Josh Zable - Vice President of Investor Relations Don Casey - Chief Executive Officer, Director Nick Alexos - Chief Financial Officer, Executive Vice President, Chief Administrative Officer.

Glen Santangelo - Deutsche Bank Tycho Peterson - JPMorgan Jeff Johnson - Baird Robert Jones - Goldman Sachs Jon Block - Stifel Erin Wright - Credit Suisse John Kreger - William Blair Yi Chen - H.C. Wainwright David Stratton - Great Lakes Review.

Good day and welcome to the Dentsply Sirona, Incorporated fourth quarter and year-end 2017 earnings call. Today's conference is being recorded. At this time, I would like to turn things over to Mr. Josh Zable, Vice President of Investor Relations. Please go ahead, sir..

Thank you and good morning everyone. Welcome to our fourth quarter 2017 conference call. I would like to remind you that an earnings press release and presentation is available on our website at www.dentsplysirona.com. Before we begin, please take a moment to read the forward-looking statement on slide two and three of our earnings slide presentation.

During today's conference call, we will make certain predictive statements that reflect our current views about our future performance and financial results. We base these statements on certain assumptions and expectations of future events that are subject to risks and uncertainties.

Our most recent Form 10-K and Form 10-Q lists some of our most important risk factors that could cause actual results to differ from our predictions. And, with that, I will now turn the program over to Don Casey, Chief Executive Officer of Dentsply Sirona..

Thanks Josh and good morning everyone. This is the first time some of you are meeting either Nick Alexos or myself, so we really appreciate you joining us. I would like to accomplish a few things this morning. The first is to provide some of my initial impressions. The second is to outline some key areas.

And finally, I will discuss what you can expect from this management team going forward. While it's very early in my tenure, as a fact this marks the end of week three for me, much of what I have seen confirms my rationale for accepting this role.

It also reinforces why I am confident that my previous experiences align well with what DENTSPLY SIRONA will need going forward. The few weeks have underscored that this is a great company in an attractive market, but is one that's also coming off a challenging year in terms of financial performance as well as one with lots of changes in management.

We have now turned the page on that. We have a new management team in place that is excited about our future. Looking at that future, I know we have several great assets that we can leverage. They include being the number one or two brands in multiple consumable categories. These categories provide a reliable and stable source of growth.

But beyond that, each of these brands represents an opportunity to build a relationship with dentists and labs, whether in areas like endodontics, preventive, restorative, our products touch hundreds of thousands of dentists around the globe each year, all of which represent an opportunity to start a conversation.

Our leadership position in technology and equipment such as CAD/CAM and imaging is another major strength and is an important foundation for future growth. It is up to us to better leverage that relationship to bring in all aspects of our portfolio to these dentists that are already very committed to DENTSPLY SIRONA.

In some places, we are beginning to see the power of combining our differentiated products into one offering. Among the many examples we could cite is a program where we now offer digital impression with the implant in a novel program to cross-sell both products.

This not only improves our value proposition versus the competition but is driving new sales leads for both franchises. And as a matter of fact, we are starting to see implants return to growth after two down years. This is a model that we would like to replicate in several other product categories.

But our competitive advantage is more than just offering leading products. We can bring the power of our clinical education and training along with our products to truly become a solution provider. Having such a broad portfolio allows us to be a leader in this space that no other competitor can match.

We bring this broad education and training portfolio to our customers on a daily basis in the market and through major events like Dentsply Sirona World. Our breadth also gives us a lot of flexibility in creating novel win-wins for our important dealer-partners such as Patterson and Henry Schein.

Going forward, our entire team understands the need to take the potential of DENTSPLY SIRONA and turn it into performance. An initiative that was kicked off late last year brought our senior leadership team together to identify our top five priorities. They are starting to bear fruit and we will continue to push them.

They include delivering on the concept that we are the dental solutions company and acting as one team globally. But I would also like to highlight two of these initiatives that I will personally own, growth and margin improvement. Our growth plans going forward will be built around a few key priorities. The first is sales force effectiveness.

At DENTSPLY SIRONA, we have 30-plus sales force and close to 5,800 people globally in sales and sales-support. It is essential that we improve the performance of this group.

That includes targeting, messaging, training, use of sales force productivity tools, all while providing outstanding customer service and it includes teaching our businesses how to cross-sell each other to take advantage of our unique portfolio. And finally, but not least, there needs to be a renewed focus on our customers.

