CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (USD $) | ||||
In Thousands, except Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Net sales | $531,032 | $529,953 | $1,591,197 | $1,685,582 |
Cost of products sold | 258,051 | 249,770 | 764,276 | 804,670 |
Gross profit | 272,981 | 280,183 | 826,921 | 880,912 |
Selling, general and administrative expenses | 178,841 | 180,729 | 543,207 | 565,599 |
Restructuring, impairments and other costs (Note 9) | 1,210 | 18,539 | 5,905 | 20,202 |
Operating income | 92,930 | 80,915 | 277,809 | 295,111 |
Other income and expenses: | ||||
Interest expense | 5,456 | 9,284 | 16,877 | 25,437 |
Interest income | (858) | (4,669) | (4,326) | (14,564) |
Other expense, net | 480 | 1,030 | 1,326 | 4,100 |
Income before income taxes | 87,852 | 75,270 | 263,932 | 280,138 |
Provision for income taxes | 19,999 | 9,204 | 65,570 | 67,219 |
Net income | 67,853 | 66,066 | 198,362 | 212,919 |
Less: Net gain (loss) attributable to the noncontrolling interests | 370 | 19 | (1,062) | 45 |
Net income attributable to DENTSPLY International | $67,483 | $66,047 | $199,424 | $212,874 |
Earnings per common share | ||||
-Basic | 0.45 | 0.44 | 1.34 | 1.43 |
-Diluted | 0.45 | 0.44 | 1.33 | 1.4 |
Cash dividends declared per common share | 0.05 | 0.045 | 0.15 | 0.135 |
Weighted average common shares outstanding | ||||
-Basic | 148,547 | 148,775 | 148,546 | 149,186 |
-Diluted | 150,638 | 151,697 | 150,077 | 152,137 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS (USD $) | ||
In Thousands | Sep. 30, 2009
| Dec. 31, 2008
|
Current Assets: | ||
Cash and cash equivalents | $333,368 | $203,991 |
Short-term investments | 37 | 258 |
Accounts and notes receivables-trade, net (Note 1) | 356,976 | 319,260 |
Inventories, net (Note 7) | 311,666 | 306,125 |
Prepaid expenses and other current assets | 125,056 | 120,228 |
Total Current Assets | 1,127,103 | 949,862 |
Property, plant and equipment, net | 445,365 | 432,276 |
Identifiable intangible assets, net | 119,344 | 103,718 |
Goodwill | 1,308,824 | 1,277,026 |
Other noncurrent assets, net | 66,473 | 67,518 |
Total Assets | 3,067,109 | 2,830,400 |
Current Liabilities: | ||
Accounts payable | 98,125 | 104,329 |
Accrued liabilities | 230,265 | 193,660 |
Income taxes payable | 34,896 | 36,178 |
Notes payable and current portion of long-term debt (Note 13) | 240,366 | 25,795 |
Total Current Liabilities | 603,652 | 359,962 |
Long-term debt (Note 13) | 154,842 | 423,679 |
Deferred income taxes | 77,838 | 69,049 |
Other noncurrent liabilities | 328,326 | 318,297 |
Total Liabilities | 1,164,658 | 1,170,987 |
Stockholders' Equity: | ||
Preferred stock, $.01 par value; .25 million shares authorized; no shares issued | 0 | 0 |
Common stock, $.01 par value; 200 million shares authorized; 162.8 million shares issued at September 30, 2009 and December 31, 2008 | 1,628 | 1,628 |
Capital in excess of par value | 195,781 | 187,154 |
Retained earnings | 2,016,007 | 1,838,958 |
Accumulated other comprehensive income (Note 3) | 95,139 | 39,612 |
Treasury stock, at cost, 14.3 million shares at September 30, 2009 and 14.2 million shares at December 31, 2008 | (481,300) | (479,630) |
Total DENTSPLY International Stockholders' Equity | 1,827,255 | 1,587,722 |
Noncontrolling interests | 75,196 | 71,691 |
Total Stockholders' Equity | 1,902,451 | 1,659,413 |
Total Liabilities and Stockholders' Equity | $3,067,109 | $2,830,400 |
Parenthetical Data For Consolid
Parenthetical Data For Consolidated Condensed Balance Sheets (USD $) | ||
Share data in Millions, except Per Share data | Sep. 30, 2009
| Dec. 31, 2008
|
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | 0.01 | 0.01 |
Preferred stock, shares authorized (in shares) | 0.25 | 0.25 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollar per share) | 0.01 | 0.01 |
Common stock, share authorized (in shares) | 200 | 200 |
Common stock, shares issued (in shares) | 162.8 | 162.8 |
Treasury stock, shares (in shares) | 14.3 | 14.2 |
1_CONSOLIDATED CONDENSED STATEM
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (USD $) | ||
In Thousands | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Cash flows from operating activities: | ||
Net income | $198,362 | $212,919 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 40,118 | 36,697 |
Amortization | 9,227 | 6,703 |
Deferred income taxes | 9,655 | 25,245 |
Share-based compensation expense | 14,778 | 12,748 |
Restructuring, impairments and other costs | 5,905 | 20,202 |
Stock option income tax benefit | (2,921) | (3,575) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts and notes receivable-trade, net | (23,166) | (45,344) |
Inventories, net | 10,670 | (25,918) |
Prepaid expenses and other current assets | 248 | (2,176) |
Accounts payable | (9,699) | 6,838 |
Accrued liabilities | (4,325) | 9,026 |
Income tax payable | (546) | (5,636) |
Other, net | (2,942) | (10,886) |
Net cash provided by operating activities | 245,364 | 236,843 |
Cash flows from investing activities: | ||
Capital expenditures | (43,282) | (55,286) |
Cash paid for acquisitions of businesses, net of cash acquired | (2,986) | (43,937) |
Purchases of short-term investments | 0 | (154,568) |
Liquidation of short-term investments | 219 | 102,091 |
Expenditures for identifiable intangible assets | (128) | (2,201) |
Proceeds from sale of property, plant and equipment, net | 2,143 | 702 |
Net cash used in investing activities | (44,034) | (153,199) |
Cash flows from financing activities: | ||
Net change in short-term borrowings | (1,482) | 1,033 |
