DENTSPLY International Inc. Reports Fourth Quarter and Full Year 2005 Sales and Earnings.YORK York, former name of Toronto, Canada York, Ont.: see Toronto, Ont., Canada. York, city, England York, city (1991 pop. 123,126) and district, North Yorkshire, N England, at the confluence of the Ouse and Foss rivers. , 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 year ended December December: see month. 31, 2005. Sales in 2005 increased 1.2% to $1.72 billion compared to $1.69 billion reported for 2004. Sales excluding precious metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. , increased 4.2% in 2005. Internal growth, of sales excluding precious metals, (excluding currency translation and acquisitions) was 2.0% for the full year. The impact of the German dental reform on internal growth is estimated to be a negative 4% for the year.
Net income from continuing operations for 2005 was $45.4 million or
$0.56 per diluted share. The 2005 earnings included the following
items:
1) Pretax impairment and restructuring charges primarily
associated with the injectable anesthetic facility and
indefinite-lived intangible assets, of $232.8 million ($178.9
million after-tax) or $2.21 per diluted share.
2) Net non-recurring benefits related to tax reorganization and
repatriation activities of $8.9 million or $0.11 per diluted
share.
Net income from continuing operations for 2004 was $210.3 million or
$2.56 per diluted share. The 2004 period includes:
1) Pretax charges of $7.1 million or $0.06 per diluted share
relating to restructuring activities.
2) A net income tax benefit of $19.5 million or $0.24 per diluted
share primarily related to adjustments and settling audits of
tax returns.
Earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for comparability analysis, excluding the items noted above for the years ending 2005 and 2004, which constitutes a non-GAAP measure, were $215.4 million or $2.66 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 for 2005 compared to $2.38 in 2004, an increase of 11.8%. Sales in the fourth quarter 2005 decreased 3.9% to $447.4 million compared to $465.5 million reported in the fourth quarter of 2004. Sales excluding precious metals, decreased 1.1% to $400.3 million in the fourth quarter of 2005. The sales growth rate was negatively impacted in the quarter due to stronger pre-reform purchasing levels by dental professionals within Germany in the fourth quarter of last year. Sales were also negatively impacted in the fourth quarter of 2005 due to the implementation of price increases earlier in the year, and a negative impact from currency translation, as the U.S. dollar was stronger in the quarter compared to the same period last year against most foreign currencies. Net loss from continuing operations for the fourth quarter of 2005 was $0.7 million or $0.01 per diluted share, a decrease compared to net income from continuing operations of $69.0 million or $0.83 per diluted share in the fourth quarter of 2004. The fourth quarter of 2005 included a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. and restructuring charge 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. of $101.4 million ($67.5 million after-tax) or $0.86 per diluted share, primarily associated with the injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. anesthetic anesthetic Agent that produces a local or general loss of sensation, including pain, and therefore is useful in surgery and dentistry. General anesthesia induces loss of consciousness, most often using hydrocarbons (e.g. facility and indefinite-lived intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . This charge reflects the Company's decision to permanently close its Chicago-based Pharmaceutical Manufacturing facility and to seek strategic alternatives for the facility and for the dental injectable product supply. The quarter also included a net income tax benefit from a global tax project and the repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of foreign earnings of $5.7 million or $0.07 per diluted share. The fourth quarter of 2004 included pretax charges of $4.0 million or $0.03 per diluted share relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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). activities for the creation of the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Shared Service Center and Sales/Customer Service consolidations in Europe and Japan. The quarter also included a reduction of income taxes of $15.4 million or $0.19 per diluted share related to adjustments in the Company's tax contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. from settling audits of domestic and foreign tax returns and adjustments associated with prior periods. Earnings from continuing operations, excluding the items noted above for the fourth quarter of 2005 