My name is Lori and I will be your conference facilitator this morning. At this time, I would like to welcome everyone to Envista Holdings Corporation’s Third Quarter 2019 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]I will now turn the call over to Mr. John Bedford, Vice President of Investor Relations. Mr. Bedford, you may begin your conference.

Hello, everyone, and thanks for joining us on the call. With us today are Amir Aghdaei, our Chief Executive Officer; and Howard Yu, our Chief Financial Officer. I'd like to point out that our earnings release, the slide presentation, supplementing today's call and the reconciliations and other information required by SEC Regulation G relating to any non-GAAP financial measures provided during the call are all available on the Investors section of our website, www.envistaco.com.The audio portion of this call will be archived on the Investors section of our website later today, under the heading Events and Presentations and will remain archived until our next quarterly call. A replay of this call will also be available until November 5, 2019. During the presentation, we will describe some of the more significant financial measures to Envista. Envista operated as part of Danaher Corporation until its separation in September 2019 and historical financial measures prior to the separation presented in this announcement were derived from Danaher's accounting records and are presented on a standalone basis.During the presentation we will also describe some of the more significant factors that impacted year-over-year performance. The supplemental materials describing additional factors that impacted year-over-year performance are available on our website. Unless otherwise noted, all references in these remarks and supplemental materials to company-specific financial metrics relate to the continuing operation of the company in the third quarter of 2019, and all references to period to period increases or decreases in financial metrics are year-over-year.We may also describe certain products and devices, which have application submitted and pending for certain regulatory approvals or are available only in certain markets. During the call, we will make forward-looking statements within the meaning of the federal securities laws, including statements regarding events or developments that we believe or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings, and actual results might differ materially from any forward-looking statements that we make today. These forward-looking statements speak only as of the date they are made, and we do not assume any obligation to update any forward-looking statements, except as required by law.With that I'd like to turn the call over to our Chief Executive Officer, Amir.

Thanks, John, and welcome everyone to Envista's first earning call. We are pleased with the results of our first quarter as a public company. The team has made traction on several cost initiatives resulting in earning, margins and cash flow that exceeded our expectations. We began the process of building Envista in 2016 and have made tremendous progress since the consolidation, simplification and reinvesting in this business. In September 2019, we completed our IPO and now listed in the New York Stock Exchange. This event marked another milestone in our journey to transform Envista.I would like to thank our 12,000 employees for their hard work over the past several months to make this happen. I would also like to thank Danaher for the opportunity to stand on our own as well as dedication and support from the many Danaher associates, who help us along the way. Before moving into the details, I would like to spend a few minutes describing Envista, our purpose and our priorities. Envista is a global dental company with $2.8 billion in annual revenue and leading positions in traditional equipment and consumables as well as a specialty products and technologies, which include our implants and orthodontics business.Over 60% of our portfolio is composed of specialty consumables and imaging, which generally have attractive growth rates and profit margins. At Envista, our purpose is to partner with professionals to improve lives. We know that dental professionals do more than creating healthy beautiful smiles. They create confidence. To achieve their goals, they need a champion. We will be there for them. At Envista, we’re uniquely positioned to be their champion. A combination of continuous improvement that buy us toward action, a deep respect for professionals we serve, innovative product and services involved in us to partner with dental professionals.…

Thanks, Amir. That concludes our formal comments. Lori, we're now ready for questions.

Thank you. [Operator Instructions] Our first question comes from the line of Tycho Peterson of J.P. Morgan.

Hey, thank you. Amir, I think most people are honing in on your comments on the equipment side and it looks like a little bit of a deterioration versus what you were modeling. Can you talk a little bit more about what's going on in the channel there? And what gives you confidence that we could see a recovery heading into next year?

Thank you, Tycho. Even destocking action and portfolio action that we have taken over the last several years, business is in a much better place now than it has ever been. We’re impacted by slightly lower demand in equipment for Q3 and we anticipate that is going to continue in Q4. We anticipate the business to improve as we move into 2020.

And I guess along those lines, can you also comment on what you saw in the channel on consumables? I mean given where we've been on this journey of destocking and distributor dynamics, can you just talk a little bit about what you’re seeing there?

We do not anticipate any inventory related issues as we go forward. We think they have good insights into the sell-out and sell-in and we have seen positive impact in our consumable business due to actions that we have taken in the past several quarters.