Cash paid for treasury stock | (21,253) | (99,771) |
Cash dividends paid | (22,383) | (20,231) |
Proceeds from long-term borrowings | 0 | 117,900 |
Payments on long-term borrowings | (57,150) | (205,613) |
Proceeds from exercise of stock options | 9,451 | 11,990 |
Excess tax benefits from share-based compensation | 2,921 | 3,575 |
Net cash used in financing activities | (89,896) | (191,117) |
Effect of exchange rate changes on cash and cash equivalents | 17,943 | (7,706) |
Net increase (decrease) in cash and cash equivalents | 129,377 | (115,179) |
Cash and cash equivalents at beginning of period | 203,991 | 169,384 |
Cash and cash equivalents at end of period | $333,368 | $54,205 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $) | ||
In Thousands | 9 Months Ended
Sep. 30, 2009 | 12 Months Ended
Dec. 31, 2008 |
Balance, Beginning | $1,659,413 | $1,516,402 |
Purchase of subsidiary shares from noncontrolling shareholder | 71,931 | |
Net income | 198,362 | 283,270 |
Foreign currency translation adjustment | 81,085 | (71,458) |
Net loss on derivative financial instruments | (21,422) | (13,986) |
Unrecognized losses and prior service cost, net | 431 | (20,700) |
Comprehensive Income | 258,456 | 177,126 |
Exercise of stock options | 9,451 | 12,726 |
Tax benefit from stock options exercised | 2,921 | 3,910 |
Share based compensation expense | 14,778 | 17,290 |
Funding of Employee Stock Option Plan | 1,347 | 180 |
Treasury shares purchased | (21,253) | (112,634) |
Adjustments from Acquisitions | (388) | |
RSU dividends | 0 | 0 |
Cash dividends | (22,274) | (27,518) |
Balance, Ending | 1,902,451 | 1,659,413 |
Common Stock | ||
Balance, Beginning | 1,628 | 1,628 |
Purchase of subsidiary shares from noncontrolling shareholder | 0 | |
Net income | 0 | 0 |
Foreign currency translation adjustment | 0 | 0 |
Net loss on derivative financial instruments | 0 | 0 |
Unrecognized losses and prior service cost, net | 0 | 0 |
Comprehensive Income | 0 | 0 |
Exercise of stock options | 0 | 0 |
Tax benefit from stock options exercised | 0 | 0 |
Share based compensation expense | 0 | 0 |
Funding of Employee Stock Option Plan | 0 | 0 |
Treasury shares purchased | 0 | 0 |
Adjustments from Acquisitions | 0 | |
RSU dividends | 0 | 0 |
Cash dividends | 0 | 0 |
Balance, Ending | 1,628 | 1,628 |
Capital in Excess of Par Value | ||
Balance, Beginning | 187,154 | 173,084 |
Purchase of subsidiary shares from noncontrolling shareholder | 0 | |
Net income | 0 | 0 |
Foreign currency translation adjustment | 0 | 0 |
Net loss on derivative financial instruments | 0 | 0 |
Unrecognized losses and prior service cost, net | 0 | 0 |
Comprehensive Income | 0 | 0 |
Exercise of stock options | (8,724) | (7,268) |
Tax benefit from stock options exercised | 2,921 | 3,910 |
Share based compensation expense | 14,778 | 17,290 |
Funding of Employee Stock Option Plan | (61) | 62 |
Treasury shares purchased | 0 | 0 |
Adjustments from Acquisitions | (388) | |
RSU dividends | 101 | 76 |
Cash dividends | 0 | 0 |
Balance, Ending | 195,781 | 187,154 |
Retained Earnings | ||
Balance, Beginning | 1,838,958 | 1,582,683 |
Purchase of subsidiary shares from noncontrolling shareholder | 0 | |
Net income | 199,424 | 283,869 |
Foreign currency translation adjustment | 0 | 0 |
Net loss on derivative financial instruments | 0 | 0 |
Unrecognized losses and prior service cost, net | 0 | 0 |
Comprehensive Income | 0 | 0 |
Exercise of stock options | 0 | 0 |
Tax benefit from stock options exercised | 0 | 0 |
Share based compensation expense | 0 | 0 |
Funding of Employee Stock Option Plan | 0 | 0 |
Treasury shares purchased | 0 | 0 |
Adjustments from Acquisitions | 0 | |
RSU dividends | (101) | (76) |
Cash dividends | (22,274) | (27,518) |
Balance, Ending | 2,016,007 | 1,838,958 |
Accumulated Other Comprehensive Income (Loss) | ||
Balance, Beginning | 39,612 | 145,819 |
Purchase of subsidiary shares from noncontrolling shareholder | 0 | |
Net income | 0 | 0 |
Foreign currency translation adjustment | 76,518 | (71,521) |
Net loss on derivative financial instruments | (21,422) | (13,986) |
Unrecognized losses and prior service cost, net | 431 | (20,700) |
Comprehensive Income | 0 | 0 |
Exercise of stock options | 0 | 0 |
Tax benefit from stock options exercised | 0 | 0 |
Share based compensation expense | 0 | 0 |
Funding of Employee Stock Option Plan | 0 | 0 |
Treasury shares purchased | 0 | 0 |
Adjustments from Acquisitions | 0 | |
RSU dividends | 0 | 0 |
Cash dividends | 0 | 0 |
Balance, Ending | 95,139 | 39,612 |
Treasury Stock | ||
Balance, Beginning | (479,630) | (387,108) |
Purchase of subsidiary shares from noncontrolling shareholder | 0 | |
Net income | 0 | 0 |
Foreign currency translation adjustment | 0 | 0 |
Net loss on derivative financial instruments | 0 | 0 |
Unrecognized losses and prior service cost, net | 0 | 0 |
Comprehensive Income | 0 | 0 |
Exercise of stock options | 18,175 | 19,994 |
Tax benefit from stock options exercised | 0 | 0 |
Share based compensation expense | 0 | 0 |
Funding of Employee Stock Option Plan | 1,408 | 118 |
Treasury shares purchased | (21,253) | (112,634) |
Adjustments from Acquisitions | 0 | |
RSU dividends | 0 | 0 |
Cash dividends | 0 | 0 |
Balance, Ending | (481,300) | (479,630) |
Total Dentsply International Stockholders Equity | ||
Balance, Beginning | 1,587,722 | 1,516,106 |
Purchase of subsidiary shares from noncontrolling shareholder | 0 | |
Net income | 199,424 | 283,869 |
Foreign currency translation adjustment | 76,518 | (71,521) |
