DENTSPLY SIRONA Inc. (“Dentsply Sirona”) (NASDAQ:XRAY), The Dental
Solutions CompanyTM, today announced its financial results for the
three and twelve months ended December 31, 2016.
Fourth Quarter 2016 Financial
Results
Reported net sales of $996.5 million increased
48.5% compared to $671.1 million in the fourth quarter of
2015. For the three month period ended December 31, 2016,
sales of the combined businesses1 grew 4.3% on a
constant currency basis and internal growth2 was
1.8% which was negatively impacted by approximately 300 basis
points of channel inventory reduction related to a change in
distribution strategy in North America.
On a geographic basis, U.S. reported net sales
of $329.0 million increased 48.2% compared to $222.0 million in the
fourth quarter of 2015. During the three month period ended
December 31, 2016, U.S. reported net sales, excluding precious
metals, of $327.7 million increased 48.5% compared to $220.6
million in the fourth quarter of 2015. Sales of the combined U.S.
businesses1 declined 5.1% on a constant currency
basis with internal growth2 down 7.0% which was
negatively impacted by approximately 850 basis points of channel
inventory reduction related to a change in distribution strategy in
North America.
Reported net sales in Europe of $402.4 increased
37.7% compared to $292.2 million. Reported net sales in Europe,
excluding precious metals, increased 43.1% to $391.4 million
compared to $273.6 million in the fourth quarter of 2015.
Sales of the combined European businesses1 grew
7.9% on a constant currency basis with internal
growth2 of 5.2% during the three month period
ended December 31, 2016.
1 “Sales of our combined businesses” combines the
historical consolidated revenues of DENTSPLY and Sirona, giving
effect to the merger as if it had been consummated on January 1,
2015.2 For a reconciliation of constant currency growth to internal
sales growth please see supplemental tables 1-3 at the end of the
release.
Non-GAAP adjusted EPS, constant currency growth and internal
growth and results are non-GAAP financial measures that exclude
certain items. Please refer to the disclosure at the end of
the release.
Reported net sales in Rest of World of $265.1 increased 69.0%
compared to $156.9 million. Reported net sales in Rest of World,
excluding precious metals, increased 73.7% to $263.5 million
compared to $151.7 million in the fourth quarter of 2015.
Sales of the Rest of World combined businesses1
grew 12.5% on a constant currency basis with internal
growth2 of 9.4% during the three month period
ended December 31, 2016.
Reported net sales in the Dental and Healthcare
Consumables segment of $513.3 million increased 5.6% from $485.9
million. Reported net sales, excluding precious metals, increased
by 8.4% to $499.5 million in the fourth quarter of 2016.
Sales of the combined businesses1 for Dental and
Healthcare Consumables grew 3.4% on a constant currency basis with
internal growth2 of 3.5% during the three month
period ended December 31, 2016.
Reported net sales for Technologies increased by
160.9% to $483.2 million. Reported net sales for
Technologies, excluding precious metals, increased by 161.0% to
$483.1 million in the fourth quarter of 2016. This increase is due
to the consolidation of the Sirona businesses for three months. For
the three month period ended December 31, 2016, sales of the
combined businesses1 for Technologies grew 5.2% on
a constant currency basis and internal growth2 of
the combined businesses was flat. Internal growth was
negatively impacted by approximately 650 basis points related to
channel inventory reduction.
Net income attributable to Dentsply Sirona for
the fourth quarter of 2016 was $107.0 million, or $0.46 per diluted
share, compared to $58.6 million, or $0.41 per diluted share in the
fourth quarter of 2015. On an adjusted basis, excluding
certain items, non-GAAP net earnings per diluted share were $0.67
compared to $0.65 in the fourth quarter of 2015. A
reconciliation of the non-GAAP measures to earnings per share
calculated on a US-GAAP basis is provided in the attached
table.
Full Year 2016 Financial
Results
Reported net sales of $3,745.3 million increased
40.0% compared to $2,674.3 million in 2015. Reported net
sales, excluding precious metals, of $3.68 billion increased 42.6%
compared to $2.58 billion in 2015. For the twelve month
period ended December 31, 2016, sales of the combined
businesses1 grew 3.6% at constant currency
exchange rates and internal growth2 was 2.4% which
was negatively impacted by around 50 basis points related to
channel inventory reduction.
On a geographic basis, U.S. reported net sales
of $1,311.6 million increased 35.8% compared to $965.9 million in
2015. U.S. reported net sales, excluding precious metals, of $1.31
billion increased 36.3% compared to $958.8 million in 2015. Sales
of the combined businesses1 grew 1.0% on a
constant currency basis with internal growth2 down
0.9%, which was negatively impacted by over 100 basis points
related to channel inventory reduction.
Reported net sales in Europe of $1,463.2 million
increased 30.0% compared to $1,125.7 million in 2015. Reported net
sales in Europe, excluding precious metals, increased 33.5% to
$1.42 billion compared to $1.07 billion in 2015. Sales of the
combined businesses1 grew 3.2% on a constant
currency basis with internal growth2 of 2.9%
during the twelve month period ended December 31, 2016.
Reported net sales in Rest of World of $970.5
million increased 66.6% compared to $582.7 million in 2015.
Reported net sales in Rest of World, excluding precious metals,
increased 71.0% to $952.9 million compared to $557.4 million in
2015. Sales of the combined businesses1 grew
8.2% on a constant currency basis with internal
growth2 of 6.6% during the twelve month period
ended December 31, 2016.
Reported net sales in the Dental and Healthcare
Consumables segment of $2,058.1 million increased 5.0% from
$1,961.0 million. Net sales, excluding precious metals,
increased by 6.7% to $1.99 billion in 2016. Sales of the
combined businesses1 for Dental and Healthcare
Consumables grew 2.7% on a constant currency basis with internal
growth2 of 2.9% during the twelve month period
ended December 31, 2016.
Reported net sales for Technologies increased by
136.5% to $1.69 billion in 2016. This increase reflects the
consolidation of the Sirona businesses for twelve months. For the
twelve month period ended December 31, 2016, sales of the combined
businesses1 for Technologies grew 4.6% on a
constant currency basis and internal growth2 of
the combined businesses was 1.8%. Internal growth was negatively
impacted by over 125 basis points related to inventory reduction in
North America.
Net income attributable to Dentsply Sirona for
2016 was $429.9 million, or $1.94 per diluted share, compared to
$251.2 million, or $1.76 per diluted share in 2015. On an
adjusted basis, excluding certain items, net earnings per diluted
share were $2.78 compared to $2.62 in 2015. A reconciliation
of the non-GAAP measures to earnings per share calculated on a
US-GAAP basis is provided in the attached table.
Jeffrey T. Slovin, Dentsply Sirona’s Chief
Executive Officer commented: “In 2016 we completed our historic
merger to create Dentsply Sirona, The Dental Solutions
CompanyTM. Our integration is on track and our ability to
deliver on strategic objectives and capture synergies enabled us to
overcome dealer inventory reduction in the fourth quarter related
to a change in distribution strategy in North America. We
accelerated growth in the fourth quarter, led by Dental and
Healthcare Consumables growth of 3.5% and finished at the upper end
of our guidance range with adjusted EPS of $2.78.”
Mr. Slovin continued: “2017 will be a pivotal
year for Dentsply Sirona as we move from integration to
transformation. In North America, we are re-defining and
broadening our go to market strategy. While the transition
will create a headwind in the first half of the year, the new
strategy will expand our access to the market and accelerate the
adoption of our technologies in the second half of the year and
beyond. At the International Dental Show, we will showcase
over fifty innovations and new products that will shape the
industry for years to come.”
Mr. Slovin concluded: “In addition to the
continuing integration benefits and the short-term headwind from
implementation of our go to market strategy in North America, our
guidance for 2017 also reflects the negative impacts of foreign
exchange and share count associated with the merger. Based on
these factors, we are establishing guidance for 2017 non-GAAP
earnings within the range of $2.80 to $2.90 per diluted share, with
earnings growth significantly stronger in the back half of the
year.”
Guidance for 2017^
Management adjusted EPS for 2017 in the range of $2.80 to $2.90
per diluted share.
