NEWS
For Further
Information
Contact:
William R. Jellison | FOR IMMEDIATE RELEASE |
Senior Vice President and
Chief Financial Officer
(717) 849-4243
DENTSPLY International Inc.
Reports Record Third Quarter 2008 Sales and Earnings
York, PA – October 28, 2008 -- DENTSPLY International Inc. (NASDAQ–XRAY) today announced record sales and earnings for the three months ended September 30, 2008.
FINANCIAL RESULTS
Three Months Ended September 30, 2008
Net sales in the third quarter of 2008 increased 8.6% to $530.0 million compared to $488.1 million reported for the third quarter of 2007. Net sales, without precious metal content, increased 9.6% to $488.1 million in the third quarter of 2008, as we continued to benefit from a balanced portfolio of dental products with a diversified geographic mix, favorable exchange impact and acquisition growth.
Net income for the third quarter of 2008 was $66.0 million, or $0.44 per diluted share, compared to $0.42 per diluted share in the third quarter of 2007. Net income in the third quarter of 2008 included an $11.4 million net of tax charge for restructuring and other costs, and a net benefit for income tax-related adjustments of $8.2 million, which combined, reduced earnings per share on a net basis by $.02 per diluted share. The third quarter of 2007 included the net of tax impact of restructuring and other costs of $3.0 million and a net benefit for income tax-related adjustments of $7.8 million, which combined, benefited earnings per diluted share by $.03.
Net income on a non-GAAP basis, (excluding restructuring and other costs, and income tax-related adjustments), was $69.3 million or $0.46 per diluted share in the third quarter of 2008 compared to $61.0 million or $0.39 per diluted share in the third quarter of 2007. This represents a 17.9% increase in
earnings per diluted share on an adjusted non-GAAP basis. For a reconciliation of GAAP and non-GAAP measures, see the attached table.
2008 Third Quarter Results & 2008 Full Year Outlook
Bret Wise, Chairman and Chief Executive Officer, stated “We are very pleased to once again deliver record top and bottom line results in the third quarter. We continue to benefit from our role as a key diversified player in the global dental industry, which generally has less volatility than broader markets. We believe our global market position and financial strength in today’s economic environment will allow us to develop a stronger presence in the worldwide dental market as we move forward.“
Mr. Wise went on to state, “While we acknowledge that economic volatility is making global markets more unpredictable, our strong and consistent year-to-date performance, new product launches, and current assessment of business and market conditions continue to give us confidence in our business model. We are reconfirming our 2008 guidance of $1.86 to $1.91 for earnings per diluted share. Guidance for 2008 excludes income tax related adjustments, restructuring and other costs, and the benefit from the provisions of SFAS 157.”
ADDITIONAL INFORMATION
A conference call has been scheduled for Wednesday, October 29, 2008 at 8:30 AM Eastern Time. A live broadcast is available through Shareholder.com by accessing DENTSPLY’s website at www.dentsply.com. The Conference ID # is 1471266. If you would like to participate in this call, dial (877) 719-9799 (for domestic calls), and (719)325-4820 (for international calls). An on-line rebroadcast, as well as a transcript of the call, will be available to the public following the call at the DENTSPLY website: www.dentsply.com. A replay will be available for one week following the conference call at (888) 203-1112 (for domestic calls) and (719) 457-0820 (for international calls), Passcode # 1471266.
DENTSPLY designs, develops, manufactures and markets a broad range of products for the dental market. The Company believes that it is the world’s leading manufacturer and distributor of dental prosthetics, precious metal dental alloys, dental ceramics, endodontic instruments and materials, prophylaxis paste, dental sealants, ultrasonic scalers, and crown and bridge materials; the leading United States manufacturer and distributor of dental handpieces, dental x-ray film holders, film mounts and bone substitute/grafting materials; and a leading worldwide manufacturer or distributor of dental implants, impression materials, orthodontic appliances, dental cutting instruments, infection control products, and dental injectable anesthetics. The Company distributes its dental products in over 120 countries under some of the most well-established brand names in the industry.
DENTSPLY is committed to the development of innovative, high quality, cost-effective new products for the dental market.
This press release contains forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding future events or the future financial performance of the Company that involve substantial risks and uncertainties. Actual events or results may differ materially from those in the projections or other forward-looking information set forth herein as a result of certain risk factors.
These risk factors include, without limitation; the continued strength of dental markets, the timing, success and market reception for our new and existing products, uncertainty with respect to governmental actions with respect to dental products, outcome of litigation, continued support of our products by influential
dental professionals, and changes in the general economic environment that could affect our business. Changes in such assumptions or factors could produce significantly different results. For an additional description of risk factors, please refer to the Company’s Annual Report on Form 10-K and its subsequent periodic reports on Forms 10-Q filed with the Securities and Exchange Commission.
