other things, distribution channel changes, impact from competition, and new product developments. The Company also considers the current and projected market and economic conditions for dental and medical device industries, both in the United States and globally, when determining its assumptions.
Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time at which such impairments are recognized.
Estimates based on these assumptions may differ significantly from actual results. Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time at which such impairments are recognized.
See Note 16, Income Taxes, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K. Material Trends in Capital Resources On February 14, 2023, the Board of Directors of the Company approved a plan to restructure the Company’s business to improve operational performance and drive shareholder value creation.
See Note 16, Income Taxes, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K. Material Trends in Capital Resources On July 29, 2024, the Board of Directors of the Company approved an additional plan to restructure the Company’s business to improve operational performance and drive stockholder value creation (the “2024 Plan”).
Wellspect Healthcare A reconciliation of net sales to organic sales for the year ended December 31, 2023 is as follows: Year Ended December 31, (in millions, except percentages) 2023 2022 $ Change % Change Net sales $ 288 $ 270 $ 18 6.6 % Unfavorable foreign exchange impact (0.7 %) Organic sales 7.3 % Percentages are based on actual values and may not recalculate due to rounding.
Wellspect Healthcare A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows: Year Ended December 31, (in millions, except percentages) 2024 2023 $ Change % Change Net sales $ 304 $ 288 $ 16 5.9 % Favorable foreign exchange impact 0.1 % Organic sales 5.8 % Percentages are based on actual values and may not recalculate due to rounding.
Net sales for products sold to our customers in Israel comprise less than 1% of our consolidated net sales for the year ended December 31, 2023.
Net sales for products sold to our customers in Israel comprised approximately 1% of our consolidated net sales for the year ended December 31, 2024.
Organic sales is an important internal measure for the Company, and its senior management receives a monthly analysis of operating results that includes organic sales. The performance of the Company is measured on this metric along with other performance metrics.
Organic sales is an important internal measure for the Company, and its senior management receives a monthly analysis of operating results that includes organic sales.
For the year ended December 31, 2023, net sales in Russia and Ukraine were approximately 2% of our consolidated net sales, and net assets in these countries were $78 million. These net assets include $42 million of cash and cash equivalents held within Russia as of December 31, 2023.
For the year ended December 31, 2024, net sales in Russia and Ukraine were approximately 2% of our consolidated net sales, and net assets in these countries were $64 million. These net assets include $39 million of cash and cash equivalents held within Russia as of December 31, 2024 , as well as inventory and trade accounts receivable.
The Company had $225 million outstanding borrowings under the commercial paper facility at December 31, 2023 resulting in $475 million remaining available under the revolving credit and commercial paper facilities. The Company also has access to $44 million in uncommitted short-term financing under lines of credit from various financial institutions.
The Company had $410 million outstanding borrowings under the commercial paper facility at December 31, 2024 resulting in $290 million remaining available under the revolving credit and commercial paper facilities. The Company also has access to $34 million in uncommitted short-term financing under lines of credit from various financial institutions, the availability of which is reduced by other short-term borrowings.
For further details see Item 8, Note 18, Restructuring and O ther Costs, in the Notes to the Consolidated Financial Statements of this Form 10-K. 49 Segment Adjusted Operating Income Year Ended December 31, (in millions, except percentages) (a) 2023 2022 $ Change % Change Connected Technology Solutions $ 101 $ 161 $ (60) (37.5 %) Essential Dental Solutions 478 467 11 2.4 % Orthodontic and Implant Solutions 156 193 (37) (19.3 %) Wellspect Healthcare 87 73 14 19.9 % Percentages are based on actual values and may not recalculate due to rounding.
For further information, see Item 8, Note 18, Restructuring and O ther Costs, in the Notes to Consolidated Financial Statements of this Form 10-K. 49 Segment Adjusted Operating Income Year Ended December 31, (in millions, except percentages) (a) 2024 2023 $ Change % Change Connected Technology Solutions $ 70 $ 101 $ (31) (30.3 %) Essential Dental Solutions 479 478 1 0.2 % Orthodontic and Implant Solutions 80 156 (76) (48.6 %) Wellspect Healthcare 98 87 11 12.7 % Percentages are based on actual values and may not recalculate due to rounding.
For the year ended December 31, 2023, net sales of products produced at these sites comprise approximately 3% of our consolidated net sales and 13% of the net sales attributed to our Orthodontic and Implant Solutions segment.
