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

November 16, 2012 | About:
10qk

10qk

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Sirona Dental Systems Inc. (SIRO) filed Annual Report for the period ended 2012-09-30.

Sirona Dental Systems, Inc. has a market cap of $3.19 billion; its shares were traded at around $61.565 with a P/E ratio of 19.9 and P/S ratio of 3.5. 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:

Although the U.S. Dollar is Sironas reporting currency, its functional currencies vary depending on the country of operation. For the fiscal year ended September 30, 2012, approximately 39% of Sironas revenue and approximately 69% of its expenses were in Euro. During the periods under review, the U.S. Dollar/Euro exchange rate has fluctuated significantly, thereby impacting Sironas financial results. Between October 1, 2009 and September 30, 2012, the U.S. Dollar/Euro exchange rate used to calculate items included in Sironas financial statements varied from a low of $1.2094 to a high of $1.4155. Although Sirona does not apply hedge accounting, Sirona has entered into foreign exchange forward contracts to manage foreign currency exposure. As of September 30, 2012, these contracts had notional amounts totalling $ 34.3 million. As these agreements are relatively short-term (generally six months), continued fluctuation in the U.S. Dollar/Euro exchange rate could materially affect Sironas results of operations.

Cost of sales for the fiscal year ended September 30, 2012 was $455.4 million, an increase of $25.2 million, or 5.9%, as compared with the fiscal year ended September 30, 2011. Gross profit as a percentage of revenue was 53.5% compared to 52.9% in the prior year. Cost of sales included amortization and depreciation expense resulting from the step-up to fair values of tangible and intangible assets of $43.9 million as well as non-cash share-based compensation expense of $0.1 million for the fiscal year ended September 30, 2012, compared to amortization and depreciation expense resulting from the step-up to fair values of tangible and intangible assets of $50.5 million and non-cash share-based compensation expense of $0.1 million for the fiscal year ended September 30, 2011. Excluding these amounts, cost of sales as a percentage of revenue was 42.0 % for the fiscal year ended September 30, 2012, compared with 41.5% for the fiscal year ended September 30, 2011, and therefore gross profit as a percentage of revenue was 58.0% compared to 58.5% in the prior year.

For the fiscal years ended September 30, 2012 and 2011, Sirona recorded a profit before income taxes of $178.3 million and $159.5 million, respectively. The average actual effective tax rate for these years was 24% and 22.4%, respectively. The income tax provision for the fiscal years ended September 30, 2012 and 2011 was $42.7 and $35.7 million, respectively.

Cost of sales for the fiscal year ended September 30, 2011 was $430.2 million, an increase of $58.9 million, or 15.9%, as compared with the fiscal year ended September 30, 2010. Gross profit as a percentage of revenue was 52.9% compared to 51.8% in the prior year. Cost of sales included amortization and depreciation expense resulting from the step-up to fair values of tangible and intangible assets of $50.5 million as well as non-cash share-based compensation expense of $0.1 million for the fiscal year ended September 30, 2011, compared to amortization and depreciation expense resulting from the step-up to fair values of tangible and intangible assets

For the fiscal years ended September 30, 2011 and 2010, Sirona recorded a profit before income taxes of $159.5 million and $115.2 million, respectively. The average actual effective tax rate for these years was 22.4% and 20.6%, respectively. The income tax provision for the fiscal years ended September 30, 2011 and 2010 was $35.7 and $23.8 million, respectively.

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