DENTSPLY SIRONA Inc. (“Dentsply Sirona”) (Nasdaq: XRAY), the Dental
Solutions Company, today announced its financial results for the
three months ended September 30, 2019.
Don Casey, Chief Executive Officer, commented;
“We are pleased to report solid third quarter results and
encouraged that the Company continues to demonstrate good progress
against our stated restructuring goals of accelerating growth,
improving margins and simplifying the organization. The key to our
third quarter performance was the success of our new product
launches, particularly the Primescan Digital Impression System, and
we are encouraged by the positive reception to the many new
products we launched at Dentsply Sirona World in October. Revenue
growth and our comprehensive cost savings programs contributed to
significant margin expansion in the third quarter of 2019. While we
still have a lot of work to do, we are convinced that the ongoing
execution of our restructuring plan will continue to drive strong
financial performance and create significant value for our
shareholders.”
Operating Financial Results
(GAAP)
|
|
Third Quarter |
(in millions, except per share
data and percentages) |
|
2019 |
|
2018 |
|
% Change |
Net sales |
|
$ |
962 |
|
$ |
928 |
|
3.7 |
% |
Operating income |
|
$ |
110 |
|
$ |
46 |
|
139 |
% |
Net income per common share –
diluted |
|
0.38 |
|
0.13 |
|
192 |
% |
Operating Financial Results
(non-GAAP)[1]
|
|
Third Quarter |
(in millions, except per share
data and percentages) |
|
2019 |
|
2018 |
|
% Change |
Net sales |
|
$ |
951 |
|
$ |
924 |
|
2.9 |
% |
Internal sales growth[2] |
|
|
|
|
|
7.5 |
% |
Operating income |
|
$ |
172 |
|
$ |
120 |
|
43 |
% |
Adjusted EPS |
|
0.57 |
|
0.38 |
|
51 |
% |
[1] Non-GAAP net sales, internal sales growth,
operating income and adjusted EPS are results that are non-GAAP
financial measures which exclude certain items. Please refer to the
tables at the end of this release for a reconciliation between GAAP
and non-GAAP measures.[2] The Company defines “internal” sales
growth as constant currency sales growth excluding the impacts of
net acquisitions and divestitures and discontinued products.
Cash Flow and Liquidity
Operating cash flow in the third quarter was
$159 million, up $34 million, or up 27% as compared to the prior
year period. Free cash flow, which represents operating cash flow,
less capital expenditures, was $136 million in the third quarter of
2019, up 78% as compared to the third quarter of 2018. The strong
cash flow performance was the result of higher sales and improved
profitability resulting from our efficiency initiatives. During the
third quarter, the Company repurchased 1.9 million shares, at a
total cost of $100 million and paid a dividend of $20 million,
bringing the total cash returned to shareholders to $120 million in
the third quarter.
Segment Results
Consumables SegmentConsumables
sales grew 1.8% to $416 million, and increased 3.2% on an internal
sales growth basis. This performance was driven by growth in sales
of Restorative and Endodontics products, partially offset by a
modest decline in Laboratory Dental product sales.
Technologies & Equipment
SegmentTechnologies & Equipment sales grew 5.1% to
$535 million and increased 11% on an internal growth basis. Key
drivers of this growth were Digital Dentistry (which includes the
CAD/CAM and Orthodontics businesses) and Healthcare, offset in part
by weakness in Equipment & Instruments sales, mainly a function
of ongoing competitive pressures in our Imaging business. Growth in
Digital Dentistry was very strong, driven by the successful launch
of our Primescan CAD/CAM digital impression scanning
system.
Fiscal Year 2019 Outlook
The Company increased the FY19 guidance range
for Adjusted Earnings Per Share to $2.42 to $2.48.
|
|
|
|
Previous Guidance |
Updated Guidance |
Revenue |
$3.95B to $4.05B |
$3.95B to $4.05B |
Internal revenue
growth[3] |
4%-5% |
Upper end of 4%-5% |
Portfolio shaping/M&A
revenue impact |
($60M) |
($60M) |
Foreign currency FY19
impact |
($100M) |
($135M) |
Adjusted operating income
margin[3] |
18%-19% |
18%-19% |
Non-GAAP effective tax rate[3] |
|
24.75% |
|
24.75% |
Adjusted earnings per
share[3] |
$2.35-$2.45 |
$2.42-$2.48 |
Note: 2019
guidance does not incorporate any additional 2019 share repurchase
activity |
[3] Dentsply Sirona does not provide GAAP
financial measures on a forward-looking basis, because the company
believes it is unable to provide a meaningful or accurate
calculation or estimation of reconciling items and the information
is not available without unreasonable effort. These reconciling
items include the impact of prospective acquisitions, acquisitions
announced but not yet closed and other non-GAAP items, including
restructuring costs and various other factors, many of which are
difficult to predict.
