DENTSPLY SIRONA Inc. (“Dentsply Sirona”) (Nasdaq: XRAY), the Dental
Solutions Company, today announced its financial results for the
three months ended June 30, 2019.
Second Quarter 2019 Financial
Results
Reported net sales of $1,009.4 million declined
3.1% in the second quarter of 2019 and were up 3.0% on an internal
sales growth basis. In the United States, revenues decreased by
2.6% and decreased by 1.5% on an internal basis. Rest of World
region revenues declined 6.9% on a reported basis but increased
2.4% on an internal sales growth basis. European regions revenues
declined 1.1% with foreign exchange accounting for 6.9% of the
European revenue decline. On an internal sales growth basis,
European revenues increased by 7.1%.
Net income attributable to Dentsply Sirona for
the second quarter of 2019 was $36.4 million, or $0.16 per diluted
share, compared to a loss of $1,122.0 million, or $4.98 per basic
share in the second quarter of 2018. On an adjusted basis,
excluding certain items, non-US GAAP net earnings per diluted share
were $0.66 compared to $0.60 in the second quarter of 2018. A
reconciliation of the non-US GAAP measures to earnings per share
calculated on a US GAAP basis is provided in the attached
tables.
Don Casey, Chief Executive Officer, commented,
“It was a solid quarter as we continue to deliver on the core
elements of our restructuring plan of growth, margin improvement
and organization simplification. Second quarter internal growth of
three percent is in line with the target we outlined last November.
Our new product lineup is set to drive continued growth in the back
half of the year. We are operating in our new simplified structure
that is improving efficiency and enabling us to achieve
approximately a one thousand reduction in headcount over the past
eight months. In the second quarter, gross margin improved 130
basis points compared to prior year, and our adjusted operating
income margin expanded to over 20%. Our results demonstrate that
solid sales growth and disciplined expense management drive
significant operating leverage. As a result of the robust financial
performance in the quarter, today we are increasing our Adjusted
EPS guidance for 2019.”
Mr. Casey continued, “There is still a
tremendous amount of work to be done as we focus on continuing to
deliver growth and margin improvement. We would like to thank all
our employees for their effort in helping to drive this favorable
result. We are fully confident that this team will continue to
execute on our program, and that we can deliver significant value
for our shareholders as we move forward."
2019 Guidance [2]
The Company increased 2019 guidance range for
Adjusted Earnings Per Share to $2.35 to $2.45, up from the previous
range of $2.30 to $2.40. The 2019 guidance incorporates the
following assumptions:
- Reported revenue guidance range of $3.95 to $4.05 billion.
- Internal sales growth in the range of 4% to 5%.
- Portfolio shaping initiatives and M&A reduce 2019 revenues
by approximately $60 million.
- At current exchange rates, currency is anticipated to be a 2.5%
headwind to 2019 revenues, reducing 2019 reported revenues by
approximately $100 million.
- Adjusted operating income margin of 18% to 19%, up from
previous adjusted operating margin guidance of 17% to 18%.
- Operating expenses below 2018 levels.
- Non-US GAAP effective tax rate of 24.75%, up from previous
guidance of 24.0%.
- 2019 guidance does not incorporate any additional 2019 share
repurchase activity.
[1] Non-US GAAP adjusted EPS, net sales
excluding precious metal, constant currency growth and internal
growth and results are non-US GAAP financial measures that exclude
certain items. Please refer to the disclosure at the end of the
release. For a reconciliation of constant currency growth to
internal revenue growth please see supplemental tables at the end
of the release.
[2] Our guidance is presented on a non-US GAAP basis, as it does
not include the impact of prospective acquisitions, acquisitions
announced but not yet closed and other non-US 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.
Conference Call/Webcast
InformationDentsply Sirona’s management team will host an
investor conference call and live webcast on August 2nd, at 8:30 am
EST. A presentation will also 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 +1-877-370-7637
for domestic calls, or +1-629-228-0723 for international calls. The
Conference ID # is 8397306. 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
+1-855-859-2056 (for domestic calls) or +1-404-537-3406 (for
international calls), replay passcode # 8397306.
