Sirona Dental Systems, Inc. (Sirona) has reported revenues of $179.7 million for the first quarter of fiscal 2009, compared with the revenues of $200.1 million in the year-ago quarter. It also reported net income of $5.6 million, or $0.10 per share, for the first quarter of fiscal 2009, compared with the net income of $17 million, or $0.31 per share, in the year-ago quarter.
First quarter fiscal 2009 vs. first quarter fiscal 2008 financial results
Revenue was $179.7 million, down $20.4 million or 10.2% (down 4.4% on a constant currency basis), with growth rates for the company’s business segments as follows:
Imaging Systems down 5% (flat constant currency); Treatment Centers down 12% (down 4% constant currency); CAD/CAM down 13% (down 9% constant currency); and Instruments down 14% (down 6% constant currency). Revenue in the US down by 6%, driven by lower CAD/CAM Systems segment sales, as the prior year period benefited from the MC XL trade-in program. Outside the United States, revenue decreased 12% (down 4% constant currency), as revenue declines in Europe more than offset gains in other international markets.
Gross profit was $87.0 million, down $7.4 million compared to prior year. Gross profit margin was 48.4% in the first quarter of 2009, up from 47.2% in the prior year quarter. The increase in gross profit margin was due to lower levels of deal related amortization and depreciation in the first quarter of fiscal 2009.
First quarter 2009 operating income excluding amortization expense was $39.4 million (operating income of $21.8 million plus amortization expense of $17.6 million). This compares to first quarter 2008 operating income excluding amortization expense of $49.5 million (operating income of $27.2 million plus amortization expense of $22.3 million).
First quarter 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, and a loss of $0.02 resulting from the revaluation of short-term intra-group loans. The estimated effective tax rate for the quarter and fiscal 2009 is 28%.
For the first quarter of 2008, earnings per share included $0.27 of amortization and depreciation expense attributable to the write-up in value of assets due to purchase accounting, a gain of $0.046 related to the revaluation of the Patterson exclusivity fee and a $0.027 gain resulting from the revaluation of short-term intragroup loans.
At December 31, 2008, the company had cash and cash equivalents of $143.7 million and total debt of $548.5 million, resulting in net debt of $404.8 million. This compares to net debt of $403.8 million at September 30, 2008.
Chairman, president & chief executive officer, Jost Fischer commented; “Our first quarter results are inline with our expectations. Against the backdrop of a challenging economic environment, we continue to execute and are taking the necessary steps to succeed. Our CEREC AC launch is off to a great start, and represents another example of how our industry leading research and development efforts benefit the company. In addition, our expense management initiatives are underway and we will start seeing the benefit as we move forward. With our continuing investment in research and development, best-in-class product offerings, and excellent relationships with our dealer partners, we remain confident in the prospects for our business.”
Fiscal 2009 outlook
The company reaffirmed its fiscal 2009 outlook and expects both revenues on a constant currency basis, and operating income excluding amortization to be flat as compared to fiscal 2008.