UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report July 26, 2006
(Date of earliest event reported)
DENTSPLY INTERNATIONAL INC
(Exact name of Company as specified in charter)
Delaware 0-16211 39-1434669
(State of Incorporation) (Commission (IRS Employer
File Number) Identification No.)
221 West Philadelphia Street, York, Pennsylvania 17405
(Address of principal executive offices) (Zip Code)
(717) 845-7511 (Company's telephone number
including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
_____ Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
_____ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
_____ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
_____ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. - Results of Operations and Financial Condition
The following information is furnished pursuant to Item 2.02, "Results of
Operations and Financial Condition."
On July 26, 2006, the Company issued a press release disclosing its second
quarter 2006 sales and earnings. This earnings release references net sales
excluding precious metal content and net income excluding certain unusual items,
both of which could be considered measures not calculated in accordance with
generally accepted accounting principles (non-GAAP measures). Due to the
fluctuations of precious metal prices and because the precious metal content of
the Company's sales is largely a pass-through to customers and has minimal
effect on earnings, the Company reports sales both with and without precious
metal content to show the Company's performance independent of precious metal
price volatility and to enhance comparability of performance between periods.
Earnings from continuing operations excluding certain unusual items is presented
to enhance the comparability between periods. A copy of the Company's press
release is attached hereto as Exhibit (99.1) and is hereby incorporated by
reference.
Item 9.01. Financial Statements and Exhibits
(a) Financial Statements - Not applicable.
(b) Exhibits:
99.1 The Dentsply International Inc. Second Quarter 2006 earnings release
issued July 26, 2006 as referenced in Item 2.02.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
DENTSPLY INTERNATIONAL INC
(Company)
/s/William R. Jellison
William R. Jellison
Senior Vice President and
Chief Financial Officer
Date: July 26, 2006
NEWS
For Further
Information
Contact:
William R. Jellison FOR IMMEDIATE RELEASE
Senior Vice President and
Chief Financial Officer
(717) 849-4243
DENTSPLY International Inc.
Reports Record Second Quarter 2006 Sales and Earnings
York, PA - July 26, 2006 -- DENTSPLY International Inc. (NASDAQ-XRAY) today
announced sales and earnings for the quarter ended June 30, 2006. Net sales
increased 6.2% to $472.4 million compared to $444.8 million reported for the
second quarter of 2005. Net sales, excluding precious metal content, increased
5.8% in the second quarter of 2006. Sales growth improved in the U.S. and also
within the broader consumable products category.
Net income for the second quarter of 2006 was $59.3 million, or $0.37 per
diluted share, an increase of 5.7% in diluted earnings per share compared to net
income of $57.9 million, or $0.35 per diluted share in the second quarter of
2005. Net income in the second quarter of 2006 includes the net of tax impact of
both expensing stock options of $2.9 million, ($0.02 per diluted share), and of
restructuring costs of $1.6 million, ($0.01 per diluted share). The second
quarter of 2006 includes a net charge to income tax expense of $0.8 million
($0.01 per diluted share) from tax related adjustments, while the second quarter
of 2005 included a net reduction of income tax expense of $1.8 million ($0.01
per diluted share) related to the settlement of audits of tax returns associated
with prior periods. All share and per share amounts have been adjusted to
reflect the stock split.
On an adjusted basis, earnings, excluding restructuring costs and tax
adjustments, but including the expensing of stock options in both periods, which
constitutes a non-GAAP measure, were $61.7 million or $0.39 per diluted share in
the second quarter of 2006, compared to $53.1 million or $0.33 per diluted share
in the second quarter of 2005. This represents an 18.2% increase in diluted
earnings per share. For a reconciliation of this non-GAAP measure to earnings
per share calculated according to GAAP, see the attached table.
Gary Kunkle, Chairman and Chief Executive Officer, commented that, "We are very
pleased with the continued strength of our global business. DENTSPLY's breadth
and depth of products, combined with our global footprint provide further
opportunities to build and strengthen our business. Improvements in our
operational performance provide us with the ability to further strengthen sales,
marketing, and research and development activities."
Mr. Kunkle also stated, "Our solid performance, in the first half of the year,
provides us additional confidence in the prospects for the full year. We expect
to increase our internal investment in growth initiatives over the next few
quarters; however we are also increasing the top-end of our year-end 2006
earnings guidance to $1.40-1.44 per dilutive share, including the expensing of
stock options, but excluding restructuring charges and tax adjustments."
DENTSPLY will hold a conference call on Thursday, July 27, 2006 at 8:30 AM
Eastern Time. To access the call, dial 877-885-5820 (for domestic calls) and
706-643-9578 (for international calls). The Conference I.D. # is 2739364. This
conference call will be broadcast live on the Internet at www.dentsply.com. An
audio replay of the conference call will be available for two weeks. To access
the replay, please dial (800) 642-1687 (for domestic calls) and (706) 645-9291
(for international calls).
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, precious metal dental
alloys, dental ceramics, endodontic instruments and materials, prophylaxis
paste, dental sealants, ultrasonic scalers, and crown and bridge materials; the
leading United States manufacturer and distributor of dental handpieces, dental
x-ray film holders, film mounts and bone substitute/grafting materials; and a
leading worldwide manufacturer or distributor of dental injectable anesthetics,
impression materials, orthodontic appliances, dental cutting instruments and
dental implants. 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.