About Dentsply SironaDentsply
Sirona is the world’s largest manufacturer of professional dental
products and technologies, with a 132-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. The Company’s shares of common stock 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:
Investors:John Sweeney, CFA, IRCVice President,
Investor
Relations+1-717-849-7863John.Sweeney@dentsplysirona.com
Forward-Looking Statements and
Associated Risks
Information the Company has included or
incorporated by reference in this Form 8-K, and information which
may be contained in other filings with the U. S. Securities and
Exchange Commission (the “SEC”) as well as press releases or other
public statements, contains or may contain forward-looking
statements. These forward-looking statements include, among other
things, statements about the completion of the year-end financial
statement audit and expected financial results referred to herein,
and/or statements about the Company’s plans, objectives,
expectations (financial or otherwise) or intentions, including the
Company's 2019 guidance.
The Company’s forward-looking statements involve
risks and uncertainties. Actual results may differ significantly
from those projected or suggested in any forward-looking
statements. The Company does not undertake any obligation to
release publicly any revisions to such forward-looking statements
to reflect events or circumstances occurring after the date hereof
or to reflect the occurrence of unanticipated events. Any number of
factors could cause the Company’s actual results to differ
materially from those contemplated by any forward-looking
statements, including, but not limited to, the risks associated
with the following:
- the preliminary nature of the financial results contained in
this release
- the Company's ability to successfully implement its cost
reduction and restructuring plans
- the Company’s ability to remain profitable in a very
competitive marketplace, which depends upon the Company’s ability
to differentiate its products and services from those of
competitors
- the Company’s failure to anticipate and appropriately adapt to
changes or trends within the rapidly changing dental
industry
- the effect of changes in the Company’s management and
personnel
- changes in applicable laws, rules or regulations, or their
interpretation or enforcement, or the enactment of new laws, rules
or regulations, which apply to the Company’s business practices
(past, present or future) or require the Company to spend
significant resources for compliance
- a significant failure or disruption in service within the
Company’s operations or the operations of key
distributors
- results in pending and future litigation, investigations or
other proceedings which could subject the Company to significant
monetary damages or penalties and/or require us to change our
business practices, or the costs incurred in connection with such
proceedings
- the Company’s failure to attract and retain talented employees,
or to manage succession and retention for its Chief Executive
Officer or other key executives
- the Company’s failure to successfully integrate the business
operations or achieve the anticipated benefits from any acquired
businesses
- the Company’s failure to execute on, or other issues arising
under, certain key client contracts
- the impact of the Company’s debt service obligations on the
availability of funds for other business purposes, the terms of and
required compliance with covenants relating to the Company’s
indebtedness and its access to the credit markets in
general
- general economic conditions
- other risks described from time to time in the Company’s
filings with the SEC
You should carefully consider these and other
relevant factors, including those risk factors in Part I, Item 1A,
“Risk Factors” in the Company's most recent Form 10-K and any other
information included or incorporated by reference in this Report,
and information which may be contained in the Company’s other
filings with the SEC, when reviewing any forward-looking statement.
Investors should understand it is impossible to predict or identify
all such factors or risks. As such, you should not consider either
foregoing lists, or the risks identified in the Company’s SEC
filings, to be a complete discussion of all potential risks or
uncertainties associated with an investment in the company.
Non-US GAAP Financial
Measures
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 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 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.
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 intangible assets either purchased or acquired
through a business combination. The Company believes that this
information is helpful in understanding underlying operating trends
and cash flow generation.
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 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 significant product lines. In addition,
this category includes the roll off to the consolidated statements
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) Gain on sale of marketable
securities. This adjustment represents the gain on the sale of
marketable securities held by the Company. The gain has been
excluded from adjusted net income attributed to Dentsply Sirona to
allow investors to evaluate and understand operating trends
excluding this gain.
