- Net sales of $947 million were flat year-over-year, organic sales decreased (0.3%)
- GAAP gross margin of 52.2%, GAAP net loss of ($266) million or ($1.25) per share
- Adjusted EBITDA margin of 18.2%, adjusted EPS of $0.49
- Revised FY23 outlook: organic sales growth of ~1% (from ~3%); adjusted EPS of $1.80 to $1.85 (from $1.92 to $2.02)
- Company expects to repurchase $150 million of its common stock in Q4 2023
CHARLOTTE, N.C., Nov. 02, 2023 (GLOBE NEWSWIRE) -- DENTSPLY SIRONA Inc. (“Dentsply Sirona” or the "Company") (Nasdaq: XRAY) today announced its financial results for the third quarter of 2023.
Third quarter net sales of $947 million were flat (organic sales decreased (0.3%)) compared to the third quarter of 2022. Net loss for the third quarter of 2023 was ($266) million, or ($1.25) per share, compared to net loss of ($1,077) million, or ($5.01) per share in the third quarter of 2022. Non-cash charges for the impairment of goodwill and other intangible assets were ($302) million net of tax, or ($1.42) per share in the third quarter of 2023, and ($1,092) million net of tax, or ($5.07) per share in the third quarter of 2022. Adjusted earnings per diluted share were $0.49 compared to $0.41 in the third quarter of 2022. The improvement in adjusted EPS was primarily driven by cost reductions, leading to adjusted EBITDA margin expansion and a lower tax rate. A reconciliation of Non-GAAP measures (including organic sales, adjusted EBITDA and margin, adjusted EPS, and adjusted free cash flow conversion) to GAAP measures is provided below.
"Despite the challenging external environment which negatively impacted sales results in the quarter, we delivered over 18% adjusted EBITDA margin and 20% adjusted EPS growth. Bright spots for the quarter include 10% organic sales growth in our global aligners business, 20% growth in China, and double-digit growth in our U.S. CAD/CAM business," said Simon Campion, President and Chief Executive Officer. "We have made meaningful progress on our transformation initiatives to improve our operational execution and deliver innovative solutions to our customers. We remain confident that these efforts will position us to deliver significant value over the long-term."
Q3 23 Summary Results (GAAP)
| (in millions, except per share amount and percentages) | Q3 23 | Q3 22 | YoY | ||||||
| Net Sales | $947 | $947 | — | ||||||
| Gross Profit | $495 | $508 | (2.7%) | ||||||
| Gross Margin | 52.2% | 53.7% | |||||||
| Net Loss Attributable to Dentsply Sirona | ($266) | ($1,077) | (75.3%) | ||||||
| Diluted (Loss)/ Earnings Per Share | ($1.25) | ($5.01) | (75.0%) | ||||||
| Percentages are based on actual values and may not reconcile due to rounding. | |||||||||
Q3 23 Summary Results (Non-GAAP)[1]
| (in millions, except per share amount and percentages) | Q3 23 | Q3 22 | YoY | ||||||
| Net Sales | $947 | $947 | — | ||||||
| Organic Sales Growth % | (0.3%) | ||||||||
| Adjusted EBITDA | $170 | $167 | 3.7% | ||||||
| Adjusted EBITDA Margin | 18.2% | 17.5% | |||||||
| Adjusted EPS | $0.49 | $0.41 | 19.6% | ||||||
| [1] Organic sales growth, adjusted EBITDA, and adjusted EPS are Non-GAAP financial measures which exclude certain items. Please refer to "Non-GAAP Financial Measures" below for a description of these measures and to the tables at the end of this release for a reconciliation between GAAP and Non-GAAP measures. Percentages are based on actual values and may not reconcile due to rounding. | |||||||||
Q3 23 Segment Results
| Connected Technology Solutions | Essential Dental Solutions | Orthodontic and Implant Solutions | Wellspect Healthcare | Total | |||||||
| Net Sales Growth % | (3.8 | %) | (0.3 | %) | 2.2 | % | 9.9 | % | — | ||
| Organic Sales Growth % | (4.6 | %) | (0.9 | %) | 3.7 | % | 6.8 | % | (0.3 | %) | |
Q3 23 Geographic Results
| United States | Europe | Rest of World | Total | ||||||
| Net Sales Growth % | (0.2 | %) | (1.1 | %) | 2.0 | % | — | ||
| Organic Sales Growth % | (0.9 | %) | (2.8 | %) | 4.5 | % | (0.3 | %) | |
Cash Flow and Liquidity
Operating cash flow in the third quarter of 2023 was $134 million, compared to $109 million in the prior year, primarily as a result of improved profitability and working capital, including the impact of a lower build of inventory, and the timing of accounts receivable and accounts payable. In the third quarter of 2023, the Company paid $29 million in dividends resulting in a total of $236 million returned to shareholders through dividends and share repurchases in the first nine months of 2023. The Company had $309 million of cash and cash equivalents as of September 30, 2023.
