Sirona (Nasdaq:SIRO), the dental technology leader, today announced its
financial results for the quarter ended March 31, 2014.
Second Quarter Fiscal 2014 vs. Second Quarter Fiscal 2013 Financial
Revenue was $282.7 million, an increase of $15.4 million or up 5.7% (and
up 2.9% on a constant currency basis). The Company's business segments
performed as follows: Instruments increased 13.4% (up 9.3% on a constant
currency basis), Imaging Systems increased 5.0% (up 2.8% on a constant
currency basis), CAD/CAM Systems increased 5.0% (up 2.5% on a constant
currency basis), and Treatment Centers increased 4.6% (up 0.8% on a
constant currency basis).
Revenue in the United States increased 4.5%, and revenues outside the
United States increased 6.2% (up 2.3% constant currency). U.S. revenues
benefited from continued demand for our Imaging and CAD/CAM products.
Growth was driven by new user demand for our CAD/CAM products. Sales
growth in international markets was driven by Asia Pacific, led by Japan.
Gross profit was $151.5 million, up $6.8 million. Gross profit margin
was 53.6% in the second quarter of Fiscal 2014, compared to 54.1% in the
prior year. The change in gross profit margin as a percent of sales was
mainly driven by foreign exchange impacts as well as product and
regional sales mix.
Net income attributable to Sirona Dental Systems, Inc. for the second
quarter of 2014 was $37.3 million, or $0.66 per diluted share, versus
$31.8 million, or $0.56 per diluted share in the prior year period.
Non-GAAP adjusted earnings per diluted share for the second quarter of
2014 was $0.80 compared to $0.75 in the prior year quarter, or an
increase of 6.3%. A reconciliation of the non-GAAP measure to earnings
per share calculated on a GAAP basis is provided in the attached table.
At March 31, 2014, the Company had cash and cash equivalents of $255.3
million and total debt of $79.6 million, resulting in net cash of $175.7
million. This compares to net cash of $135.4 million at December 31,
Jeffrey Slovin, President and CEO of Sirona, commented: "During the
second quarter, Sirona grew 6.9% in local currencies, on top of 16.7%
growth in the second quarter last year. Our strong results were driven
by the U.S. and Asia Pacific. Japan performed particularly well ahead of
a planned tax increase."
Mr. Slovin continued: "Treatment Centers and CAD/CAM each had record
quarters. Increased new user demand drove CAD/CAM growth of 7.6% in
local currencies, on top of 23% growth in the second quarter last year.
For the second quarter in a row, Instruments was our fastest growing
segment, up 12.9% in local currencies."
Mr. Slovin added: "Continuous innovation combined with our world class
sales and service infrastructure is the engine that drives Sirona. Our
product pipeline is full of exciting new products with compelling
advancements, some of which will be introduced in the near future. "
Fiscal 2014 Guidance
Management reiterates guidance of FY14 constant currency revenue growth
of 4% to 6% and non-GAAP adjusted EPS* in the range of $3.60
to $3.70 (reflecting growth of approximately 6% to 9%).
Conference Call/Webcast Information
Sirona will hold a conference call to discuss its financial results at
8:30 a.m. Eastern Time on May 9, 2014. The teleconference can be
accessed by calling +1-877-415-3184 (domestic) or +1-857-244-7327
(international) using passcode # 85531897. 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 May
16, 2014 by calling +1-888-286-8010 (domestic) or +1-617-801-6888
(international) using passcode #492686. 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, constant currency growth and local
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
SIRONA DENTAL SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In millions, except for share and per shareamounts)
Selling, general and administrativeexpense
Gain (loss) on foreign currencytransactions, net
Net (income) loss attributable tononcontrolling interests
NET INCOME ATTRIBUTABLE TOSIRONA DENTAL SYSTEMS,
INCOME PER SHARE(attributable to Sirona Dental
Systems,Inc. common shareholders):
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except for share and par value amounts)(Unaudited)
57,647,248 shares issued; 55,347,500 shares outstanding at Mar.
