Dentsply Sirona Reports Third Quarter 2018 Results; Announces Restructuring Plan to Drive Value-Creation
• Reported Q3 revenues of $928.4 million, down 8.0% compared to prior year; constant currency decline1 of 5.9%
• Q3 2018 GAAP EPS of $0.13 vs. $0.39 in Q3 2017. Q3 2018 Non-GAAP EPS of $0.38 compared with Non-GAAP EPS of $0.70 in Q3 2017
• The Company updated 2018 guidance and now anticipates 2018 Non-GAAP adjusted EPS at or slightly below the low end of the previous guidance range of $2.00 to $2.152
• Restructuring expected to result in $200-$225 million of net annual cost savings by 2021 and to result in one-time expenditures and charges of approximately $275 million
YORK, Pa., November 8, 2018 - DENTSPLY SIRONA Inc. (“Dentsply Sirona”) (Nasdaq: XRAY), the Dental Solutions Company, today announced its financial results for the three months ended September 30, 2018.
The Company also announced that it is implementing a comprehensive plan to accelerate revenue growth, improve margins and simplify the business. The plan includes a restructuring that is anticipated to achieve $200-$225 million in net annual cost savings by 2021, through streamlining the organization
and consolidating functions. The execution of the plan is anticipated to result in annualized topline growth of 3-4%, an adjusted operating income margin of 20% by the end of 2020, and an adjusted operating income margin of 22% by 2022. The plan anticipates a net reduction in global workforce of approximately 6-8%.
Third Quarter 2018 Financial Results
Reported net sales of $928.4 million declined 8.0% compared to $1,009.2 million in the third quarter of 2017, and declined 6.5% on an internal basis. Net income attributable to Dentsply Sirona for the third quarter of 2018 was $28.0 million, or $0.13 per diluted share, compared to net income of $90.6 million, or $0.39 per diluted share, in the third quarter of 2017. On an adjusted basis, excluding certain items, non-GAAP net earnings per diluted share were $0.38 compared to $0.70 in the third quarter of 2017. A reconciliation of the non-GAAP measures to earnings per share calculated on a US-GAAP basis is provided in the attached tables.
Technology & Equipment revenues declined by 11.3% in the third quarter of 2018 as revenues were impacted by a significant amount of inventory destocking in the third quarter. This destocking, combined with a high level of inventory stocking in the third quarter of 2017, drove the revenue decline. Excluding inventory stocking and destocking in both quarters, Technology & Equipment third quarter internal revenues would have increased as compared to the third quarter of the prior year, reflective of solid underlying retail demand, particularly in the U.S. Third quarter Consumable revenue growth was impacted by a short-term disruption stemming from the consolidation of our distribution infrastructure in Venlo, the Netherlands. The Company has put in place a program to remediate the disruption and expects Consumable revenue growth to soon return to its normal growth trajectory.