and 2004, which constitutes a non-GAAP measure, would have been $61.1 million or $0.76 per diluted share for 2005 compared to $56.0 million or $0.68 in 2004, an increase of 11.8% on a diluted per share basis. Gary K. Kunkle, Chairman and Chief Executive Officer, commented that, "DENTSPLY was faced with two significant challenges in 2005, the soft German market (impacted by the reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. changes implemented by their government) and the increased costs associated with our pharmaceutical facility. We are pleased however, with the underlying profit improvements in our business and our strong year-end cash flow. We look forward to 2006 with the promise of moving both these issues behind us and the expectation of solid improvements, and new product introductions in many of our businesses." Earnings Guidance for 2006 The Company expects earnings in 2006 to be $2.80 to $2.85 per diluted share, excluding any restructuring costs. This includes approximately $.15 per diluted share of costs associated with the expensing of stock options due to the adoption of stock-based compensation following the mandatory adoption of Statement of Financial Accounting Standard ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") 123(R) Share-Based Payment, effective January 1, 2006. On a non-GAAP basis excluding the after-tax impact of expensing of stock-based compensation and restructuring costs, 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 are expected to be $2.95 to $3.00. A conference call has been scheduled for Thursday, February 9 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 4378954. 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 Fourth 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 A generic term for any kind of copy, particularly an official or certified representation of the record of what took place in a court during a trial or other legal proceeding. A transcript of record 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 pros·thet·ics n. The branch of medicine or surgery that deals with the production and application of artificial body parts. pros , precious metal dental alloys This is a list of alloys for which an article exists in Wikipedia (or is proposed but not yet written). They are grouped by base metal, in order of increasing atomic number. Within these headings they are in no particular order. , dental ceramics ceramics (sərăm`ĭks), materials made of nonmetallic minerals that have been permanently hardened by firing at a high temperature, or objects made of such materials. , 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 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 cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. 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 Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). .
DENTSPLY INTERNATIONAL INC.
(IN THOUSANDS EXCEPT PER SHARE DATA)
Earnings Summary:
The following tables present the reconciliation of reported GAAP net
income/(loss) from continuing operations in total and on a per share
basis to the non-GAAP financial measures.
Twelve Months Ended December 31, 2005:
Income Diluted
(Expense) Per Share
--------- ---------
Income from Continuing Operations $ 45,413 $ 0.56
Income Tax Related Adjustments (8,899) (0.11)
Restructuring and Impairment Costs 178,915 2.21
--------- ---------
Adjusted Non-GAAP Earnings From Continuing
Operations $215,429 $ 2.66
========= =========
Twelve Months Ended December 31, 2004:
Income Diluted
(Expense) Per Share
--------- ---------
Income from Continuing Operations $210,286 $ 2.56
Income Tax Related Adjustments (19,496) (0.24)
Restructuring Costs 4,960 0.06
--------- ---------
Adjusted Non-GAAP Earnings From Continuing
Operations $195,750 $ 2.38
========= =========
DENTSPLY INTERNATIONAL INC.
(IN THOUSANDS EXCEPT PER SHARE DATA)
Earnings Summary:
The following tables present the reconciliation of reported GAAP net
income/(loss) from continuing operations in total and on a per share
basis to the non-GAAP financial measures.
Three Months Ended December 31, 2005:
Income Diluted
(Expense) Per Share
--------- ---------
Loss from Continuing Operations $ (725) $ (0.01)
Income Tax Related Adjustments (5,700) (0.07)
Restructuring and Impairment Costs 67,503 0.86
Dilutive Effect of Including Potential Outstanding
Shares on Earnings Per Share (a) - (0.02)
--------- ---------
Adjusted Non-GAAP Earnings From Continuing
Operations $ 61,078 $ 0.76
========= =========
(a) For the three months ended December 31, 2005, the dilutive
weighted average number of common shares outstanding excluded
potential common shares from stock options of 1,299. These shares
were excluded from the GAAP calculation of earnings per share due
to their antidilutive effect resulting from the loss from
continuing operations.
