Printer Friendly Version View printer-friendly version << Back

July 31, 2012 at 7:15 AM EDT

DENTSPLY International Reports Record Second Quarter Results

News

For further information contact:    

Derek Leckow
Vice President
Investor Relations
(717) 849-7863                                                          

  • Record second quarter net sales grew 30% on a constant currency basis excluding precious metals 

  • Record earnings per diluted share of $0.56 on a GAAP reported basis and $0.62 on an adjusted basis 

York, PA - July 31, 2012 - DENTSPLY International Inc. (NASDAQ: XRAY) today announced sales and earnings for the three months ended June 30, 2012.  Net sales in the second quarter of 2012 increased 25.2% to $763.0 million from $609.4 million in the second quarter of 2011.  Net sales, excluding precious metals content, of $698.5 million increased 23.8% from $564.0 million in the second quarter of 2011.  Constant currency net sales growth, excluding precious metals content, in the second quarter was 30.0%, driven largely by acquisitions, but also supported by internal sales growth in the U.S., Europe, and Rest of World categories.    

Net income attributable to DENTSPLY International for the second quarter of 2012 was $80.8 million, or $0.56 per diluted share, compared to $74.2 million, or $0.52 per diluted share in the second quarter of 2011.  On an adjusted basis, excluding certain non-GAAP items, earnings increased to $0.62 per diluted share from $0.56 per diluted share in the second quarter of 2011.  A reconciliation of the non-GAAP measure to earnings per share calculated on a GAAP basis is provided in the attached table.  

Bret Wise, Chairman and Chief Executive Officer, stated "DENTSPLY continued to deliver strong results in the second quarter with record sales and earnings, and solid sequential improvement in operating margins.  Our  business continues to perform well, particularly in light of macroeconomic issues in the U.S. and Europe and a significant weakening of the euro during the quarter.  In light of the recent trading range of the euro, we are updating our full year adjusted earnings expectations to a range of $2.18 to $2.24 from the prior range of of $2.22 to $2.30 per diluted share."  

Additional Information

A conference call is scheduled to begin today at 8:30 a.m. (Eastern Time) and a live webcast and accompanying slides will be accessible on DENTSPLY's website www.dentsply.com.  In order to participate in the call, dial (888) 801-6497 for domestic calls, or (913) 312-0706 for international calls.  The Conference ID # is 4125185.  At that time, you will be able to discuss second quarter 2012 results 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 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), Replay Passcode # 4125185. 

DENTSPLY International Inc. is a leading manufacturer and distributor of dental and other healthcare products.  The Company believes it is the world's largest manufacturer of professional dental products.  For over 110 years, DENTSPLY's commitment to innovation and professional collaboration has enhanced its portfolio of branded consumables and small equipment.  Headquartered in the United States, the Company has global operations with sales in more than 120 countries.  Visit www.dentsply.com for more information about DENTSPLY and its products.  

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 and medical markets, the timing, success and market reception for our new and existing products, uncertainty with respect to governmental actions with respect to dental and medical products, outcome of litigation, continued support of our products by influential dental and medical professionals, our ability to successfully integrate acquisitions, risks associated with foreign currency exchange rates, 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 US GAAP, the Company provides adjusted net income attributable to DENTSPLY International and adjusted earnings per diluted common share.  These adjusted amounts consist of US GAAP amounts excluding, net of tax (1) acquisition related costs, (2) restructuring and other costs, (3) amortization of purchased intangible assets, (4) orthodontics business continuity costs, (5) income related to credit risk adjustments, (6) certain fair value adjustments at an unconsolidated affiliated company, and (7) income tax related adjustments.  Adjusted earnings per diluted common share is calculated by dividing adjusted net income attributable to DENTSPLY International by diluted weighted-average common shares outstanding.  Adjusted net income attributable to DENTSPLY International and adjusted earnings per diluted common share are considered measures not calculated in accordance with US GAAP, and therefore are non-US GAAP measures.  These non-US GAAP measures may differ from other companies.  Income tax related adjustments may include the impact to adjust the interim effective income tax rate to the expected annual effective tax rate.

