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July 29, 2010 at 7:00 AM EDT

DENTSPLY International Inc. Reports Second Quarter 2010 Sales and Earnings

YORK, Pa., July 29, 2010 (GLOBE NEWSWIRE) -- DENTSPLY International Inc. (Nasdaq:XRAY) today announced sales and earnings for the three months ended June 30, 2010. Net sales in the second quarter of 2010 increased 2.2% to $565.1 million compared to $552.8 million reported for the second quarter of 2009. Net sales, excluding precious metal content, increased 1.5% to $519.3 million in the second quarter of 2010 and were negatively impacted by the strengthening of the U.S. dollar.

Net income attributable to DENTSPLY International for the second quarter of 2010 was $72.4 million, or $0.49 per diluted share, compared to $0.47 per diluted share in the second quarter of 2009. Net income attributable to DENTSPLY International in the second quarter of 2010 included the net of tax impact of restructuring and other costs of $0.2 million, an incremental net of tax interest charge of $0.7 million resulting from a credit risk adjustment to outstanding derivatives, and a net charge for income tax-related adjustments of $0.6 million, which in aggregate reduced earnings per share on a net basis by $.01 per diluted share. Net income attributable to DENTSPLY International in the second quarter of 2009 included the net of tax impact of restructuring and other costs of $2.2 million, a net of tax impact for acquisition-related activities of $0.5 million and a net charge for income tax-related adjustments of $0.2 million, which in aggregate reduced earnings per share on a net basis by $.02 per diluted share. For a reconciliation of GAAP and non-GAAP measures, see the attached table.

Bret Wise, Chairman and Chief Executive Officer, stated, "The dental markets have shown a modest recovery in the first half of 2010. In this environment, we are pleased that our performance has also gradually improved, allowing us to generate positive internal sales growth through the first half of the year. We continue to make investments in the business that we believe will accelerate our performance as the dental markets recover. Consistent with the trends established late last year, we are generating positive earnings growth and strong cash flows, despite the negative effects of the stronger U.S. dollar compared to many currencies. We expect these positive performance trends will continue for the remainder of 2010, although currency exchange rates are also expected to have negative effects on reported results. Based on current exchange rates, we are adjusting our full year earnings expectations to $1.86 to $1.94 per diluted share."   This guidance for earnings per diluted share is on a non-GAAP basis, excluding restructuring and other costs, acquisition-related activities and income tax-related adjustments.

ADDITIONAL INFORMATION

A conference call has been scheduled for Thursday, July 29, 2010 at 8:30 AM Eastern Time. A live broadcast is available through Shareholder.com by accessing DENTSPLY's website at www.dentsply.com. In order to participate in the call, dial (888) 765-5546 (for domestic calls) and (913) 312-1468 (for international calls). The Conference ID # is 3786104. At that time, you will be able to discuss the second quarter earnings with DENTSPLY's Chairman and Chief Executive Officer, Mr. Bret Wise; President and Chief Operating Officer, Mr. Chris Clark; and Senior Vice President and Chief Financial Officer, Mr. William Jellison.

A rebroadcast of the conference call will be available to the public online at the DENTSPLY website, www.dentsply.com. You may also access a dial-in replay for one week following the call at (888) 203-1112 (for domestic calls) or (719) 457-0820 (for international calls), Passcode # 3786104. 

DENTSPLY designs, develops, manufactures and markets a broad range of products for the dental market. The Company believes that it is the world's leading manufacturer and distributor of dental prosthetics, endodontic instruments and materials and ultrasonic scalers; the leading United States manufacturer and distributor of denture teeth, dental handpieces, dental x-ray film holders, film mounts and prophylaxis paste; and a leading worldwide manufacturer or distributor of dental injectable anesthetics, impression materials, orthodontics appliances, dental cutting instruments, dental implants and restorative dental materials, dental sealants and crown and bridge materials.  The Company distributes its dental products in over 120 countries under some of the most well-established brand names in the industry. 

DENTSPLY is committed to the development of innovative, high quality, cost-effective new products for the dental market.