(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 and the vesting and
exercise of employee share-based compensation. 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 (loss) 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.
DENTSPLY SIRONA INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(In millions, except per share amounts and
percentages)(unaudited)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Net sales |
$ |
1,009.4 |
|
$ |
1,042.1 |
|
|
$ |
1,955.6 |
|
$ |
1,998.2 |
|
Net sales, excluding precious
metal content |
1,000.5 |
|
1,032.7 |
|
|
1,935.5 |
|
1,978.5 |
|
|
|
|
|
|
|
|
|
Cost of products sold |
468.6 |
|
489.3 |
|
|
915.1 |
|
931.3 |
|
|
|
|
|
|
|
|
|
Gross profit |
540.8 |
|
552.8 |
|
|
1,040.5 |
|
1,066.9 |
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
430.9 |
|
432.2 |
|
|
862.8 |
|
867.4 |
|
|
|
|
|
|
|
|
|
Goodwill impairment |
— |
|
1,085.8 |
|
|
— |
|
1,085.8 |
|
|
|
|
|
|
|
|
|
Restructuring and other
costs |
42.4 |
|
188.9 |
|
|
62.9 |
|
199.1 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
67.5 |
|
(1,154.1 |
) |
|
114.8 |
|
(1,085.4 |
) |
|
|
|
|
|
|
|
|
Net interest and other expense
(income) |
19.9 |
|
8.2 |
|
|
13.4 |
|
(17.9 |
) |
|
|
|
|
|
|
|
|
Income (loss) before income
taxes |
47.6 |
|
(1,162.3 |
) |
|
101.4 |
|
(1,067.5 |
) |
|
|
|
|
|
|
|
|
Provision (benefit) for income
taxes |
11.2 |
|
(41.3 |
) |
|
25.8 |
|
(27.6 |
) |
|
|
|
|
|
|
|
|
Net income (loss) |
36.4 |
|
(1,121.0 |
) |
|
75.6 |
|
(1,039.9 |
) |
|
|
|
|
|
|
|
|
Less: Net income attributable
to noncontrolling interest |
— |
|
1.0 |
|
|
— |
|
0.9 |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to Dentsply Sirona |
$ |
36.4 |
|
$ |
(1,122.0 |
) |
|
$ |
75.6 |
|
$ |
(1,040.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share attributable to Dentsply Sirona: |
|
|
|
|
|
|
|
Basic |
$ |
0.16 |
|
$ |
(4.98 |
) |
|
$ |
0.34 |
|
$ |
(4.60 |
) |
Diluted |
$ |
0.16 |
|
$ |
(4.98 |
) |
|
$ |
0.34 |
|
$ |
(4.60 |
) |
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
224.2 |
|
225.2 |
|
|
223.7 |
|
226.2 |
|
Diluted |
225.7 |
|
225.2 |
|
|
225.3 |
|
226.2 |
|
|
|
|
|
|
|
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(In millions)(unaudited)
|
June 30, 2019 |
|
December 31, 2018 |
|
|
|
|
Assets |
|
|
|
Current Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
250.1 |
|
$ |
309.6 |
Accounts and notes receivable-trade, net |
700.1 |
|
701.9 |
Inventories, net |
608.3 |
|
598.9 |
Prepaid expenses and other current assets, net |
269.8 |
|
277.6 |
|
|
|
|
Total Current Assets |
1,828.3 |
|
1,888.0 |
|
|
|
|
Property, plant and equipment,
net |
819.6 |
|
870.6 |
Operating lease right-of-use
assets, net |
155.8 |
|
— |
Identifiable intangible
