Sirona Dental Systems announces first-quarter fiscal 2010 results

Sirona (Nasdaq: SIRO), the dental technology leader, today announced its financial results for the quarter ended December 31, 2009.

First Quarter Fiscal 2010 vs. First Quarter Fiscal 2009 Financial Results

Revenue was $214.8 million, an increase of $35.1 million or 19.5% (up 10.9% on a constant currency basis), with growth rates for the Company's business segments as follows: CAD/CAM increased 37.5% (up 29.3% constant currency); Instruments increased 19.0% (up 6.7% constant currency); Imaging Systems increased 9.2% (up 3.7% constant currency); and Treatment Centers increased 12.2% (up 0.5% constant currency). Revenue in the United States increased by 12.1% driven by the CAD/CAM and Imaging segments. Outside the United States, revenue increased by 23.3% (up 10.4% constant currency), driven by strength in Germany, Australia, Canada and Japan.

Gross profit was $112.4 million, up $25.4 million compared to prior year. Gross profit margin was 52.3% in the first quarter of fiscal 2010, compared to 48.4% in the prior year. The gross profit margin expansion was driven by product and regional mix and lower levels of amortization expense.

First quarter 2010 operating income excluding amortization expense was $59.6 million (operating income of $43.5 million plus amortization expense of $16.2 million), compared to $39.4 million (operating income of $21.8 million plus amortization expense of $17.6 million) in the prior year.

Net income for the first quarter of 2010 was $31.2 million, or $0.55 per diluted share, compared to $5.6 million, or $0.10 per diluted share in the prior year period. First quarter 2010 earnings per share included $0.22 of amortization and depreciation expense attributable to the write-up in value of assets due to purchase accounting, a loss of $0.02 related to the revaluation of the Patterson exclusivity fee, and a loss of $0.02 resulting from the revaluation of short-term intra-group loans. For the first quarter of 2009, earnings per share included $0.22 of amortization and depreciation expense attributable to the write-up in value of assets due to purchase accounting, a loss of $0.03 related to the revaluation of the Patterson exclusivity fee, a $0.02 loss resulting from the revaluation of short-term intra-group loans and a $0.01 gain on sale of an asset.

At December 31, 2009, the Company had cash and cash equivalents of $215.9 million and total debt of $470.1 million, resulting in net debt of $254.2 million. This compares to net debt of $293.8 million at September 30, 2009. The decrease in net debt was driven by strong cash flow from operations.

Chairman, President & CEO, Jost Fischer commented; “We are pleased with our exceptionally strong performance in the first quarter. Sirona’s top line growth was driven by our recent innovative product launches and our technologically advanced product portfolio. The bottom line benefited from robust sales growth, margin expansion, expense management initiatives and deleveraging. We are pleased with our results and are confident in the prospects of our business.”

Fiscal 2010 Guidance Update

The Company expects to achieve revenue growth at the higher end of its fiscal 2010 guidance range of 4% to 6%. Operating income excluding amortization expense is expected to be in the range of $170 to $176 million, compared to the previous range of $166 million to $176 million.