DENTSPLY International Inc. Third Quarter Results Exceed Analysts' Earnings Estimates; Revenue Increases 17.0% to $253.5 Million.Business Editors YORK, Pa.--(BUSINESS WIRE)--Oct. 22, 2001 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 record third quarter results. Sales for the third quarter ended September 30, 2001 were $253.5 million, an increase of 17.0% over $216.7 million in the year earlier quarter. Internal growth for the quarter was 6.3%, exchange rates had a negative 1.3% impact and growth from acquisitions net of divestitures accounted for 12.0% during the quarter. Net income for the third quarter was a record $25.9 million, up 11.1%, compared to $23.3 million in the third quarter of 2000. 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. earnings per common share were $.49, an increase of 8.9% over the third quarter of 2000. Diluted earnings per common share for the quarter includes a negative $.03 per share impact from the $84.6 million earnout payment made in May 2001 to Tulsa Dental in connection with the acquisition of the Tulsa 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 business in 1996. Excluding this impact, dilutive earnings per common share increased 15.6% in the third quarter. John C. Miles II, Chairman and Chief Executive Officer, stated "We are pleased that DENTSPLY again generated excellent results which continue to meet or exceed analysts' expectations. The dental markets around the world continue to show acceptable growth and management remains confident in achieving analysts' earnings estimates for the full year 2001." DENTSPLY also announced today that, after in depth review of the Oraqix Stage III clinicals, it has decided not to proceed under the existing contract terms with AstraZeneca regarding the Oraqix product. This means the $10 million initial payment associated with Oraqix previously anticipated being made in the fourth quarter will not be made. Mr. Miles stated, "We are still very excited with the potential of the Oraqix products. We believe that it provides significant pain relief during scaling and root planing The objective of scaling and root planing, otherwise known as conventional periodontal therapy, is to remove or eliminate the etiologic agents which cause inflammation: dental plaque, its products and calculus,[1] procedures, however, our analysis of the available clinical data to date does not indicate that this pain relief is equivalent to that provided by injectible 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. . Based on this we are in discussions with AstraZeneca to modify the contract and payment terms associated with this product." Mr. Miles went on to say, "Several very exciting, high potential new products are being launched during the fourth quarter: CERCON, the new high tech all ceramic CAD/CAM CAD/CAM in full computer-aided design/computer-aided manufacturing. Integration of design and manufacturing into a system under direct control of digital computers. unit along with its proprietary zirconia 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!" product used in creating crowns and bridges is being rolled out to the German market during the fourth quarter by our newly acquired Degussa Dental business. XIVE, a new immediate load implant implant /im·plant/ (im-plant´) to insert or to graft (tissue, or inert or radioactive material) into intact tissues or a body cavity. system was launched by our Friadent Implant business at the beginning of the fourth quarter. At the same time Friadent launched the CeraMed bone grafting Bone Grafting Definition Bone grafting is a surgical procedure by which new bone or a replacement material is placed into spaces between or around broken bone (fractures) or holes in bone (defects) to aid in healing. product line featuring PEPGEN P-15. We are excited by the potential for each of these products to generate substantial sales revenue moving forward. "Finally, we are very excited about the acquisition of Degussa Dental and the significant synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. opportunities for both sales growth and cost reduction that this combination offers. Our immediate focus in the coming months is the successful rapid and profitable integration of the three platform acquisitions made during 2001." For the nine months ended September 30, 2001 sales increased 15.0% to $753.8 million from $655.4 million in the first nine months of 2000, including a 2.0% negative impact due to the strong U.S. dollar. Net