assets, net |
2,295.9 |
|
2,420.3 |
Goodwill, net |
3,412.7 |
|
3,431.3 |
Other noncurrent assets,
net |
63.0 |
|
76.8 |
|
|
|
|
Total Assets |
$ |
8,575.3 |
|
$ |
8,687.0 |
|
|
|
|
Liabilities and
Equity |
|
|
|
Current Liabilities: |
|
|
|
Accounts payable |
$ |
248.1 |
|
$ |
283.9 |
Accrued liabilities |
524.4 |
|
578.9 |
Income taxes payable |
52.0 |
|
58.1 |
Notes payable and current portion of long-term debt |
56.3 |
|
92.4 |
|
|
|
|
Total Current Liabilities |
880.8 |
|
1,013.3 |
|
|
|
|
Long-term debt |
1,441.3 |
|
1,564.9 |
Operating lease
liabilities |
119.3 |
|
— |
Deferred income taxes |
519.8 |
|
552.8 |
Other noncurrent
liabilities |
431.2 |
|
423.0 |
|
|
|
|
Total Liabilities |
3,392.4 |
|
3,554.0 |
|
|
|
|
Total Equity |
5,182.9 |
|
5,133.0 |
|
|
|
|
Total Liabilities and Equity |
$ |
8,575.3 |
|
$ |
8,687.0 |
|
|
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(In millions)(unaudited)
|
Six Months Ended June 30, |
|
2019 |
|
|
2018 |
|
Cash flows from
operating activities: |
|
|
|
Net income (loss) |
$ |
75.6 |
|
|
$ |
(1,039.9 |
) |
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation |
70.4 |
|
|
68.8 |
|
Amortization of intangible assets |
95.5 |
|
|
100.1 |
|
Amortization of deferred financing costs |
1.4 |
|
|
1.3 |
|
Fixed Asset Impairment |
33.2 |
|
|
— |
|
Deferred income taxes |
(18.4 |
) |
|
(70.8 |
) |
Stock based compensation expense |
34.4 |
|
|
9.8 |
|
Restructuring and other costs - non-cash |
14.8 |
|
|
9.1 |
|
Goodwill impairment |
— |
|
|
1,085.8 |
|
Indefinite-lived intangible asset impairment |
5.3 |
|
|
179.2 |
|
Other non-cash income |
(16.7 |
) |
|
(2.9 |
) |
Loss on disposal of property, plant and equipment |
0.6 |
|
|
0.6 |
|
Gain on divestiture of noncontrolling interest |
(8.7 |
) |
|
— |
|
Loss on sale of non-strategic businesses or product lines |
14.5 |
|
|
— |
|
Gain on sale of equity security |
— |
|
|
(44.1 |
) |
Changes in operating assets and liabilities, net of
acquisitions: |
|
|
|
Accounts and notes receivable-trade, net |
(1.5 |
) |
|
23.0 |
|
Inventories, net |
(18.3 |
) |
|
(69.3 |
) |
Prepaid expenses and other current assets, net |
7.9 |
|
|
(25.7 |
) |
Other noncurrent assets, net |
6.9 |
|
|
(7.7 |
) |
Accounts payable |
(32.2 |
) |
|
(6.5 |
) |
Accrued liabilities |
(81.1 |
) |
|
(4.6 |
) |
Income taxes |
(11.0 |
) |
|
(28.5 |
) |
Other noncurrent liabilities |
1.8 |
|
|
(5.7 |
) |
Net cash provided by
operating activities |
174.4 |
|
|
172.0 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Capital expenditures |
(63.5 |
) |
|
(81.2 |
) |
Purchase of short term
investments |
(0.3 |
) |
|
— |
|
Cash paid for acquisitions of
businesses and equity investments, net of cash acquired |
— |
|
|
(130.5 |
) |
