DENTSPLY SIRONA Inc. (NASDAQ:XRAY) Q4 2024 Earnings Conference Call February 27, 2025 8:30 AM ET Company Participants Andrea Daley - Vice President of Investor Relations Simon Campion - President & Chief Executive Officer Herman Cueto - Interim Chief Financial Officer Conference Call Participants Elizabeth Anderson - Evercore ISI Erin Wright - Morgan Stanley Brandon Vazquez - William Blair David Saxon - Needham & Company Jeffrey Johnson - Baird Kevin Caliendo - UBS Michael Cherny - Leerink Partners Jonathan ...

Core Insights - DENTSPLY SIRONA Inc. reported disappointing fourth-quarter 2024 results, with adjusted EPS of 26 cents, missing the consensus estimate by 39.5% and reflecting a 40.9% year-over-year decline [1] - The company also reported a GAAP loss of $2.16 per share compared to a profit of 32 cents in the same quarter last year [1] Revenue Details - Total revenues for the fourth quarter were $905 million, falling short of the consensus estimate by 1.6% and down 10.6% year-over-year [2] - The decline in revenue was attributed to a 6% impact from Byte sales, with organic revenue also decreasing by 10.7% [2] Full-Year Results - For the full year 2024, total sales reached $3.79 billion, a decrease of 4.3% year-over-year [3] - Adjusted EPS for 2024 was $1.67, down 8.8% compared to 2023 [3] Business Segments - The company operates under four segments: Connected Technology Solutions, Essential Dental Solutions, Orthodontic and Implant Solutions, and Wellspect Healthcare [4][5] - Connected Technology Solutions reported revenues of $293 million, down 8.3% year-over-year [6] - Orthodontic and Implant Solutions saw sales of $185 million, a decline of 28.6% year-over-year, impacted by $62 million from Byte sales [7] - Essential Dental Solutions generated $346 million in sales, down 3.5% year-over-year, affected by order timing in the U.S. [8] - Wellspect Healthcare reported sales of $81 million, an increase of 8.6% year-over-year, driven by product innovation [9] Geographic Revenue Performance - U.S. revenues decreased 29.9% year-over-year organically to $259 million [10] - Revenues from the Rest of the World decreased 2% organically to $238 million [10] - European revenues improved 1.8% organically year-over-year to $408 million [10] Margin Analysis - Adjusted gross profit for the quarter was $477 million, down 14.5% year-over-year, with an adjusted gross margin of 52.7%, contracting 240 basis points [11] - Adjusted operating income was $96 million, down 32.9% from the previous year, with an adjusted operating margin of 10.6%, contracting 350 basis points [12] Financial Update - The company ended the fourth quarter with cash and cash equivalents of $272 million, down from $296 million at the end of the third quarter [13] - Cumulative net cash provided by operating activities totaled $461 million, compared to $377 million in the prior year [13] 2025 Guidance - DENTSPLY SIRONA revised its 2025 guidance, expecting net sales between $3.50 billion and $3.60 billion, reflecting a 4-2% decline on an organic basis [14] - The company anticipates adjusted EPS in the range of $1.80 to $2.00, with the consensus estimate at $1.90 [14] Market Reaction - The company’s shares rose 1.1% in pre-market trading despite the disappointing results, although the stock has declined 23.9% over the past six months [15]

