DENTSPLY International Reports Record Results for Second Quarter 2011
Jul 28, 2011 (GlobeNewswire via COMTEX) --
- Record Second quarter net sales increased 7.8% and 8.7% excluding precious metals
- Earnings per diluted share grew 6.1% as reported, and were up 10.0% on an adjusted basis
- Raising guidance for fiscal 2011 earnings
YORK, Pa., July 28, 2011 (GLOBE NEWSWIRE) -- DENTSPLY International Inc. (Nasdaq:XRAY) today announced record sales and earnings for the three months ended June 30, 2011. Net sales in the second quarter of 2011 increased 7.8% to $609.4 million compared to $565.1 million reported for the second quarter of 2010. Net sales, excluding precious metal content, were $564.0 million, an 8.7% increase compared to $518.8 million the second quarter of 2010. The net sales growth, excluding precious metal content, was primarily the result of favorable foreign exchange rates, however we also had positive impacts from both recent acquisitions and internal sales growth, despite headwinds from reduced orthodontic supply and lower Japanese sales resulting from the natural disaster in that country.
Net income attributable to DENTSPLY, for the second quarter of 2011 was $74.2 million, or $0.52 per diluted share, representing growth of 6.1% compared to $0.49 per diluted share in the second quarter of 2010. Earnings per diluted share in the second quarter of 2011, on a non-GAAP basis, were $0.55, an increase of 10.0% from $0.50 in the first quarter of 2010. Earnings were positively impacted by organic growth, favorable foreign currency exchange rates and a lower effective tax rate, and were negatively impacted by the supply disruption of orthodontic products sourced from Japan and depressed sales within that region. A reconciliation of the non-GAAP measure to earnings per share calculated according to GAAP is presented on the attached table.
Bret Wise, Chairman and Chief Executive Officer, stated "We are pleased to report record sales and earnings in the second quarter and we are particularly pleased with the early sales performance from a number of new products launched during the first half of the year. Although our results have been negatively impacted by the supply outage of orthodontic products sourced from Japan, we continue to execute our contingency plans to mitigate the impact on both our near-term and long-term results. We expect that the negative impact will increase in the back half of the year and that we should begin to recover early in 2012. Based upon our performance in the first half of the year, our outlook for a stable or improving market in the second half, and our current assessment of our orthodontic contingency plans, we are increasing our guidance for adjusted earnings per diluted share in 2011, to a range of $1.92 to $2.00 from our previous guidance of $1.86 to $1.98 per diluted share."
"We continue to be very excited about our announced transaction to acquire Astra Tech AB from AstraZeneca. We have submitted the transaction for regulatory approval in all countries where it is required and remain optimistic that the transaction will close later this year. The transaction creates some compelling opportunities for us to grow our business and we look forward to welcoming the Astra Tech employees to DENTSPLY, when the transaction closes."
ADDITIONAL INFORMATION
A conference call has also been scheduled for today, Thursday, July 28, 2011 at 8:30 a.m. (Eastern Time). 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 live broadcast is available by accessing DENTSPLY's website at www.dentsply.com. In order to participate in the call, dial (888) 271-8594 (for domestic calls) and (913) 312-1487 (for international calls). The Conference ID # is 8303524.
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), pass code #8303524.