Goodwill Impairment
In the third quarter of 2023, the Company recorded a non-cash charge for the impairment of goodwill and other intangible assets of ($302) million net of tax, primarily within the Connected Technology Solutions segment. The decline in fair value for this reporting unit was driven by adverse macroeconomic factors as a result of weakened demand particularly in European markets, and increased discount rates.
2023 Outlook
Based on the results of the third quarter and recent developments in the macroeconomic environment, the Company is revising its 2023 outlook. The revised outlook includes anticipated organic sales growth of approximately 1%, with net sales in the range of $3.90 billion to $3.94 billion. Adjusted EPS is expected to be in the range of $1.80 to $1.85.
Other 2023 outlook assumptions are included in the third quarter 2023 earnings presentation posted on the Investors section of the Dentsply Sirona website at https://investor.dentsplysirona.com. The Company does not provide forward-looking estimates on a GAAP basis as certain information is not available without unreasonable effort and cannot be reasonably estimated.
Conference Call/Webcast Information
Dentsply Sirona’s management team will host an investor conference call and live webcast on November 2, 2023, at 8:30 am ET. A live webcast of the investor conference call and a presentation related to the call will be available on the Investors section of the Company’s website at https://investor.dentsplysirona.com.
For those planning to participate on the call, please register at https://register.vevent.com/register/BIa301207860894df0b505ba3db530d61d. A webcast replay of the conference call will be available on the Investors section of the Company’s website following the call.
About Dentsply Sirona
Dentsply Sirona is the world’s largest manufacturer of professional dental products and technologies, with over a century of innovation and service to the dental industry and patients worldwide. Dentsply Sirona develops, manufactures, and markets a comprehensive solutions offering including dental and oral health products as well as other consumable medical devices under a strong portfolio of world class brands. Dentsply Sirona’s products provide innovative, high-quality and effective solutions to advance patient care and deliver better and safer dental care. Dentsply Sirona’s headquarters is located in Charlotte, North Carolina. The Company’s shares are listed in the United States on Nasdaq under the symbol XRAY. Visit www.dentsplysirona.com for more information about Dentsply Sirona and its products.
Contact Information:
Investors:
Andrea Daley
Vice President, Investor Relations
+1-704-805-1293
InvestorRelations@dentsplysirona.com
Press:
Marion Par-Weixlberger
Vice President, Public Relations & Corporate Communications
+43 676 848414588
marion.par-weixlberger@dentsplysirona.com
Forward-Looking Statements and Associated Risks
This Press Release contains statements that do not directly and exclusively relate to historical facts which constitute forward-looking statements, including, statements and projections concerning, among other things, the expected timing, benefits and costs associated with the Company’s restructuring plan described in this Press Release. The Company’s forward-looking statements represent current expectations and beliefs and involve risks and uncertainties. Actual results may differ significantly from those projected or suggested in any forward-looking statements and no assurance can be given that the results described in such forward-looking statements will be achieved. Investors are cautioned not to place undue reliance on such forward-looking statements which speak only as of the date they are made. The forward-looking statements are subject to numerous assumptions, risks and uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of our control. The Company does not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Any number of factors could cause the Company’s actual results to differ materially from those contemplated by any forward-looking statements, including, but not limited to, the risks associated with the following: the Company’s ability to remain profitable in a very competitive marketplace, which depends upon the Company’s ability to differentiate its products and services from those of competitors; the Company’s failure to realize assumptions and projections which may result in the need to record additional impairment charges; the effect of changes to the Company’s distribution channels for its products and the failure of significant distributors of the Company to effectively manage their inventories; the Company’s ability to control costs and failure to realize expected benefits of cost reduction and restructuring efforts and the Company’s failure to anticipate and appropriately adapt to changes or trends within the rapidly changing dental industry. Investors should carefully consider these and other relevant factors, including those risk factors in Part I, Item 1A, (“Risk Factors”) in the Company’s most recent Form 10-K, including any amendments thereto, and any updating information which may be contained in the Company’s other filings with the SEC, when reviewing any forward-looking statement. The Company notes these factors for investors as permitted under the Private Securities Litigation Reform Act of 1995. Investors should understand it is impossible to predict or identify all such factors or risks. As such, you should not consider either the foregoing lists, or the risks identified in the Company’s SEC filings, to be a complete discussion of all potential risks or uncertainties.
