DENTSPLY International Inc. Reports First Quarter 2006 Sales and Earnings.YORK, Pa. -- DENTSPLY International Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :XRAY) today announced sales and earnings for the quarter ended March 31, 2006. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased 5.9% to $431.0 million compared to $407.0 million reported for the first quarter of 2005. Net sales, excluding precious metal content, increased 3.9% in the first quarter of 2006, compared to 2005. Sales, in the first quarter of 2006, were positively affected by stronger European internal growth, but negatively impacted by a stronger U.S. dollar compared to the same period last year. Net income for the first quarter of 2006 was $50.0 million, or $0.62 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, an increase of 3.3% compared to income of $49.0 million, or $0.60 per diluted share in the first quarter of 2005. Net income in the first quarter of 2006 included the net of tax impact of both expensing stock options of $3.2 million, ($0.04 per diluted share), and of restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs of $3.1 million ($0.04 per diluted share). On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, earnings, excluding restructuring costs but including the expensing of stock options in both periods, which constitutes a non-GAAP measure, were $53.1 million or $0.66 per diluted share in the first quarter of 2006, compared to $46.4 million or $0.56 per diluted share in the first quarter of 2005. This is a 17.9% increase in diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . For a reconciliation of this non-GAAP measure to earnings per share calculated according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , see the attached table. Gary Kunkle, Chairman and Chief Executive Officer, commented, "We are pleased to see an improvement in the German market, during the first quarter. While we do not expect 2006 will return to 2004 levels in Germany, we do expect our European growth to benefit from improvements in this important region throughout most of 2006." Mr. Kunkle also stated, "We are also experiencing continued strong performance in the all ceramic section of our prosthetics pros·thet·ics n. The branch of medicine or surgery that deals with the production and application of artificial body parts. pros business, orthodontics orthodontics: see dentistry. and our implant implant /im·plant/ (im-plant´) to insert or to graft (tissue, or inert or radioactive material) into intact tissues or a body cavity. businesses, as we continue to gain market share in these important categories. These positive trends along with other initiatives give us confidence in maintaining our earnings guidance of $2.80- $2.85 per diluted share for 2006, including the expensing of stock options, but excluding restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. ." A conference call has been scheduled for Thursday, May 4 at 8:30 AM Eastern Time. A live broadcast is available through Thomson Financial Thomson Financial A major provider of information, analytical tools, and consulting services to the financial community. The firm, a division of Thomson Corporation, is best known to investors for its First Call segment, which publishes consensus earnings Services by accessing DENTSPLY's website at www.dentsply.com. The Conference ID # is 8260278. In order to participate in the call, dial (877) 885-5820 (for domestic calls) and (706) 643-9578 (for international calls). At that time, you will be able to discuss the First Quarter Earnings with DENTSPLY's Chairman and Chief Executive Officer, Mr. Gary Kunkle; President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , Mr. Bret Wise; and Senior Vice President and Chief Financial Officer, Mr. William Jellison. An on-line rebroadcast, as well as a transcript of the conference call, will be available to the public following the conference call at the DENTSPLY website: www.dentsply.com. A replay will be available for one week following the conference call at (800) 642-1687 (for domestic calls) and (706) 645-9291 (for international calls). 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 Endodontic Pertaining to the inside structures of the tooth, including the dental pulp and tooth root, and the periapical tissue surrounding the root. Mentioned in: Root Canal Treatment endodontic instruments and materials, prophylaxis prophylaxis (prō'fĭlăk`sĭs), measures designed to prevent the occurrence of disease or its dissemination. Some examples of prophylaxis are immunization against serious diseases such as smallpox or diphtheria; quarantine to confine paste, dental sealants Dental sealants are a dental treatment consisting of applying a plastic material to one or more teeth, for the intended purpose of preventing dental caries (cavities) or other forms of tooth decay. , ultrasonic ultrasonic /ul·tra·son·ic/ (-son´ik) beyond the upper limit of perception by the human ear; relating to sound waves having a frequency of more than 20,000 Hz. ul·tra·son·ic adj. 1. scalers, and crown and bridge materials; the leading United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. manufacturer and distributor of dental handpieces, dental x-ray film Noun 1. X-ray film - photographic film used to make X-ray pictures bitewing - a dental X-ray film that can be held in place by the teeth during radiography holders, film mounts and bone substitute/grafting materials; and a leading worldwide manufacturer or distributor of dental injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. anesthetics Anesthetics Drugs or methodologies used to make a body area free of sensation or pain. Mentioned in: Appendectomy , impression materials, orthodontic orthodontic (ôr´th  dän´tik),adj appliances, dental cutting instruments and dental implants dental implant n. An artificial tooth that is anchored in the gums or jawbone to replace a missing tooth. dental implant . The Company distributes its dental products in over 120 countries under some of the most well established brand names in the industry. DENTSPLY is committed to the development of innovative, high quality, cost-effective new products for the dental market. This press release contains forward-looking information (within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995) regarding future events or the future financial performance of the Company that involve substantial risks and uncertainties. Actual events or results may differ materially from those in the projections or other forward-looking information set forth herein as a result of certain risk factors. These risk factors include, without limitation; the continued strength of dental markets, the timing, success and market reception for our new and existing products, uncertainty with respect to governmental actions with respect to dental products, outcome of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , continued support of our products by influential dental professionals, and changes in the general economic environment that could affect our business. Changes in such assumptions or factors could produce significantly different results. For an additional description of risk factors, please refer to the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and its subsequent periodic reports on Forms 10-Q filed with the Securities and Exchange Commission. Non-GAAP Financial Measures DENTSPLY believes that the non-GAAP financial information provided in this release may be useful to investors for comparison purposes because the Company has historically provided similar information. The non-GAAP financial information should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with GAAP.
