CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (USD $) | ||
In Thousands, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Income Statement [Abstract] | ||
Net sales | $545,944 | $506,949 |
Cost of products sold | 263,906 | 241,217 |
Gross profit | 282,038 | 265,732 |
Selling, general and administrative expenses | 188,034 | 177,987 |
Restructuring and other costs | 4,680 | 1,570 |
Operating income | 89,324 | 86,175 |
Other income and expenses: | ||
Interest expense | 5,720 | 6,153 |
Interest income | (787) | (1,956) |
Other expense, net | 945 | 917 |
Income before income taxes | 83,446 | 81,061 |
Provision for income taxes | 21,255 | 21,131 |
Net income | 62,191 | 59,930 |
Less: Net income (loss) attributable to the noncontrolling interests | 348 | (1,813) |
Net income attributable to DENTSPLY International | $61,843 | $61,743 |
Earnings per common share | ||
Basic | 0.42 | 0.42 |
Diluted | 0.41 | 0.41 |
Cash dividends declared per common share | 0.05 | 0.05 |
Weighted average common shares outstanding | ||
Basic | 146,776 | 148,514 |
Diluted | 149,294 | 149,705 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | ||
In Thousands | 3 Months Ended
Mar. 31, 2010 | 12 Months Ended
Dec. 31, 2009 |
Current Assets: | ||
Cash and cash equivalents | $405,017 | $450,348 |
Accounts and notes receivables-trade, net | 355,030 | 348,684 |
Inventories, net | 301,198 | 291,640 |
Prepaid expenses and other current assets | 117,209 | 127,124 |
Total Current Assets | 1,178,454 | 1,217,796 |
Property, plant and equipment, net | 420,779 | 439,619 |
Identifiable intangible assets, net | 83,515 | 89,086 |
Goodwill, net | 1,279,103 | 1,312,596 |
Other noncurrent assets, net | 24,896 | 28,835 |
Total Assets | 2,986,747 | 3,087,932 |
Current Liabilities: | ||
Accounts payable | 108,118 | 100,847 |
Accrued liabilities | 196,890 | 249,169 |
Income taxes payable | 3,481 | 12,366 |
Notes payable and current portion of long-term debt | 18,946 | 82,174 |
Total Current Liabilities | 327,435 | 444,556 |
Long-term debt | 457,565 | 387,151 |
Deferred income taxes | 70,166 | 72,524 |
Other noncurrent liabilities | 248,963 | 276,743 |
Total Liabilities | 1,104,129 | 1,180,974 |
Commitments and contingencies | ||
Equity: | ||
Preferred stock, $.01 par value; .25 million shares authorized; no shares issued | 0 | 0 |
Common stock, $.01 par value; 200.0 million shares authorized; 162.8 million shares issued at March 31, 2010 and December 31, 2009 | 1,628 | 1,628 |
Capital in excess of par value | 194,806 | 195,495 |
Retained earnings | 2,137,952 | 2,083,459 |
Accumulated other comprehensive income | 34,607 | 83,542 |
Treasury stock, at cost, 16.5 million shares at March 31, 2010 and 15.8 million shares at December 31, 2009 | (557,805) | (532,019) |
Total DENTSPLY International Equity | 1,811,188 | 1,832,105 |
Noncontrolling interests | 71,430 | 74,853 |
Total Equity | 1,882,618 | 1,906,958 |
Total Liabilities and Equity | $2,986,747 | $3,087,932 |
PARENTHETICAL DATA FOR CONSOLID
PARENTHETICAL DATA FOR CONSOLIDATED BALANCE SHEETS (USD $) | ||
Share data in Millions, except Per Share data | Mar. 31, 2010
| Dec. 31, 2009
|
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 dollars 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) | 16.5 | 15.8 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $) | ||
In Thousands | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Cash flows from operating activities: | ||
Net income | $62,191 | $59,930 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 15,265 | 12,930 |
Amortization | 2,524 | 3,441 |
Deferred income taxes | (3,745) | (1,750) |
Share based compensation expense | 5,223 | 4,789 |
Restructuring and other costs - noncash | 363 | 328 |
Excess tax benefits from share-based compensation | (1,898) | (592) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts and notes receivable-trade, net | (15,530) | (19,745) |
Inventories, net | (14,472) | (18,675) |
Prepaid expenses and other current assets | (5,729) | 1,208 |