NON-GAAP FINANCIAL MEASURES
DENTSPLY believes that the non-GAAP financial information provided in this release may be useful to investors for comparison purposes because the Company has historically provided similar information. The non-GAAP financial information should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with GAAP.
DENTSPLY INTERNATIONAL INC.
CONDENSED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
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| THREE MONTHS ENDED |
| NINE MONTHS ENDED | ||||||
|
| September 30, |
| September 30, | ||||||
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| 2008 |
| 2007 |
| 2008 |
| 2007 | ||
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NET SALES | $ | 529,953 | $ | 488,103 | $ | 1,685,582 | $ | 1,468,329 | ||
NET SALES - Ex Precious Metals |
| 488,086 |
| 445,332 |
| 1,526,607 |
| 1,330,706 | ||
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COST OF PRODUCTS SOLD |
| 249,770 |
| 235,113 |
| 804,670 |
| 700,277 | ||
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GROSS PROFIT |
| 280,183 |
| 252,990 |
| 880,912 |
| 768,052 | ||
% OF NET SALES |
| 52.9% |
| 51.8% |
| 52.3% |
| 52.3% | ||
% OF NET SALES - Ex Precious Metals |
| 57.4% |
| 56.8% |
| 57.7% |
| 57.7% | ||
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SELLING, GENERAL & ADMINISTRATIVE EXPENSES |
| 180,729 |
| 165,708 |
| 565,599 |
| 501,869 | ||
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RESTRUCTURING AND OTHER COSTS |
| 18,539 |
| 4,692 |
| 20,202 |
| 8,889 | ||
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INCOME FROM OPERATIONS |
| 80,915 |
| 82,590 |
| 295,111 |
| 257,294 | ||
% OF NET SALES |
| 15.3% |
| 16.9% |
| 17.5% |
| 17.5% | ||
% OF NET SALES - Ex Precious Metals |
| 16.6% |
| 18.5% |
| 19.3% |
| 19.3% | ||
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NET INTEREST AND OTHER NON OPERATING (INCOME) EXPENSE | 5,664 |
| 745 |
| 15,018 |
| (3,643) | |||
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PRE-TAX INCOME |
| 75,251 |
| 81,845 |
| 280,093 |
| 260,937 | ||
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INCOME TAXES |
| 9,204 |
| 16,126 |
| 67,219 |
| 71,313 | ||
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NET INCOME | $ | 66,047 | $ | 65,719 | $ | 212,874 | $ | 189,624 | ||
% OF NET SALES |
| 12.5% |
| 13.5% |
| 12.6% |
| 12.9% | ||
% OF NET SALES - Ex Precious Metals |
| 13.5% |
| 14.8% |
| 13.9% |
| 14.2% | ||
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EARNINGS PER SHARE |
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-BASIC | $ | 0.44 | $ | 0.43 | $ | 1.43 | $ | 1.25 | ||
-DILUTIVE | $ | 0.44 | $ | 0.42 | $ | 1.40 | $ | 1.23 | ||
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DIVIDENDS PER SHARE | $ | 0.045 | $ | 0.040 | $ | 0.135 | $ | 0.120 | ||
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING |
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-BASIC |
| 148,775 |
| 151,632 |
| 149,186 |
| 151,886 | ||
-DILUTIVE |
| 151,697 |
| 154,736 |
| 152,137 |
| 154,735 | ||
DENTSPLY INTERNATIONAL INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
|
| September 30, 2008 |
| December 31, 2007 |
ASSETS |
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CURRENT ASSETS: |
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CASH AND CASH EQUIVALENTS | $ | 54,205 | $ | 169,384 |
SHORT TERM INVESTMENTS |
| 190,545 |
| 146,939 |
ACCOUNTS AND NOTES RECEIVABLE-TRADE,NET |
| 345,477 |
| 307,622 |
INVENTORIES, NET |
| 278,761 |
| 258,032 |
OTHER CURRENT ASSETS |
| 103,108 |
| 100,045 |
TOTAL CURRENT ASSETS |
| 972,096 |
| 982,022 |
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PROPERTY, PLANT AND EQUIPMENT, NET |
| 386,885 |
| 371,409 |
IDENTIFIABLE INTANGIBLE ASSETS, NET |
| 68,466 |
| 76,167 |
GOODWILL, NET |
| 1,145,212 |
| 1,127,420 |
OTHER NONCURRENT ASSETS, NET |
| 88,652 |
| 118,551 |
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TOTAL ASSETS | $ | 2,661,311 | $ | 2,675,569 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY: |
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CURRENT LIABILITIES | $ | 338,047 | $ | 312,411 |
LONG-TERM DEBT |
| 401,685 |
| 482,063 |
OTHER LIABILITIES |
| 271,618 |
| 304,146 |
DEFERRED INCOME TAXES |
| 63,187 |
| 60,547 |
TOTAL LIABILITIES |
| 1,074,537 |
| 1,159,167 |
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MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES |
| 355 |
| 296 |
STOCKHOLDERS’ EQUITY |
| 1,586,419 |
| 1,516,106 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,661,311 | $ | 2,675,569 |
DENTSPLY INTERNATIONAL INC.