Conference Call/Webcast
Information
Dentsply Sirona’s management team will host an
investor conference call and live webcast today at 9:30 am
EST. A presentation related to the call will be available on
www.dentsplysirona.com in the Investors section.
Investors can access the webcast via a link on
Dentsply Sirona’s web site at www.dentsplysirona.com. For
those planning to participate on the call, please dial 877-874-1571
for domestic calls, or (719) 325-4874 for international
calls. The Conference ID # is 6233577. A replay of the
conference call will be available online on the Dentsply Sirona web
site, and a dial-in replay will be available for one week following
the call at (888) 203-1112 (for domestic calls) or (719) 457-0820
(for international calls), replay passcode # 6233577.
About Dentsply Sirona:
Dentsply Sirona is the world’s largest
manufacturer of professional dental products and technologies, with
a 130-year history of innovation and service to the dental industry
and patients worldwide. Dentsply Sirona develops,
manufactures, and markets a comprehensive solutions offering
including dental and oral health products as well as other
consumable medical devices under a strong portfolio of world class
brands. As The Dental Solutions Company™, Dentsply Sirona’s
products provide innovative, high-quality and effective solutions
to advance patient care and deliver better, safer and faster
dentistry. Dentsply Sirona’s global headquarters is located
in York, Pennsylvania, and the international headquarters is based
in Salzburg, Austria. The company’s shares are listed in the United
States on NASDAQ under the symbol XRAY. Visit
www.dentsplysirona.com for more information about Dentsply Sirona
and its products.
Contact Information:
Joshua Zable, IRCVP, Investor Relations and
Corporate
Communications+1-718-482-2184joshua.zable@dentsplysirona.com
Derek Leckow, IRCVP, Investor
Relations+1-717-849-7863derek.leckow@dentsplysirona.com
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These statements can be identified by the use
of forward-looking terminology, including "may," "believe," "will,"
"expect," "anticipate," "estimate," "plan," "intend," "project,"
"forecast," or other similar words. Statements contained in this
press release are based on information presently available to the
Company and assumptions that the Company believe to be reasonable.
The Company is not assuming any duty to update this information if
those facts change or if the assumptions are no longer believed to
be reasonable. Investors are cautioned that all such statements
involve risks and uncertainties, and important factors could cause
actual events or results to differ materially from those indicated
by such forward-looking statements. These risk factors include,
without limitation; risks that the new businesses will not be
integrated successfully; risks that the combined companies will not
realize the estimated cost savings, synergies and growth, or that
such benefits may take longer to realize than expected; risks
relating to unanticipated costs of integration, including operating
costs, customer loss or business disruption being greater than
expected; unanticipated changes relating to competitive factors in
the industries in which the Company operates; the ability to hire
and retain key personnel; reliance on and integration of
information technology systems; international, national or local
economic, social or political conditions that could adversely
affect the Company or its customers; risks associated with
assumptions made in connection with critical accounting estimates
and legal proceedings; the ability to attract new customers and
retain existing customers in the manner anticipated; the continued
strength of dental and medical device markets; the timing, success
and market reception for our new and existing products; uncertainty
regarding governmental actions with respect to dental and medical
products; outcome of litigation and/or governmental enforcement
actions; volatility in the capital markets or changes in our credit
ratings; continued support of our products by influential dental
and medical professionals; our ability to successfully integrate
acquisitions; risks associated with foreign currency exchange
rates; risks associated with our competitors' introduction of
generic or private label products; our ability to accurately
predict dealer and customer inventory levels; our ability to
successfully realize the benefits of any cost reduction or
restructuring efforts; our ability to obtain a supply of certain
finished goods and raw materials from third parties; changes in the
general economic environment that could affect the business; and
the potential of international unrest, economic downturn or effects
of currencies, tax assessments, tax adjustments, anticipated tax
rates, raw material costs or availability, benefit or retirement
plan costs, or other regulatory compliance costs. The foregoing
list of factors is not exhaustive.
Non-US GAAP Financial
Measures
In addition to the results reported in
accordance with US GAAP, the Company provides adjusted net income
attributable to Dentsply Sirona and adjusted earnings per diluted
common share (“adjusted EPS”). The Company discloses adjusted
net income attributable to Dentsply Sirona to allow investors to
evaluate the performance of the Company’s operations exclusive of
certain items that impact the comparability of results from period
to period and may not be indicative of past or future performance
of the normal operations of the Company and certain large non-cash
charges related to purchased intangible assets. The Company
believes that this information is helpful in understanding
underlying operating trends and cash flow generation.
The principal measurements used by the Company
in evaluating its business are: (1) constant currency sales growth
by segment and geographic region; (2) internal sales growth by
segment and geographic region; and (3) adjusted operating income
and margins of each reportable segment, which excludes the impacts
of purchase accounting, corporate expenses, and certain other items
to enhance the comparability of results period to period.
These principal measurements are not calculated in accordance with
accounting principles generally accepted in the United States;
therefore, these items represent non-US GAAP measures. These non-US
GAAP measures may differ from other companies and should not be
considered in isolation from, or as a substitute for, measures of
financial performance prepared in accordance with US GAAP.
The Company defines “constant currency sales
growth” as the increase or decrease in net sales from period to
period excluding precious metal content and the impact of changes
in foreign currency exchange rates. This impact is calculated by
comparing current-period revenues to prior-period revenues, with
both periods converted at the U.S. dollar to local currency average
foreign exchange rate for each month of the prior period, for the
currencies in which the Company does business.
The Company defines “internal sales growth” as
constant currency sales growth excluding the impacts of net
acquisitions and divestitures, merger accounting impacts and
discontinued products.
Management also believes that the presentation
of net sales, excluding precious metal content, provides useful
information to investors because a portion of Dentsply Sirona’s net
sales is comprised of sales of precious metals generated through
sales of the Company’s precious metal dental alloy products, which
are used by third parties to construct crown and bridge materials.
Due to the fluctuations of precious metal prices and because the
cost of the precious metal content of the Company’s sales is
largely passed through to customers and has minimal effect on
earnings, Dentsply Sirona reports net 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. The Company uses its
cost of precious metal purchased as a proxy for the precious metal
content of sales, as the precious metal content of sales is not
separately tracked and invoiced to customers. The Company believes
that it is reasonable to use the cost of precious metal content
purchased in this manner since precious metal dental alloy sale
prices are typically adjusted when the prices of underlying
precious metals change.
Adjusted net income and adjusted EPS are
important internal measures for the Company. Senior
management receives a monthly analysis of operating results that
includes adjusted net income and adjusted EPS and the performance
of the Company is measured on this basis along with other
performance metrics.
The adjusted net income attributable to Dentsply
Sirona consists of net income attributable to Dentsply Sirona
adjusted to exclude the impact of the following:
(1) Business combination related costs and fair
value adjustments. These adjustments include costs related to
integrating and consummating mergers and recently acquired
businesses, as well as costs, gains and losses related to the
disposal of businesses or product lines. In addition, this
category includes the roll off to the consolidated statement of
operations of fair value adjustments related to business
combinations, except for amortization expense noted below.
These items are irregular in timing and as such may not be
indicative of past and future performance of the Company and are
therefore excluded to allow investors to better understand
underlying operating trends.
(2) Restructuring program related costs and
other costs. These adjustments include costs related to the
implementation of restructuring initiatives as well as certain
other costs. These costs can include, but are not limited to,
severance costs, facility closure costs, lease and contract
terminations costs, related professional service costs, duplicate
facility and labor costs associated with specific restructuring
initiatives, as well as, legal settlements and impairments of
assets. These items are irregular in timing, amount and impact to
the Company’s financial performance. As such, these items may
not be indicative of past and future performance of the Company and
are therefore excluded for the purpose of understanding underlying
operating trends.
(3) Amortization of purchased intangible
assets. This adjustment excludes the periodic amortization
expense related to purchased intangible assets. Amortization
expense has been excluded from adjusted net income attributed to
Dentsply Sirona to allow investors to evaluate and understand
operating trends excluding these large non-cash charges.
