DENTSPLY International Inc. Reports Record Second Quarter 2006 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 quarter ended June June: see month. 30, 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 6.2% to $472.4 million compared to $444.8 million reported for the second quarter of 2005. Net sales, excluding precious metal content, increased 5.8% in the second quarter of 2006. Sales growth improved in the U.S. and also within the broader consumable A material that is used up and needs continuous replenishment, such as paper and toner. "The low-tech end of the high-tech field!" products category. Net income for the second quarter of 2006 was $59.3 million, or $0.37 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 5.7% 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 compared to net income of $57.9 million, or $0.35 per diluted share in the second quarter of 2005. Net income in the second quarter of 2006 includes the net of tax impact of both expensing stock options of $2.9 million, ($0.02 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 $1.6 million, ($0.01 per diluted share). The second quarter of 2006 includes a net charge to income tax expense of $0.8 million ($0.01 per diluted share) from tax related adjustments, while the second quarter of 2005 included a net reduction of income tax expense of $1.8 million ($0.01 per diluted share) related to the settlement of audits of tax returns associated with prior periods. All share and per share amounts have been adjusted to reflect the stock split. On an adjusted basis, earnings, excluding restructuring costs and tax adjustments, but including the expensing of stock options in both periods, which constitutes a non-GAAP measure, were $61.7 million or $0.39 per diluted share in the second quarter of 2006, compared to $53.1 million or $0.33 per diluted share in the second quarter of 2005. This represents an 18.2% increase in diluted earnings per share. 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 that, "We are very pleased with the continued strength of our global business. DENTSPLY's breadth and depth of products, combined with our global footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. provide further opportunities to build and strengthen our business. Improvements in our operational performance provide us with the ability to further strengthen sales, marketing, and research and development activities." Mr. Kunkle also stated, "Our solid performance, in the first half of the year, provides us additional confidence in the prospects for the full year. We expect to increase our internal investment in growth initiatives over the next few quarters; however we are also increasing the top-end of our year-end 2006 earnings guidance to $1.40-1.44 per dilutive share, 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. and tax adjustments." DENTSPLY will hold a conference call on Thursday, July 27, 2006 at 8:30 AM Eastern Time. To access the call, dial 877-885-5820 (for domestic calls) and 706-643-9578 (for international calls). The Conference I.D. # is 2739364. This conference call will be broadcast live on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.dentsply.com. An audio replay of the conference call will be available for two weeks. To access the replay, please dial (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 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 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.
DENTSPLY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
NET SALES $472,444 $444,834 $903,440 $851,809
NET SALES - Ex Precious Metals 423,524 400,478 806,939 769,540
COST OF PRODUCTS SOLD 230,290 217,551 441,150 415,585
GROSS PROFIT 242,154 227,283 462,290 436,224
% OF NET SALES 51.3% 51.1% 51.2% 51.2%
% OF NET SALES - Ex Precious
Metals 57.2% 56.8% 57.3% 56.7%
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 152,926 146,376 298,357 284,924
RESTRUCTURING COSTS 2,636 (228) 7,333 40
--------- --------- --------- ---------
INCOME FROM OPERATIONS 86,592 81,135 156,600 151,260
% OF NET SALES 18.3% 18.2% 17.3% 17.8%
% OF NET SALES - Ex Precious
Metals 20.4% 20.3% 19.4% 19.7%
NET INTEREST AND OTHER
(INCOME) EXPENSE 526 682 (675) 457
--------- --------- --------- ---------
PRE-TAX INCOME 86,066 80,453 157,275 150,803
INCOME TAXES 26,750 22,560 47,955 43,861
--------- --------- --------- ---------
NET INCOME 59,316 57,893 109,320 106,942
% OF NET SALES 12.6% 13.0% 12.1% 12.6%
% OF NET SALES - Ex Precious
Metals 14.0% 14.5% 13.5% 13.9%
EARNINGS PER SHARE
-BASIC $ 0.38 $ 0.36 $ 0.69 $ 0.66
-DILUTIVE $ 0.37 $ 0.35 $ 0.68 $ 0.65
DIVIDENDS PER SHARE $ 0.0350 $ 0.0300 $ 0.0700 $ 0.0600
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
-BASIC 156,814 160,274 157,402 160,836
-DILUTIVE 159,834 163,216 160,446 163,882
DENTSPLY INTERNATIONAL INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
2006 2005
------------ ------------
ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 475,417 $ 434,525
ACCOUNTS AND NOTES RECEIVABLE-TRADE, NET 299,048 254,822
INVENTORIES, NET 229,373 208,179
OTHER CURRENT ASSETS 155,234 132,517
------------ ------------
TOTAL CURRENT ASSETS 1,159,072 1,030,043
PROPERTY,PLANT AND EQUIPMENT, NET 321,910 316,218
GOODWILL, NET 975,156 933,227
IDENTIFIABLE INTANGIBLE ASSETS, NET 67,983 68,600
OTHER NONCURRENT ASSETS, NET 42,592 59,241
------------ ------------
TOTAL ASSETS $ 2,566,713 $ 2,407,329
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES $ 716,176 $ 741,234
LONG-TERM DEBT 413,307 270,104
OTHER LIABILITIES 149,496 111,311
DEFERRED INCOME TAXES 37,124 42,912
------------ ------------
TOTAL LIABILITIES 1,316,103 1,165,561
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARIES 213 188
STOCKHOLDERS' EQUITY 1,250,397 1,241,580
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,566,713 $ 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 June 30, 2006
Income Diluted
(Expense) Per Share
--------- ---------
Net Income $ 59,316 $ 0.37
Restructuring Costs 1,638 0.01
Income Tax Related Adjustments 783 0.01
--------- ---------
Adjusted Non-GAAP Earnings $ 61,737 $ 0.39
========= =========
Three Months Ended June 30, 2005
Income Diluted
(Expense) Per Share
--------- ---------
Net Income $ 57,893 $ 0.35
Stock-Based Compensation Expense as Disclosed in
Footnotes (2,775) (0.02)
Income Tax Related Adjustments (1,791) (0.01)
Restructuring Costs (185) (0.00)
Rounding 0.01
--------- ---------
Adjusted Non-GAAP Earnings $ 53,142 $ 0.33
========= =========
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.
Six Months Ended June 30, 2006
Income Diluted
(Expense) Per Share
--------- ---------
Net Income $109,320 $ 0.68
Restructuring Costs 4,692 0.03
Income Tax Related Adjustments 648 0.00
--------- ---------
Adjusted Non-GAAP Earnings $114,660 $ 0.71
========= =========
Six Months Ended June 30, 2005
Income Diluted
(Expense) Per Share
--------- ---------
Net Income $106,942 $ 0.65
Stock-Based Compensation Expense as Disclosed in
Footnotes (5,548) (0.03)
Income Tax Related Adjustments (2,108) (0.01)
Restructuring Costs (21) (0.00)
--------- ---------
Adjusted Non-GAAP Earnings $ 99,265 $ 0.61
========= =========
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