Proceeds from sale of equity
security |
— |
|
|
54.1 |
|
Cash received for sale of
non-strategic businesses and product lines |
11.6 |
|
|
— |
|
Cash received on derivative
contracts |
27.0 |
|
|
1.9 |
|
Cash paid on derivative
contracts |
— |
|
|
(2.4 |
) |
Expenditures for identifiable
intangible assets |
— |
|
|
(5.3 |
) |
Proceeds from sale of
property, plant and equipment, net |
0.7 |
|
|
3.9 |
|
Net cash used in
investing activities |
(24.5 |
) |
|
(159.5 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Repayments on short-term
borrowings |
(23.3 |
) |
|
187.3 |
|
Cash paid for treasury
stock |
(60.0 |
) |
|
(250.2 |
) |
Cash dividends paid |
(39.1 |
) |
|
(39.7 |
) |
Cash paid for contingent
consideration on prior acquisitions |
(30.6 |
) |
|
— |
|
Proceeds from long-term
borrowings |
1.7 |
|
|
0.3 |
|
Repayments on long-term
borrowings |
(134.6 |
) |
|
(0.4 |
) |
Proceeds from exercise of
stock options |
76.4 |
|
|
13.9 |
|
Net cash used in
financing activities |
(209.5 |
) |
|
(88.8 |
) |
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
0.1 |
|
|
(5.0 |
) |
Net decrease in cash and cash
equivalents |
(59.5 |
) |
|
(81.3 |
) |
Cash and cash equivalents at
beginning of period |
309.6 |
|
|
320.6 |
|
Cash and cash equivalents at
end of period |
$ |
250.1 |
|
|
$ |
239.3 |
|
|
|
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES(In millions, except
percentages)(unaudited)
A reconciliation of reported net sales to non-US
GAAP net sales, excluding precious metal content, is as
follows:
|
|
Three Months Ended June 30, |
|
|
(in millions, except
percentages) |
|
2019 |
|
2018 |
|
Variance % |
|
|
|
|
|
|
|
Net
sales |
|
$ |
1,009.4 |
|
$ |
1,042.1 |
|
(3.1 |
%) |
|
Less: precious metal content of sales |
|
8.9 |
|
9.4 |
|
(5.3 |
%) |
|
Net sales, excluding precious
metal content |
|
1,000.5 |
|
1,032.7 |
|
(3.1 |
%) |
|
Acquisition related adjustments (a) |
|
— |
|
2.1 |
|
NM |
|
Non-US GAAP, net sales,
excluding precious metal content |
|
$ |
1,000.5 |
|
$ |
1,034.8 |
|
(3.3 |
%) |
|
Foreign exchange impact |
|
|
|
|
|
(4.4 |
%) |
|
Constant currency growth |
|
|
|
|
|
1.1 |
% |
|
Acquisitions |
|
|
|
|
|
(0.6 |
%) |
|
Discontinued products |
|
|
|
|
|
(1.3 |
%) |
|
Internal sales
growth |
|
|
|
|
|
3.0 |
% |
|
NM - Not meaningful
(a) Represents an adjustment to reflect deferred
revenue that was eliminated under business combination accounting
standards.
|
|
|
|
|
|
|
Three Months Ended June 30, 2019 |
|
Q2 2019 Growth |
|
Three Months Ended June 30, 2018 |
(in millions, except
percentages) |
US |
Europe |
ROW |
Total |
|
US |
Europe |
ROW |
Total |
|
US |
Europe |
ROW |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
329.5 |
$ |
422.0 |
$ |
257.9 |
$ |
1,009.4 |
|
(2.6 |
%) |