And Tycho, this is Howard. Maybe to comment as well, we are seeing stability there on the consumables side there. And also the one thing to keep in mind is our outlook for 2020 is not changing. We still have a low single digit growth what we previously talked about. We feel really good about the setup largely around the MPIs and Spark as that becomes more meaningful in 2020, as well as our emerging markets continue to stay strong.

Okay. And then on the divestiture front, this is something you hadn't talked a lot about at the time of the IPO, but I think there was always some talk that you would go down this path. Can you talk a little bit about where we are in that process? I guess, you said you'll be done on the value implant side outside the U.S. by year end.

Yeah. So there are two questions. One is about divestiture, the other one, if I'm not mistaken, on the value side. The value implant, we have gone through a rationalization and consolidation outside the U.S. and China. Our intention is to have a clear position [indiscernible] with our Nobel premium position and its geography with our value position. That transformation is undergoing. We expect that most of that to be behind us seen by end of the year. Under portfolio management, we have evolved our business into more specialty, higher margin, higher consumer of business and we anticipate continue that over time. Breadth of our portfolio is advantage, especially in emerging markets and DSOs. Of course, if you decide to do any moves to be more modest action with clear view of improving our core growth and our margin.

Okay. I'll leave it at that. Thank you.

Your next question comes from the line of Jeff Johnson of Baird.

Good morning, Jeff.

Mr. Johnson, please go ahead. If your line is muted, please unmute it sir.

Sorry. Can you hear me now?

Yes, loud and clear.

All right, there is no response from that line. Your next question comes from Elizabeth Anderson of Evercore ISI.

Hi, good morning guys. Congrats on the first quarter out of the gate here. I was just wondering if you could comment a little bit on the – obviously you had a nice margin improvement in the quarter and any changes to how you're viewing that pace of margin over the next couple of quarters? Just comment on that thing.

Yes, Elizabeth thanks. We're clearly pleased with the traction that we've seen here in the quarter around margins. And we see that as a result of some of the moderations around the investments. That said, we continue to full speed ahead with regards to investing in our innovation, our MPIs. We want to make sure that we get those to the market consistent with what we've indicated in the past. As it relates to 2020, we'll provide some more detailed guidance when we get to Q4 earnings. But again, we feel really good about our positioning here coming out of Q3.

Okay, perfect. That's helpful. And just in regards to Spark, how are you viewing the transition from sort of your like key opinion leaders with that product to sort of a more generalist orthodontist like audience? Is it – there are certain factors. Is production is gating it? Could you sort of talk us through like what are the milestones you're sort of hitting on the path to expanding that product more broadly?

Thank you. We have learned this from Danaher and we have experienced that in the past probably 12 months to 18 months, a lot more obviously that a phase approach would serve us well, serve our customers well. And that approach talks about taking a small group of people, working with them very closely in a very intimate relationship, answering their needs, making sure that they are really productive and we are responding to their needs very quickly. And in case of Spark, what we did with some of the leading customers that we have a very close relationship for years. We used that as an opportunity to really develop a DBS – EVS model from trainee to the third case rep. The team went through extensive work. This is what continuous improvement comes in place to demonstrate that we can really change the office workflow.When we optimize that, when we did in place we are adding more to that group. We are signing up the next group and the next group. Our intention is to follow that phase approach, months after months, quarter after quarter. The Spark would be a meaningful growth factor for us in 2020 and years after that. Our intention is to make sure every customer of ours is successful in that process. We want to make sure that team demonstrates the ability that we are able to create something that it is sustainable and make a difference for our customers and their patients over time.

Great. That’s very helpful. Thank you.

Your next question comes from Jeff Johnson of Baird.

Thank you guys. Can you hear me now?

Yup, loud and clear.

Yes, sorry about that guys. So, Amir that was helpful on Spark there on the gating and timeline. Could you maybe do the same for N1? Just how should we think about U.S. approval? How does the European launch broaden out here over the next few quarters? Just any insight on N1 would be helpful. Thank you.

Thank you, Jeff. We believe N1 is a major innovation in implant procedure, addresses large barriers for implant procedures, which in our opinion are patient fear, procedure time, total treatment time or time to teeth. This is because of different protocols that we’re using. We’re using two drills versus six, in some cases more than six, lower drilling speed, 50 RPMs. And the design is completely different than what we have had before. It’s patented. We have had it in hands of some of our key customers that are proven and demonstrated to us that this is something that it is a game changer.We believe that this is a significant positive change for dental implant procedures and implant adoption. We anticipate, as I mentioned in the remark, we have demonstrated that during Q3 to at large number of customers. We anticipate that the first launch in EU in 2020, there'll be already have CE Mark approved and other geographies to follow. We’re following the standard procedure of working with FDA. We want to make sure that we built infrastructure and capacities to be ready. We will follow a very similar process as I outlined with the Spark. Today’s approach taking a small number of our key customers, making them successful, take the next phase and continue to expand it over time. Our intention is to improve the growth of our implant business year-after-year. N1 plays a really important role in that transformation.