For the year ended December 31, 2024, net sales of products produced at these sites comprised approximately 3% o f our consolidated net sales an d 13% of the net sales of the Orthodontic and Implant Solutions segment.
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 in dental offices 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 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.
Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. The process of determining significant estimates is fact specific and considers factors such as historical experience, current and expected economic conditions, product mix and in some cases, actuarial techniques. The Company evaluates these significant factors as facts and circumstances dictate.
The process of determining significant estimates is fact-specific and, when determining significant estimates, management considers factors such as historical experience, current and expected economic conditions, product mix and in some cases, actuarial techniques. The Company evaluates these significant factors as facts and circumstances dictate. Some events as described below could cause results to differ significantly from those determined using estimates.
Additionally, the Company sells products from across our portfolio to distributors of dental products and direct to dental practices within Israel and its neighboring countries which may face reduced patient traffic and demand for our products in the near term.
The Company continues to monitor developments and prepare contingency plans to limit potential disruption to its operations in the future. Additionally, we sell products from across our portfolio to distributors of dental products and direct to dental practices within Israel and its neighboring countries which may face reduced patient traffic and demand for our products in the near term.
Wellspect Healthcare The increase in segment adjusted operating income resulted from the increase in organic sales noted above, as well as margin improvements due to favorable manufacturing leverage from higher volumes, partially offset by unfavorable foreign currency translation.
Wellspect Healthcare The increase in segment adjusted operating income was driven by the increase in organic sales noted above due to new product launches, as well as margin improvements due to favorable manufacturing leverage from higher volumes.
Beginning in the second quarter of 2022, the Company’s financial results have also been impacted by the costs associated with the internal investigation conducted and completed by the Audit and Finance Committee and subsequently, the external investigation by the SEC which is currently in progress.
Beginning in the second quarter of 2022, the Company’s financial results have also been impacted by the costs associated with the internal investigation conducted by the Audit and Finance Committee of the Company’s Board of Directors, along with associated litigation and an external investigation by the SEC, both of which are ongoing.
Further information regarding the details of income taxes is presented in Note 16, Income Taxes, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K. 2022 Compared to 2021 Discussion of the results of operations for the year ended December 31, 2022 as compared to December 31, 2021 was included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 1, 2023.
Further information regarding the details of income taxes is presented in Note 16, Income Taxes, in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K. 2023 Compared to 2022 Discussion of the results of operations for the year ended December 31, 2023 as compared to December 31, 2022 was included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 29, 2024. 51 CRITICAL ACCOUNTING ESTIMATES The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires the Company to make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and accompanying notes.
Goodwill is not amortized; instead, it is tested for impairment annually or more frequently if events or circumstances indicate that the carrying value of goodwill may be impaired, or if a decision is made to sell a business. Judgment is involved in determining if an indicator of impairment has occurred during the year.
Goodwill is not amortized; instead, it is tested for impairment at the reporting unit level annually at April 1 or more frequently if events or circumstances indicate that the carrying value of goodwill may be impaired, or if a decision is made to sell a business.
Essential Dental Solutions A reconciliation of net sales to organic sales for the year ended December 31, 2022 was as follows: Year Ended December 31, (in millions, except percentages) 2022 2021 $ Change % Change Net sales $ 1,427 $ 1,516 $ (89) (5.8 %) Unfavorable foreign exchange impact (5.2 %) Organic sales (0.6 %) Percentages are based on actual values and may not recalculate due to rounding.
Net Sales by Segment Connected Technology Solutions A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows: Year Ended December 31, (in millions, except percentages) 2024 2023 $ Change % Change Net sales $ 1,062 $ 1,169 $ (107) (9.2 %) Unfavorable foreign exchange impact (1.0 %) Organic sales (8.2 %) Percentages are based on actual values and may not recalculate due to rounding.
In anticipation of a continued inflationary trend and potentially deteriorating macroeconomic environment, the Company has attempted to mitigate these pressures through the following actions, among others: • Driving strategic procurement initiatives to leverage alternative sources of raw materials and transportation; • Implementing cost-containment measures, as well as intensifying continuous improvement and restructuring programs in our manufacturing and distribution facilities and other areas of our business; • Optimizing our customer management and implementing strategic investments in our commercial sales organization in key markets, particularly the United States; and 43 • Refining our focus on developing a winning portfolio with global scale to maximize market share in a competitive pricing environment.