Recent Announcements & Additional
Highlights
Dentsply Sirona World 2019 was
hosted in Las Vegas in October and represented a celebration of
dentistry combining professional development courses, opportunities
for dental professionals to connect with each other and world class
entertainment. Dentsply Sirona World 2019 brought together 7,000
dental professionals to celebrate dentistry’s cutting-edge
technology. Participants accessed over 100 in-depth, clinical
education sessions and workshops with over 100 captivating
speakers, representing the best and brightest minds in dentistry.
At Dentsply Sirona World 2019, the Company introduced new U.S.
product launches including:
- Schick AE Sensor –
A dental intraoral x-ray sensor that features an Advanced Exposure
technology that generates an excellent imaging quality, even at
lower x-ray dosage ranges.
- Orthophos, E, S and
SL – panoramic imaging lines for the U.S. market.
- The Astra Tech implant
system EV – developed to provide excellent initial
stability for improved outcomes in any type of bone, either for
delayed load or immediate load cases.
- Trunatomy Endodontic
Files – an innovative and minimally invasive endodontic
file system.
- 3D Dental Printing of
Dentures – A joint venture that utilizes the Carbon 3D
printer and new Dentsply Sirona materials to create high quality,
durable 3D printed dentures.
- Updated CEREC 5.1
Software – a performance upgrade for CEREC. The addition
of OraCheck allows dentists to visualize three-dimensional changes
on virtual optical scans over time on their own computer.
Appointed New Board MemberThe
Company announced that Janet S. Vergis was appointed to its Board
of Directors, increasing the size of its Board from ten to eleven
members.
Conference Call/Webcast
InformationDentsply Sirona’s management team will host an
investor conference call and live webcast on November 7, at 8:30 am
ET. A presentation will also be available on www.dentsplysirona.com
in the Investors section.
Investors can access the webcast via a link on
Dentsply Sirona’s web site at www.dentsplysirona.com. For those
planning to participate on the call, please dial +1-877-370-7637
for domestic calls, or +1-629-228-0723 for international calls. The
Conference ID # is 8769438. A replay of the conference call will be
available online on the Dentsply Sirona web site, and a dial-in
replay will be available for one week following the call at
+1-855-859-2056 (for domestic calls) or +1-404-537-3406 (for
international calls), replay passcode # 8769438.
About Dentsply SironaDentsply
Sirona is the world’s largest manufacturer of professional dental
products and technologies, with a 132-year history of innovation
and service to the dental industry and patients worldwide. Dentsply
Sirona develops, manufactures, and markets a comprehensive
solutions offering including dental and oral health products as
well as other consumable medical devices under a strong portfolio
of world class brands. As The Dental Solutions Company, Dentsply
Sirona’s products provide innovative, high-quality and effective
solutions to advance patient care and deliver better, safer and
faster dentistry. The Company’s shares of common stock are listed
in the United States on Nasdaq under the symbol XRAY. Visit
www.dentsplysirona.com for more information about Dentsply Sirona
and its products.
Contact
Information:Investors:John Sweeney, CFA, IRCVice
President, Investor
Relations+1-717-849-7863John.Sweeney@dentsplysirona.com
Forward-Looking Statements and
Associated Risks
Information the Company has included or
incorporated by reference in this Form 8-K, and information which
may be contained in other filings with the U. S. Securities and
Exchange Commission (the “SEC”) as well as press releases or other
public statements, contains or may contain forward-looking
statements. These forward-looking statements include, among other
things, statements about the completion of the year-end financial
statement audit and expected financial results referred to herein,
and/or statements about the Company’s plans, objectives,
expectations (financial or otherwise) or intentions, including the
Company's 2019 guidance.
The Company’s forward-looking statements involve
risks and uncertainties. Actual results may differ significantly
from those projected or suggested in any forward-looking
statements. The Company does not undertake any obligation to
release publicly any revisions to such forward-looking statements
to reflect events or circumstances occurring after the date hereof
or to reflect the occurrence of unanticipated events. Any number of
factors could cause the Company’s actual results to differ
materially from those contemplated by any forward-looking
statements, including, but not limited to, the risks associated
with the following:
- the preliminary nature of the
financial results contained in this release
- the Company's ability to
successfully implement its cost reduction and restructuring
plans
- the Company’s ability to remain
profitable in a very competitive marketplace, which depends upon
the Company’s ability to differentiate its products and services
from those of competitors
- the Company’s failure to anticipate
and appropriately adapt to changes or trends within the rapidly
changing dental industry
- the effect of changes in the
Company’s management and personnel
- changes in applicable laws, rules
or regulations, or their interpretation or enforcement, or the
enactment of new laws, rules or regulations, which apply to the
Company’s business practices (past, present or future) or require
the Company to spend significant resources for
compliance
- a significant failure or disruption
in service within the Company’s operations or the operations of key
distributors
- results in pending and future
litigation, investigations or other proceedings which could subject
the Company to significant monetary damages or penalties and/or
require us to change our business practices, or the costs incurred
in connection with such proceedings
- the Company’s failure to attract
and retain talented employees, or to manage succession and
retention for its Chief Executive Officer or other key
executives
- the Company’s failure to
successfully integrate the business operations or achieve the
anticipated benefits from any acquired businesses
- the Company’s failure to execute
on, or other issues arising under, certain key client
contracts
- the impact of the Company’s debt
service obligations on the availability of funds for other business
purposes, the terms of and required compliance with covenants
relating to the Company’s indebtedness and its access to the credit
markets in general
- general economic
conditions
- other risks described from time to
time in the Company’s filings with the SEC
You should carefully consider these and other
relevant factors, including those risk factors in Part I, Item 1A,
“Risk Factors” in the Company's most recent Form 10-K and any other
information included or incorporated by reference in this Report,
and information which may be contained in the Company’s other
filings with the SEC, when reviewing any forward-looking statement.
