Sirona Reports Record Fiscal 2013 First Quarter Results

Sirona Reports Record Fiscal 2013 First Quarter Results

  • First quarter revenues of $272.4 million, up 5.5% compared to prior year, or up 8.6% constant currency*.
  • First quarter earnings per share of $0.68 on a GAAP reported basis compared to $0.67 in the prior year. First quarter non-GAAP adjusted EPS* of $0.94, up 9% compared to $0.87 in the prior year.
  • Fiscal 2013 guidance confirmed.

LONG ISLAND CITY, N.Y.--(BUSINESS WIRE)-- Sirona (NAS: SIRO) , the dental technology leader, today announced its financial results for the quarter ended December 31, 2012.

First Quarter Fiscal 2013 vs. First Quarter Fiscal 2012 Financial Results


Revenue was $272.4 million, an increase of $14.3 million or up 5.5% (and up 8.6% on a constant currency basis). The Company's business segments performed as follows: CAD/CAM Systems increased 13.5% (up 16.5% on a constant currency basis), Treatment Centers increased 4.3% (up 8.4% on a constant currency basis), Imaging Systems increased 2.7% (up 4.9% on a constant currency basis), and Instruments decreased 5.8% (down 2.1% on a constant currency basis).

Revenue in the United States increased 29.0%, while revenues outside the United States decreased 3.3% (up 0.6% constant currency). We had exceptional growth in the U.S. benefiting from strong demand for our Imaging and CAD/CAM products as well as from anticipated tax changes. Despite solid demand, sales in international markets were impacted by Omnicam capacity constraints and from the prioritization of the U.S., the challenging prior-year comparison for Imaging, and a back-end loaded order intake during the quarter, which will translate into sales in the second quarter of fiscal year 2013.

Gross profit was $151.9 million, up $13.1 million. Gross profit margin was 55.8% in the first quarter of Fiscal 2013, compared to 53.8% in the prior year. Gross profit margin as a percent of sales was positively impacted by a positive segment and product mix and lower deal related amortization.

Net income for the first quarter of 2013 was $38.3 million, or $0.68 per diluted share, versus $38.3 million, or $0.67 per diluted share in the prior year period. Non-GAAP adjusted earnings per diluted share for the first quarter of 2013 was $0.94 compared to $0.87 in the prior year quarter. A reconciliation of the non-GAAP measure to earnings per share calculated on a GAAP basis is provided in the attached table.

At December 31, 2012, the Company had cash and cash equivalents of $124.2 million and total debt of $75.4 million, resulting in net cash of $48.8 million. This compares to net cash of $75.6 million at September 30, 2012.

Jost Fischer, Chairman and CEO of Sirona commented: "It is extremely gratifying for my last quarter as CEO of Sirona to leave on such a high note, reporting a record first quarter. The Company is in an excellent position. We continue to see significant enthusiasm surrounding the launch of our revolutionary Omnicam. Demand was so strong that we could not fulfill all of our orders. I am pleased to report that the ramp up phase of manufacturing for the Omnicam is behind us. We continue to see strong demand across Sirona's broad product portfolio and in all major geographies. I am pleased to see us begin fiscal 2013, building on last year's success: we extended our global leadership position and delivered strong financial results."

Mr. Fischer continued: "For the quarter, three of our segments had record quarters, with CAD/CAM and Treatment Centers leading our growth, up 16.5% and 8.4% respectively, on a constant currency basis. Revenue growth was extremely strong in the U.S., up 29.0%, positively impacted by our expanded exclusivity agreement with Patterson, strong demand for our CAD/CAM and Imaging products, and the anticipated implementation of the Medical Device Tax in 2013. Sales outside the U.S. were impacted by prioritization of shipments, but we are seeing strong order intake and we expect to see it reflected in our sales beginning next quarter. Our positive momentum across the product portfolio is continuing into the second quarter and we expect revenue growth to accelerate throughout the year."

