Previous Statements by XRAY
» DENTSPLY International's CEO Discusses 1Q 2012 Results - Earnings Call Transcript
» Dentsply International's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» DENTSPLY International's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» DENTSPLY International's CEO Discusses Q2 2011 Results - Earnings Call Transcript
As you can see in the release our results this quarter include a number of nonrecurring items under non-GAAP adjustments. In an effort to provide clarity from the distortion of some of these items our comments on this call will focus on results including certain adjustments which are noted in our non-GAAP reconciliation tables contained in the release. You’ll note that our earnings guidance is also presented on an adjusted basis. With that, I would now like to turn the call over to Chairman and CEO Bret Wise. Bret?Bret Wise Yeah, thank you Derek. Good morning, everyone. Thanks for joining us on the call this morning. DENTSPLY had another very strong quarter in Q2 which built on the solid start we had in Q1 this year. We had record performance in both sales and adjusted earnings. Our total growth ex-PM came in at 23.8% and that included internal growth of 3.6%. Earnings were very strong at $0.62 adjusted EPS and that was driven by numerous factors which we’ll get into in a moment; however, the most important in my mind is the operating expansion that we saw in our base business. These results exceeded our own expectations for the quarter by a couple cents per share and overall we view it as a very strong performance operationally. In a moment we’ll give more details on the performance but before we do I have a few comments on the overall dental market. I think it’s fair to say that the global dental market probably slowed at least modestly in the quarter, most noticeably in the US. Job growth in the US as you know remains weak and we’ve seen economic projections for the back half of the year come down really meaningfully at this point. Although dental is not as dependent on economic factors as other markets we’re not immune either. At present, the weak job market is clearly bearing on consumer confidence and has had a modest effect in our view on the dental consumption thus far. So although markets continue to grow it’s more modest than it was say six months ago.
In Europe we believe that the market is still in positive territory in total although market dynamics vary significantly from geographic markets to country markets. As you know, the economic headlines have not really improved and may have eroded a bit. From a currency perspective it’s also no secret that the Euro has declined significantly from a year ago. At current rates the decline of the Euro will be at the 13% plus range in Q3 versus the prior year quarter, which improves our cost position for products produced in the Eurozone but also reduces profits when profits are translated back to dollars. Both those are important dynamics for us.In the rest of the world category which includes some 120 country markets for us we continue to see signs of strength which is reflected in our rest of world growth this quarter. This includes both the developed and the developing portions of that rest of world category for us. With this backdrop we’re very pleased to report what we view as very strong results for the company. Let me give you firs the highlights to start and then Chris is going to comment on the Astra Tech integration and our ortho re-launch program, and then finally Bill will provide some details on our financial performance. As noted in the release sales as reported were $763 million; that’s up 25.2%, and excluding precious metals content sales were up 23.8%. Both the sales with and without metal were records for Q2 and it’s driven primarily by our 2011 acquisitions, most notably Astra Tech; but also reflects a solid internal growth building off a very solid start we had in Q1. At a high level our internal growth continues to be driven by new products, continued above-market performance in the dental specialties and some continued improvement in our lab business.
Our growth excluding precious metals for the quarter breaks down as follows: as I mentioned total growth was 23.8% and that was comprised of internal growth of 3.6% and acquisition growth of 26.4% to result in constant currency growth of 30.0%. Currency translation was a (-)2.6% this quarter. Internal growth at 3.6% was again negatively impacted but really only slightly by the supply outage in orthodontics. Excluding Japan and orthodontics internal growth was 3.9% for the quarter. This is a good result against a sluggish GDP growth really in most of the developed regions around the world and for the first half in total we’re pleased with our internal growth performance again ex-ortho and –Japan at the 4.2% in this economic environment.Geographic internal growth was positive in each of our major regions and I’ll give this to you first in total and then without orthodontics and Japan. So first in total, external growth was 1.0% in the US; again despite the orthodontics headwind. It was positive 2.8% for Europe and a positive 8.6% for the rest of the world. Without ortho and Japan internal growth ex-PM was 2.9% in the US so you can see that orthodontics had the largest effect on internal growth in the US this quarter. Internal growth in Europe ex-ortho was 2.6% - a good result in light of the macro headlines we see in the region; and rest of the world ex-ortho and –Japan was 8.1% which is encouraging results and reflect the initiatives we have for the emerging markets that we’ve discussed with you on recent calls. Read the rest of this transcript for free on seekingalpha.com