DENTSPLY
NEWS
For further
Information
Contact:
Bret W. Wise FOR IMMEDIATE RELEASE
Senior Vice President and
Chief Financial Officer
(717) 849-4718
DENTSPLY International INC.
REPORTS STRONG RESULTS FOR SECOND QUARTER 2003
York, PA - July 30, 2003 -- DENTSPLY International Inc. (NASDAQ
-XRAY) today announced sales for the second quarter of 2003 were a
record $417.9 million, an increase of 9.7% compared to the second
quarter of 2002. Sales excluding precious metal content rose
10.9% to $371.7 million compared to $335.2 million in the 2002
period. Net income for the second quarter 2003 was $44.2
million, up 20.1% over the prior year and earnings per share were
$.55, a 19.6% increase over 2002.
Sales for the six months ended June 30, 2003 were $814.1 million,
a 10.6% increase compared to $735.9 million for the six months
ended June 30, 2002. Sales excluding precious metals for the 2003
period were $713.5 million, an 11.3% increase compared to the 2002
period. Net income for the six month period in 2003 was $82.5
million, a 18.0% increase over the prior period, and earnings per
diluted share were $1.03 per share, an increase of 17.0%, compared
to $0.88 per share in the 2002 period.
The Company recorded pretax charges of $5.5 million in the second
quarter and total pretax charges of $9.6 million in the six month
period of 2003, related primarily to accounting for inventory,
receivables and prepaid expenses at three locations impacted by
integration activities following the completion of acquisitions in
2001. The largest portion of these charges relate to an
inventory adjustment at one of these divisions, confirmed by a
physical inventory that the Company initiated and completed in the
second quarter. Also in the second quarter, the Company
initiated and completed an independent evaluation of its
accounting practices for establishing reserves. As a result of
this evaluation, the Company identified and reversed to income
$4.4 million of reserves that should have been reversed in prior
periods or were erroneously established. In the first quarter of
2003, the Company reversed $2.4 million of product return reserves
that were recorded in excess of appropriate amounts. The impact of
the establishment and reversal of these reserves was not material
to the results of operations in prior periods and will not be
material to the results of operations in 2003. As a result of
this evaluation, the Company is revising certain procedures for
identifying and estimating reserves to improve the accuracy of its
accounting for loss contingencies in the future.
John C. Miles, II, Chairman and Chief Executive Officer, commented
that "the Company's growth continues to be driven by new product
introductions over the past 18 months, particularly those in
dental consumables. I am particularly pleased with the rapid sales
growth of several of our new product introductions including
Cercon, our all ceramic crown and bridge consumable and Aquasil
Ultra, our new impression material. Our new product pipeline
remains robust and we anticipate several additional key product
introductions in the second half of 2003."
DENTSPLY Conference Call Information:
DENTSPLY will hold a conference call on Thursday, July 31, 2003 at
8:30 a.m. (TZ: Eastern). To access the call, please dial domestic
(877) 885-5820 and international (706) 643-9578. This conference
call will be broadcast live on the Internet at www.dentsply.com.
An audio replay of the conference call will be available for two
weeks. To access the replay, please dial domestic (800) 642-1687
and international (706) 645-9291. Call I.D. : 1382341. A
transcript of the conference call will also be available through
the Company's web site five days after the call.
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 x-ray
equipment, dental handpieces, intraoral cameras, dental x-ray film
holders, film mounts and bone substitute/grafting materials; and a
leading worldwide manufacturer or distributor of dental injectible
anesthetics, impression materials, orthodontic appliances, dental
cutting instruments and dental implants. 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 statements regarding
future events or the future financial performance of the company.
Actual events or results may differ materially from those in the
projections or other forward-looking statements set forth herein
as a result of certain risk factors. These risk factors include
without limitation; the ability to continue to generate sufficient
cash flow to pay down debt as planned, the continued strength of
dental markets, the timing, success and market reception for our
new product introductions, and changes in the general economic
environment that could affect our business.
For an additional description of risk factors, please refer to the
Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission.
DENTSPLY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
June 30 June 30
-------------------- --------------------
2003 2002 2003 2002
--------- --------- --------- ---------
NET SALES $417,949 $381,013 $814,136 $735,881
NET SALES - ex PM $371,668 $335,218 $713,506 $640,786
COST OF PRODUCTS SOLD 212,839 196,473 418,955 381,969
GROSS PROFIT 205,110 184,540 395,181 353,912
% OF NET SALES 49.1% 48.4% 48.5% 48.1%
% OF NET SALES - ex PM 55.2% 55.1% 55.4% 55.2%
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 134,085 119,783 262,146 234,199
RESTRUCTURING (INCOME)/COSTS 0 (44) 0 (2,001)
--------- --------- --------- ---------
INCOME FROM OPERATIONS 71,025 64,801 133,035 121,714
% OF NET SALES 17.0% 17.0% 16.3% 16.5%
% OF NET SALES - ex PM 19.1% 19.3% 18.6% 19.0%
NET INTEREST AND
OTHER EXPENSE (INCOME) 5,542 9,017 10,832 15,714
--------- --------- --------- ---------
PRE-TAX INCOME 65,483 55,784 122,203 106,000
INCOME TAXES 21,265 18,964 39,718 36,084
--------- --------- --------- ---------
NET INCOME $44,218 $36,820 $82,485 $69,916
% OF NET SALES 10.6% 9.7% 10.1% 9.5%
% OF NET SALES - ex PM 11.9% 11.0% 11.6% 10.9%
EARNINGS PER SHARE-BASIC $0.56 $0.47 $1.05 $0.90
-DILUTIVE $0.55 $0.46 $1.03 $0.88
DIVIDENDS PER SHARE $0.04600 $0.04600 $0.09200 $0.09200
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING-BASIC 78,688 78,163 78,566 78,056
-DILUTIVE 80,327 80,076 80,168 79,858
DENTSPLY INTERNATIONAL INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
2003 2002
ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 81,401 $ 25,652
ACCOUNTS AND NOTES RECEIVABLE-TRADE, NET 243,813 221,262
INVENTORIES, NET 229,592 214,492
OTHER CURRENT ASSETS 82,489 79,595
TOTAL CURRENT ASSETS 637,295 541,001
PROPERTY,PLANT AND EQUIPMENT, NET 348,971 313,178
GOODWILL, NET 941,598 898,497
IDENTIFIABLE INTANGIBLES ASSETS, NET 236,973 236,009
OTHER NONCURRENT ASSETS, NET 139,372 98,348
TOTAL ASSETS $2,304,209 $2,087,033
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES $ 379,577 $ 365,745
LONG-TERM DEBT 824,971 769,823
OTHER LIABILITIES 93,321 87,239
DEFERRED INCOME TAXES 27,038 27,039
---------- ----------
TOTAL LIABILITIES 1,324,907 1,249,846
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES 1,320 1,259
STOCKHOLDERS' EQUITY 977,982 835,928
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,304,209 $2,087,033