Fiscal 2013 Guidance

Management continues to anticipate fiscal year 2013 constant currency revenue growth to be in the range of 9% to 11%, and EPS on a non-GAAP adjusted basis in a range of $3.33 to $3.43 (reflecting growth of approximately 10% to 13%).

Conference Call/Webcast Information

Sirona will hold a conference call to discuss its financial results at 8:30 a.m. Eastern Time on February 8, 2013. The teleconference can be accessed by calling +1 800.561.2718 (domestic) or +1 617.614.3525 (international) using passcode # 89492026. The webcast will be available via the Internet at http://ir.sirona.com and a presentation relating to the call will be available on our website. A replay of the conference call will be available through February 15, 2013 by calling +1 888 286 8010 (domestic) or +1 617 801 6888 (international) using passcode #61019907. A web archive will be available for 30 days at www.sirona.com.

About Sirona Dental Systems, Inc.

Sirona, the dental technology leader, has served dealers and dentists worldwide for more than 130 years. Sirona develops, manufactures, and markets a complete line of dental products, including CAD/CAM restoration systems (CEREC), digital intra-oral, panoramic and 3D imaging systems, dental treatment centers and handpieces. Visit http://www.sirona.com for more information about Sirona and its products.

This press release contains forward-looking information about Sirona Dental Systems, Inc.'s financial results, guidance and estimates, business prospects, and products and services that involve substantial risks and uncertainties or other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You can identify these statements by the use of words such as "may," "could," "estimate," "will," "believe," "anticipate," "think," "intend," "expect," "project," "plan," "target," "forecast", and similar words and expressions which identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not guarantees of future performance and involve known and unknown risks and uncertainties, and other factors. Readers are cautioned not to place undue reliance on such statements, which speak only as of the date hereof. For a discussion of such risks, uncertainties and other matters that could cause actual results to differ materially, including risks relating to, among other factors, the market for dental product and services, pricing, future sales volume of the Company's products, the possibility of changing economic, market and competitive conditions, dependence on products, dependence on key personnel, technological developments, intense competition, market uncertainties, dependence on distributors, ability to manage growth, dependence on key suppliers, dependence on key members of management, government regulation, acquisitions and affiliations and currency exchange rate fluctuations, readers are urged to carefully review and consider various disclosures made by the Company in its Annual Report on Form 10-K and in its reports on Forms 10-Q and 8-K filed with the U.S. Securities and Exchange Commission, which can be accessed through the SEC's website, www.sec.gov . This presentation contains non GAAP financial measures, which should not be viewed in isolation and do not purport to be an alternative to net income (loss) as an indicator of operating performance or an alternative to cash flows from operating activities as a measure of liquidity. The Company assumes no obligation to and expressly disclaims any obligation to update or revise any forward-looking statements contained in this document to reflect new information or future events or developments after the date any such statement is made.

_____________________________________________________________________

* Non-GAAP adjusted EPS and constant currency growth and results are non-GAAP financial measures that exclude certain items. Please refer to "Reconciliation of GAAP and non-GAAP Information (unaudited)" in the attached exhibits for a description of these items.

 

SIRONA DENTAL SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

         
Three months ended
December 31,
2012 2011

$'000s (except per share amounts)

 
Revenue $ 272,404 $ 258,116
Cost of sales 120,533 119,333
Gross profit 151,871 138,783
 
Selling, general and administrative expense 85,783 73,646
Research and development 14,095 13,286
Provision for doubtful accounts and notes receivable 70 39
Net other operating income (6,914) (2,500)
 
Operating income 58,837 54,312
 
(Gain)/loss on foreign currency transactions, net 4,580 2,230
(Gain)/loss on derivative instruments (1,346) 436
Interest expense, net 970 903
Other expense/(income) 340 262
Income before taxes 54,293 50,481
Income tax provision 15,226 11,611
Net income 39,067 38,870

Less: Net income attributable to noncontrolling interests

765 593
Net income attributable to Sirona Dental Systems, Inc. $ 38,302 $ 38,277
 

Income per share (attributable to Sirona Dental

Systems, Inc. common shareholders):