Accounts payable | 9,195 | (2,633) |
Accrued liabilities | (12,519) | (26,863) |
Income taxes payable | (6,801) | (1,824) |
Other, net | 2,477 | 95 |
Net cash provided by operating activities | 36,544 | 10,639 |
Cash flows from investing activities: | ||
Capital expenditures | (8,030) | (14,183) |
Cash paid for acquisitions of businesses, net of cash acquired | (7,687) | (574) |
Liquidation of short-term investments | 0 | 58 |
Expenditures for identifiable intangible assets | (107) | 0 |
Proceeds from sale of property, plant and equipment, net | 113 | 17 |
Net cash used in investing activities | (15,711) | (14,682) |
Cash flows from financing activities: | ||
Net change in short-term borrowings | (2,124) | 1,045 |
Cash paid for treasury stock | (41,423) | (4,664) |
Cash dividends paid | (7,409) | (7,460) |
Proceeds from long-term borrowings | 311,834 | 108,900 |
Payments on long-term borrowings | (299,215) | (53,507) |
Proceeds from exercise of stock options | 7,403 | 1,360 |
Excess tax benefits from share-based compensation | 1,898 | 592 |
Net cash (used in) provided by financing activities | (29,036) | 46,266 |
Effect of exchange rate changes on cash and cash equivalents | (37,128) | (19,915) |
Net (decrease) increase in cash and cash equivalents | (45,331) | 22,308 |
Cash and cash equivalents at beginning of period | 450,348 | 203,991 |
Cash and cash equivalents at end of period | $405,017 | $226,299 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited) (USD $) | ||||||||
In Thousands | Common Stock
| Capital in Excess of Par Value
| Retained Earnings
| Accumulated Other Comprehensive Income (Loss)
| Treasury Stock
| Total DENTSPLY International Equity
| Noncontrolling Interest
| Total
|
Balance at Dec. 31, 2008 | $1,628 | $187,154 | $1,838,958 | $39,612 | ($479,630) | $1,587,722 | $71,691 | $1,659,413 |
Comprehensive Income: | ||||||||
Net income | 0 | 0 | 61,743 | 0 | 0 | 61,743 | (1,813) | 59,930 |
Other comprehensive income (loss), net of tax: | ||||||||
Foreign currency translation adjustments | 0 | 0 | 0 | (75,758) | 0 | (75,758) | (4,428) | (80,186) |
Net loss on derivative financial instruments | 0 | 0 | 0 | 42,471 | 0 | 42,471 | 0 | 42,471 |
Unrecognized losses and prior service pension cost, net | 0 | 0 | 0 | 1,978 | 0 | 1,978 | 1 | 1,979 |
Comprehensive Income | 30,434 | (6,240) | 24,194 | |||||
Exercise of stock options | 0 | (2,261) | 0 | 0 | 3,621 | 1,360 | 0 | 1,360 |
Tax benefit from stock options exercised | 0 | 592 | 0 | 0 | 0 | 592 | 0 | 592 |
Share based compensation expense | 0 | 4,789 | 0 | 0 | 0 | 4,789 | 0 | 4,789 |
Funding of Employee Stock Option Plan | 0 | (70) | 0 | 0 | 1,408 | 1,338 | 0 | 1,338 |
Treasury shares purchased | 0 | 0 | 0 | 0 | (4,664) | (4,664) | 0 | (4,664) |
RSU Dividends | 0 | 34 | (34) | 0 | 0 | 0 | 0 | 0 |
Cash dividends ($0.05 per share) | 0 | 0 | (7,425) | 0 | 0 | (7,425) | 0 | (7,425) |
Balance at Mar. 31, 2009 | 1,628 | 190,238 | 1,893,242 | 8,303 | (479,265) | 1,614,146 | 65,451 | 1,679,597 |
Balance at Dec. 31, 2009 | 1,628 | 195,495 | 2,083,459 | 83,542 | (532,019) | 1,832,105 | 74,853 | 1,906,958 |
Comprehensive Income: | ||||||||
Net income | 0 | 0 | 61,843 | 0 | 0 | 61,843 | 348 | 62,191 |
Other comprehensive income (loss), net of tax: | ||||||||
Foreign currency translation adjustments | 0 | 0 | 0 | (73,422) | 0 | (73,422) | (3,771) | (77,193) |
Net loss on derivative financial instruments | 0 | 0 | 0 | 23,724 | 0 | 23,724 | 0 | 23,724 |
Unrecognized losses and prior service pension cost, net | 0 | 0 | 0 | 763 | 0 | 763 | 0 | 763 |
Comprehensive Income | 12,908 | (3,423) | 9,485 | |||||
Exercise of stock options | 0 | (4,372) | 0 | 0 | 11,775 | 7,403 | 0 | 7,403 |
Tax benefit from stock options exercised | 0 | 1,898 | 0 | 0 | 0 | 1,898 | 0 | 1,898 |
Share based compensation expense | 0 | 5,223 | 0 | 0 | 0 | 5,223 | 0 | 5,223 |
Funding of Employee Stock Option Plan | 0 | 206 | 0 | 0 | 1,132 | 1,338 | 0 | 1,338 |
