DENTSPLY International Inc. (DENTSPLY) has reported net sales of $2,193.7 million for the full year of 2008, up 9.1%, compared with the net sales of $2,009.8 in the previous year-end. It has also reported net income of $283.9 million, or $1.87 per diluted share, for the full year of 2008, compared with the net income of $259.7 million or $1.68 per diluted share, in the previous year-end.
The increase in sales for the year primarily resulted from strong growth in the specialty product areas of endodontics, implants and orthodontics. Acquisitions and favorable foreign exchange impacts also benefited sales growth for the full year.
Net income for the full-year of 2008 included charges, net of tax, for restructuring and other related items of $19.8 million, or ($0.13) per diluted share. Net Income also included a net reduction to income tax expense of $17.1 million, $0.11 per diluted share, related to the resolution of certain tax matters and a $1.1 million or $0.01 per diluted share, interest benefit, net of tax from the adoption of Statement of Financial Accounting No. 157 (SFAS 157). The net income in 2007 included charges, net of tax, for restructuring and other related items of $6.7 million, ($0.04) per diluted share, and a net reduction of income tax expense of $9.9 million, $0.06 per diluted share, related to the resolution of certain tax matters.
For comparability analysis, net income, excluding restructuring and other related items, tax adjustments and the benefits of the adoption of SFAS 157 for the years ending 2008 and 2007 (a non-GAAP measure), was $285.5 million or $1.88 per diluted share for 2008, compared to $256.4 million or $1.66 per diluted share in 2007, an increase of 13.3% in diluted earnings per share.
Three months ended December 31, 2008
Net sales in the fourth quarter of 2008 decreased 6.2% to $508.1 million compared to $541.5 million reported in the fourth quarter of 2007. Net sales, excluding precious metal content, decreased 4.5% in the fourth quarter of 2008. The lower sales levels were impacted by the significant strengthening of the U.S. dollar during the quarter, which reduced sales by 4.5%, as well as slowing of dental demand in certain regions as underlying economic activity declined. Sales of specialty products in the aggregate continued to experience positive growth in the quarter, however slowed from double-digit sales growth earlier in the year.
Net income for the fourth quarter of 2008 was $71.0 million, or $0.47 per diluted share, compared to net income of $70.0 million, or $0.45 per diluted share, in the fourth quarter of 2007. Net income in the fourth quarter of 2008 includes charges, net of tax, for restructuring and other related items of $7.3 million, or ($0.05) per diluted share. The fourth quarter of 2008 also includes a net reduction to income tax expense of $10.5 million, $0.07 per diluted share, from the resolution of certain tax matters. The fourth quarter of 2007 included charges, net of tax, for restructuring and other related items of $1.0 million, ($0.01) per diluted share, and a net reduction of income tax expense of $2.5 million, $0.02 per diluted share, related to the resolution of certain tax matters.
On an adjusted basis, earnings, excluding restructuring and other related items and tax adjustments, which constitutes a non-GAAP measure, were $67.8 million or $0.45 per diluted share in the fourth quarter of 2008, compared to $68.5 million or $0.44 per diluted share in the fourth quarter of 2007, an increase of 2.3% in earnings per diluted share.
2008 Results & 2009 Outlook Bret Wise, chairman and chief executive officer, commented, “We are pleased to have delivered strong growth in both sales and earnings in 2008, despite the challenges presented by the world economy in the fourth quarter. DENTSPLY is well positioned, with continued strong cash flows and a favorable liquidity position, to prosper throughout economic cycles. We continue to focus on investing in growth opportunities in the global dental market while managing our cost structure to ensure flexibility in our operating model as we move into 2009. As a result, we expect that earnings per diluted share will range from $1.85 to $1.95 for the full year 2009.”
Guidance for 2009 excludes restructuring and other costs, the reversal of the inventory step-up from our recent acquisitions and income tax related adjustments.