Net loss on derivative financial instruments | (21,422) | (13,986) |
Unrecognized losses and prior service cost, net | 431 | (20,700) |
Comprehensive Income | 254,951 | 177,662 |
Exercise of stock options | 9,451 | 12,726 |
Tax benefit from stock options exercised | 2,921 | 3,910 |
Share based compensation expense | 14,778 | 17,290 |
Funding of Employee Stock Option Plan | 1,347 | 180 |
Treasury shares purchased | (21,253) | (112,634) |
Adjustments from Acquisitions | (388) | |
RSU dividends | 0 | 0 |
Cash dividends | (22,274) | (27,518) |
Balance, Ending | 1,827,255 | 1,587,722 |
Noncontrolling Interest | ||
Balance, Beginning | 71,691 | 296 |
Purchase of subsidiary shares from noncontrolling shareholder | 71,931 | |
Net income | (1,062) | (599) |
Foreign currency translation adjustment | 4,567 | 63 |
Net loss on derivative financial instruments | 0 | 0 |
Unrecognized losses and prior service cost, net | 0 | 0 |
Comprehensive Income | 3,505 | (536) |
Exercise of stock options | 0 | 0 |
Tax benefit from stock options exercised | 0 | 0 |
Share based compensation expense | 0 | 0 |
Funding of Employee Stock Option Plan | 0 | 0 |
Treasury shares purchased | 0 | 0 |
Adjustments from Acquisitions | 0 | |
RSU dividends | 0 | 0 |
Cash dividends | 0 | 0 |
Balance, Ending | $75,196 | $71,691 |
2_Parenthetical Data For Consol
Parenthetical Data For Consolidated Statement Of Changes In Equity (USD $) | ||
Sep. 30, 2009
| Dec. 31, 2008
| |
Comprehensive Income: | ||
Cash Dividends, Value Per Share | 0.15 | 0.185 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES The accounting policies of Company, as applied in the interim condensed consolidated financial statements presented herein are substantially the same as presented in the Companys Annual Report on Form 10-K/A for the year ended December 31, 2008, except as indicated below: Accounts and Notes Receivable-Trade Accounts and notes receivables trade, net are stated net of allowances for doubtful accounts and trade discounts, which were $21.8 million and $19.4 million at September 30, 2009 and December 31, 2008, respectively. Business Acquisitions During the first quarter of 2009, the Company adopted the new accounting guidance for business combinations.The new guidance establishes principles and requirements for transactions that represent business combinations to be accounted for under the acquisition method.It provides guidance regarding the recognition and measurement of assets acquired, liabilities assumed, goodwill, noncontrolling interest in the acquiree and financial statement disclosure requirements. Additionally, it provides guidance for identifying a business combination, measuring the acquisition date and defining the measurement period for adjusting provisional amounts recorded. The implementation of this standard did not impact the Companys net income attributable to DENTSPLY International. Noncontrolling Interests On January 1, 2009, the Company adopted the new accounting guidance for reporting noncontrolling interest (NCI) in a subsidiary.As a result, the Company reported NCI as a separate component of Stockholders Equity in the Condensed Consolidated Balance Sheet.Additionally, the Company reported the portion of net income and comprehensive income (loss) attributed to the Company and NCI separately in the Condensed Consolidated Statement of Operations.The Company also included a separate column for NCI in the Consolidated Statement of Changes in Equity.All related disclosures have been adjusted accordingly.Prior year amounts associated with NCI in the financial statements and accompanied footnotes have been retrospectively adjusted to conform to the adoption.The implementation of this new standard did not impact the Companys net income attributable to DENTSPLY International in the current or prior period. Fair Value Measurement During the first quarter of 2009, the Company adopted the new guidance for fair value measurement.The new guidance changed the effective date for recognizing and disclosing the fair value for non-financial assets and liabilities except for items recognized or disclosed in the financial statements on a recurring basis. The implementation of this new guidance did not impact the Companys financial statements in the current or prior periods. The new guidance also required additional disclosure about the fair value of financial instruments for interim reporting periods in addition to annual financial statements. The Company has disclosed the required information in Note 13, Financing Arrangements. FASB Accounting Standards Codification In June 2009, the FASB issued The FASB Accounting Standards Codification (the Codification) as the sou |
STOCK COMPENSATION
STOCK COMPENSATION | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