DENTSPLY SIRONA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| Net sales | $ | 947 | $ | 947 | $ | 2,953 | $ | 2,939 | ||||||
| Cost of products sold | 452 | 439 | 1,389 | 1,329 | ||||||||||
| Gross profit | 495 | 508 | 1,564 | 1,610 | ||||||||||
| Selling, general, and administrative expenses | 372 | 401 | 1,204 | 1,187 | ||||||||||
| Research and development expenses | 46 | 41 | 141 | 131 | ||||||||||
| Goodwill and intangible asset impairments | 307 | 1,281 | 307 | 1,281 | ||||||||||
| Restructuring and other costs | 6 | 3 | 70 | 13 | ||||||||||
| Operating loss | (236 | ) | (1,218 | ) | (158 | ) | (1,002 | ) | ||||||
| Other income and expenses: | ||||||||||||||
| Interest expense, net | 18 | 14 | 58 | 41 | ||||||||||
| Other (income) expense, net | (4 | ) | 9 | 16 | 20 | |||||||||
| Loss before income taxes | (250 | ) | (1,241 | ) | (232 | ) | (1,063 | ) | ||||||
| Provision (benefit) for income taxes | 16 | (164 | ) | (28 | ) | (128 | ) | |||||||
| Net loss | (266 | ) | (1,077 | ) | (204 | ) | (935 | ) | ||||||
| Less: Net loss attributable to noncontrolling interest | — | — | (5 | ) | — | |||||||||
| Net loss attributable to Dentsply Sirona | $ | (266 | ) | $ | (1,077 | ) | $ | (199 | ) | $ | (935 | ) | ||
| Net loss per common share attributable to Dentsply Sirona: | ||||||||||||||
| Basic | $ | (1.25 | ) | $ | (5.01 | ) | $ | (0.94 | ) | $ | (4.34 | ) | ||
| Diluted | $ | (1.25 | ) | $ | (5.01 | ) | $ | (0.94 | ) | $ | (4.34 | ) | ||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | 211.8 | 214.9 | 212.7 | 215.6 | ||||||||||
| Diluted | 211.8 | 214.9 | 212.7 | 215.6 | ||||||||||
DENTSPLY SIRONA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
| September 30, 2023 | December 31, 2022 | ||||
| Assets | |||||
| Current Assets: | |||||
| Cash and cash equivalents | $ | 309 | $ | 365 | |
| Accounts and notes receivables-trade, net | 649 | 632 | |||
| Inventories, net | 651 | 627 | |||
| Prepaid expenses and other current assets | 304 | 269 | |||
| Total Current Assets | 1,913 | 1,893 | |||
| Property, plant, and equipment, net | 753 | 761 | |||
| Operating lease right-of-use assets, net | 182 | 200 | |||
| Identifiable intangible assets, net | 1,711 | 1,903 | |||
| Goodwill | 2,374 | 2,688 | |||
| Other noncurrent assets | 268 | 198 | |||
| Total Assets | $ | 7,201 | $ | 7,643 | |
| Liabilities and Equity | |||||
| Current Liabilities: | |||||
| Accounts payable | $ | 262 | $ | 279 | |
| Accrued liabilities | 732 | 727 | |||
| Income taxes payable | 37 | 46 | |||
| Notes payable and current portion of long-term debt | 187 | 118 | |||
| Total Current Liabilities | 1,218 | 1,170 | |||
| Long-term debt | 1,803 | 1,826 | |||
| Operating lease liabilities | 133 | 149 | |||
| Deferred income taxes | 249 | 287 | |||
| Other noncurrent liabilities | 427 | 399 | |||
| Total Liabilities | 3,830 | 3,831 | |||
| Total Equity | 3,371 | 3,812 | |||
| Total Liabilities and Equity | $ | 7,201 | $ | 7,643 | |
DENTSPLY SIRONA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
| Nine Months Ended September 30, | |||||||
| 2023 | 2022 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (204 | ) | $ | (935 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
| Depreciation | 99 | 90 | |||||
| Amortization of intangible assets | 159 | 159 | |||||
| Goodwill impairment | 291 | 1,187 | |||||
