DENTSPLY International Inc. Reports Strong Results for Second Quarter 2003.Business Editors YORK, Pa.--(BUSINESS WIRE)--July 30, 2003 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 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 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. 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 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 were $1.03 per share, an increase of 17.0%, compared to $0.88 per share in the 2002 period. The Company recorded pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern 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 Prepaid Expense An asset that arises on a balance sheet because of the payment of something in advance (prepayment). Services for the payment will be received in the near future. 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 er·ro·ne·ous adj. Containing or derived from error; mistaken: erroneous conclusions. [Middle English, from Latin err 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 This article is about ceramic materials. For the fine art, see Ceramic art. The word ceramic is derived from the Greek word κεραμικός (keramikos). crown and bridge 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!" 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 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 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 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 x-ray equipment, dental handpieces, intraoral cameras, 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 injectible 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 statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 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. 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
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