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 our 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
Annual Report on Form 10-K and its subsequent periodic reports on Forms 10-Q
filed with the Securities and Exchange Commission.
Non-GAAP Financial Measures
DENTSPLY believes that the non-GAAP financial information provided in this
release may be useful to investors for comparison purposes because the Company
has historically provided similar information. 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 INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- -------------------
2006 2005 2006 2005
-------- -------- -------- --------
NET SALES $ 472,444 $ 444,834 $ 903,440 $ 851,809
NET SALES - Ex Precious Metals 423,524 400,478 806,939 769,540
COST OF PRODUCTS SOLD 230,290 217,551 441,150 415,585
GROSS PROFIT 242,154 227,283 462,290 436,224
% OF NET SALES 51.3% 51.1% 51.2% 51.2%
% OF NET SALES - Ex Precious Metals 57.2% 56.8% 57.3% 56.7%
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 152,926 146,376 298,357 284,924
RESTRUCTURING AND OTHER COSTS 2,636 (228) 7,333 40
-------- -------- -------- --------
INCOME FROM OPERATIONS 86,592 81,135 156,600 151,260
% OF NET SALES 18.3% 18.2% 17.3% 17.8%
% OF NET SALES - Ex Precious Metals 20.4% 20.3% 19.4% 19.7%
NET INTEREST AND OTHER (INCOME) EXPENSE 526 682 (675) 457
-------- -------- -------- --------
PRE-TAX INCOME 86,066 80,453 157,275 150,803
INCOME TAXES 26,750 22,560 47,955 43,861
-------- -------- -------- --------
NET INCOME $ 59,316 $ 57,893 $ 109,320 $ 106,942
====== ====== ======= =======
% OF NET SALES 12.6% 13.0% 12.1% 12.6%
% OF NET SALES - Ex Precious Metals 14.0% 14.5% 13.5% 13.9%
EARNINGS PER SHARE
-BASIC $ 0.38 $ 0.36 $ 0.69 $ 0.66
-DILUTIVE $ 0.37 $ 0.35 $ 0.68 $ 0.65
DIVIDENDS PER SHARE $ 0.0350 $ 0.0300 $ 0.0700 $ 0.0600
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
-BASIC 156,814 160,274 157,402 160,836
-DILUTIVE 159,834 163,216 160,446 163,882
DENTSPLY INTERNATIONAL INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
2006 2005
------------- --------------
ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 475,417 $ 434,525
ACCOUNTS AND NOTES RECEIVABLE-TRADE, NET 299,048 254,822
INVENTORIES, NET 229,373 208,179
OTHER CURRENT ASSETS 155,234 132,517
-------- -------
TOTAL CURRENT ASSETS 1,159,072 1,030,043
PROPERTY,PLANT AND EQUIPMENT, NET 321,910 316,218
GOODWILL, NET 975,156 933,227
IDENTIFIABLE INTANGIBLE ASSETS, NET 67,983 68,600
OTHER NONCURRENT ASSETS, NET 42,592 59,241
------- ------
TOTAL ASSETS $ 2,566,713 $ 2,407,329
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES $ 716,176 $ 741,234
LONG-TERM DEBT 413,307 270,104
OTHER LIABILITIES 149,496 111,311
DEFERRED INCOME TAXES 37,124 42,912
------------- --------------
TOTAL LIABILITIES 1,316,103 1,165,561
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES 213 188
STOCKHOLDERS' EQUITY 1,250,397 1,241,580
---------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,566,713 $ 2,407,329
============ ===========
DENTSPLY INTERNATIONAL INC.
(IN THOUSANDS EXCEPT PER SHARE DATA)
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.
Three Months Ended June 30, 2006:
Income Diluted
(Expense) Per Share
------------- -------------
Net Income $ 59,316 $ 0.37
Restructuring Costs 1,638 0.01
Income Tax Related Adjustments 783 0.01
------------- -------------
Adjusted Non-GAAP Earnings $ 61,737 $ 0.39
============= =============
Three Months Ended June 30, 2005:
Income Diluted
(Expense) Per Share
--------------- -------------
Net Income $ 57,893 $ 0.35
Stock-Based Compensation Expense as Disclosed in Footnotes (2,775) (0.02)
Income Tax Related Adjustments (1,791) (0.01)
Restructuring Costs (185) 0.00
Rounding 0.01
------------- -------------
Adjusted Non-GAAP Earnings $ 53,142 $ 0.33
============= =============
DENTSPLY INTERNATIONAL INC.
(IN THOUSANDS EXCEPT PER SHARE DATA)
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, 2006:
Income Diluted
(Expense) Per Share
------------- -------------
Net Income $ 109,320 $ 0.68
Restructuring Costs 4,692 0.03
Income Tax Related Adjustments 648 0.00
------------- -------------
Adjusted Non-GAAP Earnings $ 114,660 $ 0.71
============= =============
Six Months Ended June 30, 2005:
Income Diluted
(Expense) Per Share
--------------- -------------
Net Income $ 106,942 $ 0.65
Stock-Based Compensation Expense as Disclosed in Footnotes (5,548) (0.03)
Income Tax Related Adjustments (2,108) (0.01)
Restructuring Costs (21) 0.00
------------- -------------
Adjusted Non-GAAP Earnings $ 99,265 $ 0.61
============= =============