Investors should understand it is impossible to predict or identify
all such factors or risks. As such, you should not consider either
foregoing lists, or the risks identified in the Company’s SEC
filings, to be a complete discussion of all potential risks or
uncertainties associated with an investment in the company.
Non-US GAAP Financial
Measures
The principal measurements used by the Company
in evaluating its business are: (1) constant currency sales growth
by segment and geographic region; (2) internal sales growth by
segment and geographic region; and (3) adjusted operating income
and margins of each reportable segment, which excludes the impacts
of purchase accounting, corporate expenses, and certain other items
to enhance the comparability of results period to period. These
principal measurements are not calculated in accordance with
accounting principles generally accepted in the United States;
therefore, these items represent non-US GAAP measures. These non-US
GAAP measures may differ from other companies and should not be
considered in isolation from, or as a substitute for, measures of
financial performance prepared in accordance with US GAAP.
The Company defines “constant currency” sales
growth as the increase or decrease in net sales from period to
period excluding precious metal content and the impact of changes
in foreign currency exchange rates. This impact is calculated by
comparing current-period revenues to prior-period revenues, with
both periods converted at the U.S. dollar to local currency foreign
exchange rate for each month of the prior period, for the
currencies in which the Company does business. The Company defines
“internal” sales growth as constant currency sales growth excluding
the impacts of net acquisitions and divestitures and discontinued
products.
Management believes that the presentation of net
sales, excluding precious metal content, provides useful
information to investors because a portion of Dentsply Sirona’s net
sales is comprised of sales of precious metals generated through
sales of the Company’s precious metal dental alloy products, which
are used by third parties to construct crown and bridge materials.
Due to the fluctuations of precious metal prices and because the
cost of the precious metal content of the Company’s sales is
largely passed through to customers and has minimal effect on
earnings, Dentsply Sirona reports net sales both with and without
precious metal content to show the Company’s performance
independent of precious metal price volatility and to enhance
comparability of performance between periods. The Company uses its
cost of precious metal purchased as a proxy for the precious metal
content of sales, as the precious metal content of sales is not
separately tracked and invoiced to customers. The Company believes
that it is reasonable to use the cost of precious metal content
purchased in this manner since precious metal dental alloy sale
prices are typically adjusted when the prices of underlying
precious metals change.
In addition to the results reported in
accordance with US GAAP, the Company provides adjusted net income
attributable to Dentsply Sirona and adjusted earnings per diluted
common share (“adjusted EPS”). The Company discloses adjusted net
income attributable to Dentsply Sirona to allow investors to
evaluate the performance of the Company’s operations exclusive of
certain items that impact the comparability of results from period
to period and may not be indicative of past or future performance
of the normal operations of the Company and certain large non-cash
charges related to intangible assets either purchased or acquired
through a business combination. The Company believes that this
information is helpful in understanding underlying operating trends
and cash flow generation.
Adjusted net income and adjusted EPS are
important internal measures for the Company. Senior management
receives a monthly analysis of operating results that includes
adjusted net income and adjusted EPS and the performance of the
Company is measured on this basis along with other performance
metrics.
The adjusted net income attributable to Dentsply Sirona consists
of net income attributable to Dentsply Sirona adjusted to exclude
the following:
(1) Business combination related costs and fair
value adjustments. These adjustments include costs related to
integrating and consummating mergers and recently acquired
businesses, as well as costs, gains and losses related to the
disposal of businesses or significant product lines. In addition,
this category includes the roll off to the consolidated statements
of operations of fair value adjustments related to business
combinations, except for amortization expense noted below. These
items are irregular in timing and as such may not be indicative of
past and future performance of the Company and are therefore
excluded to allow investors to better understand underlying
operating trends.
(2) Restructuring program related costs and
other costs. These adjustments include costs related to the
implementation of restructuring initiatives as well as certain
other costs. These costs can include, but are not limited to,
severance costs, facility closure costs, lease and contract
terminations costs, related professional service costs, duplicate
facility and labor costs associated with specific restructuring
initiatives, as well as, legal settlements and impairments of
assets. These items are irregular in timing, amount and impact to
the Company’s financial performance. As such, these items may not
be indicative of past and future performance of the Company and are
therefore excluded for the purpose of understanding underlying
operating trends.