STOCK COMPENSATION | NOTE 2 STOCK COMPENSATION The Company maintains the 2002 Equity Incentive Plan (the Plan) under which it may grant non-qualified stock options, incentive stock options, restricted stock, restricted stock units (RSU) and stock appreciation rights, collectively referred to as Awards.Awards are granted at exercise prices that are equal to the closing stock price on the date of grant.The Company authorizes grants of 14,000,000 shares of common stock, plus any unexercised portion of cancelled or terminated stock options granted under the DENTSPLY International Inc. 1993, 1998, and 2002 Plans, subject to adjustment as follows:each January, if 7% of the total outstanding common shares of the Company exceed 14,000,000, the excess becomes available for grant under the Plan.No more than 2,000,000 shares may be awarded as restricted stock and restricted stock units, and no key employee may be granted restricted stock units in excess of 150,000 shares of common stock in any calendar year. Stock options generally expire ten years after the date of grant under these plans and grants become exercisable, subject to a service condition, over a period of three years after the date of grant at the rate of one-third per year, except when they become immediately exercisable upon death, disability or qualified retirement.Restricted stock units vest 100% on the third anniversary of the date of grant and are subject to a service condition, which requires grantees to remain employed by the Company during the three year period following the date of grant.In addition to the service condition, certain key executives are subject to performance requirements. It is the Companys practice to issue shares from treasury stock when options are exercised. The Company continues to use the Black-Scholes option-pricing model to estimate the fair value of the non-qualified stock options. The assumptions used to calculate the fair value of the awards granted are evaluated and revised, as necessary, to reflect market conditions and the Companys experience. The following table represents total stock based compensation expense and the tax related benefit for the three and nine months ended September 30, 2009 and 2008: Three Months Ended Nine Months Ended September 30, September 30, (in millions) 2009 2008 2009 2008 Stock option expense $ 3.1 $ 2.9 $ 9.0 $ 8.6 RSU expense 1.6 1.1 4.8 3.2 Total stock based compensation expense $ 4.7 $ 4.0 $ 13.8 $ 11.8 Total related tax benefit $ 1.4 $ 1.1 $ 4.0 $ 2.9 The remaining unamortized compensation cost related to non-qualified stock options is $16.3 million, which will be expensed over the weighted average remaining vesting period of the options, or 1.3 years.The unamortized compensation cost related to RSUs is $10.5 million, which will be expensed over the remaining restricted period of the RSUs, or 1.5 years. The following table reflects the non-qualified stock option transactions from December 31, 2008 through September 30 |
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
COMPREHENSIVE INCOME | NOTE 3 COMPREHENSIVE INCOME The changes to balances included in accumulated other comprehensive income (AOCI) in the consolidated balance sheets are as follows: Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2009 2008 2009 2008 Net income $ 67,853 $ 66,066 $ 198,362 $ 212,919 Other comprehensive income: Foreign currency translation adjustments, net of tax 69,933 (160,667 ) 81,085 (62,846 ) Amortization of unrecognized (gains) losses and prior year service cost, net of tax (697 ) (871 ) 431 (990 ) Pension liability adjustments - (395 ) - 3,318 Net (loss) gain on derivative financial instruments, net of tax (29,053 ) 69,126 (21,422 ) 6,481 Total other comprehensive income (loss), net of tax 40,183 (92,807 ) 60,094 (54,037 ) Total Comprehensive income 108,036 (26,741 ) 258,456 158,882 Less:Comprehensive income attributable to the noncontrolling interests 3,692 19 3,505 45 Comprehensive income attributable to DENTSPLY International $ 104.344 $ (26,760 ) $ 254,951 $ 158.837 During the quarter ended September 30, 2009, foreign currency translation adjustments included currency translation gains of $81.3 million partially offset by losses of $7.7 million on the Companys loans designated as hedges of net investments.During the quarter ended September 30, 2008, foreign currency translation adjustments included currency translation losses of $166.4 million partially offset by gains of $5.8 million on the Companys loans designated as hedges of net investments.During the nine months ended September 30, 2009, foreign currency translation adjustments included currency translation gains of $86.9 million offset by losses of $2.3 million on the Companys loans designated as hedges of net investments.During the nine months ended September 30, 2008, foreign currency translation adjustments included currency translation losses of $58.3 million and losses of $4.5 million on the Companys loans designated as hedges of net investments.These foreign currency translation adjustments were offset by net gains on derivatives financial instruments, which are discussed in Note 10, Financial Instruments and Derivatives. The balances included in AOCI in the consolidated balance sheets are as follows: September 30, December 31, (in thousands) 2009 2008 Foreign currency translation adjustments $ 246,068 $ 169,550 Unrecognized losses and prior service cost, net (29,667 ) (30,098 ) Net loss on derivative financial instruments (121,262 ) (99,840 ) $ 95,139 $ 39,612 The cumulative foreign currency translation adjustments included translation gains of $356.9 million and $278.1 million as of September 30, 2009 and December 31, 2008, respectively, offse |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