DENTSPLY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
MARCH 31,
---------------------
2006 2005
---------- ----------
NET SALES $ 430,996 $ 406,975
NET SALES - Ex Precious Metals 383,761 369,336
COST OF PRODUCTS SOLD 210,860 198,034
GROSS PROFIT 220,136 208,941
% OF NET SALES 51.1% 51.3%
% OF NET SALES - Ex Precious Metals 57.4% 56.6%
SELLING, GENERAL & ADMINISTRATIVE EXPENSES
145,431 138,548
RESTRUCTURING COSTS 4,697 268
---------- ----------
INCOME FROM OPERATIONS 70,008 70,125
% OF NET SALES 16.2% 17.2%
% OF NET SALES - Ex Precious Metals 18.2% 19.0%
NET INTEREST AND OTHER INCOME (1,201) (225)
---------- ----------
PRE-TAX INCOME 71,209 70,350
INCOME TAXES 21,205 21,301
---------- ----------
NET INCOME 50,004 49,049
========== ==========
% OF NET SALES 11.6% 12.1%
% OF NET SALES - Ex Precious Metals 13.0% 13.3%
EARNINGS PER SHARE
-BASIC $ 0.63 $ 0.61
-DILUTIVE $ 0.62 $ 0.60
DIVIDENDS PER SHARE $ 0.0700 $ 0.0600
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING
-BASIC 78,999 80,703
-DILUTIVE 80,530 82,289
DENTSPLY INTERNATIONAL INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
MARCH 31, DECEMBER 31,
2006 2005
------------ ------------
ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 412,719 $ 434,525
ACCOUNTS AND NOTES RECEIVABLE-TRADE, NET 275,106 254,822
INVENTORIES, NET 226,442 208,179
OTHER CURRENT ASSETS 149,859 132,517
------------ ------------
TOTAL CURRENT ASSETS 1,064,126 1,030,043
PROPERTY,PLANT AND EQUIPMENT, NET 309,825 316,218
GOODWILL, NET 945,461 933,227
IDENTIFIABLE INTANGIBLES ASSETS, NET 67,707 68,600
OTHER NONCURRENT ASSETS, NET 55,035 59,241
------------ ------------
TOTAL ASSETS $ 2,442,154 $ 2,407,329
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES $ 778,267 $ 741,234
LONG-TERM DEBT 186,861 270,104
OTHER LIABILITIES 123,610 111,311
DEFERRED INCOME TAXES 43,757 42,912
------------ ------------
TOTAL LIABILITIES 1,132,495 1,165,561
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARIES 183 188
STOCKHOLDERS' EQUITY 1,309,476 1,241,580
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,442,154 $ 2,407,329
============ ============
DENTSPLY INTERNATIONAL INC.
(IN THOUSANDS EXCEPT PER SHARE DATA)
Earnings Summary:
The following tables present the reconciliation of reported GAAP net
income in total and on a per share basis to the non-GAAP financial
measures.
Three Months Ended March 31, 2006:
Income Diluted
(Expense) Per Share
--------- ---------
Net Income $ 50,004 $ 0.62
Restructuring Costs 3,054 0.04
--------- ---------
Adjusted Non-GAAP Earnings $ 53,058 $ 0.66
========= =========
Three Months Ended March 31, 2005:
Income Diluted
(Expense) Per Share
--------- ---------
Net Income $ 49,049 $ 0.60
Stock-Based Compensation Expense (2,773) (0.03)
Restructuring Costs 164 0.00
Rounding - (0.01)
--------- ---------
Adjusted Non-GAAP Earnings $ 46,440 $ 0.56
========= =========
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