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Sirona Dental Systems Inc. Reports Operating Results (10-Q)

August 03, 2012 | About:
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10qk

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Sirona Dental Systems Inc. (SIRO) filed Quarterly Report for the period ended 2012-06-30.

Sirona Dental Systems, Inc. has a market cap of $2.44 billion; its shares were traded at around $47.54 with a P/E ratio of 15.2 and P/S ratio of 2.7. Sirona Dental Systems, Inc. had an annual average earning growth of 50.5% over the past 10 years. GuruFocus rated Sirona Dental Systems, Inc. the business predictability rank of 2-star.

Highlight of Business Operations:

Revenue for the three months ended June 30, 2012 was $242.0 million, a decrease of $2.7 million, or 1.1%, as compared with the three months ended June 30, 2011. On a constant currency basis, adjusting for the fluctuations in the U.S. Dollar/Euro exchange rate, total revenue increased by 7.0%. By segment, CAD/CAM Systems increased 2.7% (up 9.5% on a constant currency basis), Treatment Centers increased 1.3% (up 13.3% on a constant currency basis), Imaging Systems decreased 3.4% (up 2.8% on a constant currency basis), and Instruments decreased 10.0% (up 0.6% on a constant currency basis).

Cost of sales for the three months ended June 30, 2012 was $113.6 million, a decrease of $4.3 million, or 3.6%, as compared with the three months ended June 30, 2011. Gross profit as a percentage of revenue was 53.1% compared to 51.8% in the prior year period. Cost of sales included amortization and depreciation expense resulting from the step-up to fair values of tangible and intangible assets of $10.9 million as well as non-cash share-based compensation expense of $0.03 million for the three months ended June 30, 2012 compared to amortization and depreciation expense resulting from the step-up to fair values of tangible and intangible assets of $12.9 million and non-cash share-based compensation expense of $0.03 million for the three months ended June 30, 2011. Excluding these amounts, cost of sales as a percentage of revenue was 42.4% for the three months ended June 30, 2012 compared with 42.9% for the three months ended June 30, 2011. Therefore, gross profit as a percentage of revenue was 57.6%, compared to 57.1% in the prior year period. The increase in the gross profit margin was mainly due to product mix.

For the three months ended June 30, 2012, SG&A expense was $72.4 million, an increase of $3.9 million, or 5.7%, as compared with the three months ended June 30, 2011. During the quarter, we continued to implement our strategy to invest in the expansion of our sales and service infrastructure to capitalize on opportunities to gain market share and to build up our presence in key growth markets. These investments resulted in increased revenues, particularly in international markets. SG&A expense included amortization and depreciation resulting from the step-up to fair values of tangible and intangible assets of $0.7 million as well as non-cash share-based compensation expense in the amount of $2.0 million for the three months ended June 30, 2012, compared with $0.7 million and $2.7 million, respectively, for the three months ended June 30, 2011. Excluding these amounts, as a percentage of revenue, SG&A expense increased to 28.8% for the three months ended June 30, 2012, as compared with 26.6% for the three months ended June 30, 2011.

Revenue for the nine months ended June 30, 2012 was $732.0 million, an increase of $36.9 million, or 5.3%, as compared with the nine months ended June 30, 2011. On a constant currency basis, adjusting for the fluctuations in the U.S. Dollar/Euro exchange rate, total revenue increased by 9.3%. By segment, Imaging Systems increased 7.6% (up 10.7% on a constant currency basis), Treatment Centers increased 5.3% (up 11.1% on a constant currency basis), CAD/CAM Systems increased 4.8% (up 8.2% on a constant currency basis), and Instruments decreased 0.1% (up 5.4% on a constant currency basis).

Cost of sales for the nine months ended June 30, 2012 was $340.1 million, an increase of $18.0 million, or 5.6%, as compared with the nine months ended June 30, 2011. Gross profit as a percentage of revenue was 53.5% compared to 53.7% in the prior year period. Cost of sales included amortization and depreciation expense resulting from the step-up to fair values of tangible and intangible assets of $33.2 million as well as non-cash share-based compensation expense of $0.09 million for the nine months ended June 30, 2012 compared to amortization and depreciation expense resulting from the step-up to fair values of tangible and intangible assets of $37.8 million and non-cash share-based compensation expense of $0.1 million for the nine months ended June 30, 2011. Excluding these amounts, cost of sales as a percentage of revenue was 41.9% for the nine months ended June 30, 2012 compared with 40.9% for the nine months ended June 30, 2011, and therefore gross profit as a percentage of revenue was 58.1% compared to 59.1% in the prior year period. The decrease in the gross profit margin was mainly due to product mix in all segments.

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