For the past two years, we have been too internally focused. That changes now. The second key to growth will be to accelerate the pace of innovation. This is our life blood. We will do this by really understanding our customers, looking globally at their needs, reallocating investment into higher-margin areas and creating urgency.

I strongly believe that we can take our industry-leading R&D budget and redirect it into high-impact projects that give us a better competitive position. In a rapidly changing competitive space, our technology portfolio is unmatched.

It gives us a tremendous amount of optionality and it will serve as an important foundation for our leadership in the ongoing digital revolution in dentistry. It is our intent that innovation will be at the heart of everything we do.

Our final focus area will be to grow into rapidly developing areas around the globe such as Asia, Latin America and the Middle East where we have a long history and excellent sales foundation and also a tremendous opportunity. We will make more investment and resources available where we can see near and mid-term returns.

Our urgency in restarting our growth engine is high. One way we will deliver is taking immediate action. Yesterday, we announced the change in our management structure. Going forward, the commercial leaders as well as the two R&D leads will now report directly in to me.

I intend to be a hands-on leader and believe this structure will accelerate decision-making and increase accountability. I want to thank Bob Size for his contributions over the years and for taking on the interim leadership role during our management transition.

Another area of particular emphasis will be accelerating growth within our technology and equipment business. Having concluded initial reviews, I am confident that we have a very strong product portfolio that we will be looking to augment over the mid-term.

I have also had the opportunity to spend a significant amount of time with both our leadership team and that of our critical partners, Henry Schein and Patterson. I believe that we have put solid plans in place to drive growth in the equipment areas and we will look to strengthen those plans together in the future.

We have also worked with them to get better visibility into our movement of the product at the end market. This retail visibility will allow us to rapidly determine the impact of our efforts and adjust them as needed. In addition to growth, the second of the priorities that I personally own is our program to improve margins.

We have scale but we need to put it to use. Our team is focused on delivering $100 million in cost savings over the next two years. Given the early stage we are at in areas like procurement, rationalizing our manufacturing footprint and looking to make our operating model more efficient, I believe that we have significant runway in these areas.

Some of these savings are being reinvested today, but we will begin yielding margin improvement, both in the back half of the year and beyond. The final point that I would like to make is what we, as a management team, aspire to be.

We believe that we can and should be a growth company, built on industry-leading go-to-market capability, world-class R&D and being a global solution provider. We will selectively add to our organic efforts through licensing and when appropriate, acquisitions. We understand that we need to deliver on our commitments consistently and with transparency.

Our team is committed to doing just that. I am not naïve about this challenge and it's going take some time. But I just returned from the Chicago mid-winter event where I got to walk the floor, meet with multiple customers, talk to KOLs and I got to see our team in action. It's impressive.

As part of my onboarding, I have had the pleasure of meeting literally hundreds of DENTSPLY SIRONA employees that all have an amazing passion and commitment to this company. All of this highlights the tremendous opportunity to go from talking about the potential of DENTSPLY SIRONA to delivering consistent performance.

I look forward to getting to spend time with the investment community in the future. Now I would like to turn the call over to our CFO, Nick Alexos, who will provide a more detailed look into our results and our underlying assumptions for our 2018 outlook.

Nick?.

Thanks Don and good morning everyone. I have been equally impressed by the caliber of our people, the strength of our businesses and the opportunities we can pursue to add value to all our constituents. It's also been a great month for us working with Don from the date of his announcement. Let me start by commenting on our 10-K.

By now, you have seen that we filed a Form 12b-25 for an extension of our filing date. We expect to file the 10-K by early next week and certainly prior to the expiration of the extension. Given our determination of an impairment, the complexities of tax reform passed last year and frankly the recent management changes, the extra days are helpful.

Please be assured in my confidence in the financial controls of our organization, which brings me to the impairment charge. For Q4 2017 period,, we took a charge of $848 million to reflect evaluation related to our technology and equipment assets.

This is comprised of $267 million related to indefinite-lived intangible assets and $581 million on goodwill. The charges are due to changes in projected operating performance as well as changes to our tax and foreign exchange rates. I will speak to each of these.

In simple terms, although we shipped orders as planned in Q4 of 2017, our retail sell via our channel partners in certain markets was less than we expected. Rather than decreasing channel inventory by $30 million as was referenced in our November Q3 call, we ended with an increase of $21 million, mostly in imaging and CAD/CAM units in the U.S.

and to a limited degree in other geographic regions. As a result, we have a lower growth rate in 2018 to reflect a now targeted $40 million of equipment inventory reduction and lower consumption as well as slightly reduced long-term growth rates in margins for these reporting units.