In anticipation of a continued inflationary trend and potentially deteriorating macroeconomic environment, we have attempted to mitigate these pressures through the following actions, among others: • Driving strategic procurement initiatives to leverage alternative sources of raw materials and transportation; • Implementing cost-containment measures, as well as intensifying continuous improvement and restructuring programs in our manufacturing and distribution facilities and other areas of our business, including the most recent restructuring plan approved by the Board of Directors on July 29, 2024; • Optimizing our customer management and implementing strategic investments in our commercial sales organization in key markets, particularly the United States; and • Refining our focus on developing a winning portfolio with global scale to maximize market share in a competitive pricing environment. 42 The impact of the Israel-Hamas war The terrorist attacks by Hamas militants crossing the border from Gaza to Israel in October 2023 and the subsequent military response by the Israeli government in Gaza has resulted in significant unrest and uncertainty within that region.
The impact of macroeconomic declines and high interest rates has been particularly apparent in Germany, which accounts for 11% of the Company’s sales. Germany was in a recession for most of 2023, largely due to persistent high inflation and falling household spending.
While patient volumes have largely remained stable in the United States, the impact of macroeconomic declines and high interest rates has been particularly a pparent in Germany, which represented 11% of the Company’s sales for the year ended December 31, 2024. Germany was in a recession for most of 2023, largely due to persistent high inflation and falling household spending.
Other Income and Expenses Year Ended December 31, (in millions, except percentages) 2023 2022 $ Change % Change Interest expense, net $ 81 $ 65 $ 16 24.2 % Other expense (income), net 9 53 (44) NM Net interest and other expense $ 90 $ 118 $ (28) Percentages are based on actual values and may not recalculate due to rounding.
Other Income and Expenses Year Ended December 31, (in millions, except percentages) 2024 2023 $ Change % Change Interest expense, net $ 69 $ 81 $ (12) (14.5 %) Other (income) expense, net (12) 9 (21) NM Net interest and other expense $ 57 $ 90 $ (33) Percentages are based on actual values and may not recalculate due to rounding.
Orthodontic and Implant Solutions A reconciliation of net sales to organic sales for the year ended December 31, 2023 is as follows: Year Ended December 31, (in millions, except percentages) 2023 2022 $ Change % Change Net sales $ 1,040 $ 1,006 $ 34 3.4 % Unfavorable foreign exchange impact (1.7 %) Organic sales 5.1 % Percentages are based on actual values and may not recalculate due to rounding.
The decrease was partially offset by higher volumes for endodontic products in Rest of World. 46 Orthodontic and Implant Solutions A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows: Year Ended December 31, (in millions, except percentages) 2024 2023 $ Change % Change Net sales $ 973 $ 1,040 $ (67) (6.5 %) Unfavorable foreign exchange impact (1.0 %) Organic sales (5.5 %) Percentages are based on actual values and may not recalculate due to rounding.
Benefit for income taxes We recorded an income tax benefit of $43 million and $105 million for the years ended December 31, 2023 and December 31, 2022, respectively. The decrease in tax benefit is primarily due to the impairment of goodwill recorded in 2022.
Benefit for income taxes An income tax benefit of $26 million and $43 million was recorded for the years ended December 31, 2024 and December 31, 2023, respectively. The increase in tax benefit is primarily due to additional impairments recorded in the year ended December 31, 2024.
The Company’s ratio of total net debt to total capitalization was as follows: Year Ended December 31, (in millions, except percentages) 2023 2022 Current portion of debt $ 322 $ 118 Long-term debt 1,796 1,826 Less: Cash and cash equivalents 334 365 Net debt $ 1,784 $ 1,579 Total equity 3,294 3,812 Total capitalization $ 5,078 $ 5,391 Total net debt to total capitalization ratio 35.1 % 29.3 % 57 At December 31, 2023, the Company had a total remaining borrowing capacity of $499 million under lines of credit, including lines available under its short-term arrangements and revolving credit facility.
At December 31, 2024, the Company held 65.7 million shares of treasury stock. 56 The Company’s ratio of total net debt to total capitalization was as follows: Year Ended December 31, (in millions, except percentages) 2024 2023 Current portion of debt $ 549 $ 322 Long-term debt 1,586 1,796 Less: Cash and cash equivalents 272 334 Net debt $ 1,863 $ 1,784 Total equity 1,943 3,294 Total capitalization $ 3,806 $ 5,078 Total net debt to total capitalization ratio 48.9 % 35.1 % At December 31, 2024, the Company had $313 million of borrowings available under lines of credit, including lines available under its short-term arrangements and revolving credit facility.