Company Performance - Dentsply International reported quarterly earnings of $0.26 per share, missing the Zacks Consensus Estimate of $0.43 per share, and down from $0.44 per share a year ago, representing an earnings surprise of -39.53% [1] - The company posted revenues of $905 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 1.56%, and down from $1.01 billion year-over-year [2] - Over the last four quarters, Dentsply has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Outlook - Dentsply shares have lost about 0.9% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The current consensus EPS estimate for the coming quarter is $0.41 on revenues of $919.43 million, and for the current fiscal year, it is $1.90 on revenues of $3.74 billion [7] - The estimate revisions trend for Dentsply is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Medical - Dental Supplies industry, to which Dentsply belongs, is currently in the bottom 43% of over 250 Zacks industries, suggesting that the outlook for the industry can materially impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Full year 2024 net sales were $3,793 million, a decrease of 4.3% compared to 2023, with organic sales down 3.5% including a 1.2% impact from Byte sales[3]. - Full year 2024 net loss was $910 million, or $4.48 per share, compared to a net loss of $132 million, or $0.62 per share in 2023[3]. - Fourth quarter 2024 net sales were $905 million, a decrease of 10.6% year-over-year, with organic sales down 10.7% including a 6.1% impact from Byte sales[4]. - Fourth quarter 2024 adjusted earnings per diluted share were $0.26, down 41.3% from $0.44 in the fourth quarter of 2023[8]. - The company recorded non-cash impairment charges of $370 million in Q4 2024, primarily affecting the Orthodontic and Implant Solutions and Connected Technology Solutions segments[13]. - The company reported a net loss attributable to Dentsply Sirona of $430 million for Q4 2024, compared to a net income of $67 million in Q4 2023[23]. - For the year ended December 31, 2024, the company reported a GAAP net loss of $910 million, with a diluted EPS of $(4.48)[52]. - The company incurred goodwill and intangible asset impairments totaling $1,014 million for the year ended December 31, 2024, compared to $307 million in 2023[23]. Sales and Revenue Trends - The company anticipates 2025 net sales in the range of $3.50 billion to $3.60 billion, with organic sales expected to decline between 4.0% to 2.0%[15]. - For Q4 2024, total net sales decreased by 10.6% to $905 million compared to $1,012 million in Q4 2023, with U.S. sales down 29.8%[42]. - For the year ended December 31, 2024, total net sales were $3,793 million, a decline of 4.3% from $3,965 million in 2023, with U.S. sales down 6.2%[43]. - Organic sales for Q4 2024 decreased by 10.7% compared to Q4 2023, with U.S. organic sales down 29.9%[42]. - The company experienced a foreign exchange impact on net sales, with a total impact of (0.8%) for the year ended December 31, 2024[43]. Cost Management and Efficiency - Operating cash flow for full year 2024 was $461 million, an increase from $377 million in 2023, driven by improved inventory management[12]. - The company plans to focus on restructuring and cost management strategies to improve future performance[46]. - The company aims to enhance efficiency through restructuring initiatives, which may lead to fluctuating charges in future periods[30]. - Restructuring-related charges and other costs amounted to $123 million in 2023, increasing to $136 million in 2024[57]. Asset and Liability Management - Total assets decreased to $5,753 million as of December 31, 2024, from $7,370 million in 2023, indicating a significant reduction in asset base[24]. - Total liabilities decreased to $3,810 million in 2024 from $4,076 million in 2023, showing improved financial leverage[24]. - Net cash provided by operating activities was $461 million for the year ended December 31, 2024, an increase from $377 million in 2023[25]. Research and Development - Research and development expenses were $165 million for the year ended December 31, 2024, down from $184 million in 2023[23]. Future Projections - Adjusted EPS for 2025 is projected to be between $1.80 and $2.00[15]. - The company expects external market conditions to remain broadly unchanged in 2025, with a focus on transformational initiatives to drive EBITDA margin expansion[5].

Core Viewpoint - Dentsply Sirona reported a significant decline in net sales and increased net losses for both the fourth quarter and full year of 2024, primarily due to macroeconomic pressures and competitive dynamics, despite some improvements in specific business areas [4][10]. Financial Performance Summary - Full year 2024 net sales were $3,793 million, a decrease of 4.3% compared to 2023, with organic sales down 3.5% [2][10]. - The company experienced a net loss of $910 million, or $4.48 per share, compared to a net loss of $132 million, or $0.62 per share in 2023 [2][10]. - Fourth quarter net sales were $905 million, down 10.6% year-over-year, with organic sales decreasing 10.7% [3][10]. - The fourth quarter net loss was $430 million, or $2.16 per diluted share, compared to a net income of $67 million, or $0.32 per share in Q4 2023 [3][10]. Segment Performance - The Connected Technology Solutions segment saw a net sales decline of 8.3% in Q4 and 9.2% for the full year [7]. - Essential Dental Solutions experienced a 3.5% decline in Q4 and a 0.9% decline for the full year [7]. - Orthodontic and Implant Solutions faced a significant drop of 28.6% in Q4 and 6.5% for the full year [7]. - Wellspect Healthcare was a bright spot, with an 8.6% increase in Q4 and 5.9% for the full year [7]. Geographic Performance - In the United States, net sales decreased by 29.8% in Q4 and 6.2% for the full year [8]. - Europe showed resilience with a 2.8% increase in Q4, although it declined by 2.1% for the full year [8]. - The Rest of the World experienced a 3.4% decline in Q4 and a 5.1% decline for the full year [8]. Cash Flow and Liquidity - Operating cash flow for Q4 2024 was $87 million, down from $160 million in Q4 2023, while full year operating cash flow improved to $461 million from $377 million in the prior year [9]. - The company returned $376 million to shareholders through dividends and share repurchases in 2024 [9]. Impairments and Charges - Dentsply Sirona recorded non-cash charges for goodwill and intangible asset impairments of $370 million in Q4 2024, primarily affecting the Orthodontic and Implant Solutions and Connected Technology Solutions segments [11][20]. 2025 Outlook - For 2025, the company anticipates net sales in the range of $3.50 billion to $3.60 billion, with organic sales expected to decline between 4.0% to 2.0% [10][13]. - Adjusted EPS is projected to be between $1.80 and $2.00 [10][13].