(4) Credit risk and fair value
adjustments. These adjustments include both the cost and
income impacts of adjustments in certain assets and liabilities
including the Company’s pension obligations, that are recorded
through net income which are due solely to the changes in fair
value and credit risk. These items can be variable and driven
more by market conditions than the Company’s operating
performance. As such, these items may not be indicative of
past and future performance of the Company and therefore are
excluded for comparability purposes.
(5) Certain fair value adjustments related to an
unconsolidated affiliated company. This adjustment represents
the fair value adjustment of the unconsolidated affiliated
company’s convertible debt instrument held by the Company.
The affiliate is accounted for under the equity method of
accounting. The fair value adjustment is driven by open
market pricing of the affiliate’s equity instruments, which has a
high degree of variability and may not be indicative of the
operating performance of the affiliate or the Company.
(6) Income tax related adjustments. These
adjustments include both income tax expenses and income tax
benefits that are representative of income tax adjustments mostly
related to prior periods, as well as the final settlement of income
tax audits, and discrete tax items resulting from the
implementation of restructuring initiatives. These
adjustments are irregular in timing and amount and may
significantly impact the Company’s operating performance. As
such, these items may not be indicative of past and future
performance of the Company and therefore are excluded for
comparability purposes.
Adjusted earnings per diluted common share is
calculated by dividing adjusted net income attributable to Dentsply
Sirona by diluted weighted-average common shares outstanding.
Adjusted net income attributable to Dentsply Sirona 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 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.
^Our guidance is presented on a non-GAAP basis,
as it does not include the impact of prospective acquisitions,
acquisitions announced but not yet closed and other non-GAAP items,
including restructuring costs, many of which are difficult to
predict. Therefore, we cannot provide a full reconciliation of
these measures. The Company is unable at this time to address
the probable significance of all of the unavailable
information.
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In millions, except per share amounts and
percentages) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net sales |
$ |
996.5 |
|
|
$ |
671.1 |
|
|
$ |
3,745.3 |
|
|
$ |
2,674.3 |
|
Net sales, excluding
precious metal content |
982.6 |
|
|
645.9 |
|
|
3,681.0 |
|
|
2,581.5 |
|
|
|
|
|
|
|
|
|
Cost of products
sold |
455.0 |
|
|
296.4 |
|
|
1,744.4 |
|
|
1,157.1 |
|
|
|
|
|
|
|
|
|
Gross profit |
541.5 |
|
|
374.7 |
|
|
2,000.9 |
|
|
1,517.2 |
|
% of Net
sales |
54.3 |
% |
|
55.8 |
% |
|
53.4 |
% |
|
56.7 |
% |
% of Net sales,
excluding precious metal content |
55.1 |
% |
|
58.0 |
% |
|
54.4 |
% |
|
58.8 |
% |
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
399.7 |
|
|
267.8 |
|
|
1,523.0 |
|
|
1,077.3 |
|
|
|
|
|
|
|
|
|
Restructuring and other
costs |
7.6 |
|
|
13.8 |
|
|
23.2 |
|
|
64.7 |
|
|
|
|
|
|
|
|
|
Operating income |
134.2 |
|
|
93.1 |
|
|
454.7 |
|
|
375.2 |
|
% of Net
sales |
13.5 |
% |
|
13.9 |
% |
|
12.1 |
% |
|
14.0 |
% |
% of Net sales,
excluding precious metal content |
13.7 |
% |
|
14.4 |
% |
|
12.4 |
% |
|
14.5 |
% |
|
|
|
|
|
|
|
|
Net interest and other
expense |
1.7 |
|
|
20.8 |
|
|
13.8 |
|
|
45.5 |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
132.5 |
|
|
72.3 |
|
|
440.9 |
|
|
329.7 |
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
24.6 |
|
|
13.8 |
|
|
9.5 |
|
|
77.0 |
|
|
|
|
|
|
|
|
|
Equity in net income
(loss) of |
|
|
|
|
|
|
|
unconsolidated
affiliated company |
— |
|
|
0.1 |
|
|
— |
|
|
(1.6 |
) |
|
|
|
|
|
|
|
|
Net income |
107.9 |
|
|
58.6 |
|
|
431.4 |
|
|
251.1 |
|
% of Net
sales |
10.8 |
% |
|
8.7 |
% |
|
11.5 |
% |
|
9.4 |
% |
% of Net sales,
excluding precious metal content |
11.0 |
% |
|
9.1 |
% |
|
11.7 |
% |
|
9.7 |
% |
|
|
|
|
|
|
|
|
Less: Net income (loss)
attributable to noncontrolling |
|
|
|
|
|
|
|
interests |
0.9 |
|
|
— |
|
|
1.5 |
|
|
(0.1 |
) |
|
|
|
|
|
|
|
|
Net income attributable
to Dentsply Sirona |
$ |
107.0 |
|
|
$ |
58.6 |
|
|
$ |
429.9 |
|
|
$ |
251.2 |
|
|
|
|
|
|
|
|
|
% of Net
sales |
10.7 |
% |
|
8.7 |
% |
|
11.5 |
% |
|
9.4 |
% |
% of Net sales,
excluding precious metal content |
10.9 |
% |
|
9.1 |
% |
|
11.7 |
% |
|
9.7 |
% |
|
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.46 |
|
|
$ |
0.42 |
|
|
$ |
1.97 |
|
|
$ |
1.79 |
|
Diluted |
$ |
0.46 |
|
|
$ |
0.41 |
|
|
$ |
1.94 |
|
|
$ |
1.76 |
|
|
|
|
|
|
|
|
|
Cash dividends declared
per common share |
$ |
0.0775 |
|
|
$ |
0.0725 |
|
|
$ |
0.3100 |
|
|
$ |
0.2900 |
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
Basic |
230.7 |
|
|
140.0 |
|
|
218.0 |
|
|
140.0 |
|
Diluted |
234.2 |
|
|
142.9 |
|
|
221.6 |
|
|
142.5 |
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In millions) |
(unaudited) |
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
December 31, 2015 |
Assets |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
383.9 |
|
|
$ |
284.6 |
|
Accounts and
notes receivable-trade, net |
636.0 |
|
|
399.9 |
|
Inventories,
net |
517.1 |
|
|
340.4 |
|
Prepaid expenses
and other current assets, net |
345.6 |
|
|
171.8 |
|
Total Current Assets |
1,882.6 |
|
|
1,196.7 |
|
|
|
|
|
Property, plant and
equipment, net |
799.8 |
|
|
558.8 |
|
Identifiable intangible
assets, net |
2,957.6 |
|
|
600.7 |
|
Goodwill, net |
5,952.0 |
|
|
1,987.6 |
|
Other noncurrent
assets, net |
64.1 |
|
|
59.1 |
|
|
|
|
|
Total Assets |
$ |
11,656.1 |
|
|
$ |
4,402.9 |
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
|
|
Current
liabilities |
$ |
771.0 |
|
|
$ |
476.0 |
|
Long-term debt |
1,511.1 |
|
|
1,141.0 |
|
Deferred income
taxes |
848.6 |
|
|
160.3 |
|
Other noncurrent
liabilities |
399.5 |
|
|
286.2 |
|
Total Liabilities |
3,530.2 |
|
|
2,063.5 |
|
|
|
|
|
Total Dentsply Sirona
Equity |
8,114.3 |
|
|
2,338.0 |
|
Noncontrolling
interests |
11.6 |
|
|
1.4 |
|
Total Equity |
8,125.9 |
|
|
2,339.4 |
|
|
|
|
|
Total Liabilities and Equity |
$ |
11,656.1 |
|
|
$ |
4,402.9 |
|
|
|
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In millions) |
(unaudited) |
|
|
Year Ended December 31, |
|
2016 |
|
2015 |
Cash flows from
operating activities: |
|
|
|
|
|
|
|
Net income |
$ |
431.4 |
|
|
$ |
251.1 |
|
|
|
|
|
Adjustments to
reconcile net income to net cash provided by operating activities:
|
|