Treasury shares purchased | 0 | 0 | 0 | 0 | (41,423) | (41,423) | 0 | (41,423) |
RSU Distributions | 0 | (3,678) | 0 | 0 | 2,730 | (948) | 0 | (948) |
RSU Dividends | 0 | 34 | (34) | 0 | 0 | 0 | 0 | 0 |
Cash dividends ($0.05 per share) | 0 | 0 | (7,316) | 0 | 0 | (7,316) | 0 | (7,316) |
Balance at Mar. 31, 2010 | $1,628 | $194,806 | $2,137,952 | $34,607 | ($557,805) | $1,811,188 | $71,430 | $1,882,618 |
1_PARENTHETICAL DATA FOR CONSOL
PARENTHETICAL DATA FOR CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited) (USD $) | ||
Mar. 31, 2010
| Mar. 31, 2009
| |
Comprehensive Income: | ||
Cash Dividends, Value Per Share | 0.05 | 0.05 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the Company, as applied in the interim consolidated financial statements presented herein are substantially the same as presented in the Companys Form 10-K for the year ended December 31, 2009, except as may be 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 $12.7 million and $13.3 million at March 31, 2010 and December 31, 2009, respectively. Variable Interest Entities In June 2009, the Financial Accounting Standards Board (FASB) issued new accounting guidance for variable interest entities (VIE).The new guidance includes: (1) the elimination of the exemption from consolidation for qualifying special purpose entities, (2) a new approach for determining the primary beneficiary of a VIE, which requires that the primary beneficiary have both (i) the power to control the most significant activities of the VIE and (ii) either the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, and (3) the requirement to continually reassess who should consolidate a VIE.The Company adopted this guidance on January 1, 2010, and the adoption did not have a material impact on the Companys financial position and results of operations. The Company consolidates all VIE where the Company has determined that it has the power to direct the activities that most significantly impact the VIEs economic performance and shares in either the significant risks or rewards of the VIE.The Company continually reassesses VIE to determine if consolidation is appropriate. Revisions in Classification Certain revisions in classification have been made to prior years data in order to conform to current year presentation. |
STOCK COMPENSATION
STOCK COMPENSATION | |
3 Months Ended
Mar. 31, 2010 | |
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 authorized grants under the plan of 14.0 million 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 14.0 million, the excess becomes available for grant under the Plan.No more than 2.0 million shares may be awarded as restricted stock and RSU, and no key employee may be granted restricted stock and RSU in excess of approximately 0.2 million 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.RSU 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. Similar to stock options, RSU become immediately exercisable upon death, disability or qualified retirement.It is the Companys practice to issue shares from treasury stock when options are exercised. At the date of grant, the Company uses 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 months ended March 31, 2010 and 2009: (in millions) 2010 2009 Stock option expense $ 2.9 $ 2.9 RSU expense 2.0 1.5 Total stock based compensation expense $ 4.9 $ 4.4 Total related tax benefit $ 1.4 $ 1.1 The remaining unamortized compensation cost related to non-qualified stock options is $16.0 million, which will be expensed over the weighted average remaining vesting period of the options, or 1.8 years. The unamortized compensation cost related to RSU is $11.6 million, which will be expensed over the remaining restricted period of the RSU, or 1.9 years. The following table reflects the non-qualified stock option transactions from December 31, 2009 through March 31, 2010: Outstanding Exercisable Weighted Weighted Average Aggregate Average Aggregate (in thousands, Exercise Intrinsic Exercise In |