Fundamentally, we still believe the growth rate of our technology and equipment segment to be in the mid-single digit range and our CAD/CAM unit to be above that. 2017 was clearly a transition year, especially in North America, but our dual distribution model makes sense and we value our partnership with both Patterson and Henry Schein.

Importantly, we have now aligned to better track our inventory and as Don mentioned, we are aggressively working on our sales and marketing strategies globally. In April, for example, our imaging equipment was seamlessly will integrate into Henry Schein's dentists' practice management software for the first time.

We anticipate that this should help boost sales of imaging products in the back half of the year. We are also very confident in our continued partnership with Patterson leveraging their significant customer service infrastructure for their equipment sales.

The second and separate element of the impairment charge is the calculated higher effective tax rate, which was primarily driven by U.S. tax reform legislation past December of 2017. Although recent tax will reduce the U.S.

statutory rate from 35% to 21%, other aspects of the legislation actually diminish the use of foreign tax credits as well as our ability to defer tax on foreign income. In addition, certain foreign jurisdictions continue to reform their tax policies and broaden their tax base.

Since DENTSPLY SIRONA's effective tax rates are expected to marginally increase over time, the projected net cash flows associated with the evaluated assets were reduced.

The third element of the impairment charge relates to changes in the foreign exchange rate projections versus the fair value model that was completed for the April 30, 2017 annual goodwill impairment testing. In general terms, while stronger foreign currencies and especially the Euro relative to the U.S.

dollar are good for the company's total earnings, a strong Euro in particular increases the cost structure of the equipment reporting units which are primarily based in Germany and Austria. This in turn unfavorably impacts the fair value of these reporting units as a result of the reduction in their profitability.

At the same time, while the fair value is lessened from the strengthening of the Euro relative to the U.S. dollar, the book value of these reporting units increase at December 31, 2017 as a result of the significant underlying Euro based balance sheet values of these German and Austrian operations.

For the fiscal year 2017, the total impairment charge related to these assets is now over $2 billion which is meaningful, although a non-cash charge. The historical successes of our technology products has no doubt drawn increased competitive offerings in the market which has also pressured margins.

As Don highlighted, we as a company have not executed on several facets. Nonetheless, our forecasted growth is based on our continuing investments in innovative technologies in both our technology and equipment and consumables segments and investments in our global sales and marketing efforts working along our channel partners.

Now let me review some of the highlights for the fourth quarter and the full year. As provided in our supplemental financials, this quarter we began reporting in two segments as part of our priority to simplify the business. This also represents how we intend to drive the strategies of the company.

You can find the detailed historical growth rates of these segment and regions in the financial supplements provided along with our press release and the earnings presentation. For the fourth quarter, constant currency total sales increased 5.3%, driven by technologies and equipment, which increased 5.8%.

As I said earlier, based on our estimates, total technology and equipment sales were favorably impacted by approximately $21 million in equipment inventory build during the quarter. Consumables constant currency sales grew at 4.6% with broad growth across categories, which is a pretty solid quarter for them Regionally, the U.S.

posted strong growth but was the beneficiary of what we estimate to be $23 million in channel equipment inventory build during the quarter. This overlaps the $21 million I just mentioned for the total sales figure. Europe was up 2.6%, also driven by stronger technology and equipment growth and the rest of world was up 3.7%.

All of these percentages are in a constant currency basis. When we look at revenues for the year, it's a similar story. Sales of the combined businesses, which is the pro forma for a January 1, 2016 merger date,, grew 1.6% on a constant currency basis. The U.S.

benefited from what we estimate to be full year $38 million in channel inventory build but it was down in total for the year at a negative 0.5%. Europe was up 4.1% pro forma on a constant currency basis. And the rest of world was only up slightly for the full year at 0.8% on the same basis.

As Don said, the integration impacted our rest of the world organization, which grew significantly lower than it should. As you will also see, the consumables sector for the year grew at 3.7% whereas technology and equipment was marginally negative, once again on a constant currency basis. In general, we believe our end markets are stable and growing.

Our performance should improve with better execution as we have discussed. Turning to margins for the quarter. We improved our adjusted margin rate versus a year ago, which was a function of stronger product and regional mix and higher volumes creating SG&A leverage.