EARNINGS PER COMMON SHARE | NOTE 4 - EARNINGS PER COMMON SHARE The dilutive effect of outstanding options and restricted stock is reflected in diluted earnings per share by application of the treasury stock method.The following table sets forth the computation of basic and diluted earnings per common share: Basic Earnings Per Common Share Computation Three Months Ended Nine Months Ended (in thousands, except per share amounts) September 30, September 30, 2009 2008 2009 2008 Net income attributable to DENTSPLY International $ 67,483 $ 66,047 $ 199,424 $ 212,874 Common shares outstanding 148,547 148,775 148,546 149,186 Earnings per common share - basic $ 0.45 $ 0.44 $ 1.34 $ 1.43 Diluted Earnings Per Common Share Computation (in thousands, except per share amounts) Net income attributable to DENTSPLY International $ 67,483 $ 66,047 $ 199,424 $ 212,874 Common shares outstanding 148,547 148,775 148,546 149,186 Incremental shares from assumed exercise of dilutive options 2,091 2,922 1,531 2,951 Total shares 150,638 151,697 150,077 152,137 Earnings per common share - diluted $ 0.45 $ 0.44 $ 1.33 $ 1.40 Options to purchase 1.5 million and 4.5 million shares of common stock that were outstanding during the three and nine months ended September 30, 2009, respectively, were not included in the computation of diluted earnings per share since the options exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive.Antidilutive shares during the three and nine months ended September 30, 2008, were 1.3 million and 1.4 million, respectively. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
BUSINESS ACQUISITIONS | NOTE 5 - BUSINESS ACQUISITIONS During the first nine months of 2009, the Company paid $3.0 million, net of cash acquired, primarily related to a payment for an additional purchase price related to an acquisition completed in 2007.The payment was related to provisions in the purchase agreement that allow for additional payments based on the post closing performance of the individual business. |
SEGMENT INFORMATION
SEGMENT INFORMATION | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
SEGMENT INFORMATION | NOTE 6 - SEGMENT INFORMATION The Company has numerous operating businesses covering a wide range of products and geographic regions, primarily serving the professional dental market. Professional dental products represented approximately 97% of sales for the periods ended September 30, 2009 and 2008. The operating businesses are combined into operating groups, which have overlapping product offerings, geographical presence, customer bases, distribution channels, and regulatory oversight. These operating groups are considered the Companys reportable segments as the Companys chief operating decision-maker regularly reviews financial results at the operating group level and uses this information to manage the Companys operations. The accounting policies of the groups are consistent with those described in the Companys most recently filed Annual Report on Form10-K/A in the summary of significant accounting policies.The Company measures segment income for reporting purposes as net operating income before restructuring, impairments and other cost, interest expense, interest income, other (income) expense and taxes. In January 2009, the Company moved several locations between segments which resulted in a change to the management structure and helped the Company gain operating efficiencies and effectiveness. The segment information below reflects this revised structure for all periods shown. United States, Germany, and Certain Other European Regions Consumable Businesses This business group includes responsibility for the design, manufacturing, sales and distribution for certain small equipment and chairside consumable products in the United States, Germany, and certain other European regions.It also has responsibility for the sales and distribution of certain Endodontic products in Germany. France, United Kingdom, Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses This business group includes responsibility for the sales and distribution for certain small equipment, chairside consumable products, certain laboratory products and certain Endodontic products in France, United Kingdom, Italy, the Commonwealth of Independent States (CIS), Middle East, Africa, Asia (excluding Japan), Japan and Australia, as well as the sale and distribution of implant products and bone substitute/grafting materials in Italy, Asia and Australia. This business group also includes the responsibility for sales and distribution for certain laboratory products, implants products and bone substitution/grafting materials for Austria.It also is responsible for sales and distribution for certain small equipment and chairside consumable products, certain laboratory products, implant products and bone substation/grafting materials in certain other European countries.In addition this business group also includes the manufacturing and sale of Orthodontic products and certain laboratory products in Japan, and the manufacturing of certain laboratory and certain Endodontic products in Asia. Canada/Latin America/Endodontics/Orthodontics This business group includes responsibility for the design, manufacture, and/or sal |
INVENTORIES
INVENTORIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
INVENTORIES | NOTE 7 - INVENTORIES Inventories are stated at the lower of cost or market.At September 30, 2009 and December 31, 2008, the cost of $9.3 million, or 3.0%, and $9.6 million, or 3.1%, respectively, of inventories was determined by the last-in, first-out (LIFO) method. The cost of other inventories was determined by the first-in, first-out (FIFO) or average cost methods. The Company establishes reserves for inventory estimated to be obsolete or unmarketable equal to the difference between the cost of inventory and estimated market value based upon assumptions about future demand and market conditions.The inventory valuation reserves were $32.7 million and $28.4 million as of September 30, 2009 and December 31, 2008, respectively. If the FIFO method had been used to determine the cost of LIFO inventories, the amounts at which net inventories are stated would be higher than reported at September 30, 2009 and December 31, 2008 by $3.7 million and $3.5 million, respectively. Inventories, net of inventory valuation reserves, consist of the following: September 30, December 31, (in thousands) 2009 2008 Finished goods $ 191,501 $ 184,226 Work-in-process 55,345 58,123 Raw materials and supplies 64,820 63,776 $ 311,666 $ 306,125 |