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

DENTSPLY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
Net sales $ 762,994 $ 609,443 $ 1,479,407 $ 1,179,946
Net sales, excluding precious metal content 698,480 563,990 1,364,105 1,090,995
Cost of products sold 355,525 294,592 679,188 565,111
Gross profit 407,469 314,851 800,219 614,835
% of Net sales 53.4 % 51.7 % 54.1 % 52.1 %
% of Net sales, excluding precious metal content 58.3 % 55.8 % 58.7 % 56.4 %
Selling, general and administrative expenses 296,034 210,984 600,388 411,751
Restructuring and other costs 2,528 6,863 3,765 7,496
Operating income 108,907 97,004 196,066 195,588
% of Net sales 14.3 % 15.9 % 13.3 % 16.6 %
% of Net sales, excluding precious metal content 15.6 % 17.2 % 14.4 % 17.9 %
Net interest and other expense 13,321 4,574 27,288 9,159
Income before income taxes 95,586 92,430 168,778 186,429
Provision for income taxes 14,875 17,957 29,590 41,669
Equity in net income (loss) attributable
to unconsolidated affiliated company 1,329 917 (2,919 ) 93
Net income 82,040 75,390 136,269 144,853
% of Net sales 10.8 % 12.4 % 9.2 % 12.3 %
% of Net sales, excluding precious metal content 11.7 % 13.4 % 10.0 % 13.3 %
Less: Net income attributable to noncontrolling interests 1,276 1,154 2,220 1,533
Net income attributable to DENTSPLY International $ 80,764 $ 74,236 $ 134,049 $ 143,320
% of Net sales 10.6 % 12.2 % 9.1 % 12.1 %
% of Net sales, excluding precious metal content 11.6 % 13.2 % 9.8 % 13.1 %
Earnings per common share:
Basic $ 0.57 $ 0.53 $ 0.95 $ 1.01
Dilutive $ 0.56 $ 0.52 $ 0.93 $ 1.00
Cash dividends declared per common share $ 0.055 $ 0.050 $ 0.110 $ 0.100
Weighted average common shares outstanding:
Basic 141,737 141,052 141,729 141,331
Dilutive 143,863 143,373 143,908 143,694

DENTSPLY INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2012 2011
Assets
Current Assets:
Cash and cash equivalents $ 53,210 $ 77,128
Accounts and notes receivable-trade, net 462,233 427,709
Inventories, net 403,195 361,762
Prepaid expenses and other current assets 186,544 146,304
Total Current Assets 1,105,182 1,012,903
Property, plant and equipment, net 587,285 591,445
Identifiable intangible assets, net 947,747 791,100
Goodwill, net 2,036,084 2,190,063
Other noncurrent assets, net 194,458 169,887
Total Assets $ 4,870,756 $ 4,755,398
Liabilities and Equity
Current liabilities $ 748,203 $ 724,073
Long-term debt 1,482,783 1,490,010
Deferred income taxes 334,673 249,822
Other noncurrent liabilities 316,098 407,342
Total Liabilities 2,881,757 2,871,247
Total DENTSPLY International Equity 1,951,569 1,848,077
Noncontrolling interests 37,430 36,074
Total Equity 1,988,999 1,884,151
Total Liabilities and Equity $ 4,870,756 $ 4,755,398

DENTSPLY INTERNATIONAL INC.
(In thousands)
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, 2012
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 108,907 15.6 %
Amortization of Purchased Intangible Assets 12,685 1.9 %
Acquisition-Related Activities 4,902 0.7 %
Restructuring and Other Costs 2,910 0.4 %
Orthodontics Business Continuity Costs 345 - %
Adjusted Non-GAAP Operating Income $ 129,749 18.6 %
Three Months Ended June 30, 2011
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 97,004 17.2 %
Acquisition-Related Activities 5,866 1.0 %
Amortization of Purchased Intangible Assets 2,245 0.4 %
Restructuring and Other Costs 997 0.2 %
Orthodontics Business Continuity Costs 720 0.1 %
Adjusted Non-GAAP Operating Income $ 106,832 18.9 %

DENTSPLY INTERNATIONAL INC.
(In thousands)
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.
Six Months Ended June 30, 2012
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 196,066 14.4 %
Amortization of Purchased Intangible Assets 28,047 2.1 %
Acquisition-Related Activities 12,436 1.0 %
Restructuring and Other Costs 4,640 0.3 %
Orthodontics Business Continuity Costs 961 - %
Adjusted Non-GAAP Operating Income $ 242,150 17.8 %
Six Months Ended June 30, 2011
Operating Income (Loss) Percentage of Net Sales, Excluding Precious Metal Content
Operating Income $ 195,588 17.9 %
Acquisition-Related Activities 5,992 0.6 %
Amortization of Purchased Intangible Assets 4,511 0.4 %
Restructuring and Other Costs 1,505 0.1 %
Orthodontics Business Continuity Costs 720 0.1 %
Adjusted Non-GAAP Operating Income $ 208,316 19.1 %

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, 2012
Income Diluted
(Expense) Per Share
Net Income Attributable to DENTSPLY International $ 80,764 $ 0.56
Amortization of Purchased Intangible Assets, Net of Tax 9,007 0.06
Acquisition -Related Activities, Net of Tax and Non-Controlling Interests 2,993 0.02
Restructuring and Other Costs, Net of Tax 1,990 0.02
Orthodontics Business Continuity Costs, Net of Tax 213 -
Gain on Fair Value Adjustments at an Unconsolidated Affiliated Company, Net of Tax (1,062 ) (0.01 )
Income Tax-Related Adjustments (5,378 ) (0.03 )
Adjusted Non-GAAP Net Income Attributable to DENTSPLY International $ 88,527 $ 0.62
Three Months Ended June 30, 2011
Income Diluted
(Expense) Per Share
Net Income Attributable to DENTSPLY International $ 74,236 $ 0.52
Acquisition -Related Activities, Net of Tax 6,164 0.04
Amortization of Purchased Intangible Assets, Net of Tax 1,497 0.01
Restructuring and Other Costs, Net of Tax 591 0.01
Orthodontics Business Continuity Costs, Net of Tax 442 0.01
Credit Risk Adjustment to Outstanding Derivatives, Net of Tax (783 ) (0.01 )
Income Tax-Related Adjustments (977 ) (0.01 )
Gain on Fair Value Adjustments at an Unconsolidated Affiliated Company, Net of Tax (1,180 ) (0.01 )
Adjusted Non-GAAP Net Income Attributable to DENTSPLY International $ 79,990 $ 0.56