income was $87.6 million, or $1.67 diluted earnings per common share for the nine months ended September 30, 2001. The first nine months of 2001 earnings include a net gain of $9.8 million or $.19 per share for the sale of SoftDent, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , net of a 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. . Excluding this net gain, diluted earnings per common share were $1.48 for the first nine months of 2001, an increase of 10.4% over $1.34 per common share in the first nine months of 2000. Diluted earnings per common share for the first nine months of 2001 includes a negative $.05 per common share impact from the Tulsa earnout payment made in May. Without this negative impact, 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 increased 14.2%. DENTSPLY Conference Call Information: DENTSPLY will hold a conference call on Tuesday, October 23, 2001 at 8:30 a.m. Eastern Day Light Time. To access the call, please dial: domestic 888/799-1714 and international 212/993-0244. This conference call will be broadcast live on the Internet at www.dentsply.com or www.StreetEvents.com. An audio replay of the conference call will be available for one week. To access the replay, please dial: domestic 800/633-8284 and international 858/812-6440. Passcode: 19827164. 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 , 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, dental injectible anesthetics Anesthetics Drugs or methodologies used to make a body area free of sensation or pain. Mentioned in: Appendectomy 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 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 combined 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, including, without limitation, the difficulty of successfully combining the operations of Degussa with those of DENTSPLY in a timely manner, the ability to continue to generate sufficient cash flow to pay down the additional debt as planned, the significant increase in DENTSPLY's debt-to-capitalization ratio as a result of the acquisition and the diversion of resources to debt service rather than for investment in DENTSPLY's existing businesses. For an additional description of risk factors, please refer to the Company's 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. filing with the Securities and Exchange Commission.
DENTSPLY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
Sept. 30, 2001 Sept. 30, 2001
------------------ ------------------
2001 2000 2001 2000
-------- -------- -------- --------
NET SALES $253,501 $216,699 $753,805 $655,443
COST OF PRODUCTS SOLD 121,116 104,439 357,879 314,277
-------- -------- -------- --------
GROSS PROFIT 132,385 112,260 395,926 341,166
% OF NET SALES 52.2% 51.8% 52.5% 52.1%
SELLING, GENERAL &
ADMINISTRATIVE EXPENSES 87,975 74,123 266,759 226,558
RESTRUCTURING COSTS 0 0 5,500 0
-------- -------- -------- --------
INCOME FROM OPERATIONS 44,410 38,137 123,667 114,608
% OF NET SALES 17.5% 17.6% 16.4% 17.5%
NET INTEREST AND
OTHER EXPENSE (INCOME) 6,355 3,368 (9,972) 8,398
-------- -------- -------- --------
PRE-TAX INCOME 38,055 34,769 133,639 106,210
INCOME TAXES 12,136 11,434 45,990 36,056
-------- -------- -------- --------
NET INCOME $25,919 $23,335 $87,649 $70,154
% OF NET SALES 10.2% 10.8% 11.6% 10.7%
EARNINGS PER SHARE-BASIC $0.50 $0.45 $1.69 $1.35
-DILUTIVE $0.49 $0.45 $1.67 $1.34
DIVIDENDS PER SHARE $0.06875 $0.0625 $0.20625 $0.1875
WEIGHTED AVERAGE
NUMBER OF COMMON
SHARES OUTSTANDING-BASIC 51,834 51,665 51,742 51,963
-DILUTIVE 52,766 52,322 52,570 52,419
DENTSPLY INTERNATIONAL INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
SEPT. 30, DEC. 31,
2001 2000
ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 11,879 $ 15,433
ACCOUNTS AND NOTES
RECEIVABLE-TRADE, NET 146,568 133,643
INVENTORIES 163,853 133,304
OTHER CURRENT ASSETS 41,439 43,074
---------- ----------
TOTAL CURRENT ASSETS 363,739 325,454
PROPERTY,PLANT AND EQUIPMENT, NET 195,217 181,341
OTHER NONCURRENT ASSETS, NET 660,215 359,820
---------- ----------
TOTAL ASSETS $1,219,171 $ 866,615
========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY:
CURRENT LIABILITIES $ 209,065 $ 168,138
LONG-TERM DEBT 343,153 109,500
OTHER LIABILITIES 71,172 64,046
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARIES 2,260 4,561
STOCKHOLDERS' EQUITY 593,521 520,370
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,219,171 $ 866,615
========== ==========
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