That's helpful. Thank you. And then maybe as a follow up, I just want to make sure you have discontinued products that you're now kind of quantifying for us that is separate from the rationalization efforts. Those are two different buckets I think we're talking about. I just want to confirm that. And then I also just want to get a sense, Amir, my gut is that you have some, some maybe control of the timing of those rationalization efforts. Maybe you're being a little more aggressive here, trying to set 2020 up to just look as clear and clean of a picture for investors as possible. Is that a fair way of thinking about what's going on here in the near-term on some of those rationalization effort?

Yes, so Jeff, let me answer that first part of the question as it relates to discontinue. And these are products that we are no longer marketing and then that's a differentiation between that and rationalization. So when we talk about let's say the value implant rationalization that does not feed into the discontinued conversation that we're talking about here. That rationalization is in areas outside of the U.S. and China and specifically targeting areas where we have multi-brands of value products. And so, where we've decided that our go-to market strategy there was to emphasize one value product versus multiple products. And so that's the rationalization that we're talking about. That will continue to be baked into our core.

Jeff to answer your question about being aggressive in here, being part of Danaher, we had an opportunity to gain support for aggressively go after this brand consolidation and we continued that through the past 12 months and 18 months. The rationalization of our value implant continues by end of this year. And as you described, we are trying to be aggressive in going through that process as quickly as possible. But our expectation is as we had said before for 2020 that low single digit growth and improvement in our margin with a continuous improvement years after that.

Thank you.

Your next question comes from the line of Nathan Rich of Goldman Sachs.

Great. Thanks for the question. Amir, you, you had mentioned the inorganic opportunities you see. How quickly do you think the organization can then kind of go after those and deploy capital towards M&A? And can you kind of just describe from your vantage point what you feel like the pipeline looks like at this point?

Very good. Thank you, Nathan. To begin with our bias is towards deploying free cash flow toward M&A to improve growth in margins. You have seen in our Q3 performance that our intention of freeing up [indiscernible], gives us an opportunity to really accelerate that approach is exactly what we want to do. With [indiscernible] coming on board having tremendous amount of experience in our board, I expect that they can help us in order to accelerate our approach in that front. We will likely have a very modest dividend, but it still to be determined with the full board. We have mentioned in the past that $100 million $150 million new revenue add 3% to 5% of our inorganic growth. We have evolved the business to be a lot more into specialty, higher margin, higher consumable business and we anticipate that that will continue over time. We have as part of Danaher has a standard process in place for M&A.We do calculation. We have continued to do calculation in the past three, four years. We have a rigor in place on a monthly basis to take a look at the top priorities, the head of our business development myself, the head of businesses are actively involved in this process. We continue to look for opportunities, for collaboration and partnership and we feel really good now being independent, have the agility, have access to the cash, have a board that is supporting us to really improve that moving forward. Our intention is to build the better Envista over time. M&A could help us to accelerate that model.

Thanks. I appreciate those comments. Howard, I wanted to follow up on just the – on margins and just the guidance for 4Q. It seems that implied margins are maybe kind of flat to down slightly on a sequential basis. Is that a fair way to look at it? And can you maybe just kind of talk through the dynamics there as we look kind of the 3Q to 4Q margins?

Sure. Thanks, Nate. We're actually encouraged by the better than anticipated traction that we got here in the quarter in Q3. And actually I think that our sequential improvement slightly on the margin side, but we are committed as we indicated earlier to our investment in our business and making sure that we get those MPIs launched consistent with what we said in the past. And so we will continue to focus there on the R&D side. The one thing to keep in mind as well, Nate, is that there are some corporate costs that get layered in here in the quarter, so that that might be impacting some of that calculation as well. But we think that the actions that we've taken overall we're confident and we're going to see those expanding our margins and we'll see that read through in 2020 as well.

Great. Thanks for the time.

Yes.

Yes.

Your next question comes from the line of Brandon Couillard of Jefferies.