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.
Six Months Ended June 30, 2012
Income Diluted
(Expense) Per Share
Net Income Attributable to DENTSPLY International $ 134,049 $ 0.93
Amortization of Purchased Intangible Assets, Net of Tax 19,989 0.14
Acquisition-Related Activities, Net of Tax 7,789 0.05
Loss on Fair Value Adjustments at an Unconsolidated Affiliated Company, Net of Tax 3,595 0.03
Restructuring and Other Costs, Net of Tax 3,154 0.02
Orthodontics Business Continuity Costs, Net of Tax 621 -
Income Tax-Related Adjustments (5,414 ) (0.03 )
Adjusted Non-GAAP Net Income Attributable to DENTSPLY International $ 163,783 $ 1.14
Six Months Ended June 30, 2011
Income Diluted
(Expense) Per Share
Net Income Attributable to DENTSPLY International $ 143,320 $ 1.00
Acquisition -Related Activities, Net of Tax 6,241 0.05
Amortization of Purchased Intangible Assets, Net of Tax 3,006 0.02
Restructuring and Other Costs, Net of Tax 874 0.01
Orthodontics Business Continuity Costs, Net of Tax 442 -
Gain on Fair Value Adjustments at an Unconsolidated Affiliated Company, Net of Tax (260 ) -
Income Tax-Related Adjustments (781 ) (0.01 )
Credit Risk Adjustment to Outstanding Derivatives, Net of Tax (783 ) (0.01 )
Adjusted Non-GAAP Net Income Attributable to DENTSPLY International $ 152,059 $ 1.06

DENTSPLY INTERNATIONAL INC.
(In thousands, except per share amounts)
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, 2012
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - GAAP Operating Results $ 95,586 $ (14,875 ) 15.6 %
Amortization of Purchased Intangible Assets 12,685 (3,678 )
Acquisition-Related Activities 4,902 (1,909 )
Restructuring and Other Costs 2,910 (920 )
Orthodontics Business Continuity Costs 345 (132 )
Loss on Fair Value Adjustments at an Unconsolidated Affiliated Company (95 ) 29
Income Tax-Related Adjustments - (5,378 )
As Adjusted - Non-GAAP Operating Results $ 116,333 $ (26,863 ) 23.1 %
Three Months Ended June 30, 2011
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - GAAP Operating Results $ 92,430 $ (17,957 ) 19.4 %
Acquisition-Related Activities 6,265 (488 )
Amortization of Purchased Intangible Assets 2,245 (746 )
Restructuring and Other Costs 997 (407 )
Orthodontics Business Continuity Costs 720 (278 )
Credit Risk Adjustment to Outstanding Derivatives (1,275 ) 492
Income Tax-Related Adjustments - (977 )
As Adjusted - Non-GAAP Operating Results $ 101,382 $ (20,361 ) 20.1 %

DENTSPLY INTERNATIONAL INC.
(In thousands, except per share amounts)
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, 2012
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - GAAP Operating Results $ 168,778 $ (29,590 ) 17.5 %
Amortization of Purchased Intangible Assets 28,047 (8,058 )
Acquisition-Related Activities 12,436 (4,647 )
Restructuring and Other Costs 4,640 (1,486 )
Orthodontics Business Continuity Costs 961 (340 )
Loss on Fair Value Adjustments at an Unconsolidated Affiliated Company 178 (54 )
Income Tax-Related Adjustments - (5,414 )
As Adjusted - Non-GAAP Operating Results $ 215,040 $ (49,589 ) 23.1 %
Six Months Ended June 30, 2011
Pre-tax Income Income Tax Benefit (Expense) Percentage of Pre-Tax Income
As Reported - GAAP Operating Results $ 186,429 $ (41,669 ) 22.4 %
Acquisition-Related Activities 6,391 (538 )
Amortization of Purchased Intangible Assets 4,511 (1,505 )
Restructuring and Other Costs 1,505 (631 )
Orthodontics Business Continuity Costs 720 (278 )
Credit Risk Adjustment to Outstanding Derivatives (1,275 ) 492
Income Tax-Related Adjustments (781 )
As Adjusted - Non-GAAP Operating Results $ 198,281 $ (44,910 ) 22.6 %
###
 

HUG#1630611
}