The DENTSPLY International Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4306

This press release contains forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding future events or the future financial performance of the Company that involve substantial risks and uncertainties. Actual events or results may differ materially from those in the projections or other forward-looking information set forth herein as a result of certain risk factors. These risk factors include, without limitation; the continued strength of dental markets, the timing, success and market reception for our new and existing products, uncertainty with respect to governmental actions  with respect to dental products, outcome of litigation, continued support of our products by influential dental professionals, and changes in the general economic environment that could affect the business. Changes in such assumptions or factors could produce significantly different results. For an additional description of risk factors, please refer to the Company's most recent Form 10-K and its subsequent periodic reports on Forms 10-Q filed with the Securities and Exchange Commission.

NON-GAAP FINANCIAL MEASURES

In addition to the results reported in accordance with accounting principles generally accepted in the United States ("GAAP"), the Company provided adjusted operating income, adjusted net income attributable to DENTSPLY International and adjusted earnings per diluted share.  These adjusted amounts consist of GAAP amounts excluding (1) restructuring and other costs, (2) acquisition-related charges and (3) income tax-related adjustments.  Adjusted earnings per diluted share are calculated by dividing adjusted net income attributable to DENTSPLY International by diluted weighted-average shares outstanding.  The Company also provided an operational tax rate, which is the Company's effective tax rate, a GAAP measure, adjusted for certain one-time charges.  Adjusted operating income, adjusted net income attributable to DENTSPLY International, adjusted earnings per diluted share and operating tax rate are considered measures not calculated in accordance with GAAP, and therefore are non-GAAP measures.  These non-GAAP measures may differ from those of other companies.

The Company believes that the presentation of adjusted operating income, adjusted net income attributable to DENTSPLY International, adjusted earnings per diluted share and operating tax rate provides important supplemental information to management and investors seeking to understand the Company's financial condition and results of operations.  The non-GAAP financial information should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with GAAP.

DENTSPLY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
         
         
  Three Months Ended
June 30,
Six Months Ended
June 30,
  2010 2009 2010 2009
         
Net sales  $565,086  $552,832  $1,111,030  $1,059,781
Net sales, excluding precious metal content  519,281  511,527  1,016,767  977,177
         
Cost of products sold  277,491  267,164  541,397  508,381
         
Gross profit  287,595  285,668  569,633  551,400
 % of Net sales 50.9% 51.7% 51.3% 52.0%
 % of Net sales, excluding precious metal content 55.4% 55.8% 56.0% 56.4%
         
Selling, general and administrative expenses  182,383  183,817  370,417  361,804
         
Restructuring and other costs  243  3,125  4,923  4,695
         
Operating income  104,969  98,726  194,293  184,901
 % of Net sales 18.6% 17.9% 17.5% 17.4%
 % of Net sales, excluding precious metal content 20.2% 19.3% 19.1% 18.9%
         
Net interest and other expense  6,581  3,706  12,459  8,821
         
Income before income taxes  98,388  95,020  181,834  176,080
         
Provision for income taxes  25,042  24,440  46,297  45,571
         
Net income  73,346  70,580  135,537  130,509
 % of Net sales 13.0% 12.8% 12.2% 12.3%
 % of Net sales, excluding precious metal content 14.1% 13.8% 13.3% 13.4%
         
Less: Net income (loss) attributable to the noncontrolling interests  960  381  1,308  (1,433)
         
Net income attributable to DENTSPLY International  $72,386  $70,199  $134,229  $131,942
 % of Net sales 12.8% 12.7% 12.1% 12.4%
 % of Net sales, excluding precious metal content 13.9% 13.7% 13.2% 13.5%
         
Earnings per common share:        
 Basic  $0.50  $0.47  $0.92  $0.89
 Dilutive  $0.49  $0.47  $0.91  $0.88
         
Cash dividends declared per common share  $0.05  $0.05  $0.10  $0.10
         
Weighted average common share outstanding:        
 Basic  144,779  148,577  145,772  148,546
 Dilutive  146,939  150,057  148,048  149,822
 
 
DENTSPLY INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
     
     
  June 30,
2010
December 31,
2009
Assets    
     
Current Assets:    
     
Cash and cash equivalents  $340,347  $450,348
Accounts and notes receivable-trade, net  351,304  348,684
Inventories, net  284,394  291,640
Prepaid expenses and other current assets  113,197  127,124
Total Current Assets  1,089,242  1,217,796
     