|
(1.1 |
%) |
|
(6.9 |
%) |
|
(3.1 |
%) |
|
|
$ |
338.4 |
$ |
426.7 |
$ |
277.0 |
$ |
1,042.1 |
Less: precious metal content of sales |
1.5 |
6.6 |
0.8 |
8.9 |
|
|
|
|
|
|
1.3 |
7.3 |
0.8 |
9.4 |
Net sales, excluding precious
metal content |
328.0 |
415.4 |
257.1 |
1,000.5 |
|
(2.7 |
%) |
|
(1.0 |
%) |
|
(6.9 |
%) |
|
(3.1 |
%) |
|
|
337.1 |
419.4 |
276.2 |
1,032.7 |
Acquisition related adjustments (a) |
— |
— |
— |
— |
|
|
|
|
|
|
2.1 |
— |
— |
2.1 |
Non-US GAAP, net sales,
excluding precious metal content |
$ |
328.0 |
$ |
415.4 |
$ |
257.1 |
$ |
1,000.5 |
|
(3.3 |
%) |
|
(1.0 |
%) |
|
(6.9 |
%) |
|
(3.3 |
%) |
|
|
$ |
339.2 |
$ |
419.4 |
$ |
276.2 |
$ |
1,034.8 |
Foreign exchange impact |
|
|
|
|
|
(0.1 |
%) |
|
(6.9 |
%) |
|
(6.0 |
%) |
|
(4.4 |
%) |
|
|
|
|
|
|
Constant currency growth |
|
|
|
|
|
(3.2 |
%) |
|
5.9 |
% |
|
(0.9 |
%) |
|
1.1 |
% |
|
|
|
|
|
|
Acquisitions |
|
|
|
|
|
(1.3 |
%) |
|
(0.2 |
%) |
|
(0.3 |
%) |
|
(0.6 |
%) |
|
|
|
|
|
|
Discontinued products |
|
|
|
|
|
(0.4 |
%) |
|
(1.0 |
%) |
|
(3.0 |
%) |
|
(1.3 |
%) |
|
|
|
|
|
|
Internal sales
growth |
|
|
|
|
|
(1.5 |
%) |
|
7.1 |
% |
|
2.4 |
% |
|
3.0 |
% |
|
|
|
|
|
|
(a) Represents an adjustment to reflect deferred
revenue that was eliminated under business combination accounting
standards.
|
|
|
|
|
|
|
Three Months Ended June 30, 2019 |
|
Q2 2019 Growth |
|
Three Months Ended June 30, 2018 |
(in millions, except
percentages) |
Technologies & Equipment |
Consumables |
Total |
|
Technologies & Equipment |
Consumables |
Total |
|
Technologies & Equipment |
Consumables |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
558.4 |
$ |
451.0 |
$ |
1,009.4 |
|
0.9 |
% |
|
(7.8 |
%) |
|
(3.1 |
%) |
|
|
$ |
553.2 |
$ |
488.9 |
$ |
1,042.1 |
Less: precious metal content of sales |
— |
8.9 |
8.9 |
|
|
|
|
|
— |
9.4 |
9.4 |
Net sales, excluding precious
metal content |
558.4 |
442.1 |
1,000.5 |
|
0.9 |
% |
|
(7.8 |
%) |
|
(3.1 |
%) |
|
|
553.2 |
479.5 |
1,032.7 |
Acquisition related adjustments (a) |
— |
— |
— |
|
|
|
|
|
2.1 |
— |
2.1 |
Non-US GAAP, net sales,
excluding precious metal content |
$ |
558.4 |
$ |
442.1 |
$ |
1,000.5 |
|
0.6 |
% |
|
(7.8 |
%) |
|
(3.3 |
%) |
|
|
$ |
555.3 |
$ |
479.5 |
$ |
1,034.8 |
Foreign exchange impact |
|
|
|
|
(4.9 |
%) |
|
(3.7 |
%) |
|
(4.4 |
%) |
|
|
|
|
|
Constant currency growth |
|
|
|
|
5.5 |
% |
|
(4.1 |
%) |
|
1.1 |
% |
|
|
|
|
|
Acquisitions |
|
|
|
|
(1.1 |
%) |
|
— |
% |
|
(0.6 |
%) |
|
|
|
|
|
Discontinued products |
|
|
|
|
(2.7 |
%) |
|
— |
% |
|
(1.3 |
%) |
|
|
|
|
|
Internal sales
growth |
|
|
|
|
9.3 |
% |
|
(4.1 |
%) |
|
3.0 |
% |
|
|
|
|
|
(a) Represents an adjustment to reflect deferred
revenue that was eliminated under business combination accounting
standards.