|
|
Depreciation |
116.6 |
|
|
79.1 |
|
Amortization |
155.1 |
|
|
43.8 |
|
Amortization of deferred financing costs |
4.5 |
|
|
11.3 |
|
Deferred
income taxes |
(110.1 |
) |
|
27.4 |
|
Share-based compensation expense |
41.3 |
|
|
25.6 |
|
Restructuring and other costs - non-cash |
9.7 |
|
|
43.3 |
|
Excess
tax benefits from share-based compensation |
(12.7 |
) |
|
(11.6 |
) |
Equity in
net loss from unconsolidated affiliates |
— |
|
|
1.6 |
|
Other
non-cash income |
(32.0 |
) |
|
(13.1 |
) |
Loss on
disposal of property, plant and equipment |
2.8 |
|
|
0.8 |
|
Changes
in operating assets and liabilities, net of acquisitions: |
|
|
|
Accounts
and notes receivable-trade, net |
(75.1 |
) |
|
(0.9 |
) |
Inventories, net |
65.4 |
|
|
32.1 |
|
Prepaid
expenses and other current assets, net |
(32.4 |
) |
|
(9.5 |
) |
Other
noncurrent assets, net |
2.6 |
|
|
3.3 |
|
Accounts
payable |
7.2 |
|
|
8.8 |
|
Accrued
liabilities |
(12.2 |
) |
|
(4.7 |
) |
Income
taxes |
(7.7 |
) |
|
(8.1 |
) |
Other
noncurrent liabilities |
9.0 |
|
|
17.1 |
|
|
|
|
|
Net cash
provided by operating activities |
563.4 |
|
|
497.4 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
Capital
expenditures |
(125.0 |
) |
|
(72.0 |
) |
Cash assumed in Sirona
merger |
522.3 |
|
|
— |
|
Cash paid for
acquisitions of businesses and equity investments |
(341.8 |
) |
|
(54.0 |
) |
Cash received from sale
of business |
6.1 |
|
|
— |
|
Cash received on
derivatives contracts |
20.1 |
|
|
30.7 |
|
Cash paid on
derivatives contracts |
(17.1 |
) |
|
(6.3 |
) |
Expenditures for
identifiable intangible assets |
(1.1 |
) |
|
— |
|
Purchase of short-term
investments |
(6.8 |
) |
|
— |
|
Proceeds from
redemption of Corporate Bonds |
— |
|
|
47.7 |
|
Purchase of
Company-owned life insurance policies |
(1.7 |
) |
|
(1.4 |
) |
Proceeds from sale of
property, plant and equipment, net |
5.0 |
|
|
0.4 |
|
|
|
|
|
Net cash
provided by (used in) investing activities |
60.0 |
|
|
(54.9 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
Decrease in short-term
borrowings |
(44.1 |
) |
|
(2.2 |
) |
Cash paid for treasury
stock |
(813.9 |
) |
|
(112.7 |
) |
Cash dividends
paid |
(64.6 |
) |
|
(40.0 |
) |
Cash paid for
acquisition of noncontrolling interests of consolidated
subsidiary |
(0.4 |
) |
|
(80.5 |
) |
Proceeds from long-term
borrowings, net of deferred financing cost |
1,220.6 |
|
|
152.9 |
|
Payments on long-term
borrowings |
(877.5 |
) |
|
(267.5 |
) |
Proceeds from exercised
stock options |
41.0 |
|
|
35.5 |
|
Excess tax benefits
from share-based compensation |
12.7 |
|
|
11.6 |
|
|
|
|
|
Net cash used
in financing activities |
(526.2 |
) |
|
(302.9 |
) |
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
2.1 |
|
|
(6.6 |
) |
|
|
|
|
Net increase in cash
and cash equivalents |
99.3 |
|
|
133.0 |
|
|
|
|
|
Cash and cash
equivalents at beginning of period |
284.6 |
|
|
151.6 |
|
|
|
|
|
Cash and cash
equivalents at end of period |
$ |
383.9 |
|
|
$ |
284.6 |
|
|
|
|
|
Schedule of
non-cash investing activities |
|
|
|
Merger financed
by common stock |
$ |
6,256.2 |
|
|
$ |
— |
|
Interest paid, net of
amounts capitalized |
$ |
36.7 |
|
|
$ |
54.9 |
|
Income taxes paid |
$ |
112.3 |
|
|
$ |
71.4 |
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES |
(In millions) |
(unaudited) |
|
Segment
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
following tables set forth information about the Company’s segments
adjusted operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
Dental and Healthcare
Consumables |
$ |
127.7 |
|
|
$ |
108.1 |
|
|
$ |
544.5 |
|
|
$ |
470.1 |
|
Technologies |
99.4 |
|
|
31.6 |
|
|
355.1 |
|
|
93.7 |
|
Segment adjusted operating incomebefore
income taxes and interest |
227.1 |
|
|
139.7 |
|
|
899.6 |
|
|
563.8 |
|
|
|
|
|
|
|
|
|
Reconciling items
(income) expense: |
|
|
|
|
|
|
|
All Other |
38.1 |
|
|
21.4 |
|
|
261.3 |
|
|
78.4 |
|
Restructuring and other
costs |
7.6 |
|
|
13.8 |
|
|
23.2 |
|
|
64.7 |
|
Interest expense |
9.0 |
|
|
25.8 |
|
|
35.9 |
|
|
55.9 |
|
Interest income |
(0.6 |
) |
|
(0.4 |
) |
|
(2.0 |
) |
|
(2.2 |
) |
Other expense (income),
net |
(6.6 |
) |
|
(4.6 |
) |
|
(20.1 |
) |
|
(8.2 |
) |
Amortization of
intangible assets |
45.7 |
|
|
11.0 |
|
|
155.4 |
|
|
43.7 |
|
Depreciation resulting
from the fair valuestep-up of property, plant and equipmentfrom
business combinations |
1.4 |
|
|
0.4 |
|
|
5.0 |
|
|
1.8 |
|
Income before income taxes |
$ |
132.5 |
|
|
$ |
72.3 |
|
|
$ |
440.9 |
|
|
$ |
329.7 |
|
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES |
|
(In millions, except percentages) |
|
(unaudited) |
|
|
|
|
|
|
|
Operating
Income Summary: |
|
|
|
|
|
The
following tables present the reconciliation of reported US GAAP
operating income in total and on a percentage of net sales,
excluding precious metal content, to the non-US GAAP financial
measures. |
|
|
|
|
Three Months
Ended December 31, 2016 |
|
|
|
Operating Income (Loss) |
|
|
|
|
Operating Income |
$ |
134.2 |
|
|
Percentage of Net
Sales, Excluding Precious Metal Content |
|
13.7 |
% |
|
Amortization of Purchased Intangible Assets |
45.6 |
|
|
Business
Combination Related Costs and Fair Value Adjustments |
16.3 |
|
|
Restructuring Program Related Costs and Other Costs |
9.0 |
|
|
Credit
Risk and Fair Value Adjustments |
1.3 |
|
|
Adjusted Non-US
GAAP Operating Income |
$ |
206.4 |
|
|
Percentage of
Net Sales, Excluding Precious Metal Content |
|
21.0 |
% |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, 2015 |
|
|
|
Operating Income (Loss) |
|
|
|
|
Operating Income |
$ |
93.1 |
|
|
Percentage of Net
Sales, Excluding Precious Metal Content |
|
14.4 |
% |
|
Restructuring Program Related Costs and Other Costs |
15.2 |
|
|
Amortization of Purchased Intangible Assets |
11.0 |
|
|
Business
Combination Related Costs and Fair Value Adjustments |
7.4 |
|
|
Credit
Risk and Fair Value Adjustments |
2.0 |
|
|
Adjusted Non-US
GAAP Operating Income |
$ |
128.7 |
|
|
Percentage of
Net Sales, Excluding Precious Metal Content |
|
19.9 |
% |
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES |
|
(In millions, except percentages) |
|
(unaudited) |
|
|
|
|
|
|
|
Operating
Income Summary: |
|
|
|
|
|
The
following tables present the reconciliation of reported US GAAP
operating income in total and on a percentage of net sales,
excluding precious metal content, to the non-US GAAP financial
measures. |
|
|
|
|
Year Ended
December 31, 2016 |
|
|
|
Operating Income (Loss) |
|
|
|
|
Operating Income |
$ |
454.7 |
|
|
Percentage of Net
Sales, Excluding Precious Metal Content |
|
12.4 |
% |
|
Business
Combination Related Costs and Fair Value Adjustments |
161.8 |
|
|
Amortization of Purchased Intangible Assets |
155.3 |
|
|