Okay, thanks. Good afternoon. Amir, back on the equipment business, I'm curious if you could share any color with us in terms of whether there was any differentiation across the portfolio between the imaging treatment centers hand pieces. And specifically curious if you've seen perhaps the pricing environment and imaging deteriorate a little bit or whether this is just a more a function of unit demand.

Yes. Hi, Brandon. I will let Howard to comment on the pricing, but let me ask here the question between various segments. Our imaging business is in a really good shape. We started the transformation of Envista by focusing on imaging. As you will know and we have communicated at one point we had over seven different brands in imaging. We have started the consolidation back in 2016, mid 2016, 2017 as step by step besides consolidating brand R&D centers, software capabilities and putting products out there that has been very well received. Our OP3D system is scalable system, addressing the need of practitioners. And they can scale that up as they need to. That has been a very positive outlook and impact in the market. It continued to be excited about the imaging possibilities. We see imaging as an important part of our overall digital workflow with clear connection to our implant as well as the ortho business.We have also spent significant amount of resources and energy around software. DTX is an important part of our differentiation and growth strategy as we go forward. We have been able to demonstrate that by releasing very similar to what we talk on Spark and N1. In a small group of people demonstrating the capabilities, we're in daily contact with them to take the input, revise the process moving forward. Our intention is to have an open infrastructure, but all of our products is step by step of DTX any graded into them as we go forward. Our consumable business has seen a modest growth over time and has stabilized as Howard talked about. Inventory challenges that we have to deal with in 2017 and 2018 to a large degree behind us. We feel good about the team progress on consumable side through promotional activities, working closely with our partners, creating demand and meeting the requirement of the market. There's ample opportunities on the consumable side in emerging markets. And we are really excited about what we see happening in China specifically both on the imaging as well as on the consumable side. We have been spending energy in building product in China to meet the demand of the local customers and we’re beginning to see the outcome of those made in China for China now.

I think, Brandon, maybe just to answer your question a little bit on the pricing, you know, consistent with what we've seen over the last few quarters, pricing is down modestly, let's call it about a 100 bps. I won’t note though that on the premium side of our implants, we saw a very modest uptake on the pricing here in the quarter. And really goes to emphasize the importance for us in this environment to really have a solid cadence on NPIs and then also being selective obviously around our promotions to maximize growth.

Okay, thanks. And then just one question on high growth markets, it looks like those were up about low single digits I think in the period. Was there a tough comp there perhaps in some of those non-Chinese markets? And what are you penciling in for those areas in the fourth quarter? Thanks.

We saw a little bit of weakness on the equipment market specific in Latin America. And we expect that to continue throughout Q4, but our specialty businesses not only in China and other geographies continue to make progress. We have made significant investment in the past several of years built the infrastructure, built the capabilities, registration, training and education, and try to replicate the China model in other geographies. We think high growth market, emerging market is going to be an important part of our growth story as we go forward and we're excited about.

Yes, and Brandon just, as it relates to high growth markets going forward, we do anticipate that to continue to grow on a more consistent basis at the mid-single digits to even high-single digits. Of course, as you mentioned China leading the way with another solid double-digit performance.

All right, thank you.

Your next question comes from the line of [indiscernible] of Credit Suisse.

Great, thanks. A follow-up on the equipment question before, I guess, can you partout exactly what you're seeing in the North American market in particular? Just given some of the sensitivity in that market of late. And then also I guess on that front also on the consumable side as well. If you could comment on the North American trends specifically, that would be great? Thanks.

Thank you, Aaron. Describe the headline and macro uncertainties fundamentals really haven't changed that much. We're not seeing a broad-based sign of weakness in consumable, specialty businesses. We’re seeing some slowing in develop market basically in our equipment – basic equipment business. Value implant rationalization is not a macro event, it’s something that we have internally have taken on and we’re going through that transformation. Geographically, we continue to see growth in emerging market, but in a much slower pace in U.S. and Western Europe. Developed markets, weaker equipment business a little bit of sluggish but a stable consumable business. Within the underlying trend in a specialty market remains solid. Our auto business had another quarter of mid-single digit growth and implant X value implant rationalization is in a really good place.Everything we can transition as we have done continue that transformation over time to deliver what we expect in 2020 and a low-single digit, and better margin performance as we go forward. Our expectations are not modest around our equipment – traditional equipment and consumable business. We do not expect a radical shift over time that built our model, assuming that that will continue and we will see improvement in our growth and margin in spite of that challenges that maybe a hit.