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
COMPREHENSIVE INCOME | NOTE 3 COMPREHENSIVE INCOME The changes to balances included in accumulated other comprehensive income (AOCI), net of tax, in the consolidated balance sheets for the three months ended March 31, 2010 and 2009 are as follows: (in thousands) 2010 2009 Net income $ 62,191 $ 59,930 Other comprehensive (loss) income: Foreign currency translation adjustments (77,193 ) (80,186 ) Net gain on derivative financial instruments 23,724 42,471 Amortization of unrecognized losses and prior year service pension cost 763 1,979 Total other comprehensive loss (52,706 ) (35,736 ) Total comprehensive income 9,485 24,194 Comprehensive loss attributable to the noncontrolling interests (3,423 ) (6,240 ) Comprehensive income attributable to DENTSPLY International $ 12,908 $ 30,434 During the quarter ended March 31, 2010, foreign currency translation adjustments included currency translation losses of $81.2 million partially offset by gains of $4.0 million on the Companys loans designated as hedges of net investments.During the quarter ended March 31, 2009, foreign currency translation adjustments included currency translation losses of $89.9 million partially offset by gains of $9.7 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, net of tax, in the consolidated balance sheets are as follows: March 31, December 31, (in thousands) 2010 2009 Foreign currency translation adjustments $ 146,694 $ 220,116 Net loss on derivative financial instruments (90,076 ) (113,800 ) Unrecognized losses and prior year service pension cost (22,011 ) (22,774 ) $ 34,607 $ 83,542 The cumulative foreign currency translation adjustments included translation gains of $253.5 million and $327.8 million as of March 31, 2010 and December 31, 2009, respectively, offset by losses of $106.8 million and $107.7 million, respectively, on loans designated as hedges of net investments.These foreign currency translation adjustments were offset by net losses on derivatives financial instruments, which are discussed in Note 10, Financial Instruments and Derivatives. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | |
3 Months Ended
Mar. 31, 2010 | |
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 for the three months ended March 31, 2010 and 2009: Basic Earnings Per Common Share Computation (in thousands, except per share amounts) 2010 2009 Net income attributable to DENTSPLY International $ 61,843 $ 61,743 Common shares outstanding 146,776 148,514 Earnings per common share - basic $ 0.42 $ 0.42 Diluted Earnings Per Common Share Computation (in thousands, except per share amounts) Net income attributable to DENTSPLY International $ 61,843 $ 61,743 Common shares outstanding 146,776 148,514 Incremental shares from assumed exercise of dilutive options 2,518 1,191 Total shares 149,294 149,705 Earnings per common share - diluted $ 0.41 $ 0.41 Options to purchase 3.0 million shares of common stock that were outstanding during the three months ended March 31, 2010, 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.There were 8.1 million antidilutive shares of common stock outstanding during the three months ended March 31, 2009. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
BUSINESS ACQUISITIONS | NOTE 5 BUSINESS ACQUISITIONS The acquisition related activity for the three months ended March 31, 2010 of $7.7 million, net of cash acquired, was related to two acquisitions and one earn-out payment on an acquisition from 2008. The purchase agreement for one acquisition provides for an additional payment to be made based upon the operating performance of the business; however, the Company does not expect the additional payment to be material to the financial statements. The results of operations for the two businesses have been included in the accompanying financial statements since the effective date of the respective transaction. The purchase prices have been allocated on the basis of preliminary