DENTSPLY SIRONA INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(In millions)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
US GAAP |
|
|
|
|
|
|
|
NON-US GAAP |
|
Three MonthsEnded June30, 2019 |
Amortization of Purchased Intangible Assets |
Restructuring Program Related Costsand Other Costs
(a) |
Business Combination Related Costs and Fair Value
Adjustments |
Credit Risk and Fair Value Adjustments |
Tax Impact of Non-US GAAP Adjustments |
Income Tax Related Adjustments |
Total Non-US GAAP Adjustments |
Three Months Ended June 30, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES |
$ |
1,009.4 |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
$ |
— |
|
$ |
1,009.4 |
|
NET SALES-excluding precious
metals |
|
1,000.5 |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
— |
|
|
1,000.5 |
|
GROSS PROFIT |
|
540.8 |
|
28.8 |
|
11.0 |
|
1.5 |
|
— |
|
— |
— |
41.3 |
|
|
582.1 |
|
% OF NET SALES-excluding
precious metals |
|
54.1 |
% |
|
|
|
|
|
|
|
|
58.2 |
% |
SG&A EXPENSES |
|
430.9 |
|
(18.5 |
) |
(31.8 |
) |
(0.3 |
) |
— |
|
— |
— |
(50.6 |
) |
|
380.3 |
|
% OF NET SALES-excluding
precious metals |
|
43.1 |
% |
|
|
|
|
|
|
|
|
38.0 |
% |
RESTRUCTURING AND OTHER
COSTS |
|
42.4 |
|
— |
|
(42.4 |
) |
— |
|
— |
|
— |
— |
(42.4 |
) |
|
— |
|
INCOME FROM OPERATIONS |
|
67.5 |
|
47.3 |
|
85.2 |
|
1.8 |
|
— |
|
— |
— |
134.3 |
|
|
201.8 |
|
% OF NET SALES-excluding
precious metals |
|
6.7 |
% |
|
|
|
|
|
|
|
|
20.2 |
% |
NET INTEREST AND OTHER
EXPENSE |
|
19.9 |
|
— |
|
(14.5 |
) |
(0.2 |
) |
(1.3 |
) |
— |
— |
(16.0 |
) |
|
3.9 |
|
PRE-TAX INCOME |
|
47.6 |
|
47.3 |
|
99.7 |
|
2.0 |
|
1.3 |
|
— |
— |
150.3 |
|
|
197.9 |
|
INCOME TAXES |
|
11.2 |
|
— |
|
— |
|
— |
|
— |
|
38.0 |
0.8 |
38.8 |
|
|
50.0 |
|
% OF PRE-TAX INCOME |
|
23.5 |
% |
|
|
|
|
|
|
|
|
25.3 |
% |
LESS: NET INCOME ATTRIBUTABLE
TO NON-CONTROLLING INTERESTS |
|
— |
|
|
|
|
|
|
|
— |
|
|
— |
|
NET INCOME ATTRIBUTABLE TO
DENTSPLY SIRONA |
$ |
36.4 |
|
|
|
|
|
|
|
$ |
111.5 |
|
$ |
147.9 |
|
% OF NET SALES-excluding
precious metals |
|
3.6 |
% |
|
|
|
|
|
|
|
|
14.8 |
% |
EARNINGS PER SHARE -
DILUTED |
$ |
0.16 |
|
|
|
|
|
|
|
$ |
0.50 |
|
$ |
0.66 |
|
(a) Certain
severance costs related to the Chief Financial Officer and Chief
Human Resources Officer of $11.0 million are included within this
item. |
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(In millions)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
US GAAP |
|
|
|
|
|
|
|
|
NON-US GAAP |