For the year, adjusted operating margins declined as our expenses grew while our sales did not. We have made some growth investments that take 12 to 18 months to deliver and we should start to see the benefit of them in the back half of 2018.

Q4 reported GAAP EPS was a loss of $2.95 and the full year GAAP EPS was a loss of $6.86, both reflecting the impairment charges we have discussed. Adjusted EPS for Q4 was a positive $0.82 and for the full year 2017 adjusted EPS was $2.66, which is in line with the updated guidance provided in November.

As I said earlier, shipments was as planned in Q4, but the retail sales in equipment lagged our expectation. Cash flow from operating activities was $602 million, up 6.8% for the year despite increases in net trade working capital that needs to be reduced.

Operating cash flow is an important indicator of the health of our business and an area we can improve. CapEx for the year was $144 million. This is something that we will also monitor to ensure that capital spend is delivering appropriate returns.

During the quarter, you will note that we executed on two small transactions, one in preventive and one in endo. Over the year, we spent $153 million in small tuck-in acquisitions that will help us grow faster. Now turning to guidance. Our guidance includes the following assumptions.

Full-year constant currency sales growth around 3%, free any meaningful acquisitions or divestitures that have not closed yet. At the current exchange rates, this translates to reported revenues in the range of $4.2 billion to $4.25 billion for 2018.

As I discussed earlier, our revenue assumptions include about $40 million targeted reduction in dealer equipment inventory, which is costing us about a 1% growth rate overall. We expect to reduce a large portion of the dealer equipment inventory levels in the first part of the year, which will clearly impact the performance of the U.S. business.

Also keep in mind that Europe faces last year's IDS comps as well in Q1. We expect gross margins and operating margins to be flat to slightly down versus 2017 as underlying margin rate improvement in businesses are expected to be offset by foreign exchange effects and the headwind from the target inventory equipment reductions.

As Don mentioned, we are committed to delivering $100 million in operating cost savings by fiscal year 2019 and we expect more than half of that to be in 2018.

Although we expect the savings to result in increased margin over time, as I mentioned 2018 margins are being impacted by the foreign exchange, the inventory reductions and certain investments during the year. Below the operating line, we have also taken steps to reduce our interest expense by approximately $20 million.

Overall, we have a very low cost debt structure and ample availability to grow our businesses and make acquisitions. On taxes, as I said, there is a meaningful change in the non-GAAP effective tax rate from 17.4% in 2017 to now estimated 22% for 2018. Once again, this is based on the changes in the U.S.

tax legislation, which reduce our foreign tax credits and limit our abilities to defer foreign tax income. Please note, only approximately 35% of our revenues are from the U.S. CapEx guidance for the year is expected to be similar to 2017. There are clearly many variables to our EPS guidance throughout the income statement, which we manage.

Excluding $0.16 impact due to the change in non-GAAP effective tax rate I had outlined, our guidance of $2.70 to $2.80 for 2018 underlines EPS growth rate of 8% to 11%. We have not incorporated any material share repurchases into this guidance.

So to summarize, we believe we have taken the right actions to prepare for revenue, profit growth and strong cash flows in 2018 and margin improvement over time. And I turn the call over to Don for some final remarks..

Thanks Nick. And I would really like to thank you and your entire team. It's been a very busy time and you have done a lot of really great work and I have spend just a tremendous month getting to know you and the entire team as well as the DENTSPLY SIRONA team.

Before we open up to questions, I want to reemphasize how much we value your interest and we plan to organize an Investor Day at some point at one of our facilities. We also plan to provide you at that time with our long-term views on the business in terms of revenue growth, margin and capital allocation.

We look forward to getting that date on your calendar shortly. I will now turn the call over to the operator for questions.

Operator?.

[Operator Instructions]. And we will hear first from Glen Santangelo of Deutsche Bank..

Hi. Good morning. Don, just wanted to talk to you about underlying growth trends. First, on the consumable side.

2017, I think most saw that consumable sales were probably a little bit lower than expected, as dental volumes were a bit lower, but now that you are the last dental company to report, we have heard from Danaher, Schein and Patterson and the numbers are kind of a little bit all over the place.

So I just want to get your perspective, given your market share and your global reach, what are you all seeing in terms unit volumes and consumable sales on an organic basis?.