Property, plant and equipment, net  399,077  439,619
Identifiable intangible assets, net  76,998  89,086
Goodwill, net  1,208,765  1,312,596
Other noncurrent assets, net  23,185  28,835
     
Total Assets  $2,797,267  $3,087,932
     
     
Liabilities and Equity    
     
Current liabilities  $322,374  $444,556
Long-term debt  462,976  387,151
Deferred income taxes  73,779  72,524
Other noncurrent liabilities  196,728  276,743
Total Liabilities  1,055,857  1,180,974
     
Total DENTSPLY International Equity  1,675,714  1,832,105
Noncontrolling interests  65,696  74,853
Total Equity  1,741,410  1,906,958
     
Total Liabilities and Equity  $2,797,267  $3,087,932
 
 
DENTSPLY INTERNATIONAL INC.
       
(In thousands, except per share amounts)
       
       
Operating Income Summary:      
       
The following tables present the reconciliation of reported GAAP operating income in total and on a percentage
of net sales, excluding precious metal content, to the non-GAAP financial measures.
       
Three Months Ended June 30, 2010      
    Operating
Income (Loss)
Percentage
of Net Sales,
Excluding Precious
Metal Content
       
Operating Income    $104,969 20.2%
       
Restructuring and Other Costs    243 0.1%
       
Adjusted Non-GAAP Operating Income    $105,212 20.3%
       
   
       
Three Months Ended June 30, 2009      
    Operating
Income (Loss)
Percentage
of Net Sales,
Excluding Precious
Metal Content
       
Operating Income    $98,726 19.3%
       
Restructuring and Other Costs    3,125 0.6%
       
Acquisition-Related Activities    1,173 0.2%
       
Adjusted Non-GAAP Operating Income    $103,024 20.1%
 
 
DENTSPLY INTERNATIONAL INC.
     
(In thousands, except per share amounts)
     
     
Earnings Summary:    
     
The following tables present the reconciliation of reported GAAP net income attributable to DENTSPLY International and on a per share basis to the non-GAAP financial measures.
     
Three Months Ended June 30, 2010    
  Income
(Loss)
Diluted
Per Share
     
Net Income Attributable to DENTSPLY International  $72,386  $0.49
     
Restructuring and Other Costs, Net of Tax and  Noncontrolling Interests  219  0.00
     
Credit Risk Adjustment to Outstanding Derivatives, Net of Tax  732  0.00
     
Income Tax-Related Adjustments  571  0.00
     
Rounding  --   0.01
     
Adjusted Non-GAAP Net Income Attributable to DENTSPLY International  $73,908 $0.50
     
   
     
Three Months Ended June 30, 2009    
  Income
(Loss)
Diluted
Per Share
     
Net Income Attributable to DENTSPLY International  $70,199  $0.47
     
Restructuring and Other Costs, Net of Tax and Noncontrolling Interests  2,185  0.01
     
Acquisition-Related Activities, Net of Tax and Noncontrolling Interests  519  0.00
     
Income Tax-Related Adjustments  212  0.00
     
Rounding  --   0.01
     
Adjusted Non-GAAP Net Income Attributable to DENTSPLY International  $73,115  $0.49
 
 
DENTSPLY INTERNATIONAL INC.
       
(In thousands)
       
       
Operating Tax Rate Summary:      
       
The following tables present the reconciliation of reported GAAP effective tax rate as a percentage of income before income taxes to the non-GAAP financial measure.
       
Three Months Ended June 30, 2010      
  Income Before
Income Taxes
Income Taxes Percentage
of Income Before
Income Taxes
       
As Reported - GAAP Operating Results  $98,388  $(25,042) 25.5%
       
Restructuring and Other Costs  243  (59)  
       
Credit Risk Adjustment to Outstanding Derivatives  1,192  (460)  
       
Income Tax-Related Adjustments  --   571  
       
As Adjusted - Non-GAAP Operating Results  $99,823  $(24,990) 25.0%
       
       
       
Three Months Ended June 30, 2009      
  Income Before
Income Taxes
Income Taxes Percentage
of Income Before
Income Taxes
       
As Reported - GAAP Operating Results $95,020  $(24,440) 25.7%
       
Restructuring and Other Costs  3,125  (940)  
       
Acquisition-Related Activities  1,173  (308)  
       
Income Tax-Related Adjustments  --   212  
       
As Adjusted - Non-GAAP Operating Results  $99,318  $(25,476) 25.7%
 
 
DENTSPLY INTERNATIONAL INC.
     