BENEFIT PLANS
BENEFIT PLANS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
BENEFIT PLANS | NOTE 8 - BENEFIT PLANS The following sets forth the components of net periodic benefit cost of the Companys benefit plans and for the Companys other postretirement employee benefit plans for the three and nine months ended September 30, 2009 and September 30, 2008, respectively: Defined Benefit Plans Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2009 2008 2009 2008 Service cost $ 2,144 $ 1,920 $ 6,211 $ 5,336 Interest cost 2,059 1,638 5,957 6,073 Expected return on plan assets (1,012 ) (1,022 ) (2,951 ) (3,387 ) Amortization of transition obligation 61 59 177 183 Amortization of prior service cost 34 85 103 174 Amortization of net loss (gain) 423 (12 ) 1,241 50 Settlement gain - (2,313 ) - (2,313 ) Net periodic benefit cost $ 3,709 $ 355 $ 10,738 $ 6,116 Other Postretirement Plans Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2009 2008 2009 2008 Service cost $ 13 $ 12 $ 40 $ 37 Interest cost 156 163 467 476 Amortization of net loss 50 52 151 126 Net periodic benefit cost $ 219 $ 227 $ 658 $ 639 The following sets forth the information related to the funding of the Companys benefit plans for 2009: Other Pension Postretirement (in thousands) Benefits Benefits Actual, September 30, 2009 $ 7,845 $ 489 Projected for the remainder of the year 2,337 596 Total for year $ 10,182 $ 1,085 |
RESTRUCTURING, IMPAIRMENT AND O
RESTRUCTURING, IMPAIRMENT AND OTHER COSTS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
RESTRUCTURING, IMPAIRMENT AND OTHER COSTS | NOTE 9 RESTRUCTURING, IMPAIRMENT AND OTHER COSTS Restructuring Costs During the three months ended September 30, 2009 and September 30, 2008, the Company recorded net restructuring costs of $0.0 million and $0.9 million, respectively.During the nine months ended September 30, 2009 and September 30, 2008, the Company recorded restructuring costs of $4.3 million and $1.7 million, respectively. These costs are recorded in Restructuring, impairments and other costs in the statement of operations and the associated liabilities are recorded in accrued liabilities in the condensed consolidated balance sheet.These costs consist of employee severance benefits, payments due to contracts terminations and other restructuring costs. During 2009 and 2008, the Company initiated several restructuring plans primarily related to the integration, reorganization and closure or consolidation of certain production and selling facilities in order to better leverage the Companys resources by minimizing costs and obtaining operational efficiencies. As of September 30 2009, the Companys restructuring accruals were as follows: Severance 2007 and (in thousands) Prior Plans 2008 Plans 2009 Plans Total Balance, December 31, 2008 $ 664 $ 2,806 $ - $ 3,470 Provisions and adjustments (183 ) 2,454 1,698 3,969 Amounts applied (77 ) (203 ) (954 ) (1,234 ) Balance, September 30, 2009 $ 404 $ 5,057 $ 744 $ 6,205 Lease/Contract Terminations 2007 and (in thousands) Prior Plans Total Balance, December 31, 2008 $ 1,271 $ 1,271 Provisions and adjustments (339 ) (339 ) Amounts applied (38 ) (38 ) Balance, September 30, 2009 $ 894 $ 894 Other Restructuring Costs 2007 and (in thousands) Prior Plans 2008 Plans 2009 Plans Total Balance, December 31, 2008 $ 108 $ 56 $ - $ 164 Provisions and adjustments 112 545 6 663 Amounts applied (150 ) (592 ) (6 ) (748 ) Balance, September 30, 2009 $ 70 $ 9 $ - $ 79 The following table provides the year-to-date changes in the restructuring accruals by segment: December 31, Provisions and Amounts September 30, (in thousands) 2008 Adjustments Applied 2009 United States, Germany, and Certain Other European Regions Consumable Businesses $ 1,286 $ (118 ) $ (289 ) $ 879 France, U.K., Italy, and Certain OtherEuropean Countries, CIS, Middle East, Africa, Pacific Rim Businesses 19 |
FINANCIAL INSTRUMENTS AND DERIV
FINANCIAL INSTRUMENTS AND DERIVATIVES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
FINANCIAL INSTRUMENTS AND DERIVATIVES | NOTE 10 FINANCIAL INSTRUMENTS AND DERIVATIVES On January 1, 2009, the Company adopted the new accounting guidance for expanded disclosures about derivative instruments and hedging activities.As a result the Company has expanded its disclosures about its strategies, objectives and risks for using derivative instruments.In addition, the Company has disclosed the fair value of derivative instruments and their gains and losses in tabular format as required.The adoption of this new guidance did not have a material impact on the Companys financial statements. Derivative Instruments and Hedging Activities The Company's activities expose it to a variety of market risks, which primarily include the risks related to the effects of changes in foreign currency exchange rates, interest rates and commodity prices.These financial exposures are monitored and managed by the Company as part of its overall risk management program. The objective of this risk management