Okay, great. Thanks. And then, is there any update on X – on the X Pro Intraoral Scanner and when you think that launch could be or should we think about the competitive positioning of that product and should we also anticipate you’ll showcase a new product launches kind of that greater New York in the upcoming month? Thanks.

Thank you, Aaron. iOS Intraoral Scanner an important part of our digital ecosystem and a category that we're committed to having an offering. We started this and we believe that it is really important to have workflow integration. We believe DTX iOS imaging integrated together to be a key differentiation overtime. It allows practitioners to have a simple workflow from diagnostic to planning to execution and see productivity element of it as well as the clinical outcome that they're looking for. As with other major products that we talked about already we have found the most effective way of launching a product is a phase rollout. Well then I’ll continue to update you expo today is a hands up – in the hands of a small group of customers. They are giving us feedback. We’re improving the product and we're going to continue to expand that as we go forward.

Okay. Thank you.

Your next question comes from the line of David Lewis of Morgan Stanley.

Hi, this is Nathan on for David today. Thanks for taking the question. I wanted to follow-up quickly on margins. I was wondering if you could parse out or provide a little bit more color on some of the components of the expansion here in third quarter. For example, how much of that was driven by sales mix, cost initiatives, price, et cetera?

Yes, hold on just a sec here. Yes, I think that a significant portion of the margin improvement comes by way of the cost savings. We've talked about that in the past. Talking and targeting the $90 million historically and going forward really the $60 million and so we see that coming in three buckets. One of them would be around productivity and we're seeing some of that come through largely around the manufacturing, consolidation as well, and we're seeing some of that yield forward as well.And then we see some indirect rationalization. We talked about that historically. We have over 20,000 suppliers and so we're working through that process and obviously some just straight spend control as well. And we're also seeing some material savings, I'd say about a quarter of that savings is coming by way of purchasing price variance as well as value engineering on the cost side. I mean overall we're seeing some of that coming by way of just the growth in specialty and then clearly the equipment and consumers being down a little bit as well.

Great. That's very helpful. And then just a quick follow-up on price. Our understanding is that your price and your guidance is modeled at status quo. And if you look at the past several quarters, price has gotten slightly worse from 50 bps to 100 bps. I guess do you see this as the new status quo at 100 bps for a quarter? And a follow-up, do you see this as a risk at all to 2020 guidance?

Now we don't see this as a risk to 2020 guidance. I think we've baked in our price assumptions as well. Nathan, we do see that pricing here is about 100 bps down, maybe a little bit higher on the equipment and consumables business. But as I indicated on the premium side of our implant, we had a slightly higher pricing and again the importance in this environment is clearly having a solid cadence around MPIs and we believe that is in our game plan.

Great. Thank you.

Your next question comes from the line of Jon Block of Stifel.

Thanks guys. Good morning. Maybe I'll just start-off on the traditional consumable number I mean, I think you said up low-single-digits. It seems like a pretty good number. I'm just curious, how do you think this is fairing relative to industry? Is that actually call it a share gaining number if you isolate a traditional consumables? And then is there anything that's sort of call out for general trends across the industry guys as the quarter progress? And then I've just got a quick follow-up. Thanks.

Yes, thank you Jon. We think on the categories that we participate on traditional consumable; we're keeping pace with the market. As you well know, $7 billion market, many categories on restorative and infection prevention and so on and so forth. On those categories that we are present; we have put energy around innovation, improving our operational capabilities, improving our commercial capabilities. We're keeping track with the market.We don't anticipate a significant change in the upcoming quarter next year. We don't expect that to become a major up or down factors. We’ve seen that is stabilized and that's what we have anticipated and we have planned for. Upon saying that it is important category and I'm going to do everything possible in order to make sure the cadence of a new product introduction out there, our commercial execution is up to the expectation and expand our footprint in high growth market, emerging market in ongoing basis.

Okay. Very helpful. And then just to pivot over to call it specialty, I'm just curious how you view the clear aligner market call it over the next couple of years. So there's a bunch of new competitors. You guys have a very solid product with Spark. You view this as predominantly taking share, call it from the big incumbent or do you think that everyone pushing clear aligners actually accelerates the market as it seems a clear aligners Spark case for you guys, arguably as revenue and gross profit dollar accretive for Envista verses wires and brackets case. So we just love your thoughts there? Thanks guys.