estimates of the fair values of assets acquired and liabilities assumed.The Company expects to finalize the purchase price allocations for the two acquisitions in the second quarter of 2010, and does not expect the adjustments to be material to the financial statements.As of March 31, 2010, the Company has recorded a total of $4.3 million in goodwill related to the unallocated portions of the respective purchase prices, and all of this goodwill is associated with the Canada/Latin America/Endodontics/Orthodontics segment. As discussed in Note 1, Significant Accounting Policies, the Company adopted the new accounting guidance for VIE.The adoption has not changed the Companys prior conclusion that all current VIE should be consolidated.Under the new accounting guidance for VIE, the Company believes it is the primary beneficiary for all the VIE since the Company directs the activities that most significantly impacts the economic performance of the VIE and has the obligation to absorb losses and the right to receive benefits that could potentially be significant to the VIE.The consolidation of the VIE net assets is immaterial to the Companys financial position with most of the net assets recorded in goodwill and identifiable intangible assets. |
SEGMENT INFORMATION
SEGMENT INFORMATION | |
3 Months Ended
Mar. 31, 2010 | |
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 March 31, 2010 and 2009. 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 Form10-K in the summary of significant accounting policies.The Company measures segment income for reporting purposes as operating income before restructuring and other costs, interest expense, interest income, other income and expenses and income taxes. 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 France,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 sales and distribution of certain small equipment, chairside consumable products, certain laboratory products and Endodontic products in Brazil.It also has responsibility for the sales and distribution of most of the Companys dental products sold in Latin America and Canada. This business group also includes the resp |
INVENTORIES
INVENTORIES | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
INVENTORIES | NOTE 7 - INVENTORIES Inventories are stated at the lower of cost or market.At March 31, 2010 and December 31, 2009, the cost of $8.7 million, or 2.9%, and $7.8 million, or 2.7%, 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 $32.8 million and $31.9 million as of March 31, 2010 and December 31, 2009, 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 March 31, 2010 and December 31, 2009 by $4.3 million and $4.0 million, respectively. Inventories, net of inventory valuation reserves, consist of the following: March 31, December 31, (in thousands) 2010 2009 Finished goods $ 181,232 $ 178,721 Work-in-process 54,383 53,056 Raw materials and supplies 65,583 59,863 $ 301,198 $ 291,640 |
BENEFIT PLANS
BENEFIT PLANS | |
3 Months Ended
Mar. 31, 2010 | |
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 months ended March 31, 2010 and 2009, respectively: Defined Benefit Plans (in thousands) 2010 2009 Service cost $ 2,015 $ 2,006 Interest cost 2,143 1,919 Expected return on plan assets (1,152 ) (958 ) Amortization of transition obligation 31 57 Amortization of prior service cost 20 34 Amortization of net loss 241 403 Net periodic benefit cost $ 3,298 $ 3,461 Other Postretirement Plans (in thousands) 2010 2009 Service cost $ 14 $ 13 Interest cost 153 156 Amortization of net loss 69 50 Net periodic benefit cost $ 236 $ 219 The following sets forth the information related to the funding of the Companys benefit plans for 2010: Other Pension Postretirement (in thousands) Benefits Benefits Actual at March 31, 2010 $ 1,933 $ (61 ) Projected for the remainder of the year 6,708 1,168 Total for year $ 8,641 $ 1,107 |
RESTRUCTURING AND OTHER COSTS
RESTRUCTURING AND OTHER COSTS | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