- Basic $ 0.70 $ 0.69
- Diluted $ 0.68 $ 0.67
Weighted average shares - basic 55,004,471 55,783,648
Weighted average shares - diluted 56,327,927 57,121,505
 

SIRONA DENTAL SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

             
December 31, September 30,
2012 2012
(unaudited)
$'000s (except per share amounts)
ASSETS
 
Current assets
Cash and cash equivalents $ 124,170 $ 151,088
Accounts receivable, net of allowance for doubtful accounts
of $1,290 and $1,408, respectively 145,569 132,569
Inventories, net 92,124 81,007
Deferred tax assets 27,942 24,781
Prepaid expenses and other current assets 24,242 17,622
Income tax receivable 2,291 2,213
 
Total current assets 416,338 409,280
 

Property, plant and equipment, net of accumulated depreciation

and amortization of $135,418 and $125,706, respectively

147,400

143,351

Goodwill 659,533 631,077
Investments 25 14
Intangible assets, net of accumulated amortization of

$463,164 and $446,447, respectively

326,837 288,556
Other non-current assets 4,642 9,368
Deferred tax assets 13,051 12,888
 
Total assets $ 1,567,826 $ 1,494,534
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current liabilities
Trade accounts payable $ 61,838 $ 51,961
Short-term debt and current portion of long-term debt 419 478
Income taxes payable 19,155 14,906
Deferred tax liabilities 499 817
Accrued liabilities and deferred income 111,329 118,075
 
Total current liabilities 193,240 186,237
 
Long-term debt 75,000 75,000
Deferred tax liabilities 136,959 122,441
Other non-current liabilities 24,336 16,852
Pension related provisions 62,977 61,629
Deferred income 37,500 40,000
 
Total liabilities 530,012 502,159
 
Shareholders' equity

Preferred stock ($0.01 par value; 5,000,000 shares authorized;

 

 

none issued and outstanding)

0

0

Common stock ($0.01 par value; 95,000,000 shares authorized;
 
56,776,626 shares issued and 54,946,874 shares outstanding at Dec. 31, 2012;

56,598,045 shares issued and 55,051,673 shares outstanding at Sept. 30, 2012

567 566
Additional paid-in capital 706,745 699,279
Treasury stock (at cost)
 
1,829,752 shares held at cost at Dec. 31, 2012;

1,546,372 shares held at cost at Sept. 30, 2012

(86,230) (69,058)
Excess of purchase price over predecessor basis (49,103) (49,103)
Retained earnings 475,773 437,471
Accumulated other comprehensive income/(loss) (13,332) (29,797)
Total Sirona Dental Systems, Inc. shareholders' equity 1,034,420 989,358
Noncontrolling interests 3,394 3,017
 
Total shareholders' equity 1,037,814 992,375
 
Total liabilities and shareholders' equity $ 1,567,826 $ 1,494,534
 

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SIRONA DENTAL SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

Three months ended

December 31,
2012  

2011

$'000s
Cash flows from operating activities
Net income $ 39,067 $ 38,870
 
Adjustments to reconcile net income

to net cash provided by operating activities

Depreciation and amortization 17,912 19,255
(Gain)/loss on disposal of property, plant and equipment (30) -
(Gain)/loss on derivative instruments (1,346) 436
(Gain)/loss on foreign currency transactions 4,580 2,230
Deferred income taxes 8,815 (4,428)
Amortization of debt issuance cost 138 199
Share-based compensation expense 6,097 2,093
 
Changes in assets and liabilities
Accounts receivable (12,753) (28,626)
Inventories (10,589) 2,129
Prepaid expenses and other current assets (6,054) 5,022
Restricted cash - 646
Other non-current assets (81) (273)
Trade accounts payable 9,078 (10,478)
Accrued liabilities and deferred income (26,908) (17,060)
Other non-current liabilities 1,873 193
Income taxes receivable (41) 1,741
Income taxes payable 3,932 4,389
 
Net cash provided by operating activities 33,690 16,338
 
Cash flows from investing activities
Investment in property, plant and equipment (10,347) (7,875)
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