program is to reduce the volatility that these market risks may have on the Company's operating results and equity. Certain of the Company's inventory purchases are denominated in foreign currencies, which expose the Company to market risk associated with exchange rate movements.The Company's policy generally is to hedge major foreign currency transaction exposures through foreign exchange forward contracts.These contracts are entered into with major financial institutions thereby minimizing the risk of credit loss.In addition, the Company's investments in foreign subsidiaries are denominated in foreign currencies, which create exposures to changes in exchange rates.The Company uses debt and derivatives denominated in the applicable foreign currency as a means of hedging a portion of this risk. With the Companys significant level of variable interest rate long-term debt and net investment hedges, changes in the interest rate environment can have a major impact on the Companys earnings, depending upon its interest rate exposure.As a result, the Company manages its interest rate exposure with the use of interest rate swaps, when appropriate, based upon market conditions. The manufacturing of some of the Companys products requires the use of commodities, which are subject to market fluctuations.In order to limit the unanticipated impact on earnings from such market fluctuations, the Company selectively enters into commodity swaps for certain materials used in the production of its products.Additionally, the Company uses non-derivative methods, such as the precious metal consignment agreements to effectively hedge commodity risks. Cash Flow Hedges The Company uses interest rate swaps to convert a portion of its variable interest rate debt to fixed interest rate debt.As of September 30, 2009, the Company has three groups of significant variable interest rate to fixed rate interest rate swaps.One of the groups of swaps has notional amounts totaling 12.6 billion Japanese yen, and effectively converts the underlying variable interest rates to an average fixed interest rate of 1.6% for a term of ten years, ending in September 2012.Another swap has a notional amount of 65.0 milli |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 11 FAIR VALUE MEASUREMENT The Company records financial instruments at fair value with unrealized gains and losses related to certain financial instruments reflected in AOCI on the Condensed Consolidated Balance Sheets.In addition, the Company recognizes certain liabilities at fair value.The Company primarily applies the market approach for recurring fair value measurements and endeavors to utilize the best available information.Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The degree of judgment utilized in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Pricing observability is impacted by a number of factors, including the type of financial instrument.Financial instruments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, financial instruments rarely traded or not quoted will generally have less, or no, pricing observability and a higher degree of judgment utilized in measuring fair value. The following tables set forth by level within the fair value hierarchy the Companys financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2009 and December 31, 2008, which are classified as Cash and cash equivalents, Other noncurrent assets, net, Accrued liabilities,and Other noncurrent liabilities.Financial assets and liabilities that are recorded at fair value as of the balance sheet date are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As of September 30, 2009 (in thousands) Total Level 1 Level 2 Level 3 Assets Money market funds $ 333,368 $ 333,368 $ - $ - Commodity forward purchase contracts 290 - 290 - Foreign exchange forward contracts 4,648 - 4,648 - Total assets $ 338,306 $ 333,368 $ 4,938 $ - Liabilities Interest rate swaps $ 11,437 $ - $ 11,437 $ - Cross currency interest rate swaps 186,825 - 186,825 - Foreign exchange forward contracts 1,885 - 1,885 - Total liabilities $ 200,147 $ - $ 200,147 $ - As of December 31, 2008 (in thousands) Total Level 1 Level 2 Level 3 Assets Money market funds $ 203,991 $ 203,991 $ - $ - Interest Rate Swaps 2 - 2 - Foreign exchange forward contracts 2,053 - 2,053 - Total assets $ 206,046 $ 203,991 $ 2,055 $ - Liabilities Interest rate swaps $ |
UNCERTAINTIES IN INCOME TAXES
UNCERTAINTIES IN INCOME TAXES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
UNCERTAINTIES IN INCOME TAXES | NOTE 12 UNCERTAINITIES IN INCOME TAXES The Company recognizes in the consolidated financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. During the quarter-ended September 30, 2009, the resolution of outstanding tax matters, including finalization of audits, reduced income taxes by approximately $5.6 million. It is reasonably possible that certain amounts of unrecognized tax benefits will significantly increase or decrease within 12 months of the reporting date of the Companys consolidated financial statements. Final settlement and resolution of outstanding tax matters in various jurisdictions during the next twelve months could include unrecognized tax benefits of approximately $1.6 million, of which, $0.8 million will have no impact upon the effective income tax rate.Expiration of statutes of limitation in various jurisdictions could include unrecognized tax benefits of approximately $0.6 million. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