RESTRUCTURING AND OTHER COSTS | NOTE 9 RESTRUCTURING AND OTHER COSTS Restructuring Costs During the three months ended March 31, 2010 and 2009, the Company recorded restructuring costs of $0.8 million and $1.2 million, respectively.These costs are recorded in Restructuring and other costs in the consolidated statements of operations and the associated liabilities are recorded in accrued liabilities in the consolidated balance sheets.These costs primarily consist of employee severance costs. During 2010 and 2009, 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 March 31, 2010, the Companys restructuring accruals were as follows: Severance 2008 and (in thousands) Prior Plans 2009 Plans 2010 Plans Total Balance at December 31, 2009 $ 5,302 $ 3,240 $ - $ 8,542 Provisions and adjustments (25 ) - 642 617 Amounts applied (1,350 ) (909 ) (385 ) (2,644 ) Balance at March 31, 2010 $ 3,927 $ 2,331 $ 257 $ 6,515 Lease/Contract Terminations 2008 and (in thousands) Prior Plans Total Balance at December 31, 2009 $ 1,125 $ 1,125 Provisions and adjustments - - Amounts applied - - Balance at March 31, 2010 $ 1,125 $ 1,125 Other Restructuring Costs 2008 and (in thousands) Prior Plans 2009 Plans 2010 Plans Total Balance at December 31, 2009 $ 112 $ 16 $ - $ 128 Provisions and adjustments 9 77 55 141 Amounts applied (47 ) (88 ) - (135 ) Balance at March 31, 2010 $ 74 $ 5 $ 55 $ 134 The following table provides the year-to-date changes in the restructuring accruals by segment: December 31, Provisions and Amounts March 31, (in thousands) 2009 Adjustments Applied 2010 United States, Germany and Certain Other EuropeanRegions Consumable Businesses $ 1,278 $ 462 $ (202 ) $ 1,538 France, U.K., Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses 84 124 (124 ) 84 Canada/Latin America/Endodontics/ Orthodontics 639 (2 ) (637 ) - Dental Laboratory Business/ Implants/Non-Dental 7,794 174 (1,816 ) 6,152 $ 9,795 $ 758 $ (2,779 ) $ 7,774 Other Costs During the three months ended March 31, 2010 and 2009, the Company recorded other costs of $3.9 million and $0.4 million, respectively.Other costs for the three months ended March 31, 2010 and 2009 are primarily related to impairments of long-term assets and several legal matters.These other costs are reflected in Restructuring and other costs in the consolidated statements of operations. |
FINANCIAL INSTRUMENTS AND DERIV
FINANCIAL INSTRUMENTS AND DERIVATIVES | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
FINANCIAL INSTRUMENTS AND DERIVATIVES | NOTE 10 FINANCIAL INSTRUMENTS AND DERIVATIVES 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 foreign currency 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 foreign currency 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 March 31, 2010, the Company has two groups of significant variable interest rate to fixed 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 million Swiss francs, and effectively converts the underlying variable interest rates to a fixed interest rate of 4.2% for a term of seven years, ending in September 2012.A third group of swaps which had a notional amount of $150.0 million, and effectively converted underlying variable interest rates to a fixed interest rate of 3.9% for a term of two years, matured on March 15, 2010.The Company enters into interest rate swap contracts infrequently as they are only used to manage interest rate risk on |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | |
3 Months Ended
Mar. 31, 2010 | |
