Sirona third quarter revenue increases 34.1% to $244.7 million

Sirona (Nasdaq: SIRO), the dental technology leader, today announced its financial results for the quarter ended June 30, 2011.

Third Quarter Fiscal 2011 vs. Third Quarter Fiscal 2010 Financial Results

Revenue was $244.7 million, an increase of $62.3 million or up 34.1% (up 24.0% on a constant currency basis), with growth rates for the Company's business segments as follows: Imaging Systems increased 37.6% (up 29.6% constant currency); Treatment Centers increased 37.6% (up 22.1% on a constant currency basis); CAD CAM increased 31.5% (up 23.8% constant currency); and Instruments increased 26.0% (up 12.3% constant currency). Revenue in the United States increased 11.8%, while revenues outside the United States increased 45.6% (up 29.5% constant currency), with strong growth in Germany, Asia Pacific and the Middle East .

Gross profit was $126.8 million, up $32.7 million. Gross profit margin was 51.8% in the third quarter of Fiscal 2011, compared to 51.6% in the prior year.

Third quarter 2011 operating income excluding amortization expense was $60.4 million (operating income of $46.4 million plus amortization expense of $14.1 million), compared to $45.3 million (operating income of $30.7 million plus amortization expense of $14.5 million) in the third quarter of 2010.

Net income for the third quarter of 2011 was $36.3 million, or $0.63 per diluted share, versus $16.6 million, or $0.29 per diluted share in the prior year period. Non-GAAP earnings per diluted share for the third quarter of 2011 was $0.78 compared to $0.66 in the third quarter of 2010.

At June 30, 2011, the Company had cash and cash equivalents of $331.2 million and total debt of $389.3 million, resulting in net debt of $58.1 million. This compares to net debt of $119.0 million at September 30, 2010.

Jost Fischer, Chairman and CEO of Sirona commented: "I am very pleased to report another quarter of strong revenue and profit growth for the Company. The business benefited from our innovative product line, robust order levels at the International Dental Show, and Sirona's ongoing initiatives to build out its' global sales and service infrastructure. These efforts drove Sirona revenues to record levels, with particularly strong contributions from Germany and the Asia Pacific region. As a result of this solid performance, our encouraging business trends, and the ongoing momentum in international markets, we are increasing our guidance for Fiscal 2011."

Fiscal 2011 Guidance

Management now anticipates Fiscal 2011 constant currency revenue growth in the range of 15% to 17% (previously 13% to 16%), and operating income, excluding amortization estimated at $55 million, and the one-time charge of $6.6 million outlined below, to be in the range of $218 to $223 million (compared to previous guidance of $214 to $221 million).

The $6.6 million non-cash expense represents a cash payment by certain shareholders of Luxco to Jost Fischer and Simone Blank in connection with their Luxco participation. This payment will be funded entirely by certain shareholders of Luxco and no Company cash will be utilized. Pursuant to GAAP, Sirona is required to record this payment as a non-cash charge to operating expenses.

First Nine Months Fiscal 2011 vs. First Nine Months Fiscal 2010 Financial Results

Revenue was $695.1 million, an increase of $107.7 million or up 18.3% (up 17.8% constant currency) with growth rates for the Company's business segments as follows: Imaging Systems increased 21.5% (up 21.1% constant currency); CAD CAM Systems increased 19.7% (up 19.3% constant currency); Treatment Centers increased 17.2% (up 16.4% constant currency); and Instruments increased 7.6% (up 7.0% constant currency). Revenue in the United States increased 5.1%. Outside the United States, revenue increased 24.7% (up 23.9% constant currency) driven by solid performance in Europe, led by Germany, and strong growth in the Asia Pacific region.

Gross profit increased by $67.1 million to $372.9 million, up 21.9%. Gross profit margins expanded 160 basis points to 53.7 percent, the result of lower levels of amortization expense.

First nine months 2011 operating income excluding amortization expense was $177.0 million (operating income of $135.9 million plus amortization expense of $41.1 million), up 17.2% compared to $151.0 million (operating income of $104.9 million plus amortization expense of $46.2 million) in the prior year.

Source: Sirona Dental Systems, Inc.