Sirona Reports Fiscal 2013 Second Quarter Results

Sirona Reports Fiscal 2013 Second Quarter Results

• Second quarter revenues of $267.3 million, up 15.3% compared to prior year, or up 14.7% constant currency*.

• Second quarter diluted earnings per share of $0.56 on a GAAP reported basis compared to $0.54 in the prior year. Second quarter non-GAAP adjusted EPS* of $0.75, up 11.3% compared to $0.67 in the prior year.

• Management now anticipates FY13 constant currency revenue growth at 10% to 12% (previously 9% to 11%), and non-GAAP adjusted EPS* in the range of $3.36 to $3.43 (reflecting growth of approximately 11% to 13%, compared to previous guidance of $3.33 to $3.43).

LONG ISLAND CITY, N.Y.--(BUSINESS WIRE)-- Sirona (NAS: SIRO) , the dental technology leader, today announced its financial results for the quarter ended March 31, 2013.

Second Quarter Fiscal 2013 vs. Second Quarter Fiscal 2012 Financial Results

Revenue was $267.3 million, an increase of $35.5 million or up 15.3% (and up 14.7% on a constant currency basis). The Company's business segments performed as follows: CAD/CAM Systems increased 21.1% (up 20.6% on a constant currency basis), Treatment Centers increased 17.6% (up 16.7% on a constant currency basis), Imaging Systems increased 11.8% (up 11.3% on a constant currency basis), and Instruments increased 2.9% (up 2.2% on a constant currency basis).

Revenue in the United States increased 12.1%, and revenues outside the United States increased 16.5% (up 15.7% constant currency). U.S. revenues benefited from strong demand for our Imaging and CAD/CAM products and the expanded agreement with Patterson. International sales were led by Germany and our non-European markets and were particularly strong in the CAD/CAM and Treatment Center segments.

Gross profit was $144.7 million, up $20.1 million. Gross profit margin was 54.1% in the second quarter of Fiscal 2013, compared to 53.8% in the prior year. Gross profit margin as a percent of sales was positively impacted by lower deal related amortization which more than offset margin compression mainly due to product mix.

Net income for the second quarter of 2013 was $31.7 million, or $0.56 per diluted share, versus $30.5 million, or $0.54 per diluted share in the prior year period. Non-GAAP adjusted earnings per diluted share for the second quarter of 2013 was $0.75 compared to $0.67 in the prior year quarter or an increase of 11.3%. A reconciliation of the non-GAAP measure to earnings per share calculated on a GAAP basis is provided in the attached table.

At March 31, 2013, the Company had cash and cash equivalents of $156.1 million and total debt of $75.3 million, resulting in net cash of $80.7 million. This compares to net cash of $75.6 million at September 30, 2012.

Jeffrey Slovin, President and CEO of Sirona commented: "Sirona's strong second quarter reflects our continued momentum in the marketplace. We posted record quarters in both CAD/CAM and Treatment Centers, up 20.6% and 16.7% respectively, on a constant currency basis. Importantly, our double digit growth was broad based, with the U.S. up 12.1%, and International markets up 15.7%, constant currency, led by Germany and non-European markets."

Mr. Slovin continued: "Sirona once again demonstrated its market leadership at this year's International Dental Show. We launched a record number of new products that improve the patient experience and dental practice. We launched "CAD/CAM for Everyone," a significant expansion of our CAD/CAM product line to meet the diverse needs of our dentists and labs. With our current innovative product portfolio and our exceptional sales and service infrastructure, we are confident that Sirona is well positioned for future growth."

Fiscal 2013 Guidance

Management now anticipates FY13 constant currency revenue growth at 10% to 12% (previously 9% to 11%), and non-GAAP adjusted EPS* in the range of $3.36 to $3.43 (reflecting growth of approximately 11% to 13%, compared to previous guidance of $3.33 to $3.43).