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 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 March 31, 2010 and December 31, 2009, 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. March 31, 2010 (in thousands) Total Level 1 Level 2 Level 3 Assets Money market funds $ 405,017 $ 405,017 $ - $ - Commodity contracts 235 - 235 - Foreign exchange forward contracts 1,161 - 1,161 - Total assets $ 406,413 $ 405,017 $ 1,396 $ - Liabilities Interest rate swaps $ 7,886 $ - $ 7,886 $ - Cross currency basis swaps 120,107 - 120,107 - Foreign exchange forward contracts 1,877 - 1,877 - Total liabilities $ 129,870 $ - $ 129,870 $ - December 31, 2009 (in thousands) Total Level 1 Level 2 Level 3 Assets Money market funds $ 450,348 $ 450,348 $ - $ - Commodity contracts 293 - 293 - Foreign exchange forward contracts 1,159 - 1,159 - Total assets $ 451,800 $ 450,348 $ 1,452 $ - Liabilities Interest rate swaps $ 9,787 $ - $ 9,787 $ - Cross currency basis swaps 176,621 - 176,621 - Foreign exchange forward contracts 1,435 - 1,435 - Total liabilities $ 187,843 $ - $ 187,843 $ - Derivative valuations are based on observable inputs to the valuation model including interest rates, foreign currency exchange rates, future commodities prices and credit risks. The commodity contracts, in |
UNCERTAINTIES IN INCOME TAXES
UNCERTAINTIES IN INCOME TAXES | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
UNCERTAINTIES IN INCOME TAXES | NOTE 12 UNCERTAINTIES 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. It is reasonably possible that certain amounts of unrecognized tax benefits will significantly increase or decrease within twelve 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 $1.1 million.In addition, expiration of statutes of limitation in various jurisdictions during the next twelve months could include unrecognized tax benefits of approximately $1.0 million. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | |
3 Months Ended
Mar. 31, 2010 | |
Notes to Financial Statements [Abstract] | |
FINANCING ARRANGEMENTS | NOTE 13 - FINANCING ARRANGEMENTS On February 19, 2010, the Company received the proceeds of a $250.0 million Private Placement Note at a fixed rate of 4.11% for an average term of five years and a final maturity of six years.On March 1, 2010 the Company entered into a term loan facility with PNC Bank for Swiss francs 65.0 million at a variable rate based upon three month Swiss franc LIBOR, which matures in March 2012.The Companys notes payable and current portion of long-term debt, as classified on the consolidated balance sheets, amounted to $18.9 million and $82.2 million at March 31, 2010 and December 31, 2009, respectively. The Company estimates the carrying value of its total debt approximates its fair value of $476.5 million as of March 31, 2010 and $453.7 million as of December 31, 2009.The interest rates on term loan debt and commercial paper are variable and therefore the fair value of these instruments approximates their carrying values. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | |
3 Months Ended
Mar. 31, 2010 | |
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 appealed the dismissal of these claims to the Third Circuit.The Third Circuit issued its decision in April 2010 affirming the decision of the District Court. 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 appealed the decertification of the class to the California Court of Appeals and the Court of Appeals has reversed the decertification decision of the trial Court.The Company filed a Petition for Review of the Court of Appeals decision with the California Supreme Court.In April 2010 the California Supreme Court denied the Companys Petition. On December 12, 2006, a Complaint was filed by Carole Hildebrand, DDS and Robert Jaffin, DDS in the Eastern District of Pennsylvania (the Plaintiffs subsequently added Dr. Mitchell Goldm |
Document Information
Document Information | |
3 Months Ended
Mar. 31, 2010 | |
Document Information [Text Block] | |
Document Type | 10-Q |
Document Period End Date | 2010-03-31 |
Amendment Flag | false |
Entity Information
Entity Information (USD $) | |||
3 Months Ended
Mar. 31, 2010 | Apr. 26, 2010
| Jun. 30, 2009
| |
Entity [Text Block] | |||
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 | $4,762,176,900 | ||
Entity Common Stock, Shares Outstanding | 146,352,495 | ||
Document Fiscal Year Focus | 2,010 | ||
Document Fiscal Period Focus | Q1 |