(In thousands, except per share amounts)
     
     
Operating Income Summary:    
     
The following tables present the reconciliation of reported GAAP operating income in total and on a percentage of net sales, excluding precious metal content basis to the non-GAAP financial measures.
     
Six Months Ended June 30, 2010    
  Operating
Income
(Loss)
Percentage
of Net Sales,
Excluding Precious
Metal Content
     
Operating Income  $194,293 19.1%
     
Restructuring and Other Costs  4,923 0.4%
     
Recent Acquisition-Related Activities  518 0.1%
     
Adjusted Non-GAAP Operating Income  $199,734 19.6%
     
   
     
Six Months Ended June 30, 2009    
  Operating
Income
(Loss)
Percentage
of Net Sales,
Excluding Precious
Metal Content
     
Operating Income  $184,901 18.9%
     
Restructuring and Other Costs  4,695 0.5%
     
Recent Acquisition-Related Activities  3,777 0.4%
     
Adjusted Non-GAAP Operating Income  $193,373 19.8%
 
 
DENTSPLY INTERNATIONAL INC.
     
(In thousands, except per share amounts)
     
     
Earnings Summary:    
     
The following tables present the reconciliation of reported GAAP net income in total and on a per share basis to the non-GAAP financial measures.
     
Six Months Ended June 30, 2010    
  Income
(Loss)
Diluted
Per Share
     
Net Income Attributable to DENTSPLY International  $134,229  $0.91
     
Restructuring and Other Costs, Net of Tax and Non-Controlling Interests  3,010  0.02
     
Credit Risk Adjustment to Outstanding Derivatives, Net of Tax  732  0.00
     
Recent Acquisition-Related Activities, Net of Tax and  Non-Controlling Interests  388  0.00
     
Income Tax-Related Adjustments  1,007  0.01
     
Adjusted Non-GAAP Net Income Attributable to DENTSPLY International  $139,366  $0.94
     
   
     
Six Months Ended June 30, 2009    
  Income
(Loss)
Diluted
Per Share
     
Net Income Attributable to DENTSPLY International  $131,942 $0.88
     
Restructuring and Other Costs, Net of Tax and Non-Controlling Interests  3,181  0.02
     
Recent Acquisition-Related Activities, Net of Tax and Non-Controlling Interests  1,638  0.01
     
Income Tax-Related Adjustments  495  0.00
     
Rounding  --   0.01
     
Adjusted Non-GAAP Net Income Attributable to DENTSPLY International  $137,256  $0.92
 
 
DENTSPLY INTERNATIONAL INC.
       
(In thousands)
       
       
Operating Tax Rate Summary:      
       
The following tables present the reconciliation of reported GAAP effective tax rate as a percentage of income before income taxes to the non-GAAP financial measure.
       
Six Months Ended June 30, 2010      
  Income Before
Income Taxes
Income Taxes Percentage
of Income Before
Income Taxes
       
As Reported - GAAP Operating Results  $181,834  $(46,297) 25.5%
       
Restructuring and Other Costs  4,923  (1,803)  
       
Credit Risk Adjustment to Outstanding Derivatives  1,192  (460)  
       
Recent Acquisition-Related Activities  518  (130)  
       
Income Tax-Related Adjustments  --   1,007  
       
As Adjusted - Non-GAAP Operating Results  $188,467  $(47,683) 25.3%
       
       
       
   
Six Months Ended June 30, 2009      
  Income Before
Income Taxes
Income Taxes Percentage
of Income Before
Income Taxes
       
As Reported - GAAP Operating Results  $176,080  $(45,571) 25.9%
       
Restructuring and Other Costs  4,695  (1,514)  
       
Recent Acquisition-Related Activities  3,777  (1,047)  
       
Income Tax-Related Adjustments  --   495  
       
As Adjusted - Non-GAAP Operating Results  $184,552  $(47,637) 25.8%
CONTACT:  DENTSPLY International Inc.
          William R. Jellison, Senior Vice President and
           Chief Financial Officer
          (717) 849-4243
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