Restructuring Program Related Costs and Other Costs |
27.1 |
|
|
Credit
Risk and Fair Value Adjustments |
5.3 |
|
|
Adjusted Non-US
GAAP Operating Income |
$ |
804.2 |
|
|
Percentage of
Net Sales, Excluding Precious Metal Content |
|
21.8 |
% |
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2015 |
|
|
|
Operating Income (Loss) |
|
|
|
|
Operating Income |
$ |
375.2 |
|
|
Percentage of Net
Sales, Excluding Precious Metal Content |
|
14.5 |
% |
|
Restructuring Program Related Costs and Other Costs |
81.1 |
|
|
Amortization of Purchased Intangible Assets |
43.7 |
|
|
Business
Combination Related Costs and Fair Value Adjustments |
13.1 |
|
|
Credit
Risk and Fair Value Adjustments |
8.0 |
|
|
Adjusted Non-US
GAAP Operating Income |
$ |
521.1 |
|
|
Percentage of
Net Sales, Excluding Precious Metal Content |
|
20.2 |
% |
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES |
(In millions, except per share amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
Earnings
Summary: |
|
|
|
|
|
|
|
The
following tables present the reconciliation of reported US GAAP net
income attributable to Dentsply Sirona and on a per diluted common
share basis to the non-US GAAP financial measures. |
|
|
|
|
Three Months
Ended December 31, 2016 |
|
|
|
|
Net |
|
Per Diluted |
|
Income |
|
Common Share |
|
|
|
|
Net Income Attributable
to Dentsply Sirona |
$ |
107.0 |
|
|
$ |
0.46 |
|
Pre-tax
non-US GAAP adjustments: |
|
|
|
Amortization of purchased intangible assets |
45.6 |
|
|
|
Business
combination related costs and fair value adjustments |
16.3 |
|
|
|
Restructuring program related costs and other costs |
3.8 |
|
|
|
Credit
risk and fair value adjustments |
1.1 |
|
|
|
Tax
impact of the pre-tax non-US GAAP adjustments (a) |
(7.6 |
) |
|
|
Subtotal
non-US GAAP adjustments |
59.2 |
|
|
0.25 |
|
Income
tax related adjustments |
(8.1 |
) |
|
(0.04 |
) |
Adjusted Non-US
GAAP Net Income Attributable to Dentsply Sirona |
$ |
158.1 |
|
|
$ |
0.67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, 2015 |
|
|
|
|
Net |
|
Per Diluted |
|
Income |
|
Common Share |
|
|
|
|
Net Income Attributable
to Dentsply Sirona |
$ |
58.6 |
|
|
$ |
0.41 |
|
Pre-tax
non-US GAAP adjustments: |
|
|
|
Restructuring program related costs and other costs |
27.0 |
|
|
|
Amortization of purchased intangible assets |
11.0 |
|
|
|
Business
combination related costs and fair value adjustments |
7.6 |
|
|
|
Credit
risk and fair value adjustments |
2.6 |
|
|
|
Tax
impact of the pre-tax non-US GAAP adjustments (a) |
(17.4 |
) |
|
|
Subtotal
non-US GAAP adjustments |
30.8 |
|
|
0.22 |
|
Income
tax related adjustments |
3.2 |
|
|
0.02 |
|
Adjusted Non-US
GAAP Net Income Attributable to Dentsply Sirona |
$ |
92.6 |
|
|
$ |
0.65 |
|
|
|
|
|
(a) The tax amount was calculated using the
applicable statutory tax rate in the tax jurisdiction where the
non-US GAAP adjustments were generated. |
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES |
(In millions, except per share amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
Earnings
Summary: |
|
|
|
|
|
|
|
The
following tables present the reconciliation of reported US GAAP net
income attributable to Dentsply Sirona and on a per diluted common
share basis to the non-US GAAP financial measures. |
|
|
|
|
Year Ended
December 31, 2016 |
|
|
|
|
Net |
|
Per Diluted |
|
Income |
|
Common Share |
|
|
|
|
Net Income Attributable
to Dentsply Sirona |
$ |
429.9 |
|
|
$ |
1.94 |
|
Pre-tax
non-US GAAP adjustments: |
|
|
|
Business
combination related costs and fair value adjustments |
162.2 |
|
|
|
Amortization of purchased intangible assets |
155.3 |
|
|
|
Restructuring program related costs and other costs |
17.0 |
|
|
|
Credit
risk and fair value adjustments |
5.8 |
|
|
|
Tax
impact of the pre-tax non-US GAAP adjustments (a) |
(79.6 |
) |
|
|
Subtotal
non-US GAAP adjustments |
260.7 |
|
|
1.17 |
|
Income
tax related adjustments |
(73.5 |
) |
|
(0.33 |
) |
Adjusted Non-US
GAAP Net Income Attributable to Dentsply Sirona |
$ |
617.1 |
|
|
$ |
2.78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2015 |
|
|
|
|
Net |
|
Per Diluted |
|
Income |
|
Common Share |
|
|
|
|
Net Income Attributable
to Dentsply Sirona |
$ |
251.2 |
|
|
$ |
1.76 |
|
Pre-tax
non-US GAAP adjustments: |
|
|
|
Restructuring program related costs and other costs |
92.9 |
|
|
|
Amortization of purchased intangible assets |
43.7 |
|
|
|
Business
combination related costs and fair value adjustments |
13.3 |
|
|
|
Credit
risk and fair value adjustments |
8.3 |
|
|
|
Certain
fair value adjustments related to an unconsolidated affiliated
company |
(2.8 |
) |
|
|
Tax
impact of the pre-tax non-US GAAP adjustments (a) |
(39.8 |
) |
|
|
Subtotal
non-US GAAP adjustments |
115.6 |
|
|
0.82 |
|
Income
tax related adjustments |
6.3 |
|
|
0.04 |
|
Adjusted Non-US
GAAP Net Income Attributable to Dentsply Sirona |
$ |
373.1 |
|
|
$ |
2.62 |
|
|
|
|
|
(a) The tax amount was calculated using the
applicable statutory tax rate in the tax jurisdiction where the
non-US GAAP adjustments were generated. |
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES |
(In millions, except percentages) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Tax
Rate Summary: |
|
|
|
|
|
|
|
|
|
|
|
The
following tables present the reconciliation of reported US GAAP
effective tax rate as a percentage of income before income taxes to
the non-US GAAP financial measure. |
|
|
|
|
|
|
Three Months
Ended December 31, 2016 |
|
|
|
|
|
|
Pre-tax Income |
|
Income Tax Benefit (Expense) |
|
Percentage of Pre-Tax Income |
|
|
|
|
|
|
As Reported - US GAAP
Operating Results |
$ |
132.5 |
|
|
$ |
(24.6 |
) |
|
18.6 |
% |
Amortization of Purchased Intangible Assets |
45.6 |
|
|
(13.1 |
) |
|
|
Business
Combination Related Costs and Fair Value Adjustments |
16.3 |
|
|
3.9 |
|
|
|
Restructuring Program Related Costs and Other Costs |
3.8 |
|
|
1.9 |
|
|
|
Credit
Risk and Fair Value Adjustments |
1.1 |
|
|
(0.3 |
) |
|
|
Income
Tax Related Adjustments |
— |
|
|
(8.1 |
) |
|
|
As Adjusted -
Non-US GAAP Operating Results |
$ |
199.3 |
|
|
$ |
(40.3 |
) |
|
20.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, 2015 |
|
|
|
|
|
|
Pre-tax Income |
|
Income Tax Benefit (Expense) |
|
Percentage of Pre-Tax Income |
|
|
|
|
|
|
As Reported - US GAAP
Operating Results |
$ |
72.3 |
|
|
$ |
(13.8 |
) |
|
19.1 |
% |
Restructuring Program Related Costs and Other Costs |
27.0 |
|
|
(12.5 |
) |
|
|
Amortization of Purchased Intangible Assets |
11.0 |
|
|
(3.3 |
) |
|
|
Business
Combination Related Costs and Fair Value Adjustments |
7.6 |
|
|
(0.8 |
) |
|
|
Credit
Risk and Fair Value Adjustments |
2.6 |
|
|
(0.8 |
) |
|
|
Income
Tax Related Adjustments |
— |
|
|
3.2 |
|
|
|
As Adjusted -