FINANCING ARRANGEMENTS | NOTE 13 - FINANCING ARRANGEMENTS In the second quarter of 2009, the Companys U.S. dollar denominated private placement note, U.S. dollar commercial paper facility, and multi-currency revolving credit agreement were classified as short-term liabilities as they mature within the next twelve months.Notes payable and current portion of long-term debt, as classified on the condensed consolidated balance sheets, amounted to $240.4 million and $25.8 million at September 30, 2009 and December 31, 2008, respectively. The Company estimates the fair value and carrying value of its total debt was $395.2 million as of September 30, 2009.The fair value of the Companys long-term debt equaled its carrying value as the Companys debt is variable interest rate and reflects current market rates. The interest rates on private placement notes, revolving debt and commercial paper are variable and therefore the fair value of these instruments approximates their carrying values. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 - COMMITMENTS AND CONTINGENCIES On January 5, 1999, the Department of Justice filed a Complaint against the Company in the U.S. District Court in Wilmington, Delaware alleging that the Companys tooth distribution practices violated the antitrust laws and seeking an order for the Company to discontinue its practices. This case has been concluded and the District Court, upon the direction of the Court of Appeals, issued an injunction in May 2006, preventing DENTSPLY from taking action to restrict its tooth dealers in the U.S. from adding new competitive teeth lines. Subsequent to the filing of the Department of Justice Complaint in 1999, a private party putative class action was filed based on allegations similar to those in the Department of Justice case, on behalf of dental laboratories who purchased Trubyte teeth or products containing Trubyte teeth. The District Court granted the Companys Motion on the lack of standing of the laboratory class action to pursue damage claims. The Plaintiffs appealed this decision to the Third Circuit and the Court largely upheld the decision of the District Court in dismissing the Plaintiffs damages claims against DENTSPLY, with the exception of allowing the Plaintiffs to pursue a damage claim based on a theory of resale price maintenance between the Company and its tooth dealers. The Plaintiffs then filed an amended complaint in the District Court asserting that DENTSPLY and its tooth dealers, and the dealers among themselves, engaged in a conspiracy to violate the antitrust laws. The District Court has granted the Motions filed by DENTSPLY and the dealers, to dismiss Plaintiffs claims, except for the resale price maintenance claims. The Plaintiffs have appealed the dismissal of these claims to the Third Circuit. The Third Circuit has proposed scheduling oral arguments in January 2010. Also pending is a case filed by a manufacturer of a competitive tooth line seeking unspecified damages alleged to have been incurred as a result of the Companys tooth distribution practices, including the practice found to be a violation of the antitrust law. On June 18, 2004, Marvin Weinstat, DDS and Richard Nathan, DDS filed a class action suit in San Francisco County, California alleging that the Company misrepresented that its Cavitron ultrasonic scalers are suitable for use in oral surgical procedures. The Complaint seeks a recall of the product and refund of its purchase price to dentists who have purchased it for use in oral surgery. The Court certified the case as a class action in June 2006 with respect to the breach of warranty and unfair business practices claims. The class is defined as California dental professionals who purchased and used one or more Cavitron ultrasonic scalers for the performance of oral surgical procedures. The Company filed a motion for decertification of the class and this motion was granted. Plaintiffs have appealed the decertification of the class to the California Court of Appeals. On December 12, 2006, a Complaint was filed by Carole Hildebrand, DDS and Robert Jaffin, DDS in the Eastern District of PA. The case was filed by the same law firm that filed the Weinstat |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 SUBSEQUENT EVENTS On October 16, 2009, the Company entered into a Note Purchase Agreement with a group of initial purchasers, providing for the issuance by the Company on a delayed basis, no later than February 19, 2010, of $250.0 million aggregate principal amount of fixed rate 4.11% Senior Notes with an average maturity of five years and a final maturity in six years, through a private placement. The net proceeds after deducting fees and expenses of the loan are $250.0 million.The proceeds will be used to refinance the March 15, 2010 $150.0 million U.S. Private Placement Note and general corporate purposes.The obligations of the Company and the lenders are subject to the terms and conditions of the Note Purchase Agreement. |
Document Information
Document Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Period End Date | 2009-09-30 |
Amendment Flag | false |
Entity Information
Entity Information (USD $) | |||
In Hundreds, except Share data | 9 Months Ended
Sep. 30, 2009 | Oct. 29, 2009
| Jun. 30, 2008
|
Entity Information [Line Items] | |||
Entity Registrant Name | DENTSPLY INTERNATIONAL INC /DE/ | ||
Entity Central Index Key | 0000818479 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | 57418143.2 | ||
Entity Common Stock, Shares Outstanding | 148,503,212 |