(3) Amortization of purchased intangible assets.
This adjustment excludes the periodic amortization expense related
to purchased intangible assets. Amortization expense has been
excluded from adjusted net income attributed to Dentsply Sirona to
allow investors to evaluate and understand operating trends
excluding these large non-cash charges.
(4) Credit risk and fair value adjustments.
These adjustments include both the cost and income impacts of
adjustments in certain assets and liabilities including the
Company’s pension obligations, that are recorded through net income
which are due solely to the changes in fair value and credit risk.
These items can be variable and driven more by market conditions
than the Company’s operating performance. As such, these items may
not be indicative of past and future performance of the Company and
therefore are excluded for comparability purposes.
(5) Gain on sale of marketable securities.
This adjustment represents the gain on the sale of marketable
securities held by the Company. The gain has been excluded
from adjusted net income attributed to Dentsply Sirona to allow
investors to evaluate and understand operating trends excluding
this gain.
(6) Income tax related adjustments. These
adjustments include both income tax expenses and income tax
benefits that are representative of income tax adjustments mostly
related to prior periods, as well as the final settlement of income
tax audits, and discrete tax items resulting from the
implementation of restructuring initiatives and the vesting and
exercise of employee share-based compensation. These adjustments
are irregular in timing and amount and may significantly impact the
Company’s operating performance. As such, these items may not be
indicative of past and future performance of the Company and
therefore are excluded for comparability purposes.
Adjusted earnings per diluted common share is
calculated by dividing adjusted net income (loss) attributable to
Dentsply Sirona by diluted weighted-average common shares
outstanding. Adjusted net income attributable to Dentsply Sirona
and adjusted earnings per diluted common share are considered
measures not calculated in accordance with US GAAP, and therefore
are non-US GAAP measures. These non-US GAAP measures may differ
from other companies. Income tax related adjustments may include
the impact to adjust the interim effective income tax rate to the
expected annual effective tax rate. The non-US GAAP financial
information should not be considered in isolation from, or as a
substitute for, measures of financial performance prepared in
accordance with US GAAP.
DENTSPLY SIRONA INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(In millions, except per share amounts and
percentages)(unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Net sales |
$ |
962.1 |
|
$ |
928.4 |
|
|
$ |
2,917.7 |
|
$ |
2,926.6 |
|
Net sales, excluding precious
metal content |
950.6 |
|
920.6 |
|
|
2,886.1 |
|
2,899.1 |
|
|
|
|
|
|
|
|
|
Cost of products sold |
448.1 |
|
452.3 |
|
|
1,363.2 |
|
1,383.6 |
|
|
|
|
|
|
|
|
|
Gross profit |
514.0 |
|
476.1 |
|
|
1,554.5 |
|
1,543.0 |
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
399.3 |
|
418.5 |
|
|
1,262.1 |
|
1,285.9 |
|
|
|
|
|
|
|
|
|
Goodwill impairment |
— |
|
— |
|
|
— |
|
1,085.8 |
|
|
|
|
|
|
|
|
|
Restructuring and other
costs |
5.2 |
|
12.1 |
|
|
68.1 |
|
211.2 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
109.5 |
|
45.5 |
|
|
224.3 |
|
(1,039.9 |
) |
|
|
|
|
|
|
|
|
Net interest and other expense
(income) |
3.0 |
|
13.8 |
|
|
16.4 |
|
(4.1 |
) |
|
|
|
|
|
|
|
|
Income (loss) before income
taxes |
106.5 |
|
31.7 |
|
|
207.9 |
|
(1,035.8 |
) |
|
|
|
|
|
|
|
|
Provision (benefit) for income
taxes |
21.5 |
|
4.2 |
|
|
47.3 |
|
(23.4 |
) |
|
|
|
|
|
|
|
|
Net income (loss) |
85.0 |
|
27.5 |
|
|
160.6 |
|
(1,012.4 |
) |
|
|
|
|
|
|
|
|
Less: Net (loss) income
attributable to noncontrolling interest |
— |
|
(0.5 |
) |
|
— |
|
0.4 |