Yes, thank you Jon. Just to begin with, wire and bracket business as I mentioned has been mid-single digit grower continuously in the past three quarters. I'm really pleased with the outcome of the work that we have seeing here. New product introduction, commercial execution, training and education has had a such a huge impact in expanding our business outside the developed market. We are committed to that market. We're going to continue to invest and continue to grow that.I want to come back to the clear aligner. From our point of view clear aligner has three distinct segments. There is a direct to consumer segment, which we’re not participating and obviously players in that space is targeting at really different demographic, is simpler case, is expanding the market versus cannibalizing the auto, is not a replacement for aligner using more complex auto cases.The next category is GP market. Important category, important segment but that hasn't been our focus. Our on-core business is built based on relationship, based on participation of orthodontists and we have had that relationship for decades. We have outstanding customer relationship with our on-core customer. Our intention is to give them a wide range of choices. They are the one that they're telling us that is Spark [indiscernible] that they have had, is giving them the clinical treatment options or myth complex cases. That's where we are focused on. That group of customers already using clear aligners, and as we expand we think that there's opportunity for them as the market growth for us to participate in that growth. We do not see that as a capitalization of a backend environment, we see that as an add-on to a market that already exist with the customers that we already have relationship with the product that meet the requirement. We’ve only started this process. As you well know this is a market that has significant offsite and we think that we can make a difference in here for our customers and for our patients.

Next question comes from the line of John Krieger of William Blair.

Thanks very much. Howard, question in the third quarter I think the discontinued product headwind was 1.5% in specialty, and 1% in equipment and consumables. What do you expect that to be in Q4 and then in 2020?

Yes. I think that it would be fairly consistent in Q4, John as we think about the 1.5% specialty and the 1% on equipment and consumables. And going forward in 2020, maybe we'd hold-off until we provide some guidance and more direction there at the end of the Q4 there.

Okay. And then the other thing I wanted to clarify, you touched on pricing a few times in the call. Can you just clarify where you're seeing price across your portfolio improve versus deteriorate versus stay the same?

I think that broadly we are seeing some modest price deterioration. I would say that the area where we have seen little bit of price accretion would be on the premium side of the dental implants. I think when you think about the equipment and consumables overall that 100 bps, down 50 bps to 150 bps depending on the product line is pretty consistent with what we've seen. Really with the market dynamics around private label, DSO and e-commerce we're going to see that annual pressure on price. And again our emphasis to combat that is really to develop a solid cadence around NPI, and also being selective about some of the promotions to help maximize growth.

Great. Thank you. And then one final one, the slowing that you noted in the U.S. and Western Europe, was that – did you see it at all and consumables or just in the basic equipment?

Mostly on the basic equipment, John, that's where we saw majority of that implication impact.

Great. Thank you.

Next question comes from the line of [indiscernible] of Bank of America Merrill Lynch.

Thanks for taking the question. Just I guess one kind of last cleanup, thinking about basic equipment and diving I guess a little bit deep, but, just talk a little bit about what's been going on in the chair's business and there’s been some fluctuations in terms of the type of products you've offered. And as you think about heading into next year, are there any moving pieces related to that area of the business? And if not – is there any other kind of let’s say John's question about discontinued products? Anything else that's like one timer nature aside from the new product ramp that we should think about in terms of getting back to that low-single-digit growth rate you're targeting?

So we constantly look at our portfolio and try to figure out where the synergy is, where we can answer, our customer needs in a best possible format. We have continued to do that. We’ve started that process of transformation by looking at overlap between our products and we found out that we have products that they were offering the same set of capabilities and the different brands, different channel. So we started that transformation in the past several years. What you see on some of those discontinued product is the outcome of exactly what we’ve done in the past several years.In the case of chair, we used to have four different banks only a couple of years ago. We have consolidated and simplified our portfolio. We're going to continue to do that to make sure that we meet the needs of our customer base. In the case of – we mentioned, in the case of emerging market, DSOs having a complete portfolio is really important. We want to make sure that we are able to meet the needs of our customer demand in a long-term. At the same time, we are trying to make this portfolio to be higher growth, higher margin, more consumable, more specialty, more emerging market over time. Doing that gives us an opportunity to review our offering and make sure that we are really best positioned, M&A given us another angle in order to be able to accelerate that transformation. I'm excited about what we have today and the opportunities ahead of us. Thank you.

Okay, thanks.

Thank you. We have reached the allotted time for questions. So now we turn the call back to Amir for any closing remarks.

Thanks everybody, we're out all day for follow-ups.

Thank you for participating in today's conference call. You may now disconnect your line and have a wonderful day.