DENTSPLY designs, develops, manufactures and markets a broad range of professional dental products including dental implants, endodontic instruments and materials, orthodontic appliances, restorative materials, preventive materials and devices, and prosthetic materials and devices. The Company distributes its professional 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 professional 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) certain mark-to-market charges at an unconsolidated affiliated company, (2) acquisition-related charges, (3) income tax-related adjustments and, (4) restructuring and other costs. 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 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 Six Months Ended
June 30, June 30,
------------------------ ----------------------------
2011 2010 2011 2010
----------- ----------- ------------- -------------
Net sales $ 609,443 $ 565,086 $ 1,179,946 $ 1,111,030
Net sales, excluding precious
metal content 563,990 518,808 1,090,995 1,016,155
Cost of products sold 294,592 277,491 565,111 541,397
----------- ----------- ------------- -------------
Gross profit 314,851 287,595 614,835 569,633
% of Net sales 51.7% 50.9% 52.1% 51.3%
% of Net sales, excluding
precious metal content 55.8% 55.4% 56.4% 56.1%
Selling, general and
administrative expenses 210,984 182,383 411,751 370,417
Restructuring and other costs 6,863 243 7,496 4,923
----------- ----------- ------------- -------------
Operating income 97,004 104,969 195,588 194,293
% of Net sales 15.9% 18.6% 16.6% 17.5%
% of Net sales, excluding
precious metal content 17.2% 20.2% 17.9% 19.1%
Net interest and other expense 4,574 6,581 9,159 12,459
----------- ----------- ------------- -------------
Income before income taxes 92,430 98,388 186,429 181,834
Provision for income taxes 17,957 25,042 41,669 46,297
Equity in net income
attributable to unconsolidated
affiliated company 917 -- 93 --
----------- ----------- ------------- -------------
Net income 75,390 73,346 144,853 135,537
% of Net sales 12.4% 13.0% 12.3% 12.2%
% of Net sales, excluding
precious metal content 13.4% 14.1% 13.3% 13.3%
Less: Net income (loss)
attributable to the
noncontrolling interests 1,154 960 1,533 1,308
----------- ----------- ------------- -------------
Net income attributable to
DENTSPLY International $ 74,236 $ 72,386 $ 143,320 $ 134,229
=========== =========== ============= =============
% of Net sales 12.2% 12.8% 12.1% 12.1%
% of Net sales, excluding
precious metal content 13.2% 14.0% 13.1% 13.2%
Earnings per common share:
Basic $ 0.53 $ 0.50 $ 1.01 $ 0.92
Dilutive $ 0.52 $ 0.49 $ 1.00 $ 0.91
Cash dividends declared per
common share $ 0.05 $ 0.05 $ 0.10 $ 0.10
Weighted average common share
outstanding:
Basic 141,052 144,779 141,331 145,772
Dilutive 143,373 146,939 143,694 148,048
DENTSPLY INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2011 2010
------------- -------------
Assets
Current Assets:
Cash and cash equivalents $ 671,710 $ 540,038
Accounts and notes
receivable-trade, net 404,661 344,796
Inventories, net 337,200 308,738
Prepaid expenses and other
current assets 138,842 121,473
------------- -------------
Total Current Assets 1,552,413 1,315,045
Property, plant and
equipment, net 442,957 423,105
Identifiable intangible
assets, net 86,770 78,743
Goodwill, net 1,391,289 1,303,055
Other noncurrent assets, net 183,214 138,003
------------- -------------
Total Assets $ 3,656,643 $ 3,257,951
============= =============
Liabilities and Equity
Current liabilities $ 430,426 $ 360,091
Long-term debt 654,873 604,015
Deferred income taxes 81,324 72,489
Other noncurrent liabilities 408,787 311,444
------------- -------------
Total Liabilities 1,575,410 1,348,039
Total DENTSPLY International
Equity 2,042,230 1,839,386
Noncontrolling interests 39,003 70,526
------------- -------------
Total Equity 2,081,233 1,909,912
------------- -------------
Total Liabilities and
Equity $ 3,656,643 $ 3,257,951
============= =============
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, 2011
Percentage
of Net
Sales,
Ex
Operating Precious
Income Metal
(Expense) Content
----------- ----------
Income from Operations $ 97,004 17.2%
Acquisition Related Activities 5,866 1.0%
Restructuring and Other Costs 997 0.2%
Orthodontics Business Continuity
Costs 720 0.1%
----------- ----------
Adjusted Non-GAAP Operating Earnings $ 104,587 18.5%
=========== ==========
Three Months Ended June 30, 2010
Percentage
of Net
Sales,
Ex