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to Dentsply Sirona |
$ |
85.0 |
|
$ |
28.0 |
|
|
$ |
160.6 |
|
$ |
(1,012.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share attributable to Dentsply Sirona: |
|
|
|
|
|
|
|
Basic |
$ |
0.38 |
|
$ |
0.13 |
|
|
$ |
0.72 |
|
$ |
(4.50 |
) |
Diluted |
$ |
0.38 |
|
$ |
0.13 |
|
|
$ |
0.71 |
|
$ |
(4.50 |
) |
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
223.1 |
|
222.4 |
|
|
223.5 |
|
224.9 |
|
Diluted |
224.9 |
|
223.7 |
|
|
225.2 |
|
224.9 |
|
|
|
|
|
|
|
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(In millions)(unaudited)
|
September 30, 2019 |
|
December 31, 2018 |
|
|
|
|
Assets |
|
|
|
Current Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
226.1 |
|
$ |
309.6 |
Accounts and notes receivable-trade, net |
698.4 |
|
701.9 |
Inventories, net |
605.1 |
|
598.9 |
Prepaid expenses and other current assets, net |
281.7 |
|
277.6 |
|
|
|
|
Total Current Assets |
1,811.3 |
|
1,888.0 |
|
|
|
|
Property, plant and equipment,
net |
782.5 |
|
870.6 |
Operating lease right-of-use
assets, net |
156.7 |
|
— |
Identifiable intangible
assets, net |
2,167.7 |
|
2,420.3 |
Goodwill, net |
3,355.7 |
|
3,431.3 |
Other noncurrent assets,
net |
92.9 |
|
76.8 |
|
|
|
|
Total Assets |
$ |
8,366.8 |
|
$ |
8,687.0 |
|
|
|
|
Liabilities and
Equity |
|
|
|
Current Liabilities: |
|
|
|
Accounts payable |
$ |
246.3 |
|
$ |
283.9 |
Accrued liabilities |
541.0 |
|
578.9 |
Income taxes payable |
69.9 |
|
58.1 |
Notes payable and current portion of long-term debt |
11.7 |
|
92.4 |
|
|
|
|
Total Current Liabilities |
868.9 |
|
1,013.3 |
|
|
|
|
Long-term debt |
1,403.9 |
|
1,564.9 |
Operating lease
liabilities |
118.5 |
|
— |
Deferred income taxes |
500.7 |
|
552.8 |
Other noncurrent
liabilities |
415.7 |
|
423.0 |
|
|
|
|
Total Liabilities |
3,307.7 |
|
3,554.0 |
|
|
|
|
Total Equity |
5,059.1 |
|
5,133.0 |
|
|
|
|
Total Liabilities and Equity |
$ |
8,366.8 |
|
$ |
8,687.0 |
|
|
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(In millions)(unaudited)
|
Nine Months Ended September 30, |
|
2019 |
|
|
2018 |
|
Cash flows from
operating activities: |
|
|
|
Net income (loss) |
$ |
160.6 |
|
|
$ |
(1,012.4 |
) |
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation |
101.6 |
|
|
103.4 |
|
Amortization of intangible assets |
142.9 |
|
|
149.7 |
|
Amortization of deferred financing costs |
2.1 |
|
|
2.0 |
|
Fixed Asset Impairment |
33.4 |
|
|
— |
|
Deferred income taxes |
(39.9 |
) |
|
(97.9 |
) |
Stock based compensation expense |
49.8 |
|
|
15.1 |
|
Restructuring and other costs - non-cash |
15.2 |
|
|
19.2 |
|
Goodwill impairment |
— |
|
|
1,085.8 |
|
Indefinite-lived intangible asset impairment |
5.3 |
|
|
179.2 |
|
Definite-lived intangible asset impairment |
3.8 |
|
|
— |
|
Other non-cash income |
(12.4 |
) |
|
(2.0 |
) |
Loss on disposal of property, plant and equipment |
2.9 |
|
|
2.7 |
|
Gain on divestiture of noncontrolling interest |
(8.7 |
) |
|
— |
|
Loss on sale of non-strategic businesses or product lines |
14.0 |
|
|
— |
|
Gain on sale of equity security |
— |
|
|
(44.1 |
) |
Changes in operating assets and liabilities, net of
acquisitions: |
|
|
|
Accounts and notes receivable-trade, net |
(20.7 |
) |
|
25.1 |
|
Inventories, net |
(48.4 |
) |
|
(83.3 |
) |
Prepaid expenses and other current assets, net |
(3.6 |
) |
|
(47.3 |
) |
Other noncurrent assets, net |
(14.4 |
) |
|
(10.3 |
) |
Accounts payable |
(30.5 |
) |
|
10.1 |
|
Accrued liabilities |
(35.5 |
) |
|
(7.1 |
) |
Income taxes |
11.4 |
|
|
13.2 |
|
Other noncurrent liabilities |
4.6 |
|
|
(3.5 |
) |
Net cash provided by
operating activities |
333.5 |
|
|
297.6 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Capital expenditures |
(86.9 |
) |
|
(130.6 |
) |
Purchase of short term
investments |
— |
|
|
(0.1 |
) |
Liquidation of short term
investments |
0.1 |
|
|
— |
|
Cash paid for acquisitions of
businesses and equity investments, net of cash acquired |
(3.3 |
) |
|
(130.5 |
) |