| Indefinite-lived intangible asset impairment | 16 | 94 | |||||
| Deferred income taxes | (107 | ) | (220 | ) | |||
| Stock based compensation expense | 33 | 47 | |||||
| Restructuring and other costs | 39 | (5 | ) | ||||
| Other non-cash expense | 29 | 38 | |||||
| Changes in operating assets and liabilities, net of acquisitions: | |||||||
| Accounts and notes receivable-trade, net | (31 | ) | 43 | ||||
| Inventories, net | (45 | ) | (140 | ) | |||
| Prepaid expenses and other current assets | (52 | ) | (46 | ) | |||
| Other noncurrent assets | (4 | ) | (13 | ) | |||
| Accounts payable | (10 | ) | 40 | ||||
| Accrued liabilities | (23 | ) | 3 | ||||
| Income taxes | (6 | ) | 41 | ||||
| Other noncurrent liabilities | 33 | (8 | ) | ||||
| Net cash provided by operating activities | 217 | 375 | |||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (109 | ) | (117 | ) | |||
| Cash received on derivative contracts | 39 | 10 | |||||
| Other investing activities | 1 | (2 | ) | ||||
| Net cash used in investing activities | (69 | ) | (109 | ) | |||
| Cash flows from financing activities: | |||||||
| Cash paid for treasury stock | (150 | ) | (150 | ) | |||
| Proceeds on short-term borrowings | 68 | 64 | |||||
| Cash dividends paid | (86 | ) | (78 | ) | |||
| Proceeds from long-term borrowings, net of deferred financing costs | 2 | 7 | |||||
| Repayments on long-term borrowings | (6 | ) | (2 | ) | |||
| Proceeds from exercised stock options | — | 6 | |||||
| Other financing activities, net | (7 | ) | (15 | ) | |||
| Net cash used in financing activities | (179 | ) | (168 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | (25 | ) | (19 | ) | |||
| Net (decrease) increase in cash and cash equivalents | (56 | ) | 79 | ||||
| Cash and cash equivalents at beginning of period | 365 | 339 | |||||
| Cash and cash equivalents at end of period | $ | 309 | $ | 418 | |||
Non-GAAP Financial Measures
In addition to results determined in accordance with U.S. generally accepted accounting principles (“US GAAP”) the Company provides certain measures in this press release, described below, which are not calculated in accordance with US GAAP and therefore represent Non-GAAP measures. These Non-GAAP measures may differ from those used by other companies and should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with US GAAP. These Non-GAAP measures are used by the Company to measure its performance and may differ from those used by other companies.
Management believes that these Non-GAAP measures are helpful as they provide a measure of the results of operations, and are frequently used by investors and analysts to evaluate the Company’s performance exclusive of certain items that impact the comparability of results from period to period, and which may not be indicative of past or future performance of the Company.
Organic Sales
The Company defines "organic sales" as the reported net sales adjusted for: (1) net sales from acquired businesses recorded prior to the first anniversary of the acquisition; (2) net sales attributable to disposed businesses or discontinued product lines in both the current and prior year periods; and (3) the impact of foreign currency changes, which is calculated by translating current period net sales using the comparable prior period's foreign currency exchange rates.