Glen, thanks for the question. It's good to talk to you again. We feel pretty comfortable that we are seeing solid growth in the consumable areas. And look, we are a global business. Our bellwether, preventive and restorative business has pretty good growth over this year and we think we are probably gaining a little bit of share.

So when you think about our consumable business on a constant currency basis growing about 4.6% and gaining a little bit of share, that would point to mid-single digit growth. So we feel that there is some good positive underlying trends.

We like to think that some of that is due to our market share and the programs we are putting into place in the market. Next question..

And we will hear next from Tycho Peterson of JPMorgan..

Hi. Good morning.

In light of the impairment charge and the recalibration of the underlying growth for some of the businesses, can you talk a little bit more about the strategy to reaccelerate growth overall? Where are you making incremental investments? Is it aligners, CAD/CAM, implants or other areas? And when can we start to see some returns? And can you also talk a little about inorganic? How actively you are looking at M&A at this point?.

Thanks for the question, Tycho. And I will start and I will ask Nick to amplify. Look, if you think about our CAD/CAM business, we are big, big believers in digital dentistry, chair side dentistry. And we are going to continue pushing that.

One of the things that I have noted just literally right off the bat is an opportunity though to how do we expand and take some of our equipment that's got great footprints and playing more aggressively in the digital impression space.

So that's the first thing we are doing and we are working immediately with our team to make sure that our customers understand that we in fact have equipment that will let them play in that space. So that's the first thing. The second, as you look at this space, it's gotten more competitive.

When you build a really, really good, high-profit, high-growth category like CAD/CAM, you are going to invite competitors.

So one of the things that we want to do is, first we want to continue driving innovation and I think we are pointing to, what we think will be a pretty good set of launches around the IDS show and beyond and we are going to continue to innovate in that space.

The other thing, Tycho, I think I mentioned in my script, as you go through that, I am really excited about the opportunity to bring much more disciplined sales force effectiveness into this area.

As we think about the relationship we have with our partners, both Patterson and Henry Schein, in the past we have relied a lot on them to create some of the demand and I think we are going to really begin to focus on how do we work with them, but also how do we take responsibility for creating the leads and ultimately driving our business.

And I think you are going to start to see that in the back half of the year when we have a little bit of time with our management team to get after it.

Nick, what would you want to add?.

Yes. Tycho, I would just add that I think this process has highlighted a great way to prioritize opportunities to invest, both to drive growth as well as improve the operations of the business. And we want to do those in the context of the guidance that we have provided you..

Next question?.

And we will hear next from Jeff Johnson of Baird..

Thanks. Good morning guys. Can you hear me okay..

Yes..

All right. Great. So Nick, maybe just to start with you or Don, either one. So over the last few years, I think we would all admit that innovation has been somewhat lacking at DENTSPLY. It sounds like you are going to take this first $50 million tranche of cost saving and reinvest it back into the business.

I don't think anybody is going to argue with that. But I would like to hear kind of that second tranche of the $50 million out of the total $100 million. Do you think that flows through better? Does the first $50 million drive some better topline? I am just trying to think all the way to 2019 at this point.

Do things start to flow through at a better rate there? And then Nick, just also wondering, you say no repurchase in the guidance.

How do you feel about repurchases, especially with your stock at these depressed levels? I can understand not putting it in guidance, but just conceptually how do you think about the level of your stock at these levels? Thanks..

Yes. Jeff, first, thanks for the questions. I will let Nick jump in, in a second. There were two questions in there and let's talk about what are we investing in and I completely agree. We need to jumpstart our innovation engine and that's where we are putting some of it.

Some of the savings are being driven right into innovation as well as sales force effectiveness. We need to improve some of the tactics, some of the messaging and some of the programs we are putting together. So that's the first thing.

The second, as we think about the back half and where we want to grow and how do we want to grow, look, we have just begun to scratch the surface of how do we cross-sell. I mean the example that we talked about a second, a minute ago was about how do we take our imaging equipment and work better with implants.

And we think we have got a lot of opportunities that way. When we talk about share repurchase, it's very, very early for me and I just want to emphasize, look, I want to grow and this is going to take us a little while to get our hands around this. This is why you don't see us coming right out the gate talking aggressively about share repurchase.

And the priorities are, how do we grow, are there technologies or M&A that we can be doing that will accelerate growth. And then after that, we will commit to returning excess cash to shareholders. But right now, it's going to take us a little bit of time to get our arms around it. But I would tell you, our priorities are growth.

Nick, I don't know what you want to add..