Proceeds from sale of equity
security |
— |
|
|
54.1 |
|
Cash received for sale of
non-strategic businesses and product lines |
11.6 |
|
|
— |
|
Cash received on derivative
contracts |
34.5 |
|
|
3.7 |
|
Cash paid on derivative
contracts |
— |
|
|
(2.4 |
) |
Expenditures for identifiable
intangible assets |
— |
|
|
(5.5 |
) |
Proceeds from sale of
property, plant and equipment, net |
4.3 |
|
|
6.3 |
|
Net cash used in
investing activities |
(39.7 |
) |
|
(205.0 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Repayments on short-term
borrowings |
(67.4 |
) |
|
124.3 |
|
Cash paid for treasury
stock |
(160.0 |
) |
|
(250.2 |
) |
Cash dividends paid |
(58.7 |
) |
|
(59.1 |
) |
Cash paid for contingent
consideration on prior acquisitions |
(30.7 |
) |
|
— |
|
Proceeds from long-term
borrowings |
118.9 |
|
|
0.3 |
|
Repayments on long-term
borrowings |
(251.2 |
) |
|
(9.3 |
) |
Proceeds from exercise of
stock options |
78.8 |
|
|
22.8 |
|
Net cash used in
financing activities |
(370.3 |
) |
|
(171.2 |
) |
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
(7.0 |
) |
|
(8.9 |
) |
Net decrease in cash and cash
equivalents |
(83.5 |
) |
|
(87.5 |
) |
Cash and cash equivalents at
beginning of period |
309.6 |
|
|
320.6 |
|
Cash and cash equivalents at
end of period |
$ |
226.1 |
|
|
$ |
233.1 |
|
|
|
|
|
|
|
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIES(In millions, except
percentages)(unaudited)
A reconciliation of reported net sales to
non-GAAP net sales, excluding precious metal content, is as
follows:
|
|
Three Months Ended September 30, |
|
|
(in millions, except
percentages) |
|
2019 |
|
2018 |
|
Variance % |
|
|
|
|
|
|
|
Net sales |
|
$ |
962.1 |
|
$ |
928.4 |
|
3.6 |
% |
Less: precious metal content of sales |
|
11.5 |
|
7.8 |
|
47.4 |
% |
Net sales, excluding precious
metal content |
|
950.6 |
|
920.6 |
|
3.3 |
% |
Acquisition related adjustments (a) |
|
— |
|
3.2 |
|
NM |
Non-GAAP, net sales, excluding
precious metal content |
|
$ |
950.6 |
|
$ |
923.8 |
|
2.9 |
% |
Foreign exchange impact |
|
|
|
|
|
(2.3 |
%) |
Constant currency growth |
|
|
|
|
|
5.2 |
% |
Acquisitions |
|
|
|
|
|
(1.2 |
%) |
Discontinued products |
|
|
|
|
|
(1.1 |
%) |
Internal sales
growth |
|
|
|
|
|
7.5 |
% |
NM - Not meaningful
(a) Represents an adjustment to reflect deferred
revenue that was eliminated under business combination accounting
standards.
|
|
|
|
|
|
|
Three Months Ended September 30, 2019 |
|
Q3 2019 Growth |
|
Three Months Ended September 30, 2018 |
(in millions, except
percentages) |
U.S. |
Europe |
ROW |
Total |
|
U.S. |
Europe |
ROW |
Total |
|
U.S. |
Europe |
ROW |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
337.0 |
$ |
361.4 |
$ |
263.7 |
$ |
962.1 |
|
2.5 |
% |
|
3.6 |
% |
|
5.1 |
% |
|
3.6 |
% |
|
|
$ |
328.7 |
$ |
348.8 |
$ |
250.9 |
$ |
928.4 |
Less: precious metal content of sales |
1.5 |
9.1 |
0.9 |
11.5 |
|
|
|
|
|
|
1.3 |
5.6 |
0.9 |
7.8 |
Net sales, excluding precious
metal content |
335.5 |
352.3 |
262.8 |
950.6 |
|
2.5 |
% |
|
2.7 |
% |
|
5.1 |
% |
|
3.3 |
% |
|
|
327.4 |
343.2 |
250.0 |
920.6 |
Acquisition related adjustments(a) |
— |
— |
— |
— |
|
|
|
|
|
|
3.2 |
— |
— |
3.2 |
Non-GAAP, net sales, excluding
precious metal content |
$ |
335.5 |
$ |
352.3 |
$ |
262.8 |
$ |
950.6 |
|
1.5 |
% |
|
2.7 |
% |
|
5.1 |
% |
|
2.9 |
% |
|
|
$ |
330.6 |
$ |
343.2 |
$ |
250.0 |
$ |
923.8 |
Foreign exchange impact |
|
|
|
|
|
— |
% |
|
(4.6 |
%) |
|
(2.3 |
%) |
|
(2.3 |
%) |
|
|
|
|
|
|
Constant currency growth |
|
|
|
|
|
1.5 |
% |
|
7.3 |
% |
|
7.4 |
% |
|
5.2 |
% |
|
|
|
|
|
|
Acquisitions |
|
|
|
|
|
(2.7 |
%) |
|
(0.1 |
%) |
|
(0.6 |
%) |
|
(1.2 |
%) |
|
|
|
|
|
|
Discontinued products |
|
|
|
|
|
(0.4 |
%) |
|
(1.0 |
%) |
|
(2.0 |
%) |
|
(1.1 |
%) |
|
|
|
|
|
|
Internal sales
growth |
|
|
|
|
|
4.6 |
% |
|
8.4 |
% |
|
10.0 |
% |
|
7.5 |
% |
|
|
|
|
|
|
(a) Represents an adjustment to reflect deferred
revenue that was eliminated under business combination accounting
standards.
