I think the first half of the year is going to be the toughest part. And I think you’re going to see a much, much healthier spine business in the back-end of the year for ZimVie. So that’s kind of how I see it. But I really do think that there’s enough disruption, enough volatility out there that we just felt like, we should give ourselves some room to make the changes we need to do to really get to a point where we have the portfolio and the commercial team that we need that can actually win that in this market for us.
Robbie Marcus: Great. And maybe one more for me, as you think about, the below-the-line items it’s taking a significant chunk of EPS out for next year. How are you thinking about your EPS growth over the long run? And when do you think you could get back to 2022 levels? Thanks.
Rich Heppenstall: Yeah. Hey Robbie, this is Rich. So we spent a fair amount of time looking at EPS. And so I boil down the EPS change year-over-year and there was a couple of different — actually four different categories, right? So EPS actually was higher year-over-year by about $0.23 or so give or take given higher profitability. And then, some lower depreciation and amortization expense which obviously increases net income. That’s offset by some higher share-based compensation and a little bit of dilutive impact. And so the net of those two numbers is about a 4% decline, year-over-year on EPS between those two items. Where the rubber really meets the road on EPS is in two items. And the first one is interest expense, which is about $0.75.
So if you recall, our debt is SOFR plus one in three quarters. And when we spun that debt was priced at about 2.3%, we’re at about 6.7% today. And so obviously the fixed floating-rate debt so obviously the Fed increase, in the interest rate is impacting us because of our debt load. And that’s the biggest piece which is about $0.76. And then, the other piece is tax expense. What we’ve talked to you about — and the investment community about is, that our adjusted income tax expense is generally speaking about 25% of adjusted profit before tax. In 2022, there were a number of items that were cleaned up post-spin that we actually realized a tax benefit of about — a tax rate of about minus 3.8% of adjusted profit before-tax. And just that — that’s just not going to recur, right?
I mean, you can’t obviously have a favorable — a native tax rate in perpetuity. And so that normalizes into 2023, as we cleaned up a lot of these, kind of post-spin transactions in 2022. So if you think about 2024 and beyond, 2023 is actually probably more of a re-baseline based on the current environment relative to interest expense and tax expense. And then we’ll be able to grow from there.
Robbie Marcus: Okay. So fair to say, it could be a while before you get back given the current interest and tax forecast?
Vafa Jamali: Yeah. If interest expense is the highest part of it, I think that that will be the right approach.
Rich Heppenstall: Yeah. I mean if you look at the entirety of it Robbie, right, I mean about $1.20 is between interest and having a negative tax rate in 2022.
Robbie Marcus: Got it. Okay, great. Thanks a lot.
Rich Heppenstall: Thank you.
Operator: Thank you. And our next question coming from the line of Matt Miksic with Barclays. Your line is open.
Unidentified Analyst: Hi. This is Sarah on for Matt. Thanks for taking our question. Just one from us and I know we just talked about this. But in dental if you can just go a little bit deeper into the trends specifically OUS US I know you called out the VBP. Is there any additional color you can provide there and any visibility in terms of timing of when things can turn around?
