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DENTSPLY International Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 7, 2011 05:12PM

DENTSPLY International Inc. (XRAY) filed Quarterly Report for the period ended 2011-09-30. Dentsply International Inc. has a market cap of $5.06 billion; its shares were traded at around $35.79 with a P/E ratio of 17.81 and P/S ratio of 2.28. The dividend yield of Dentsply International Inc. stocks is 0.56%. Dentsply International Inc. had an annual average earning growth of 8.9% over the past 10 years. GuruFocus rated Dentsply International Inc. the business predictability rank of 4-star.



Highlight of Business Operations:

Net sales, excluding precious metal content, for the three months ended September 30, 2011 was $563.8 million, an increase of 14.1% over the third quarter of 2010. The change in net sales, excluding precious metal content, was primarily a result of the acquisition growth of $52.9 million, or 10.7%. Translation positively impacted sales growth by 4.4%. Internal growth was negative (1.1%) and was impacted by the Japan natural disaster as previously discussed. Excluding the Japanese market and Orthodontic businesses, internal growth was 3.6%.

SG&A expenses as a percentage of net sales, excluding precious metal content, increased in the third quarter of 2011 by 4.3 percentage points when compared to the third quarter of 2010. Increased expenses as a percent of net sales, excluding precious metal content, over the prior year is primarily the result of $5.5 million for expenses related to acquisition and integration cost and the higher expense rate of the Astra Tech business. In addition, the Company s expenses are higher due to costs of $1.3 million associated with supporting the Company s Orthodontic business during the period of lower sales activity (also referred to hereafter as “Orthodontic business continuity costs”). The third quarter of 2011 included $4.5 million of amortization expense related to acquired intangible assets, which included $3.4 million for acquired Astra Tech intangibles. The third quarter of 2010 included $1.2 million of amortization expense related to acquired intangible assets.

Operating income decreased $19.4 million during the three months ended September 30, 2011 compared to 2010. Gross profit increased $13.5 million, which was primarily attributed to the acquisition of Astra Tech and favorable foreign currency translation. Gross profit was negatively impacted by $16.3 million from the expensing of the inventory fair value adjustment associated with the Astra Tech acquisition as well as the impact from lower Orthodontic sales. SG&A expenses increased by $32.9 million, which included $2.7 million of acquisition related costs for Astra Tech. The SG&A expense increase also included operating expenses for Astra Tech, the Company s Orthodontic business continuity costs during the period of lower sales activity, increased marketing and selling expenses for product launches and the negative impact of foreign currency translation.

Net sales, excluding precious metal content, for the nine months ended September 30, 2011 were $1,654.7 million, an increase of 9.5% over the same period of 2010. The change in net sales, excluding precious metal content, was the result of constant currency growth of 5.0% and currency translation of 4.5%. The constant currency sales growth included internal growth of 0.9%. Excluding the Japanese market and the Orthodontic business, the internal growth rate was 3.9%.

SG&A expenses as a percentage of net sales, excluding precious metal content, increased in the nine months of 2011 by 2.3 percentage points when compared to the same period in 2010. Increased expenses as a percent of net sales, excluding precious metal content, over the prior year is primarily the result of $5.5 million for expenses related to the acquisition and integration cost and the higher expense rate of the Astra Tech business. In addition, the Company s expenses are higher due to the Orthodontic business continuity costs of $2.0 million, increased costs supporting new product launches and biennial dental trade shows. The nine months ended September 30, 2011 included $6.1 million of amortization expense related to acquired intangible assets, which include $3.4 million for acquired Astra Tech intangibles. For the same period of 2010, the Company incurred $3.0 million of amortization expense related to acquired intangibles.

Read the The complete Report



Stocks Discussed: XRAY,
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