|
|
|
|
|
|
|
Three Months Ended September 30, 2019 |
|
Q3 2019 Growth |
|
Three Months Ended September 30, 2018 |
(in millions, except
percentages) |
Technologies & Equipment |
Consumables |
Total |
|
Technologies & Equipment |
Consumables |
Total |
|
Technologies & Equipment |
Consumables |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
534.5 |
$ |
427.6 |
$ |
962.1 |
|
5.1 |
% |
|
1.8 |
% |
|
3.6 |
% |
|
|
$ |
508.5 |
$ |
419.9 |
$ |
928.4 |
Less: precious metal content of sales |
— |
11.5 |
11.5 |
|
|
|
|
|
— |
7.8 |
7.8 |
Net sales, excluding precious
metal content |
534.5 |
416.1 |
950.6 |
|
5.1 |
% |
|
1.0 |
% |
|
3.3 |
% |
|
|
508.5 |
412.1 |
920.6 |
Acquisition related adjustments(a) |
— |
— |
— |
|
|
|
|
|
3.2 |
— |
3.2 |
Non-GAAP, net sales, excluding
precious metal content |
$ |
534.5 |
$ |
416.1 |
$ |
950.6 |
|
4.5 |
% |
|
1.0 |
% |
|
2.9 |
% |
|
|
$ |
511.7 |
$ |
412.1 |
$ |
923.8 |
Foreign exchange impact |
|
|
|
|
(2.4 |
%) |
|
(2.2 |
%) |
|
(2.3 |
%) |
|
|
|
|
|
Constant currency growth |
|
|
|
|
6.9 |
% |
|
3.2 |
% |
|
5.2 |
% |
|
|
|
|
|
Acquisitions |
|
|
|
|
(2.1 |
%) |
|
— |
% |
|
(1.2 |
%) |
|
|
|
|
|
Discontinued products |
|
|
|
|
(2.0 |
%) |
|
— |
% |
|
(1.1 |
%) |
|
|
|
|
|
Internal sales
growth |
|
|
|
|
11.0 |
% |
|
3.2 |
% |
|
7.5 |
% |
|
|
|
|
|
(a) Represents an adjustment to reflect deferred
revenue that was eliminated under business combination accounting
standards.
DENTSPLY SIRONA INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(In millions)(unaudited)
|
GAAP |
|
|
|
|
|
|
|
|
NON-GAAP |
|
|
Three Months EndedSeptember 30, 2019 |
|
AmortizationofPurchased Intangible Assets |
RestructuringProgramRelatedCosts andOther
Costs |
BusinessCombinationRelatedCosts andFair
ValueAdjustments |
Credit Riskand Fair Value Adjustments |
Tax Impactof Non-GAAP Adjustments |
Income Tax Related Adjustments |
TotalNon-GAAP Adjustments |
ThreeMonthsEnded September 30,2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES |
$ |
962.1 |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
$ |
— |
|
$ |
962.1 |
|
NET SALES-excluding precious
metals |
950.6 |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
— |
|
950.6 |
|
GROSS PROFIT |
514.0 |
|
28.8 |
|
3.6 |
|
1.5 |
|
— |
|
— |
— |
33.9 |
|
547.9 |
|
% OF NET SALES-excluding
precious metals |
|
54.1 |
% |
|
|
|
|
|
|
|
|
57.6 |
% |
SG&A EXPENSES |
399.3 |
|
(18.6 |
) |
(4.8 |
) |
(0.3 |
) |
— |
|
— |
— |
(23.7 |
) |
375.6 |
|
% OF NET SALES-excluding
precious metals |
|
42.0 |
% |
|
|
|
|
|
|
|
|
39.5 |
% |
RESTRUCTURING AND OTHER
COSTS |
5.2 |
|
— |
|
(5.2 |
) |
— |
|
— |
|
— |
— |
(5.2 |
) |
— |
|
INCOME FROM OPERATIONS |
109.5 |
|
47.4 |
|
13.6 |
|
1.8 |
|
— |
|
— |
— |
62.8 |
|
172.3 |
|
% OF NET SALES-excluding
precious metals |
|
11.5 |
% |
|
|
|
|
|
|
|
|
18.1 |
% |
NET INTEREST AND OTHER
EXPENSE |
3.0 |
|
— |
|
0.4 |
|
— |
|
(1.6 |
