Item 2.02. - Results of Operations and Financial Condition
The following information is furnished pursuant to Item 2.02, "Results of Operations and Financial Condition."
On November 8, 2018, DENTSPLY SIRONA Inc. (the "Company") issued a press release disclosing its third quarter sales and earnings and the restructuring plan discussed in more detail in Item 2.05 below, including the expected costs, timing and operational benefits of the restructuring plan and the expected financial impact of the restructuring plan on the Company's future operating costs and financial results. The earnings release references net sales, excluding precious metal content, and net income, adjusted for certain charges, both of which are considered measures not calculated in accordance with generally accepted accounting principles in the United States of America (non-US GAAP measures). Due to the fluctuations of precious metal prices and because the precious metal content of the Company's sales is largely a pass-through to customers and has minimal effect on earnings, the Company reports sales both with and without precious metal content to show the Company's performance independent of precious metal price volatility and to enhance comparability of performance between periods. Earnings from operations, adjusted for certain charges, are presented to enhance the comparability between periods. A copy of the Company's press release is attached hereto as Exhibit 99.1 and is hereby incorporated by reference.
Item 2.05. - Costs Associated with Exit or Disposal Activities
On November 5, 2018, the Board of Directors of the Company approved a plan to restructure the Company’s business to support revenue growth and margin expansion and to simplify the organization, with the understanding that such restructuring plan may continue to evolve as the Company progresses through the continued planning and execution of the plan. The plan includes a restructuring of the business through streamlining the organization and consolidating functions. The restructuring plan anticipates a net reduction in the Company’s global workforce of approximately 6% to 8%, and the Company will consult with employee representation in connection with the execution of the restructuring plan where required. The Company anticipates that the restructuring will result in annualized topline growth of 3% to 4%, an adjusted operating income margin of 20% by the end of the year 2020, an adjusted operating income margin of 22% by the year 2022 and $200 million to $225 million in net annual cost savings by 2021. The Board of Directors and management of the Company developed the restructuring plan, with the help of leading third party advisors, in response to a six month diagnostic examination on the market, the Company and its performance.
The Company’s priorities also include evaluating non-core and underperforming businesses, utilizing free cash flow generation and excess balance sheet capacity to return cash to shareholders and reviewing additional longer-term cost savings opportunities.
The Company expects to incur approximately $275 million in one-time expenditures and charges.
The Company plans to provide periodic updates on the status of execution of the restructuring plan.
This Current Report on Form 8-K contains forward-looking statements, including, among other things, statements about the Company’s plans, objectives, expectations (financial or otherwise) or intentions. The Company’s forward-looking statements involve risks and uncertainties. Actual results may differ significantly from those projected or suggested in any forward-looking statements. The Company does not undertake any obligation to release publicly any revisions to such forward-looking statements to