Sirona first quarter revenue increases 9.7% to $235.6 million

Feb 4 2011

Sirona (Nasdaq: SIRO), the dental technology leader, today announced its financial results for the quarter ended December 31, 2010.

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

Revenue was $235.6 million, an increase of $20.8 million or up 9.7% (up 15.8% on a constant currency basis), with growth rates for the Company's business segments as follows: Treatment Centers increased 13.5% (up 23.0% on a constant currency basis); CAD CAM increased 12.9% (up 18.5% constant currency); Imaging Systems increased 7.4% (up 11.2% constant currency); and Instruments increased 0.1% (up 8.4% constant currency). Revenue in the United States increased 0.9%, while revenues outside the United States increased 13.8% (up 23.3% constant currency), with strong growth in Germany, other European markets and solid performance in Asia Pacific.

Gross profit was $130.4 million, up $18.0 million. Gross profit margin was 55.3% in the first quarter of Fiscal 2011, compared to 52.3% in the prior year. The gross profit margin expansion was driven by strong revenue growth and lower levels of amortization expense.

First quarter 2011 operating income excluding amortization expense was $69.5 million (operating income of $56.0 million plus amortization expense of $13.5 million), compared to $59.6 million (operating income of $43.5 million plus amortization expense of $16.2 million) in the first quarter of 2010.

Net income attributable to Sirona shareholders for the first quarter of 2011 was $42.4 million, or $0.75 per diluted share, versus $31.2 million, or $0.55 per diluted share in the prior year period. Non-GAAP earnings per diluted share for the first quarter of 2011 was $0.96, up 18.5% as compared to $0.81 in the first quarter of 2010.

At December 31, 2010, the Company had cash and cash equivalents of $265.3 million and total debt of $367.8 million, resulting in net debt of $102.5 million. This compares to net debt of $119.0 million at September 30, 2010.

Jost Fischer, Chairman and CEO of Sirona commented: "We are delighted with our strong performance in the first quarter of fiscal 2011. We saw strength across all of our lines of business, with record revenues and gross profits in each of our four segments. The Company benefited from robust sales in international markets with strong performance in Germany, other European markets and solid growth in Asia Pacific. Our strategy to develop best-in-class technology and provide practitioners innovative solutions to improve their workflow and increase their profitability is enabling Sirona to win share in the marketplace. We are pleased that our positive first quarter momentum has continued into the second quarter. As a result of our encouraging business trends, we are increasing our guidance for fiscal 2011."

Fiscal 2011 Guidance

Management now anticipates constant currency revenue growth in the range of 9% to 12% (previously 7% to 9%), and operating income (excluding amortization estimated at $54 million for fiscal 2011) to be in the range of $208 to $216 million (compared to previous guidance of $200 to $208 million).