Three Months Ended December 31, 2004:
Income Diluted
(Expense) Per Share
--------- ---------
Income from Continuing Operations $ 68,607 $ 0.83
Income Tax Related Adjustments (15,410) (0.19)
Restructuring Costs 2,806 0.03
Rounding - 0.01
--------- ---------
Adjusted Non-GAAP Earnings From Continuing
Operations $ 56,003 $ 0.68
========= =========
DENTSPLY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------- ------------------------
2005 2004 2005 2004
---------- --------- ------------ -----------
NET SALES $ 447,362 $465,500 $ 1,715,135 $1,694,232
NET SALES - Ex Precious
Metals 400,342 404,889 1,543,916 1,481,872
COST OF PRODUCTS SOLD 223,571 233,446 846,117 847,714
GROSS PROFIT 223,791 232,054 869,018 846,518
% OF NET SALES 50.0% 49.9% 50.7% 50.0%
% OF NET SALES - Ex
Precious Metals 55.9% 57.3% 56.3% 57.1%
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 144,093 148,747 563,341 544,264
RESTRUCTURING AND
IMPAIRMENT COSTS 101,404 3,959 232,755 7,124
---------- --------- ------------ -----------
(LOSS) INCOME FROM
OPERATIONS (21,706) 79,348 72,922 295,130
% OF NET SALES -4.9% 17.0% 4.3% 17.4%
% OF NET SALES - Ex
Precious Metals -5.4% 19.6% 4.7% 19.9%
NET INTEREST AND OTHER
(INCOME) EXPENSE (1,436) 4,722 1,884 20,975
---------- --------- ------------ -----------
PRE-TAX (LOSS) INCOME (20,270) 74,626 71,038 274,155
INCOME TAX (BENEFIT)
EXPENSE (19,545) 5,673 25,625 63,869
---------- --------- ------------ -----------
(LOSS) INCOME FROM
CONTINUING OPERATIONS (725) 68,953 45,413 210,286
% OF NET SALES -0.2% 14.8% 2.6% 12.4%
% OF NET SALES - Ex
Precious Metals -0.2% 17.0% 2.9% 14.2%
INCOME (LOSS) FROM
DISCONTINUED
OPERATIONS, NET OF TAX
(INCLUDING GAIN ON SALE
IN 2004 OF $43,031) - (346) - 42,879
---------- --------- ------------ -----------
NET (LOSS) INCOME $ (725) $ 68,607 $ 45,413 $ 253,165
========== ========= ============ ===========
(LOSS) INCOME PER SHARE
- BASIC:
CONTINUING OPERATIONS $ (0.01) $ 0.85 $ 0.57 $ 2.61
DISCONTINUED
OPERATIONS - - - 0.54
---------- --------- ------------ -----------
TOTAL (LOSS) INCOME PER
SHARE- BASIC $ (0.01) $ 0.85 $ 0.57 $ 3.15
========== ========= ============ ===========
(LOSS) INCOME PER SHARE
- DILUTIVE:
CONTINUING OPERATIONS $ (0.01) $ 0.83 $ 0.56 $ 2.56
DISCONTINUED
OPERATIONS - - - 0.53
---------- --------- ------------ -----------
TOTAL (LOSS) INCOME PER
SHARE: DILUTIVE $ (0.01) $ 0.83 $ 0.56 $ 3.09
========== ========= ============ ===========
DIVIDENDS PER SHARE $ 0.0700 $ 0.0600 $ 0.2500 $ 0.2175
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING
-BASIC 78,677 80,636 79,595 80,387
-DILUTIVE (a) 78,677 82,306 81,008 82,014
(a) - For the three months ended December 31, 2005, the dilutive
weighted average number of common shares outstanding excluded
potential common shares from stock options of 1,299. These shares are
excluded due to their antidilutive effect resulting from the loss from
continuing operations. For the twelve months ended December 31, 2005,
fully diluted shares were used to calculate EPS.
DENTSPLY INTERNATIONAL INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, DECEMBER 31,
2005 2004
------------ ------------
ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 434,525 $ 506,369
ACCOUNTS AND NOTES RECEIVABLE-TRADE, NET 254,822 238,873
INVENTORIES, NET 208,179 213,709
OTHER CURRENT ASSETS 95,551 97,458
------------ ------------
TOTAL CURRENT ASSETS 993,077 1,056,409
PROPERTY,PLANT AND EQUIPMENT, NET 316,218 399,880
GOODWILL, NET 933,227 996,262
IDENTIFIABLE INTANGIBLES ASSETS, NET 68,600 265,731
OTHER NONCURRENT ASSETS, NET 87,576 79,863
------------ ------------
TOTAL ASSETS $ 2,398,698 $ 2,798,145
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES $ 737,512 $ 404,607
LONG-TERM DEBT 270,104 779,940
OTHER LIABILITIES 111,311 110,829
DEFERRED INCOME TAXES 38,003 58,196
------------ ------------
TOTAL LIABILITIES 1,156,930 1,353,572
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARIES 188 600
STOCKHOLDERS' EQUITY 1,241,580 1,443,973
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,398,698 $ 2,798,145
============ ============
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