Wellspect Healthcare This segment includes the design, manufacture, and sales of the Company’s innovative continence care solutions for both urinary and bowel management. This category consists mainly of urology catheters and other healthcare-related consumable products.
Offerings in this segment also include application of our digital services and technology, including those provided by DS Core, our cloud-based platform. Wellspect Healthcare This segment includes the design, manufacture, and sales of the Company’s innovative continence care solutions for both urinary and bowel management. This category consists mainly of urology catheters and other healthcare-related consumable products.
Operating Expenses Year Ended December 31, (in millions, except percentages) 2023 2022 $ Change % Change Selling, general, and administrative expenses $ 1,613 $ 1,589 $ 24 1.5 % Research and development expenses 184 174 10 5.9 % Goodwill and intangible asset impairments 307 1,287 (980) NM Restructuring and other costs 67 14 53 NM SG&A as a percentage of net sales 40.7 % 40.5 % 20 bps R&D as a percentage of net sales 4.6 % 4.4 % 20 bps Percentages are based on actual values and may not recalculate due to rounding.
These drivers were partially offset by lower customer incentives, and a decrease in warranty costs and inventory obsolescence charges. 48 Operating Expenses Year Ended December 31, (in millions, except percentages) 2024 2023 $ Change % Change Selling, general, and administrative expenses $ 1,605 $ 1,613 $ (8) (0.4 %) Research and development expenses 165 184 (19) (10.5 %) Goodwill and intangible asset impairments 1,014 307 707 NM Restructuring costs 53 67 (14) NM SG&A as a percentage of net sales 42.3 % 40.7 % 160 bps R&D as a percentage of net sales 4.3 % 4.6 % (30) bps Percentages are based on actual values and may not recalculate due to rounding.
For additional details, see Item 7A “Quantitative and Qualitative Disclosure About Market Risk - Consignment Arrangements.” 58 Contractual Obligations The Company’s scheduled contractual cash obligations at December 31, 2023 were as follows: Within 1 Year Years 2-3 Years 4-5 Greater Than 5 Years Total (in millions) Long-term borrowings, including finance leases $ 77 $ 366 $ 269 $ 1,197 $ 1,909 Operating leases 62 77 37 23 199 Purchase commitments 193 136 6 — 335 Interest on long-term borrowings, net of interest rate swap agreements 50 90 71 50 261 Postemployment obligations 26 47 51 124 248 Precious metal consignment agreements 30 — — — 30 $ 438 $ 716 $ 434 $ 1,394 $ 2,982 Due to the uncertainty with respect to the timing of future cash flows associated with the Company’s unrecognized tax benefits at December 31, 2023, the Company is unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authority; therefore, $40 million of unrecognized tax benefits has been excluded from the contractual obligations table above.
For additional details, see Item 7A “Quantitative and Qualitative Disclosure About Market Risk - Consignment Arrangements.” Contractual Obligations The Company’s scheduled contractual cash obligations at December 31, 2024 were as follows: Within 1 Year Years 2-3 Years 4-5 Greater Than 5 Years Total (in millions) Long-term borrowings, including finance leases $ 128 $ 300 $ 227 $ 1,093 $ 1,748 Operating leases 52 61 28 10 151 Purchase commitments 194 112 40 — 346 Interest on long-term borrowings, net of interest rate swap agreements 41 73 64 17 195 Postemployment obligations 25 51 46 131 253 Precious metal consignment agreements 34 — — — 34 $ 474 $ 597 $ 405 $ 1,251 $ 2,727 Due to the uncertainty with respect to the timing of future cash flows associated with the Company’s unrecognized tax benefits at December 31, 2024, the Company is unable to make reasonably reliable estimates of the period of cash settlement with the respective taxing authority; therefore, $51 million of unrecognized tax benefits has been excluded from the contractual obligations table above.
The dynamic economic environments in which the Company’s businesses operate and key economic and business assumptions with respect to projected selling prices, increased competition and introductions of new technologies can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results.
Testing for potential impairment of these assets is dependent on significant assumptions and reflects management’s best estimates at a particular point in time. The dynamic economic environments in which the Company’s businesses operate and key economic and business assumptions with respect to projected selling prices, increased competition and introductions of new technologies can significantly affect the outcome of impairment tests.
The Company’s operations in Israel consist of two manufacturing facilities for implants products, with one site in northern Israel and one in southern Israel, which employ approximately 300 associates. These facilities remain open and continue to operate.