Core Viewpoint - Dentsply International (XRAY) is expected to report a decline in quarterly earnings and revenues, with analysts predicting earnings of $0.43 per share, a decrease of 2.3% year-over-year, and revenues of $919.36 million, reflecting a 9.2% decline compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating that analysts have not revised their initial projections during this period [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock price performance [3]. Revenue Projections - Analysts estimate 'Net sales- Connected Technology Solutions' to be $296.59 million, representing a year-over-year decline of 7% [5]. - 'Net sales- Wellspect Healthcare' is projected to reach $76.04 million, indicating a slight increase of 0.1% from the same quarter last year [5]. - 'Net sales- Essential Dental Solutions' is expected to be $337.26 million, reflecting a decrease of 5.8% year-over-year [6]. - 'Net sales- Orthodontic and Implant Solutions' is forecasted at $207.43 million, showing a significant decline of 19.9% compared to the prior year [6]. - 'Revenues- Rest of World' is projected to be $205.38 million, indicating a year-over-year decrease of 16.9% [6]. - 'Revenues- Europe' is expected to come in at $368.16 million, reflecting a decline of 7.3% year-over-year [7]. Stock Performance - Over the past month, Dentsply shares have recorded a return of -2.9%, compared to a -1.8% change in the Zacks S&P 500 composite [7]. - Based on its Zacks Rank 4 (Sell), Dentsply is likely to underperform the overall market in the upcoming period [7].

Core Viewpoint - DENTSPLY SIRONA Inc. is set to release its fourth-quarter 2024 results on February 27, with expectations of weaker sales and ongoing market challenges, particularly due to the suspension of Byte sales and regulatory issues [1][10]. Group 1: Financial Estimates - The Zacks Consensus Estimate for revenues in Q4 is $919.4 million, while the consensus for earnings is 43 cents per share [3]. - The company has lowered its full-year revenue guidance to a range of $3.79 billion to $3.82 billion, with an adjusted EBITDA margin expected to be around 17.5% [10]. Group 2: Segment Performance - The Orthodontic and Implant Solutions segment experienced a revenue decline due to the suspension of Byte sales, which is anticipated to result in a $40 million revenue loss [4]. - SureSmile showed year-on-year growth, particularly in Europe and the Rest of World, but faced weaker demand in the United States [5]. - The Connected Technology Solutions segment's performance declined, although CAD/CAM sales grew due to strong demand for mills and intraoral scanners [6]. - The Essential Dental Solutions segment saw significant organic growth, supported by early distributor orders and strong performance in China and Canada [7]. Group 3: Product Developments - The company launched several new products, including the Primescan 2 intraoral scanner and the X-Smart Pro+ endo motor, which have contributed positively to sales [8][9]. - Regulatory approval was received for five new products, and the software platform DS Core was improved with over 85 updates [9]. Group 4: Market Outlook - The company expects organic sales to decline in the high-single digits for Q4, primarily due to the Byte sales suspension and weak equipment demand in the U.S. [4]. - Despite challenges, the company plans to invest more in SureSmile orthodontics software and other digital tools to support future growth [9].

Dentsply International (XRAY) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on February 27, 2025, might help the stock move higher if these key numbers are ...

CHARLOTTE, N.C., Feb. 11, 2025 (GLOBE NEWSWIRE) -- DENTSPLY SIRONA Inc. (“Dentsply Sirona” or the "Company") (Nasdaq: XRAY) today announced that the Company has initiated a process to evaluate strategic alternatives for its Wellspect Healthcare business (“Wellspect”). Wellspect is a leading provider of bladder and bowel management care products with an over 40-year history. Through its comprehensive portfolio of products and accessories from trusted brands like LoFric® and Navina™, Wellspect has delivered i ...

NEW YORK, Jan. 29, 2025 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against DENTSPLY SIRONA Inc. (NASDAQ:XRAY) on behalf of long-term stockholders following a class action complaint that was filed against Dentsply on November 26, 2024 with a Class Period from May 6, 2021 to November 6, 2024. Our investigation concerns whether the board of directors of Dentsply have breached their fiduciary duties to the company. The ...