Adjusted Operating Income and Margin
Adjusted operating income is computed by excluding the following items from operating income (loss) as reported in accordance with US GAAP:
(1) Business combination related costs and fair value adjustments. These adjustments include costs related to consummating and integrating acquired businesses, as well as net gains and losses related to the disposed businesses. In addition, this category includes the post-acquisition roll-off of fair value adjustments recorded related to business combinations, except for amortization expense of purchased intangible assets noted below. Although the Company is regularly engaged in activities to find and act on opportunities for strategic growth and enhancement of product offerings, the costs associated with these activities may vary significantly between periods based on the timing, size and complexity of acquisitions and as such may not be indicative of past and future performance of the Company.
(2) Restructuring related charges and other costs. These adjustments include costs related to the implementation of restructuring initiatives, including but not limited to, severance costs, facility closure costs, and lease and contract termination costs, as well as related professional service costs associated with these restructuring initiatives and global transformation activity. The Company is continually seeking to take actions that could enhance its efficiency; consequently, restructuring charges may recur but are subject to significant fluctuations from period to period due to the varying levels of restructuring activity, and as such may not be indicative of past and future performance of the Company. Other costs include charges related to legal settlements, executive separation costs, write-offs of inventory as a result of product rationalization, and changes in accounting principles recorded within the period. This category also includes costs related to the recent investigations, related ongoing legal matters and associated remediation activities which primarily include legal, accounting and other professional service fees, as well as turnover and other employee-related costs.
(3) Goodwill and intangible asset impairments. These adjustments include charges related to goodwill and intangible asset impairments.
(4) Amortization of purchased intangible assets. This adjustment excludes the periodic amortization expense related to purchased intangible assets, which are recorded at fair value. Although these costs contribute to revenue generation and will recur in future periods, their amounts are significantly impacted by the timing and size of acquisitions, and as such may not be indicative of the future performance of the Company.
(5) Fair value and credit risk adjustments. These adjustments include the non-cash mark-to-market changes in fair value associated with pension assets and obligations, and equity-method investments. Although these adjustments are recurring in nature, they are subject to significant fluctuations from period to period due to changes in the underlying assumptions and market conditions. The non-service component of pension expense is a recurring item, however it is subject to significant fluctuations from period to period due to changes in actuarial assumptions, interest rates, plan changes, settlements, curtailments, and other changes in facts and circumstances. As such, these items may not be indicative of past and future performance of the Company.
Adjusted operating income margin is calculated by dividing adjusted gross profit by net sales.
Adjusted Gross Profit
Adjusted gross profit is computed by excluding from gross profit the impact any of the above adjustments that affect either sales or cost of sales.
Adjusted Net Income (Loss)
Adjusted net income (loss) consists of net income (loss) as reported in accordance with US GAAP, adjusted to exclude the items identified above, as well as the related income tax impacts of those items. Additionally, net income is adjusted for other tax-related adjustments such as: discrete adjustments to valuation allowances and other uncertain tax positions, final settlement of income tax audits, discrete tax items resulting from the implementation of restructuring initiatives and the windfall or shortfall relating to exercise of employee share-based compensation, any difference between the interim and annual effective tax rate, and adjustments relating to prior periods.
These adjustments are irregular in timing, and the variability in amounts may not be indicative of past and future performance of the Company and therefore are excluded for comparability purposes.
Adjusted EBITDA and Margin
In addition to the adjustments described above in arriving at adjusted net income, adjusted EBITDA is computed by further excluding any remaining interest expense, net, income tax expense, depreciation and amortization.
Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by net sales.
Adjusted Earnings (Loss) Per Diluted Share
Adjusted earnings (loss) (EPS) per diluted share is computed by dividing adjusted earnings (loss) attributable to Dentsply Sirona shareholders by the diluted weighted average number of common shares outstanding.