It is not clear when these restrictions will be lifted or if other countries will institute similar restrictions. The Company’s operations in Israel consist of two manufacturing facilities for implants products, with one site in northern Israel and one site in southern Israel, which together employ approximately 350 associates. These facilities remain open and continue to operate.
The increase in organic sales was primarily driven by higher volumes across all regions, particularly in Europe, the favorable impact of new product launches and price increases. 47 Net Sales by Region United States A reconciliation of net sales to organic sales for the year ended December 31, 2023 is as follows: Year Ended December 31, (in millions, except percentages) 2023 2022 $ Change % Change Net sales $ 1,437 $ 1,392 $ 45 3.2 % Favorable foreign exchange impact 0.2 % Organic sales 3.0 % Percentages are based on actual values and may not recalculate due to rounding.
Net Sales by Region United States A reconciliation of net sales to organic sales for the year ended December 31, 2024 is as follows: Year Ended December 31, (in millions, except percentages) 2024 2023 $ Change % Change Net sales $ 1,348 $ 1,437 $ (89) (6.2 %) Foreign exchange impact — % Organic sales (6.2 %) Percentages are based on actual values and may not recalculate due to rounding.
The Company’s borrowing capacity includes a $700 million multi-currency revolving credit facility that expires on May 12, 2028. The Company also has available an aggregate $500 million U.S. dollar commercial paper facility.
The Company’s borrowing capacity includes a $700 million multi-currency revolving credit facility which expires in May 2028. The Company also has access to an aggregate $700 million under a U.S. dollar commercial paper facility, which was expanded in December 2024 from its previous capacity of $500 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2023, an increase of 1% in the interest rates on the variable interest rate instruments would decrease the Company’s fair value associated with the derivative interest rate swaps by approximately $10 million. 60 Consignment Arrangements The Company holds on a consignment basis, from various financials institutions, the precious metals used in the production of precious metal dental alloy products.
Biggest changeAt December 31, 2024, an increase of 1% in the interest rates on the variable interest rate instruments would decrease the Company’s fair value associated with the derivative interest rate swaps by approximately $6 million. 60 Consignment Arrangements The Company holds on a consignment basis, from various financial institutions, the precious metals used in the production of precious metal dental alloy products.
These agreements are cancellable by either party at the end of each consignment period, which typically run for a period of one to nine months; however, because the Company typically has access to numerous financial institutions with excess capacity, consignment needs created by cancellations can be shifted among the other institutions.
These agreements are cancellable by either party at the end of each consignment period, which typically run for a period of one to nine months; however, because the Company typically has access to numerous financial institutions with excess capacity, consignment needs created by cancellations can be shifted among other institutions.
Translation gains and losses related to the net assets of the foreign subsidiaries are offset by gains and losses in the non-derivative and derivative financial instruments designated as hedges of net investment.
Translation gains and losses related to the net assets of the Company’s foreign subsidiaries are offset by gains and losses in the non-derivative and derivative financial instruments designated as hedges of net investment.
At December 31, 2023, a 10% weakening of the U.S. dollar against all other currencies would decrease the net fair value associated with the forward foreign exchange contracts by approximately $107 million. Interest Rate Risk Management The Company enters into financial instruments, including derivatives, that expose the Company to market risk related to changes in interest rates.
At December 31, 2024, a 10% weakening of the U.S. dollar against all other currencies would decrease the net fair value associated with the forward foreign exchange contracts by approximately $91 million. Interest Rate Risk Management The Company enters into financial instruments, including derivatives, that expose the Company to market risk related to changes in interest rates.
Under the terms of the consignment agreements, the Company also makes compensatory payments to the consignor banks based on a percentage of the value of the consigned precious metals inventory. At December 31, 2023, the average annual rate charged by the consignor banks was 1.3%.
Under the terms of the consignment agreements, the Company also makes compensatory payments to the consignor banks based on a percentage of the value of the consigned precious metals inventory. At December 31, 2024, the average annual rate charged by the consignor banks was 1.7%.
At December 31, 2023, the Company had approximately 22,000 troy ounces of precious metal, primarily gold, platinum, palladium and silver on consignment for periods of less than one year with a market value of $30 million.
At December 31, 2024, the Company had approximately 21,000 troy ounces of precious metal, primarily gold, platinum, palladium and silver on consignment for periods of less than one year with a market value of $34 million.

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