Yes. Jeff, I would just add, as you know and you heard, there are a lot of variables here and we feel very good of how we have brought them together to give you the guidance that we have provided. And in deference to the whole team and especially Don, there is a lot more work to do to prioritize.

I look at the cost savings, the growth investments and cash flow somewhat independently. The cost savings were targeted to go after inefficiencies in the business and we feel very comfortable that we will get those.

Separate from that, we are constantly looking at investments and have done some even in the last few months in order to either improve efficiencies or drive topline and those will overlap to some degree. And then cash flow will be the net result of an overall assessment of capital allocation strategies.

As I noted, the guidance does not include any meaningful share repurchases. So give us a little bit of a buffer and range in terms of what we determine will be the right allocation of capital in 2018 and we will obviously update you guys during the year as we progress..

Thanks for the question, Jeff.

Next question?.

And we will hear next from Robert Jones of Goldman Sachs..

Hi. Good morning, Don and Nick. Thanks for taking the question.

I guess looking at the components of your 2018 guidance, it does seem like you are implying flat to maybe even down EBIT margins for the year? I would have thought you would see some improvement with the distributor change now largely behind you, you guys talked about the synergies ramping.

So I guess how are you thinking about margins in 2018? I known, Nick, you mentioned seeing some margin pressure in the technology portfolio.

But are there any other specific dynamics or headwinds that we should be thinking about for the margins in 2018?.

Yes. Bob, very fair question and thank you. I would say the one notable element is, we do have significant foreign exchange variability, as I noted, with regard to the impairment. There is a significant cost structure for our European businesses and so that is definitely creating some margin pressure which also impacted the impairment value.

Net net, we actually benefit from foreign currency or dollar weakening, foreign currencies improving, given the global nature of this business. But on a margin basis, it actually creates a bit of a headwind which is reflected in the numbers.

We have a wide range of businesses and I can tell you, some will see margin improvement and in some other areas we will see some margin pressure. But the net amount is, as I said, slightly negative for the year is at least what we have penciled out..

Thanks Bob.

Next question?.

We will hear next from Jon Block of Stifel..

Great. Thanks guys. Good morning. I wanted to ask about long-term pricing power. There has been sort of that chatter that pricing power among the distributors may diminish over time. Schein has talked to repricing amongst DSOs. And I guess we need to see GPOs play out over time.

But what does that mean for you guys as the leading manufacturer in the market? I would love to get your thoughts on, if you are insulated from that risk a little, a lot? And maybe you can talk to how prices played into your revenue growth over the past 24 months? And Nick, how you see that evolving going forward? Thanks..

Yes. Jon, first, thanks for the question. Look, we are going to focus on developing innovative and differentiated products and we are going to charge fair value for them. We are working well with the DSOs. We have got a terrific relationship with them.

And as we view one of our imperatives to get after and focusing on the customer, we are going to work with them to understand how we can best serve their needs.

But as I said in my script, I am very excited about the idea that we are going to be developing innovative products that are going to be differentiated and we would expect to get differentiated pricing..

Yes. I would just add, Jon, that there is no notable distinction in our pricing strategies going into 2018 or beyond. That's really left down at the trade level, as it makes sense in the field.

And historically, yes, one of the things I liked about this business is that historically we are able to get reasonable price increases throughout our product lines..

And so we will hear next a question from Erin Wright of Credit Suisse..

Great. Thanks.

How should we think about the inventory build in the quarter? How is this communication between your distributor partners and the inventory management there? I guess, how are those supplier relationships progressing? What changes can be made at this point? And then more broadly, what does this say, if anything, on underlying demand trends on the equipment side? Thanks..

Yes. Erin, thank you for the question. First, we think we have got terrific relationships with both partners. As a matter of fact, at the mid-winter last week, we were able to spend a fair amount of time with the leadership of both companies and we reminded how important they are as part of our process.

One of the things we emphasized in those meetings is that we really need to get visibility to the end user, almost retail sales, if you will, because not only do we need to understand the underlying inventory, we also need to be able to adjust our programs on the fly to see what's working and what's not working.

So that's a program that both of us, both of the partners and us really want to emphasize and we think we have got good line on that. On the underlying trends, there's a couple of things on.

I mean, the first is, there is more competition and the second, as you are bringing Henry Schein on and Patterson and they now have options to sell multiple things. So I think it's taking a little while for them to figure out how to drive business.