Adjusted Free Cash Flow and Conversion
The Company defines adjusted free cash flow as net cash provided by operating activities minus capital expenditures during the same period, and adjusted free cash flow conversion is defined as adjusted free cash flow divided by adjusted net income (loss). Management believes this Non-GAAP measure is important for use in evaluating the Company’s financial performance as it measures our ability to efficiently generate cash from our business operations relative to earnings. It should be considered in addition to, rather than as a substitute for, net income (loss) as a measure of our performance or net cash provided by operating activities as a measure of our liquidity.
| DENTSPLY SIRONA INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||
| (In millions, except percentages) | |||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||
| A reconciliation of reported net sales to organic sales by geographic region is as follows: | |||||||||||||||||||||||||||
| Three Months Ended September 30, 2023 | Q3 2023 Change | Three Months Ended September 30, 2022 | |||||||||||||||||||||||||
| (in millions, except percentages) | U.S. | Europe | ROW | Total | U.S. | Europe | ROW | Total | U.S. | Europe | ROW | Total | |||||||||||||||
| Net sales | $ | 356 | $ | 354 | $ | 237 | $ | 947 | (0.2 | %) | (1.1 | %) | 2.0 | % | — | $ | 357 | $ | 358 | $ | 232 | $ | 947 | ||||
| Foreign exchange impact | 0.7 | % | 1.7 | % | (2.5 | %) | 0.3 | % | |||||||||||||||||||
| Organic sales | (0.9 | %) | (2.8 | %) | 4.5 | % | (0.3 | %) | |||||||||||||||||||
| Percentages are based on actual values and may not reconcile due to rounding. | |||||||||||||||||||||||||||
A reconciliation of reported net sales to organic sales by segment is as follows:
| Three Months Ended September 30, 2023 | Q3 2023 Change | Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||
| (in millions, except percentages) | Connected Technology Solutions | Essential Dental Solutions | Orthodontic and Implant Solutions | Wellspect Healthcare | Total | Connected Technology Solutions | Essential Dental Solutions | Orthodontic and Implant Solutions | Wellspect Healthcare | Total | Connected Technology Solutions | Essential Dental Solutions | Orthodontic and Implant Solutions | Wellspect Healthcare | Total | ||||||||||||||||||
| Net sales | $ | 276 | $ | 347 | $ | 252 | $ | 72 | $ | 947 | (3.8 | %) | (0.3 | %) | 2.2 | % | 9.9 | % | — | $ | 286 | $ | 348 | $ | 247 | $ | 66 | $ | 947 | ||||
| Foreign exchange impact | 0.8 | % | 0.6 | % | (1.5 | %) | 3.1 | % | 0.3 | % | |||||||||||||||||||||||
| Organic sales | (4.6 | %) | (0.9 | %) | 3.7 | % | 6.8 | % | (0.3 | %) | |||||||||||||||||||||||
| Percentages are based on actual values and may not reconcile due to rounding. | |||||||||||||||||||||||||||||||||
| DENTSPLY SIRONA INC. AND SUBSIDIARIES | |||||||||||||||
| (In millions, except percentages) | |||||||||||||||
| (unaudited) | |||||||||||||||
| For the three months ended September 30, 2023, a reconciliation of selected items as reported in the Condensed Consolidated Statements of Operations to adjusted Non-GAAP items is as follows: | |||||||||||||||
| (in millions, except percentages and per share data) | Gross Profit | Operating (Loss) Income | Net (Loss) Income Attributable to Dentsply Sirona (a) | Diluted EPS | |||||||||||
| GAAP | $ | 495 | $ | (236 | ) | $ | (266 | ) | $ | (1.25 | ) | ||||
| Non-GAAP Adjustments: | |||||||||||||||
| Amortization of Purchased Intangible Assets | 30 | 53 | 40 | 0.19 | |||||||||||
| Restructuring Related Charges and Other Costs | 6 | 8 | 6 | 0.03 | |||||||||||
| Goodwill and Intangible Asset Impairments | — | 307 | 302 | 1.42 | |||||||||||
| Business Combination Related Costs and Fair Value Adjustments | — | 3 | 2 | 0.01 | |||||||||||
| Income Tax Related Adjustments | — | — | 20 | 0.09 | |||||||||||
| Adjusted Non-GAAP | $ | 531 | $ | 135 | $ | 104 | $ | 0.49 | |||||||
| GAAP Margin | (24.9 | %) | |||||||||||||