First Six Months Fiscal 2013 vs. First Six Months Fiscal 2012 Financial Results

Revenue was $539.7 million, an increase of $49.8 million or up 10.2% (up 11.4% on a constant currency basis). The Company's business segments performed as follows: CAD/CAM Systems increased 17.3% (up 18.5% on a constant currency basis), Treatment Centers increased 10.6% (up 12.4% on a constant currency basis), Imaging Systems increased 6.7% (up 7.7% on a constant currency basis), and Instruments decreased 1.7% (down 0.1% on a constant currency basis).

Revenue in the United States increased 21.0%, and revenues outside the United States increased 6.1% (up 7.8% constant currency), with particularly strong performance in the CAD/CAM and Treatment Center segments.

Gross profit was $296.6 million, up $33.1 million. Gross profit margin was 54.9% in the first half of Fiscal 2013, compared to 53.8% in the prior year. Gross profit margin as a percentage of sales was positively impacted by lower levels of deal related amortization.

Net income for the six months ended March 31, 2013 was $70.0 million, or $1.24 per diluted share, versus $68.8 million, or $1.21 per diluted share in the prior year period. Non-GAAP adjusted earnings per diluted share was $1.69 in the first half of Fiscal 2013 compared to $1.54 in the first half of Fiscal 2012 or an increase of 9.6%.

Conference Call/Webcast Information

Sirona will hold a conference call to discuss its financial results at 8:30 a.m. Eastern Time on May 10, 2013. The teleconference can be accessed by calling +1 866.318.8620 (domestic) or +1 617.399.5139 (international) using passcode # 33101324. The webcast will be available via the Internet at http://ir.sirona.com and a presentation relating to the call will be available on our website. A replay of the conference call will be available through May 17, 2013 by calling +1 888 286 8010 (domestic) or +1 617 801 6888 (international) using passcode #64526160. A web archive will be available for 30 days at www.sirona.com.

About Sirona Dental Systems, Inc.

Sirona, the dental technology leader, has served dealers and dentists worldwide for more than 130 years. Sirona develops, manufactures, and markets a complete line of dental products, including CAD/CAM restoration systems (CEREC), digital intra-oral, panoramic and 3D imaging systems, dental treatment centers and handpieces. Visit http://www.sirona.com for more information about Sirona and its products.

This press release contains forward-looking information about Sirona Dental Systems, Inc.'s financial results, guidance and estimates, business prospects, and products and services that involve substantial risks and uncertainties or other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You can identify these statements by the use of words such as "may," "could," "estimate," "will," "believe," "anticipate," "think," "intend," "expect," "project," "plan," "target," "forecast", and similar words and expressions which identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not guarantees of future performance and involve known and unknown risks and uncertainties, and other factors. Readers are cautioned not to place undue reliance on such statements, which speak only as of the date hereof. For a discussion of such risks, uncertainties and other matters that could cause actual results to differ materially, including risks relating to, among other factors, the market for dental product and services, pricing, future sales volume of the Company's products, the possibility of changing economic, market and competitive conditions, dependence on products, dependence on key personnel, technological developments, intense competition, market uncertainties, dependence on distributors, ability to manage growth, dependence on key suppliers, dependence on key members of management, government regulation, acquisitions and affiliations and currency exchange rate fluctuations, readers are urged to carefully review and consider various disclosures made by the Company in its Annual Report on Form 10-K and in its reports on Forms 10-Q and 8-K filed with the U.S. Securities and Exchange Commission, which can be accessed through the SEC's website,www.sec.gov. This presentation contains non GAAP financial measures, which should not be viewed in isolation and do not purport to be an alternative to net income (loss) as an indicator of operating performance or an alternative to cash flows from operating activities as a measure of liquidity. The Company assumes no obligation to and expressly disclaims any obligation to update or revise any forward-looking statements contained in this document to reflect new information or future events or developments after the date any such statement is made.

* Non-GAAP adjusted EPS and constant currency growth and results are non-GAAP financial measures that exclude certain items. Please refer to "Reconciliation of GAAP and non-GAAP Information (unaudited)" in the attached exhibits for a description of these items.