Non-US GAAP Operating Results |
$ |
120.5 |
|
|
$ |
(28.0 |
) |
|
23.2 |
% |
|
|
|
|
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES |
(In millions, except percentages) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Tax
Rate Summary: |
|
|
|
|
|
|
|
|
|
|
|
The
following tables present the reconciliation of reported US GAAP
effective tax rate as a percentage of income before income taxes to
the non-US GAAP financial measure. |
|
|
|
|
|
|
Year Ended
December 31, 2016 |
|
|
|
|
|
|
Pre-tax Income |
|
Income Tax Benefit (Expense) |
|
Percentage of Pre-Tax Income |
|
|
|
|
|
|
As Reported - US GAAP
Operating Results |
$ |
440.9 |
|
|
$ |
(9.5 |
) |
|
2.2 |
% |
Business
Combination Related Costs and Fair Value Adjustments |
162.2 |
|
|
(29.6 |
) |
|
|
Amortization of Purchased Intangible Assets |
155.3 |
|
|
(45.0 |
) |
|
|
Restructuring Program Related Costs and Other Costs |
17.0 |
|
|
(3.2 |
) |
|
|
Credit
Risk and Fair Value Adjustments |
5.8 |
|
|
(1.8 |
) |
|
|
Income
Tax Related Adjustments |
— |
|
|
(73.5 |
) |
|
|
As Adjusted -
Non-US GAAP Operating Results |
$ |
781.2 |
|
|
$ |
(162.6 |
) |
|
20.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2015 |
|
|
|
|
|
|
Pre-tax Income |
|
Income Tax Benefit (Expense) |
|
Percentage of Pre-Tax Income |
|
|
|
|
|
|
As Reported - US GAAP
Operating Results |
$ |
329.7 |
|
|
$ |
(77.0 |
) |
|
23.4 |
% |
Restructuring Program Related Costs and Other Costs |
92.9 |
|
|
(24.3 |
) |
|
|
Amortization of Purchased Intangible Assets |
43.7 |
|
|
(13.2 |
) |
|
|
Business
Combination Related Costs and Fair Value Adjustments |
13.3 |
|
|
(1.0 |
) |
|
|
Credit
Risk and Fair Value Adjustments |
8.3 |
|
|
(2.4 |
) |
|
|
Certain
Fair Value Adjustments Related to an Unconsolidated Affiliated
Company |
(5.2 |
) |
|
1.1 |
|
|
|
Income
Tax Related Adjustments |
— |
|
|
6.3 |
|
|
|
As Adjusted -
Non-US GAAP Operating Results |
$ |
482.7 |
|
|
$ |
(110.5 |
) |
|
22.9 |
% |
|
|
|
|
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES(In millions, except
percentages)(unaudited)
For the three month period ended
December 31, 2016, sales of our combined businesses grew 4.3%
on a constant currency basis. This includes a benefit of 2.7%
from net acquisitions and was unfavorably impacted by discontinued
products by approximately 20 basis points, which results in
internal sales growth of 1.8%. Net sales, excluding precious
metal content, were negatively impacted by approximately 70 basis
points due to the strengthening of the U.S. dollar over the prior
year period. A reconciliation of reported net sales to net
sales, excluding precious metal content, of the combined business
is as follows:
|
|
Three Months Ended December 31, |
|
|
(in
millions, except percentages) |
|
2016 |
|
2015 |
|
Variance % |
|
|
|
|
|
|
|
Net
sales |
|
$ |
996.5 |
|
|
$ |
671.1 |
|
|
48.5 |
% |
Less: precious metal
content of sales |
|
13.9 |
|
|
25.2 |
|
|
(44.8 |
%) |
Net sales, excluding
precious metal content |
|
982.6 |
|
|
645.9 |
|
|
52.1 |
% |
Sirona net sales
(a) |
|
— |
|
|
304.2 |
|
|
NM |
|
Merger
related adjustments (b) |
|
1.5 |
|
|
— |
|
|
NM |
|
Elimination of intercompany net sales |
|
— |
|
|
(0.5 |
) |
|
NM |
|
Non-US GAAP combined
business, net sales,excluding precious metal content |
|
$ |
984.1 |
|
|
$ |
949.6 |
|
|
3.6 |
% |
Foreign exchange
impact |
|
|
|
|
|
(0.7 |
%) |
Constant currency
growth |
|
|
|
|
|
4.3 |
% |
Net acquisitions |
|
|
|
|
|
2.7 |
% |
Discontinued
products |
|
|
|
|
|
(0.2 |
%) |
Internal sales
growth |
|
|
|
|
|
1.8 |
% |
(a) Represents Sirona sales for the quarter
ended December 31, 2015.(b) Represents an adjustment to reflect
deferred subscription and warranty revenue that was eliminated
under business combination accounting standards to make the 2016
and 2015 non-U.S. GAAP combined business results comparable.NM -
Not meaningful
For the year ended December 31, 2016, sales
of our combined businesses grew 3.6% on a constant currency
basis. This includes a benefit of 1.7% from net acquisitions
and was unfavorably impacted by discontinued products by
approximately 50 basis points, which leads to internal growth of
2.4%. Net sales, excluding precious metal content, were
negatively impacted by approximately 90 basis points due to the
strengthening of the U.S. dollar over the prior year period.
A reconciliation of reported net sales to net sales, excluding
precious metal content, of the combined business for the year ended
December 31, 2016 and 2015, respectively, is as follows:
|
|
Year Ended December 31, |
|
|
(in
millions, except percentages) |
|
2016 |
|
2015 |
|
Variance % |
|
|
|
|
|
|
|
Net
sales |
|
$ |
3,745.3 |
|
|
$ |
2,674.3 |
|
|
40.0 |
% |
Less: precious metal
content of sales |
|
64.3 |
|
|
92.8 |
|
|
(30.7 |
%) |
Net sales, excluding
precious metal content |
|
3,681.0 |
|
|
2,581.5 |
|
|
42.6 |
% |
Sirona net sales
(a) |
|
160.7 |
|
|
1,172.5 |
|
|
NM |
|
Merger
related adjustments (b) |
|
13.5 |
|
|
— |
|
|
NM |
|
Elimination of intercompany net sales |
|
(0.5 |
) |
|
(2.3 |
) |
|
NM |
|
Non-US GAAP combined
business, net sales,excluding precious metal content |
|
$ |
3,854.7 |
|
|
$ |
3,751.7 |
|
|
2.7 |
% |
Foreign exchange
impact |
|
|
|
|
|
(0.9 |
%) |
Constant currency
growth |
|
|
|
|
|
3.6 |
% |
Net acquisitions |
|
|
|
|
|
1.7 |
% |
Discontinued
products |
|
|
|
|
|
(0.5 |
%) |
Internal sales
growth |
|
|
|
|
|
2.4 |
% |
(a) Represents Sirona sales for the year ended
December 31, 2015.(b) Represents an adjustment to reflect deferred
subscription and warranty revenue that was eliminated under
business combination accounting standards to make the 2016 and 2015
non-U.S. GAAP combined business results comparable.NM - Not
meaningful
In the United States, for the three month period
ended December 31, 2016, sales of our combined businesses
declined 5.1% on a constant currency basis. This includes a
benefit of 1.9% from net acquisitions, which results in a negative
internal sales growth rate of 7.0%. This was driven by lower
sales in the Technologies segment and was the result of lower
purchases by a dealer compared to the prior period.
In Europe, for the three month period ended
December 31, 2016, sales of our combined businesses grew 7.9%
on a constant currency basis. This includes a benefit of 3.1%
from net acquisitions and was unfavorably impacted by discontinued
products by approximately 40 basis points, which results in
internal sales growth of 5.2%. Net sales, excluding precious
metal content, were negatively impacted by approximately 1.2% due
to the strengthening of the U.S. dollar over the prior year
period. Internal sales growth in this region was led by the
Dental and Healthcare Consumables segment.