|
Three MonthsEnded June 30, 2018 |
Amortization of Purchased
Intangible Assets |
Restructuring Program Related Costs
and Other Costs |
Gain on Sale of Marketable Securities |
Business Combination Related Costs and Fair Value
Adjustments |
Credit Risk and Fair Value Adjustments |
Tax Impact of Non-US GAAP Adjustments |
Income Tax Related Adjustments |
Total Non-US GAAP Adjustments |
Three Months Ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES |
$ |
1,042.1 |
|
— |
|
— |
|
— |
2.1 |
|
— |
|
— |
— |
$ |
2.1 |
|
$ |
1,044.2 |
|
NET SALES-excluding precious
metals |
|
1,032.7 |
|
— |
|
— |
|
— |
2.1 |
|
— |
|
— |
— |
2.1 |
|
|
1,034.8 |
|
GROSS PROFIT |
|
552.8 |
|
30.1 |
|
1.9 |
|
— |
3.8 |
|
— |
|
— |
— |
35.8 |
|
|
588.6 |
|
% OF NET SALES-excluding
precious metals |
|
53.5 |
% |
|
|
|
|
|
|
|
|
|
56.9 |
% |
SG&A EXPENSES |
|
432.2 |
|
(20.0 |
) |
(1.9 |
) |
— |
(2.0 |
) |
— |
|
— |
— |
(23.9 |
) |
|
408.3 |
|
% OF NET SALES-excluding
precious metals |
|
41.9 |
% |
|
|
|
|
|
|
|
|
|
39.5 |
% |
GOODWILL IMPAIRMENT |
|
1,085.8 |
|
— |
|
(1,085.8 |
) |
— |
— |
|
— |
|
— |
— |
(1,085.8 |
) |
|
— |
|
RESTRUCTURING AND OTHER
COSTS |
|
188.9 |
|
— |
|
(188.9 |
) |
— |
— |
|
— |
|
— |
— |
(188.9 |
) |
|
— |
|
(LOSS) INCOME FROM
OPERATIONS |
|
(1,154.1 |
) |
50.1 |
|
1,278.5 |
|
— |
5.8 |
|
— |
|
— |
— |
1,334.4 |
|
|
180.3 |
|
% OF NET SALES-excluding
precious metals |
|
(111.8 |
%) |
|
|
|
|
|
|
|
|
|
17.4 |
% |
NET INTEREST AND OTHER
EXPENSE |
|
8.2 |
|
— |
|
— |
|
— |
(0.8 |
) |
(2.5 |
) |
— |
— |
(3.3 |
) |
|
4.9 |
|
PRE-TAX (LOSS) INCOME |
|
(1,162.3 |
) |
50.1 |
|
1,278.5 |
|
— |
6.6 |
|
2.5 |
|
— |
— |
1,337.7 |
|
|
175.4 |
|
INCOME TAXES |
|
(41.3 |
) |
— |
|
— |
|
— |
— |
|
— |
|
72.6 |
6.3 |
78.9 |
|
|
37.6 |
|
% OF PRE-TAX (LOSS)
INCOME |
|
3.6 |
% |
|
|
|
|
|
|
|
|
|
21.4 |
% |
LESS: NET INCOME ATTRIBUTABLE
TO NON-CONTROLLING INTERESTS |
|
1.0 |
|
|
|
|
|
|
|
|
— |
|
|
1.0 |
|
NET (LOSS) INCOME
ATTRIBUTABLE TO DENTSPLY SIRONA |
$ |
(1,122.0 |
) |
|
|
|
|
|
|
|
$ |
1,258.8 |
|
$ |
136.8 |
|
% OF NET SALES-excluding
precious metals |
|
(108.6 |
%) |
|
|
|
|
|
|
|
|
13.2 |
% |
EARNINGS PER SHARE -
DILUTED |
$ |
(4.98 |
) |
|
|
|
|
|
|
|
$ |
5.58 |
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
calculating US GAAP net loss per share |
|
|
|
|
|
|
225.2 |
|
Shares used in
calculating diluted non-US GAAP net income per share |
|
|
|
|
|
|
226.9 |
|
|
|
|
|
|
|
|
|
|
|
|
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