31, 2014;57,213,615 shares issued; 54,999,436 shares
outstanding at Sept. 30, 2013
2,299,748 shares held at cost at Mar. 31, 2014;2,214,179
shares held at cost at Sept. 30, 2013
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
ADJUSTMENTS TO RECONCILE NET INCOME TO NETCASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES
(Gain) loss on derivative instruments and foreign currencytransactions
ADJUSTMENTS TO RECONCILE NET INCOME TO NETCASH PROVIDED BY
(USED IN) OPERATINGACTIVITIES
Tax effect of common shares issued under share basedcompensation
Reconciliation of GAAP and Non-GAAP Information (unaudited)
Non-GAAP Adjusted Net Income Financial Measures
GAAP net income attributable to Sirona Dental Systems,Inc.
Amortization and depreciation expense resulting fromthe
step-up to fair values of intangible assets related topast
Compensation charge for expenses in connectionwith the CFO
Non-GAAP adjusted net income attributable to SironaDental
Systems, Inc. shareholders
Non-GAAP Adjusted EPS Guidance (unaudited)
GAAP net income attributable to Sirona Dental Systems, Inc.shareholders
Amortization and depreciation expense resulting from thestep-up
to fair values of intangible assets related to pastbusiness
Compensation charge for expenses in connection withthe CFO
Non-GAAP adjusted net income attributable to Sirona DentalSystems,
To supplement our consolidated financial statements and our business
outlook, we use the following non-GAAP financial measures: (i) non-GAAP
adjusted net income, and (ii) non-GAAP adjusted earnings per diluted
share, which exclude, as applicable, amortization and depreciation
expense resulting from the step-up to fair values of intangible and
tangible assets related to past business combinations gain/loss on
foreign currency transactions, gain/loss on derivative instruments and
any related tax effects and to the extent relevant in a particular
period, any other cash or non-cash items that management does not view
as indicative of its ongoing operating performance. Also set forth above
under the heading "FORWARD-LOOKING" are reconciliations of
forward-looking non-GAAP financial measures to the most directly
comparable GAAP financial measures.
Management recognizes that the use of these non-GAAP measures has
limitations, including the fact that they might not be comparable with
similar non-GAAP measures used by other companies and that management
must exercise judgment in determining which types of charges and other
items should be excluded from its non-GAAP financial measures. Management
currently compensates for these limitations by providing full disclosure
of each non-GAAP financial measure and a reconciliation to the most
directly comparable GAAP measure. The presentation of this financial
information is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared and
presented in accordance with GAAP.
We use these non-GAAP financial measures for financial and
operational decision making and as a means to evaluate period-to-period
comparisons. Our management believes that these non-GAAP financial
measures provide meaningful supplemental information regarding Sirona's
operating performance in the ordinary, ongoing and customary course of
its operations. Accordingly, management excludes the impact of
acquisition-related intangible depreciation and amortization in order to
compare our underlying financial performance to prior periods, certain
charges related to currency revaluation of assets and liabilities that
do not reflect our period-to-period core operating performance, and to
the extent relevant in a particular period, any other cash or non-cash
items that management does not view as indicative of its ongoing
operating performance. We believe that both management and
investors benefit from referring to these non-GAAP financial measures in
assessing our performance and when planning, forecasting and analyzing
future periods. These non-GAAP financial measures also facilitate
management's internal evaluation of period-to-period comparisons. We
believe these non-GAAP financial measures are useful to investors both
because (1) they allow for greater transparency with respect to key
metrics used by management in its financial and operational decision
making and (2) they are provided to and used by our institutional
investors and the analyst community to facilitate comparisons with prior
and subsequent reporting periods.
Constant Currency: We have included certain revenue information in
this press release on a constant currency basis. This information is a
non-GAAP financial measure. We additionally present revenue on a
constant currency basis because we believe it facilitates a comparison
of our operating results from period to period without regard to changes
resulting solely from fluctuations in currency rates.
Sirona calculates constant currency revenue growth by comparing
current period revenues to prior period revenues with both periods
converted at only the U.S. Dollar/Euro average foreign exchange rates
for each month of the current period.
Sirona also calculates local constant currency revenue growth by
comparing current period revenues to prior period revenues with all
currencies for both periods converted at the prior period monthly
Our forecasted 2014 constant currency net revenue growth guidance
excludes the impact of U.S. Dollar/Euro exchange rate fluctuations due
to the unpredictability of future changes in foreign exchange rates.
Therefore, we do not provide a reconciliation of these measures.
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