In Rest of World, for the three month period
ended December 31, 2016, sales of our combined businesses grew
12.5% on a constant currency basis. This includes a benefit
of 3.3% from net acquisitions and was unfavorably impacted by
discontinued products by approximately 20 basis points, which
results in internal sales growth of 9.4%. Net sales,
excluding precious metal content, were negatively impacted by
approximately 90 basis points due to the strengthening of the U.S.
dollar over the prior year period. Internal sales growth in
the Rest of World region was primarily driven by higher demand in
the Technologies segment.
|
|
Three Months Ended December 31,
2016 |
|
Q4 2016 Growth |
|
Three Months Ended December 31,
2015 |
(in millions, except
percentages) |
|
US |
Europe |
ROW |
Total |
|
US |
Europe |
ROW |
Total |
|
US |
Europe |
ROW |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
329.0 |
|
$ |
402.4 |
|
$ |
265.1 |
|
$ |
996.5 |
|
|
48.2 |
% |
37.7 |
% |
69.0 |
% |
48.5 |
% |
|
$ |
222.0 |
|
$ |
292.2 |
|
$ |
156.9 |
|
$ |
671.1 |
|
Less: precious metal
content of sales |
|
1.3 |
|
11.0 |
|
1.6 |
|
13.9 |
|
|
|
|
|
|
|
1.4 |
|
18.6 |
|
5.2 |
|
25.2 |
|
Net sales, excluding
precious metal content |
|
327.7 |
|
391.4 |
|
263.5 |
|
982.6 |
|
|
48.5 |
% |
43.1 |
% |
73.7 |
% |
52.1 |
% |
|
220.6 |
|
273.6 |
|
151.7 |
|
645.9 |
|
Sirona net sales
(a) |
|
— |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
125.5 |
|
93.9 |
|
84.8 |
|
304.2 |
|
Merger
relatedadjustments (b) |
|
1.0 |
|
0.5 |
|
— |
|
1.5 |
|
|
|
|
|
|
|
— |
|
— |
|
— |
|
— |
|
Elimination of intercompany net sales |
|
— |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
— |
|
(0.5 |
) |
— |
|
(0.5 |
) |
Non-US GAAP combined
business, net sales, excluding precious metal content |
|
$ |
328.7 |
|
$ |
391.9 |
|
$ |
263.5 |
|
$ |
984.1 |
|
|
(5.1 |
%) |
6.7 |
% |
11.6 |
% |
3.6 |
% |
|
$ |
346.1 |
|
$ |
367.0 |
|
$ |
236.5 |
|
$ |
949.6 |
|
Foreign
exchange impact |
|
|
|
|
|
|
— |
% |
(1.2 |
%) |
(0.9 |
%) |
(0.7 |
%) |
|
|
|
|
|
Constant currency
growth |
|
|
|
|
|
|
(5.1 |
%) |
7.9 |
% |
12.5 |
% |
4.3 |
% |
|
|
|
|
|
Net acquisitions |
|
|
|
|
|
|
1.9 |
% |
3.1 |
% |
3.3 |
% |
2.7 |
% |
|
|
|
|
|
Discontinued
products |
|
|
|
|
|
|
— |
% |
(0.4 |
%) |
(0.2 |
%) |
(0.2 |
%) |
|
|
|
|
|
Internal sales
growth |
|
|
|
|
|
|
(7.0 |
%) |
5.2 |
% |
9.4 |
% |
1.8 |
% |
|
|
|
|
|
(a) Represents Sirona sales for the quarter
ended December 31, 2015.(b) Represents an adjustment to reflect
deferred subscription and warranty revenue that was eliminated
under business combination accounting standards to make the 2016
and 2015 non-U.S. GAAP combined business results comparable.
In the United States, for the year ended
December 31, 2016, sales of our combined businesses grew 1.0%
on a constant currency basis. This includes a benefit of 2.3%
from net acquisitions and was unfavorably impacted by discontinued
products by approximately 40 basis points, which results in a
negative internal sales growth rate of 0.9%. This was driven
by lower sales in the Technologies segment and was the result of
lower purchases by a dealer compared to the prior period.
In Europe, for the year ended December 31,
2016, sales of our combined businesses grew 3.2% on a constant
currency basis. This includes a benefit of 1.0% from net
acquisitions and was unfavorably impacted by discontinued products
by approximately 70 basis points, which results in internal growth
of 2.9%. Net sales, excluding precious metal content, were
negatively impacted by approximately 1.5% due to the strengthening
of the U.S. dollar over the prior year period. Internal sales
growth in this region was primarily driven by higher demand in the
Dental and Healthcare Consumables segment.
In Rest of World, for the year ended
December 31, 2016, sales of our combined businesses grew 8.2%
on a constant currency basis. This includes a benefit of 1.9%
from net acquisitions and was unfavorably impacted by discontinued
products by approximately 30 basis points, which results in
internal growth of 6.6%. Net sales, excluding precious metal
content, were negatively impacted by approximately 1.2% due to the
strengthening of the U.S. dollar over the prior year period.
Internal sales growth in this region was driven by higher demand in
both segments led by the Technologies segment.
|
|
Year Ended December 31, 2016 |
|
2016 Growth |
|
Year Ended December 31, 2015 |
(in millions, except
percentages) |
|
US |
Europe |
ROW |
Total |
|
US |
Europe |
ROW |
Total |
|
US |
Europe |
ROW |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
|
$ |
1,311.6 |
|
$ |
1,463.2 |
|
$ |
970.5 |
|
$ |
3,745.3 |
|
|
35.8 |
% |
30.0 |
% |
66.6 |
% |
40.0 |
% |
|
$ |
965.9 |
|
$ |
1,125.7 |
|
$ |
582.7 |
|
$ |
2,674.3 |
|
Less: precious metal
content of sales |
|
5.2 |
|
41.5 |
|
17.6 |
|
64.3 |
|
|
|
|
|
|
|
7.1 |
|
60.4 |
|
25.3 |
|
92.8 |
|
Net sales, excluding
precious metal content |
|
1,306.4 |
|
1,421.7 |
|
952.9 |
|
3,681.0 |
|
|
36.3 |
% |
33.5 |
% |
71.0 |
% |
42.6 |
% |
|
958.8 |
|
1,065.3 |
|
557.4 |
|
2,581.5 |
|
Sirona net sales
(a) |
|
60.5 |
|
59.4 |
|
40.8 |
|
160.7 |
|
|
|
|
|
|
|
406.4 |
|
394.0 |
|
372.1 |
|
1,172.5 |
|
Merger
relatedadjustments (b) |
|
11.9 |
|
1.6 |
|
— |
|
13.5 |
|
|
|
|
|
|
|
— |
|
— |
|
— |
|
— |
|
Elimination of intercompany net sales |
|
(0.1 |
) |
(0.4 |
) |
— |
|
(0.5 |
) |
|
|
|
|
|
|
(0.1 |
) |
(2.2 |
) |
— |
|
(2.3 |
) |
Non-US GAAP combined
business, net sales, excluding precious metal content |
|
$ |
1,378.7 |
|
$ |
1,482.3 |
|
$ |
993.7 |
|
$ |
3,854.7 |
|
|
1.0 |
% |
1.7 |
% |
7.0 |
% |
2.7 |
% |
|
$ |
1,365.1 |
|
$ |
1,457.1 |
|
$ |
929.5 |
|
$ |
3,751.7 |
|
Foreign
exchange impact |
|
|
|
|
|
|
— |
% |
(1.5 |
%) |
(1.2 |
%) |
(0.9 |
%) |
|
|
|
|
|
Constant currency
growth |
|
|
|
|
|
|
1.0 |
% |
3.2 |
% |
8.2 |
% |
3.6 |
% |
|
|
|
|
|
Net acquisitions |
|
|
|
|
|
|
2.3 |
% |
1.0 |
% |
1.9 |
% |
1.7 |
% |
|
|
|
|
|
Discontinued
products |
|
|
|
|
|
|
(0.4 |
%) |
(0.7 |
%) |
(0.3 |
%) |
(0.5 |
%) |
|
|
|
|
|
Internal sales
growth |
|
|
|
|
|
|
(0.9 |
%) |
2.9 |
% |
6.6 |
% |
2.4 |
% |
|
|
|
|
|
(a) Represents Sirona sales for the year ended
December 31, 2015.(b) Represents an adjustment to reflect deferred
subscription and warranty revenue that was eliminated under
business combination accounting standards to make the 2016 and 2015
non-U.S. GAAP combined business results comparable.
