2022 Full Year Guidance and Strategic Outlook
Statement Regarding Non-GAAP Measures (Continued)
Management uses these non-GAAP measures to measure the Company's operating and financial performance.
The items excluded from the non-GAAP measures set forth above have been excluded for the following reasons:
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With respect to Adjusted Gross Profit, Adjusted Operating Profit, Adjusted Net Income, Adjusted Diluted Earnings Per Share and Adjusted EBITDA:
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We exclude the amortization of acquisition-related and other intangible assets because the amount and timing of such charges are significantly impacted by the timing,
size, number and nature of the acquisitions we consummate. While we have a history of significant acquisition activity, we do not acquire businesses on a predictable
cycle, and the amount of an acquisition's purchase price allocated to intangible assets and related amortization term are unique to each acquisition and can vary
significantly from acquisition to acquisition. Exclusion of this amortization expense facilitates more consistent comparisons of operating results over time between our
newly-acquired and long-held businesses, and with both acquisitive and non-acquisitive peer companies. We believe, however, that it is important for investors to
understand that such intangible assets contribute to revenue generation and that intangible asset amortization related to past acquisitions will recur in future periods
until such intangible assets have been fully amortized.
With respect to the other items excluded from Adjusted Gross Profit, Adjusted Net Income, Adjusted Operating Profit, Adjusted Diluted Earnings Per Share and
Adjusted EBITDA, we exclude these items because they are of a nature and/or size that occur with inconsistent frequency, occur for reasons that may be unrelated to
Envista's commercial performance during the period and/or we believe that such items may obscure underlying business trends and make comparisons of long-term
performance difficult.
With respect to core sales, we exclude (1) the effect of acquisitions and divested product lines because the timing, size, number and nature of such transactions can vary
significantly from period-to-period and between us and our peers, which we believe may obscure underlying business trends and make comparisons of long-term performance
difficult, (2) sales from discontinued products because discontinued products do not have a continuing contribution to operations and management believes that excluding such
items provides investors with a means of evaluating our on-going operations and facilitates comparisons to our peers, and (3) the impact of currency translation because it is
not under management's control, is subject to volatility and can obscure underlying business trends.
With respect to the FCF Measure, we adjust for payments for additions to property, plant and equipment (net of the proceeds from capital disposals) to demonstrate the amount
of operating cash flow for the period that remains after accounting for the Company's capital expenditure requirements.
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