Sirona Dental Systems, Inc. (SIRO) Q2 2012 Earnings Conference Call May 4, 2012 8:30 am ET Executives Jost Fischer - Chairman & CEO Simone Blank - CFO and EVP Jeffrey Slovin - President and Director Joshua Zable - VP, IR Analysts Ross Taylor - C.L. King & Associates, Inc Robert Jones - Goldman Sachs Group, Inc Brandon Couillard - Jefferies & Company Elliot Feldman - Barclays Capital Jonathan Block - SunTrust Robinson Humphrey Scott Green - Bank of America Merrill Lynch Steve Beuchaw - Morgan Stanley & Co. LLC Jeffrey Johnson - Robert W. Baird & Co Tycho Peterson - JP Morgan Chase & Co John Kreger - William Blair & Company, LLC Jeffrey Warshauer - Sidoti & Company, LLC Presentation Operator
Previous Statements by SIRO
» Sirona Dental Systems' CEO Discusses F1Q12 Results - Earnings Call Transcript
» Sirona Dental Systems' CEO Discusses Q4 2011 Results - Earnings Call Transcript
» Sirona Dental Systems CEO Discusses F3Q2011 Results - Earnings Call Transcript
» Sirona Dental Systems, Inc. F1Q10 (Qtr End 12/31/09) Earnings Call Transcript
Before we begin, please take a moment to read the forward-looking statements on slide two of our earnings slide presentation. During today’s conference call, we’ll make certain predictive statements that reflect our current views about our future performance and financial results. We make these statements on certain assumptions and expectations of future events that are subject to risks and uncertainties. Our most recent Form 10-K lists some of our most important risk factors that could cause actual results to differ from our predictions.And with that, I’ll now turn the program over to Jost Fischer, Chairman and CEO of Sirona Dental Systems. Jost Fischer Thanks, Joshua. It is my pleasure to welcome all of you to our second quarter 2012 conference call. Joining me today are Jeffery Slovin, President and Simone Blank, Executive Vice President and Chief Financial Officer. I’d like to introduce our new Vice President of Investor Relations, Joshua Zable. Joshua recently joined Sirona and he knows us well as he followed the Company when he was a medical device sales side analyst. We’re delighted to have him on our team and look forward to working with him. I’m pleased to report solid results for the second quarter of fiscal 2012. Our double-digit revenue growth continued with sales up 11.1% on a constant currency basis. We continue to gain market share. Operating income plus amortization also grew double-digits, up 10.9%. Treatment Centers and the CAD/CAM segments were the strongest performers in the quarter, up 17.5% and 13.7% respectively, constant currency. Under regional basis Sirona’s revenue growth was driven by international markets, up 13.7% constant currency and was particularly strong in the Asia Pacific region. This robust performance is directly attributable to the investments we made in our sales and service infrastructure and we’re pleased with the results they’re yielding.
It is important to note that many of the international markets that we’re investing in are growing materially above the Company’s average rate. Overall, our investments in key markets around the world will enable us to compete more effectively today and in the years to come.Let me reiterate the two key pillars of our successful strategy. To expand our outstanding portfolio of high-tech dental products through continuous innovation. We have invested over $250 million in the past six years in the pursuit of creating new and enhanced products and solutions to continue our world-class global sales and service infrastructure. We’re active in over 135 countries around the globe. We continue to execute on our strategy giving Sirona a clear competitive advantage and enabling us to deliver consistently strong organic. I will now turn the call over to Simone, who will review our second quarter financials. Simone Blank Thank you, Jost. In the second quarter our revenues increased $17.1 million to $231.9 million, up 8% or up 11.1% on a constant currency basis. Our double-digit revenue growth was mainly driven by continued strong performance in international markets, which increased 9.2% or up 13.7% constant currency. Sales were particularly robust in the Asia Pacific region. In the United States revenues increased 4.9% compared in the first quarter of this fiscal year. Sirona’s operating income plus amortization increased 10.9% to $52.2 million. Moving on to a review of our business segment. Revenues in our CAD/CAM segments increased 11.1% to $85.6 million or up 13.7% on a constant currency basis. CAD/CAM revenues benefited from very strong growth in international market. We continue to get excellent feedback from the marketplace on our CEREC 4.0 software. Dentists appreciate the ease of use, the ability to design multiple restorations and the increased processing speed. In the second quarter we also successfully launched the inlab 4.0 software for all our customers. Our CAD/CAM segment margin was 70%, down 160 basis points compared to the prior-year period, but on the levels of the full fiscal year 2011. The decrease in the quarter was mainly driven by current promotion.
Imaging segment revenues increased 3.5% to $74.8 million, up 6% on a constant currency basis. Growth was mainly driven by the U.S. and the non-European international markets. This quarter we started to come up against the launch of the ORTHOPHOS 2D, 3D unit. As a reminder, last years Q2 imaging grew over 20%.Read the rest of this transcript for free on seekingalpha.com