For Dental and Healthcare Consumables, for the
three month period ended December 31, 2016, sales of the
combined businesses were 3.4% on a constant currency basis.
This includes a benefit of approximately 30 basis points from net
acquisitions and was unfavorably impacted by discontinued products
by approximately 40 basis points, which results in internal sales
growth of 3.5%. Net sales, excluding precious metal content,
were negatively impacted by approximately 80 basis points due to
the strengthening of the U.S. dollar over the prior year period.
Internal sales growth in this segment was led by Europe.
For Technologies, for the three month period
ended December 31, 2016, sales of our combined businesses grew
5.2% on a constant currency basis. This includes a benefit of
5.2% from net acquisitions which results in no internal sales
growth. Net sales, excluding precious metal content, were
negatively impacted by approximately 50 basis points due to the
strengthening of the U.S. dollar over the prior year period.
Internal sales growth in this segment reflects decreased demand in
the US region as a result of lower purchases by a dealer compared
to the prior period offset by increased demand in the Rest of World
region.
|
|
Three Months Ended December 31,
2016 |
|
Q4 2016 Growth |
|
Three Months Ended December 31,
2015 |
(in millions, except
percentages) |
|
Consumables |
Technologies |
Total |
|
Consumables |
Technologies |
Total |
|
Consumables |
Technologies |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
513.3 |
|
$ |
483.2 |
|
$ |
996.5 |
|
|
5.6 |
% |
160.9 |
% |
48.5 |
% |
|
$ |
485.9 |
|
$ |
185.2 |
|
$ |
671.1 |
|
Less: precious metal
content of sales |
|
13.8 |
|
0.1 |
|
13.9 |
|
|
|
|
|
|
25.1 |
|
0.1 |
|
25.2 |
|
Net sales, excluding
precious metal content |
|
499.5 |
|
483.1 |
|
982.6 |
|
|
8.4 |
% |
161.0 |
% |
52.1 |
% |
|
460.8 |
|
185.1 |
|
645.9 |
|
Sirona net sales
(a) |
|
— |
|
— |
|
— |
|
|
|
|
|
|
26.5 |
|
277.7 |
|
304.2 |
|
Merger
relatedadjustments (b) |
|
— |
|
1.5 |
|
1.5 |
|
|
|
|
|
|
— |
|
— |
|
— |
|
Elimination of intercompany net sales |
|
— |
|
— |
|
— |
|
|
|
|
|
|
(0.5 |
) |
— |
|
(0.5 |
) |
Non-US GAAP combined
business, net sales, excluding precious metal content |
|
$ |
499.5 |
|
$ |
484.6 |
|
$ |
984.1 |
|
|
2.6 |
% |
4.7 |
% |
3.6 |
% |
|
$ |
486.8 |
|
$ |
462.8 |
|
$ |
949.6 |
|
Foreign
exchange impact |
|
|
|
|
|
(0.8 |
%) |
(0.5 |
%) |
(0.7 |
%) |
|
|
|
|
Constant currency
growth |
|
|
|
|
|
3.4 |
% |
5.2 |
% |
4.3 |
% |
|
|
|
|
Net acquisitions |
|
|
|
|
|
0.3 |
% |
5.2 |
% |
2.7 |
% |
|
|
|
|
Discontinued
products |
|
|
|
|
|
(0.4 |
%) |
— |
% |
(0.2 |
%) |
|
|
|
|
Internal sales
growth |
|
|
|
|
|
3.5 |
% |
— |
% |
1.8 |
% |
|
|
|
|
(a) Represents Sirona sales for the quarter
ended December 31, 2015.(b) Represents an adjustment to reflect
deferred subscription and warranty revenue that was eliminated
under business combination accounting standards to make the 2016
and 2015 non-U.S. GAAP combined business results comparable.
For Dental and Healthcare Consumables, for the
year ended December 31, 2016, sales of our combined businesses
grew 2.7% on a constant currency basis. This includes a
benefit of approximately 60 basis points from net acquisitions and
was unfavorably impacted by discontinued products by approximately
80 basis points, which results in internal growth of 2.9%.
Net sales, excluding precious metal content, were negatively
impacted by approximately 1.1% due to the strengthening of the U.S.
dollar over the prior year period. Sales growth was led by
Europe and the Rest of World region.
For Technologies, for the year ended
December 31, 2016, sales of our combined businesses grew 4.6%
on a constant currency basis. This includes a benefit of 2.8%
from net acquisitions which results in internal growth of
1.8%. Net sales, excluding precious metal content, were
negatively impacted by approximately 60 basis points due to the
strengthening of the U.S. dollar over the prior year period.
Sales growth in this segment reflects increased demand in the Rest
of World region offset by sales declines in the United State which
reflects lower purchases by a dealer compared to the prior year
period.
|
|
Year Ended December 31, 2016 |
|
2016 Growth |
|
Year Ended December 31, 2015 |
(in millions, except
percentages) |
|
Consumables |
Technologies |
Total |
|
Consumables |
Technologies |
Total |
|
Consumables |
Technologies |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
2,058.1 |
|
$ |
1,687.2 |
|
$ |
3,745.3 |
|
|
5.0 |
% |
136.5 |
% |
40.0 |
% |
|
$ |
1,961.0 |
|
$ |
713.3 |
|
$ |
2,674.3 |
|
Less: precious metal
content of sales |
|
63.8 |
|
0.5 |
|
64.3 |
|
|
|
|
|
|
92.2 |
|
0.6 |
|
92.8 |
|
Net sales, excluding
precious metal content |
|
1,994.3 |
|
1,686.7 |
|
3,681.0 |
|
|
6.7 |
% |
136.7 |
% |
42.6 |
% |
|
1,868.8 |
|
712.7 |
|
2,581.5 |
|
Sirona net sales
(a) |
|
15.7 |
|
145.0 |
|
160.7 |
|
|
|
|
|
|
112.1 |
|
1,060.4 |
|
1,172.5 |
|
Merger
relatedadjustments (b) |
|
— |
|
13.5 |
|
13.5 |
|
|
|
|
|
|
— |
|
— |
|
— |
|
Elimination of intercompany net sales |
|
(0.5 |
) |
— |
|
(0.5 |
) |
|
|
|
|
|
(2.3 |
) |
— |
|
(2.3 |
) |
Non-US GAAP combined
business, net sales, excluding precious metal content |
|
$ |
2,009.5 |
|
$ |
1,845.2 |
|
$ |
3,854.7 |
|
|
1.6 |
% |
4.0 |
% |
2.7 |
% |
|
$ |
1,978.6 |
|
$ |
1,773.1 |
|
$ |
3,751.7 |
|
Foreign
exchange impact |
|
|
|
|
|
(1.1 |
%) |
(0.6 |
%) |
(0.9 |
%) |
|
|
|
|
Constant currency
growth |
|
|
|
|
|
2.7 |
% |
4.6 |
% |
3.6 |
% |
|
|
|
|
Net acquisitions |
|
|
|
|
|
0.6 |
% |
2.8 |
% |
1.7 |
% |
|
|
|
|
Discontinued
products |
|
|
|
|
|
(0.8 |
%) |
— |
% |
(0.5 |
%) |
|
|
|
|
Internal sales
growth |
|
|
|
|
|
2.9 |
% |
1.8 |
% |
2.4 |
% |
|
|
|
|
(a) Represents Sirona sales for the year ended
December 31, 2015.(b) Represents an adjustment to reflect deferred
subscription and warranty revenue that was eliminated under
business combination accounting standards to make the 2016 and 2015
non-U.S. GAAP combined business results comparable.
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