| Adjusted Non-GAAP Margin | 14.2 | % | |||||||||||||
| Weighted average common shares outstanding used in calculating diluted GAAP net loss per common share | 211.8 | ||||||||||||||
| Weighted average common shares outstanding used in calculating diluted Non-GAAP net income per common share | 213.0 | ||||||||||||||
| (a) The total tax expense associated with the Non-GAAP adjustments above was $1 million | |||||||||||||||
| Percentages are based on actual values and may not reconcile due to rounding. | |||||||||||||||
| DENTSPLY SIRONA INC. AND SUBSIDIARIES | |||||||||||||||
| (In millions, except percentages) | |||||||||||||||
| (unaudited) | |||||||||||||||
| For the three months ended September 30, 2022, a reconciliation of selected items as reported in the Condensed Consolidated Statements of Operations to adjusted Non-GAAP items is as follows: | |||||||||||||||
| (in millions, except percentages and per share data) | Gross Profit | Operating (Loss) Income | Net (Loss) Income Attributable to Dentsply Sirona (a) | Diluted EPS | |||||||||||
| GAAP | $ | 508 | $ | (1,218 | ) | $ | (1,077 | ) | $ | (5.01 | ) | ||||
| Non-GAAP Adjustments: | |||||||||||||||
| Amortization of Purchased Intangible Assets | 30 | 51 | 38 | 0.17 | |||||||||||
| Restructuring Related Charges and Other Costs | — | 23 | 18 | 0.08 | |||||||||||
| Goodwill and Intangible Asset Impairments | — | 1,281 | 1,091 | 5.08 | |||||||||||
| Business Combination Related Costs and Fair Value Adjustments | 1 | 2 | 2 | 0.01 | |||||||||||
| Fair Value and Credit Risk Adjustments | — | — | 4 | 0.02 | |||||||||||
| Income Tax Related Adjustments | — | — | 12 | 0.06 | |||||||||||
| Adjusted Non-GAAP | $ | 539 | $ | 139 | $ | 88 | $ | 0.41 | |||||||
| GAAP Margin | (128.5 | %) | |||||||||||||
| Adjusted Non-GAAP Margin | 14.7 | % | |||||||||||||
| Weighted average common shares outstanding used in calculating diluted GAAP net loss per common share | 214.9 | ||||||||||||||
| Weighted average common shares outstanding used in calculating diluted Non-GAAP net income per common share | 215.2 | ||||||||||||||
| (a) The total tax expense associated with the Non-GAAP adjustments above was $198 million | |||||||||||||||
| Percentages are based on actual values and may not reconcile due to rounding. | |||||||||||||||
| DENTSPLY SIRONA INC. AND SUBSIDIARIES (In millions, except percentages) (unaudited) | ||||||||
| A reconciliation of reported net income (loss) attributable to Dentsply Sirona to adjusted EBITDA and margin for the three months ended September 30, 2023 and 2022 is as follows: | ||||||||
| Three Months Ended September 30, | ||||||||
| (in millions, except percentages) | 2023 | 2022 | ||||||
| Net loss attributable to Dentsply Sirona | $ | (266 | ) | $ | (1,077 | ) | ||
| Interest expense, net | 18 | 14 | ||||||
| Income tax expense | 16 | (164 | ) | |||||
| Depreciation(1) | 31 | 31 | ||||||
| Amortization of purchased intangible assets | 53 | 51 | ||||||
| Restructuring related charges and other costs | 315 | 1,304 | ||||||
| Business combination related costs and fair value adjustments | 3 | 2 | ||||||
| Fair value and credit risk adjustments | — | 6 | ||||||
| Adjusted EBITDA | $ | 170 | $ | 167 | ||||
| Net sales | $ | 947 | $ | 947 | ||||
| Adjusted EBITDA margin | 18.2 | % | 17.5 | % | ||||
| (1) Excludes those depreciation related amounts which were included as part of the business combination related adjustments above. | ||||||||
A reconciliation of adjusted free cash flow conversion for the three months ended September 30, 2023 and 2022 is as follows:
| Three Months Ended September 30, | ||||||||
| (in millions, except percentages) | 2023 | 2022 | ||||||
| Net cash provided by operating activities | $ | 134 | $ | 109 | ||||
| Capital expenditures | (37 | ) | (32 | ) | ||||
| Adjusted free cash flow | $ | 97 | $ | 77 | ||||
| Adjusted net income | $ | 104 | $ | 88 | ||||
| Adjusted free cash flow conversion | 93 | % | 88 | % | ||||