) |
— |
— |
(1.2 |
) |
1.8 |
|
PRE-TAX INCOME |
106.5 |
|
47.4 |
|
13.2 |
|
1.8 |
|
1.6 |
|
— |
— |
64.0 |
|
170.5 |
|
INCOME TAXES |
21.5 |
|
— |
|
— |
|
— |
|
— |
|
16.5 |
4.2 |
20.7 |
|
42.2 |
|
% OF PRE-TAX INCOME |
|
20.2 |
% |
|
|
|
|
|
|
|
|
24.8 |
% |
LESS: NET INCOME ATTRIBUTABLE
TO NON-CONTROLLING INTERESTS |
— |
|
|
|
|
|
|
|
— |
|
— |
|
NET INCOME ATTRIBUTABLE TO
DENTSPLY SIRONA |
$ |
85.0 |
|
|
|
|
|
|
|
$ |
43.3 |
|
$ |
128.3 |
|
% OF NET SALES-excluding
precious metals |
|
8.9 |
% |
|
|
|
|
|
|
|
|
13.5 |
% |
EARNINGS PER SHARE -
DILUTED |
$ |
0.38 |
|
|
|
|
|
|
|
$ |
0.19 |
|
$ |
0.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DENTSPLY SIRONA INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(In millions)(unaudited)
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
|
|
|
|
|
|
NON-GAAP |
|
Three MonthsEnded September 30, 2018 |
AmortizationofPurchased Intangible Assets |
RestructuringProgramRelated Costs and Other
Costs |
BusinessCombinationRelatedCosts andFair
ValueAdjustments |
Credit Riskand FairValueAdjustments |
Tax Impact ofNon-GAAPAdjustments |
Income TaxRelatedAdjustments |
TotalNon-GAAPAdjustments |
ThreeMonthsEndedSeptember 30, 2018 |
|
|
|
|
|
|
|
|
|
|
NET SALES |
$ |
928.4 |
|
— |
|
— |
|
3.2 |
|
— |
|
— |
— |
|
$ |
3.2 |
|
$ |
931.6 |
|
NET SALES-excluding precious
metals |
920.6 |
|
— |
|
— |
|
3.2 |
|
— |
|
— |
— |
|
3.2 |
|
923.8 |
|
GROSS PROFIT |
476.1 |
|
29.7 |
|
1.6 |
|
4.7 |
|
— |
|
— |
— |
|
36.0 |
|
512.1 |
|
% OF NET SALES-excluding
precious metals |
|
51.7 |
% |
|
|
|
|
|
|
|
|
55.4 |
% |
SG&A EXPENSES |
418.5 |
|
(19.9 |
) |
(4.9 |
) |
(1.8 |
) |
— |
|
— |
— |
|
(26.6 |
) |
391.9 |
|
% OF NET SALES-excluding
precious metals |
|
45.5 |
% |
|
|
|
|
|
|
|
|
42.4 |
% |
GOODWILL IMPAIRMENT |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
— |
|
— |
|
— |
|
RESTRUCTURING AND OTHER
COSTS |
12.1 |
|
— |
|
(12.1 |
) |
— |
|
— |
|
— |
— |
|
(12.1 |
) |
— |
|
INCOME FROM OPERATIONS |
45.5 |
|
49.6 |
|
18.6 |
|
6.5 |
|
— |
|
— |
— |
|
74.7 |
|
120.2 |
|
% OF NET SALES-excluding
precious metals |
|
4.9 |
% |
|
|
|
|
|
|
|
|
13.0 |
% |
NET INTEREST AND OTHER
EXPENSE |
13.8 |
|
— |
|
— |
|
(0.2 |
) |
(2.2 |
) |
— |
— |
|
(2.4 |
) |
11.4 |
|
PRE-TAX INCOME |
31.7 |
|
49.6 |
|
18.6 |
|
6.7 |
|
2.2 |
|
— |
— |
|
77.1 |
|
108.8 |
|
INCOME TAXES |
4.2 |
|
— |
|
— |
|
— |
|
— |
|
20.8 |
(0.3 |
) |
20.5 |
|
24.7 |
|
% OF PRE-TAX INCOME |
|
13.2 |
% |
|
|
|
|
|
|
|
|
22.7 |
% |
LESS: NET INCOME ATTRIBUTABLE
TO NON-CONTROLLING INTERESTS |
(0.5 |
) |
|
|
|
|
|
|
— |
|
(0.5 |
) |
NET INCOME ATTRIBUTABLE TO
DENTSPLY SIRONA |
$ |
28.0 |
|
|
|
|
|
|
|
$ |
56.6 |
|
$ |
84.6 |
|
% OF NET SALES-excluding
precious metals |
|
3.0 |
% |
|
|
|
|
|
|
|
|
9.2 |
% |
EARNINGS PER SHARE -
DILUTED |
$ |
0.13 |
|
|
|
|
|
|
|
$ |
0.25 |
|
$ |
0.38 |
|
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