In our meetings with both of our partners, we emphasize the need to grow our business and we think we put plans in place and we are pretty excited about where we are return to growth.

One of the underlying trends, though, that we need to conscious of, in some cases you may have emphasis moving away from the chairside dentistry and the CAD/CAM and moving into a little bit more into DI where they are looking to just by pieces of the system versus the entire system.

And again, we spent a fair amount of time with both Patterson and Henry Schein talking about what we think is just a much better patient experience, which is CAD/CAM and we want to be able to provide them as well as our own reps an opportunity to participate a little bit more aggressively in DI and that's why we are going to be pushing that as well.

Next question. Thanks..

And will hear from John Kreger of William Blair..

Thanks very much. Don, you mentioned sales force effectiveness a few times. Can you just go back to that? Our perception is, legacy SIRONA and legacy DENTSPLY had fairly different sales strategies.

So when you came in the door, what did you find? And do you feel like that the broad structure is in place? Or is there a fairly significant recasting that is necessary, from your point of view? Should be thinking about more salesman, less salesmen? Are you going to change where those sales forces are focused? Any elaboration will be helpful..

Thanks for the question, John. It is interesting. I think that there is a certain legacy DENTSPLY and a legacy SIRONA. One thing that I have actually brought in is the fact that I didn't come from either company and we are going to spend a lot of time as DENTSPLY SIRONA.

And whether the culture came from more of the consumable side which is relatively consistent program or whether it's a little bit more of the highs and lows that go along with equipment sales, we need to actually begin to do a much better job of leveraging across each other.

So when you think about our community of CEREC dentists, I mean that that to me is something that we need to leverage in a big, big way and we need to help the technology and equipment people learn to bring the consumables right along.

And one of the things, John, that we are going to spend time is making sure that all our sales forces have the opportunity to at least create leads or begin to work with our distributor partners to bring our other products in there. And that's going to be a pretty aggressive priority. The second is, I don't think it's a big recast.

I think some of it is, let's just talk about consistency. Consistency in targeting, consistency in message and in my mind, it is how do we bring sales force automation so that we are creating a great CRM program that allows the cross-selling that we are talking about.

So again, having spent time with the sales forces that have spent most of their lives in the consumables business, they get excited, hey, if we can create leads, terrific. When we were talking to the technology and equipment people, they have really not thought about how do I actually bring some of these consumables.

And an example that we cited in the script a little bit ago was actually how are we bringing implants and imaging together in a novel way. And that's got people's attention internally because it's starting to work. So I don't look at it as a big recast.

I acknowledge that there are some differences in the legacy cultures but we are going to operate as one company. We are going to operate aggressively and sales force effectiveness is probably the most immediate way that we can pull a lever to really start accelerating sales this year. Next question..

And we will hear from Yi Chen of H.C. Wainwright..

Thank you.

Do you expect to recognize more goodwill impairments during 2018?.

Just first, thanks for the question. Yes, the straightforward answer is no. We obviously have done a very thorough analysis of our business and the valuation of these assets and this is the determined impairment charge that we have calculated based on our long-range projections of the business..

Thank you. Next question..

And we will go to David Stratton of Great Lakes Review..

Good morning. Thanks for the question.

And I was wondering if you could talk a little bit more about your near to mid-term investment in underdeveloped geographies and how that differs from what DENTSPLY SIRONA has done in the past and kind of where you see that trending going forward?.

Yes. David, first, thanks for the question. It's really interesting when you come in and again at the end of week three, the thing that actually surprised me is just how much of a global company we are. We do are close to $1 billion in sales in some of these regions.

And we have had tremendous legacy presence there and we have just begun to scratch the surface of what it looks like in bringing other products to these regions. So look, do they have all the people they need, all the investments they need and all the resources they need, probably not.

And that's one of the things that I think I look forward to talking more about as we go forward in the future. But it's a region that's growing. It's got positive demographics. You have got the economies going the right way. And it's a place that we absolutely want to be growing. Next question..

And at this time there are no other questions in the queue. I will now turn the call back over to Mr. Casey, CEO of DENTSPLY SIRONA for any closing comments..

Well, first, thank you very much. We look forward to getting back and talking to you in May. And as I indicated, we will be setting up an Investment Day at one of our sites a little bit later in the year and we look forward to getting that into your calendars. So thank you very much and everyone have a great day..

Thank you..

And again, that does conclude our call. We would like to thank you for your participation. You may now disconnect..