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DENTSPLY International Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 2, 2012 04:36PM
DENTSPLY International Inc. (XRAY) filed Quarterly Report for the period ended 2012-03-31.
Highlight of Business Operations:In the three months ended March 31, 2012, the Company achieved record first quarter sales. Sales in the period grew by 25.6% on a US GAAP reported basis and grew 26.3%, excluding precious metal content. The sales growth excluding precious metal content was driven by acquisition growth of 27.2%, while internal growth added 1.1%, and currency translation was negative 2.0%. The internal growth in the period was negatively impacted by the lingering impact of the March 11, 2011 natural disaster in Japan, particularly by supply constraints in our Orthodontics business. Internal growth excluding Orthodontics and our businesses in Japan was 4.5%. This internal growth was comprised of very strong growth in the United States of 7.4%, while Europe reported 2.2% and rest of world had 4.4%.
Net sales, excluding precious metal content, for the three months ended March 31, 2012 was $665.6 million, an increase of 26.3% over the first quarter of 2011. The change in net sales, excluding precious metal content, was primarily a result of the acquisition growth of $143.3 million, or 27.2%. Translation negatively impacted sales growth by 2.0%. Internal growth was 1.1% and excluding sales in the Japanese market and Orthodontic businesses, internal growth was 4.5%.
Net sales, excluding precious metal content, increased by 19.4% for the first quarter of 2012 compared to the first quarter of 2011 on a constant currency basis, including 15.9% of acquisition growth and 3.5% of internal sales growth. Excluding the orthodontic business, the internal growth rate in the United States was 7.4%. This adjusted internal growth rate was a result of growth in each of the Company s product categories.
SG&A expenses as a percentage of net sales, excluding precious metal content, increased in the quarter end March 31, 2012 by 7.6 percentage points when compared to the same quarter of 2011. Increased expenses as a percent of net sales, excluding precious metal content, over the prior year is primarily the result of the higher expense rate of the Astra Tech business as well as $12.0 million of amortization primarily associated with intangibles from 2011 acquisitions. The first quarter 2012 also included $6.4 million for expenses related to integration costs. The first quarter of 2011 included $0.6 million of amortization expense related to acquired intangible assets. In addition, the Company s expenses are higher due to costs of $0.6 million associated with supporting the Company s Orthodontic business during the period of lower sales activity (also referred to hereinafter as “Orthodontic business continuity costs”).
Net sales, excluding precious metal content, increased $148.0 million, or 82.7%, during the three months ended March 31, 2012 compared to 2011. On a constant currency basis, net sales, excluding precious metal content, increased 84.5% primarily driven by acquisitions, including 4.5% of internal growth. The internal growth was primarily related to strong growth in the dental specialty products.