(IN THOUSANDS EXCEPT PER SHARE DATA)
Operating Income Summary:
The following tables present the reconciliation of reported GAAP operating income in total and on a percentage of net sales, excluding precious metals content basis to the non-GAAP financial measures.
Three Months Ended September 30, 2008
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| Operating Income (Expense) |
| Percentage Of Net Sales, Ex Precious Metals Content |
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Income from Operations |
| $ | 80,915 |
| 16.6% |
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Restructuring and Other Costs |
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| 18,539 |
| 3.8% |
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Adjusted Non-GAAP Operating Earnings |
| $ | 99,454 |
| 20.4% |
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Three Months Ended September 30, 2007 |
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| Operating Income (Expense) |
| Percentage Of Net Sales, Ex Precious Metals Content |
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Income from Operations |
| $ | 82,590 |
| 18.5% |
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Restructuring and Other Costs |
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| 4,692 |
| 1.1% |
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Adjusted Non-GAAP Operating Earnings |
| $ | 87,282 |
| 19.6% |
DENTSPLY INTERNATIONAL INC.
(IN THOUSANDS EXCEPT PER SHARE DATA)
Earnings Summary:
The following tables present the reconciliation of reported GAAP net income in total and on a per share basis to the non-GAAP financial measures.
Three Months Ended September 30, 2008
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| Income (Expense) |
| Diluted Per Share |
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Net Income |
| $ | 66,047 | $ | 0.44 |
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Restructuring and Other Costs, Net of Tax |
|
| 11,398 |
| 0.07 |
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Income Tax Related Adjustments |
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| (8,169) |
| (0.05) |
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Adjusted Non-GAAP Earnings |
| $ | 69,276 | $ | 0.46 |
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Three Months Ended September 30, 2007 |
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| Income (Expense) |
| Diluted Per Share |
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Net Income |
| $ | 65,719 | $ | 0.42 |
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Restructuring and Other Costs, Net of Tax |
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| 3,032 |
| 0.02 |
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Income Tax Related Adjustments |
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| (7,756) |
| (0.05) |
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Adjusted Non-GAAP Earnings |
| $ | 60,995 | $ | 0.39 |
DENTSPLY INTERNATIONAL INC.
(IN THOUSANDS EXCEPT PER SHARE DATA)
Operating Income Summary:
The following tables present the reconciliation of reported GAAP operating income in total and on a percentage of net sales, excluding precious metals content basis to the non-GAAP financial measures.
Nine Months Ended September 30, 2008
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| Operating Income (Expense) |
| Percentage Of Net Sales, Ex Precious Metals Content |
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Income from Operations |
| $ | 295,111 |
| 19.4% |
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Restructuring and Other Costs |
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| 20,202 |
| 1.3% |
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Adjusted Non-GAAP Operating Earnings |
| $ | 315,313 |
| 20.7% |
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Nine Months Ended September 30, 2007 |
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| Operating Income (Expense) |
| Percentage Of Net Sales, Ex Precious Metals Content |
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Income from Operations |
| $ | 257,294 |
| 19.3% |
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Restructuring and Other Costs |
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| 8,889 |
| 0.7% |
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Adjusted Non-GAAP Operating Earnings |
| $ | 266,183 |
| 20.0% |
DENTSPLY INTERNATIONAL INC.
(IN THOUSANDS EXCEPT PER SHARE DATA)
Earnings Summary:
The following tables present the reconciliation of reported GAAP net income in total and on a per share basis to the non-GAAP financial measures.
Nine Months Ended September 30, 2008
|
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| Income (Expense) |
| Diluted Per Share |
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Net Income |
| $ | 212,874 | $ | 1.40 |
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Provisions of SFAS 157, Net of Tax |
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| (1,129) |
| (0.01) |
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Restructuring and Other Costs, Net of Tax |
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| 12,432 |
| 0.08 |
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Income Tax Related Adjustments |
|
| (6,513) |
| (0.04) |
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Adjusted Non-GAAP Earnings |
| $ | 217,664 | $ | 1.43 |
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Nine Months Ended September 30, 2007 |
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| Income (Expense) |
| Diluted Per Share |
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Net Income |
| $ | 189,624 | $ | 1.23 |
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Restructuring Costs, Net of Tax |
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| 5,709 |
| 0.04 |
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Income Tax Related Adjustments |
|
| (7,400) |
| (0.05) |
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Rounding |
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| - |
| (0.01) |
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Adjusted Non-GAAP Earnings |
| $ | 187,933 | $ | 1.21 |