Operating Precious
Income Metal
(Expense) Content
----------- ----------
Income from Operations $ 104,969 20.2%
Restructuring and Other Costs 243 0.1%
----------- ----------
Adjusted Non-GAAP Operating Earnings $ 105,212 20.3%
=========== ==========
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, 2011
Diluted
Income Per
(Expense) Share
---------- --------
Net Income Attributable to DENTSPLY International $ 74,236 $ 0.52
Acquisition Related Activities, Net of Tax 6,164 0.04
Restructuring and Other Costs, Net of Tax 591 --
Orthodontics Business Continuity Costs, Net of Tax 442 --
Gain on Fair Value Adjustments at an Unconsolidated
Affiliated Company (1,181) (0.01)
Credit Risk Adjustment to Outstanding Derivatives, Net
of Tax (783) --
Income Tax-Related Adjustments (977) (0.01)
Rounding -- 0.01
---------- --------
Adjusted Non-GAAP Net Income Attributable to DENTSPLY
International $ 78,492 $ 0.55
========== ========
Three Months Ended June 30, 2010
Diluted
Income Per
(Expense) Share
---------- --------
Net Income Attributable to DENTSPLY International $ 72,386 $ 0.49
Credit Risk Adjustment to Outstanding Derivatives, Net
of Tax 732 0.00
Restructuring and Other Costs, Net of Tax and
Noncontrolling Interests 219 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
========== ========
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, 2011
Percentage
Pre-tax Income of Pre-tax
Income Taxes Income
---------- ----------- ----------
As Reported - GAAP Operating Results $ 92,430 $ (17,957) 19.4%
Acquisition Related Activities 6,265 (488)
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 $ 99,137 $ (19,615)
========== =========== 19.8%
Three Months Ended June 30, 2010
Percentage
Pre-tax Income of Pre-tax
Income Taxes Income
---------- ----------- ----------
As Reported - GAAP Operating Results $ 98,388 $ (25,042) 25.5%
Credit Risk Adjustment to Outstanding
Derivatives 1,192 (460)
Restructuring and Other Costs 243 (59)
Income Tax-Related Adjustments -- 571
---------- ----------- ----------
As Adjusted - Non-GAAP Operating
Results $ 99,823 $ (24,990)
========== =========== 25.0%
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.
Six Months Ended June 30, 2011
Percentage
of Net
Sales,
Ex
Operating Precious
Income Metal
(Expense) Content
----------- ----------
Income from Operations $ 195,588 17.9%
Acquisition Related Activities 5,992 0.6%
Restructuring and Other Costs 1,505 0.1%
Orthodontics Business Continuity
Costs 720 0.1%
----------- ----------
Adjusted Non-GAAP Operating Income $ 203,805 18.7%
=========== ==========
Six Months Ended June 30, 2010
Percentage
of Net
Sales,
Ex
Operating Precious
Income Metal
(Expense) Content
----------- ----------
Income from Operations $ 194,293 19.1%
Restructuring and Other Costs 4,923 0.4%
Acquisition-Related Activities 518 0.1%
----------- ----------
Adjusted Non-GAAP Operating Income $ 199,734 19.7%
=========== ==========
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, 2011
Diluted
Income Per
(Expense) Share
----------- --------
Net Income Attributable to DENTSPLY International $ 143,320 $ 1.00
Acquisition Related Activities, Net of Tax 6,241 0.04
Restructuring and Other Costs, Net of Tax 874 0.01
Orthodontics Business Continuity Costs, Net of Tax 442 0.00
Gain on Fair Value Adjustments at an Unconsolidated
Affiliated Company (260) (0.00)
Credit Risk Adjustment to Outstanding Derivatives, Net
of Tax (783) (0.01)
Income Tax-Related Adjustments (781) (0.01)
Rounding -- 0.01
----------- --------
Adjusted Non-GAAP Net Income Attributable to DENTSPLY
International $ 149,053 $ 1.04
=========== ========
Six Months Ended June 30, 2010
Diluted
Income Per
(Expense) 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
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
=========== ========
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, 2011
Percentage
of Pre-tax
Pre-tax Income
Income Taxes Income
----------- ----------- ----------
As Reported - GAAP Operating Results $ 186,429 $ (41,669) 22.4%
Acquisition Related Activities 6,391 (538)
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 $ 193,770 $ (43,405)
=========== =========== 22.4%
Six Months Ended June 30, 2010
Percentage
of Pre-tax
Pre-tax Income
Income Taxes Income
----------- ----------- ----------
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%
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: DENTSPLY International Inc.
CONTACT: Derek Leckow Vice President Investor Relations (717) 849-7863