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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

For the fiscal year ended September 30, 2004

or

For the transition period from                     to                     

Commission file number 1-16057

Sybron Dental Specialties, Inc.

(Exact name of registrant as specified in charter)

Registrant’s telephone number, including area code:

(714) 516-7400

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    þ

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Yes  þ    No  ¨

The aggregate market value of the Common Stock held by non-affiliates of the registrant, based upon the closing sale price of the registrant’s Common Stock on March 31, 2004, the last business day of our most recently completed second fiscal quarter, as reported on the New York Stock Exchange, was approximately $800,835,000. Shares of Common Stock held by each executive officer and director and by each person known to beneficially own more than 5% of the outstanding Common Stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

At December 7, 2004, there were 39,581,070 shares of the registrant’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant’s Proxy Statement for its Annual Meeting of Stockholders to be held on February 8, 2005 have been incorporated by reference into Part III of this Form 10-K.

Table of Contents

SYBRON DENTAL SPECIALTIES, INC.

TABLE OF CONTENTS

TO

2004 ANNUAL REPORT ON FORM 10-K

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PART I

General

Business and Products

Sybron Dental Specialties, Inc. is a leading global manufacturer and marketer of a broad range of consumable dental products and related small equipment and a manufacturer and distributor of products for use in infection prevention in both the medical and dental markets. Our subsidiaries operate in two business segments:

Our primary subsidiaries in each of our business segments are as follows:

We market our products in the United States and abroad under brand names such as Kerr^®, Ormco^®, Metrex^®, Pinnacle^®, Demetron^®, KerrHawe^®, AOA^™, SybronEndo^™, and Innova^™ which are well recognized in the dental and orthodontics industries.

History

Sybron Dental Specialties, Inc. was incorporated in Delaware on July 17, 2000. At the time of our incorporation we were a wholly-owned subsidiary of Apogent Technologies Inc. (“Apogent”), which in August 2004 was acquired by and became a wholly-owned subsidiary of Fisher Scientific International Inc. We were created to effect the spin-off by Apogent of its dental business in December 2000. Apogent distributed to its shareholders, by means of a pro rata distribution, all of our outstanding common stock together with related preferred stock purchase rights (the “spin-off”). As a result, we became an independent, publicly traded company.

Terms; Year References

When we use the terms “SDS,” “we,” “us,” “Company,” or “our” in this report, unless the context requires otherwise, we are referring to Sybron Dental Specialties, Inc. and its subsidiaries and their respective predecessors that comprised Apogent’s dental business prior to the spin-off. Our fiscal year ends September 30. All references to a particular year mean the fiscal year ended September 30 of that year, unless we indicate otherwise.

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Business Strategy

The key elements of our strategy to become a premier global supplier of high quality dental, infection prevention, orthodontic, dental implants and endodontic products are:

Develop Innovative Products. We strive to consistently develop and introduce innovative products. We believe that product innovation allows us to maintain our competitive position and helps fuel our internal growth. We also believe that our emphasis on new product development enables our sales force to remain effective in creating demand among dentists and orthodontists. Our dedicated research and development team regularly interacts with practicing clinicians to understand and assess new product opportunities in the marketplace.

Consistently Improve Our Efficiency. We continuously pursue opportunities to maximize cost savings. As a result, we regularly evaluate our manufacturing processes to determine optimal production strategies, and we will transfer production from one facility to another or rationalize higher-cost facilities when necessary. In addition, we consistently seek to rationalize manufacturing, warehousing and customer service operations to centralized facilities wherever possible. In fiscal 2004, we consolidated five of SpofaDental’s facilities into one facility, located in the Czech Republic, which now handles all of SpofaDental’s manufacturing and distribution. We also closed our production facility in Tijuana, Mexico during fiscal 2004 and transferred the production from that facility to our other facilities in Mexico.

Increase Revenue Opportunities Within Existing Marketplace. We continuously seek to broaden our portfolio of product offerings to maximize the opportunities within our existing customer base. For example, through acquisitions, we acquired products such as chair covers, barrier products, infection prevention products and disposable air/water syringes, dental implants, and through our research and development efforts, we added new products such as our Premise^™ nanocomposite, HiRes magnification loupe, and Damon^™ 3 self-ligating bracket.

Expand the Marketplace. We seek to expand the market for our products through product innovation. We believe that our technological leadership enables us to increase the number of uses and users of our products. For example, we believe our aesthetic brackets have increased the number of adults who are willing to undergo orthodontic treatment for functional or cosmetic reasons.

Pursue Strategic Acquisitions. Although debt reduction is an important priority, we will continue to pursue selective strategic acquisitions. We have significant experience in acquiring and integrating companies. We pursue acquisition opportunities that:

Since 1993, we have made 30 acquisitions in the United States and abroad. Since the beginning of fiscal 2001, we have completed eight acquisitions, the most recent of which was the acquisition in October 2004 of Innova LifeSciences Corporation (“Innova”), a Canadian manufacturer of dental implants. In July 2004, we acquired a business from Bioplant Products, Inc. that manufactures and sells products for use in bone generation following the extraction of a tooth. In August 2003, we acquired SpofaDental a.s., a leading manufacturer of consumable dental supplies in Central and Eastern Europe.

We have been able to use our existing distribution channels to market many of the product lines we have acquired and we have achieved other synergies, such as the elimination of duplicative administrative or other functions or the combining of manufacturing operations with some of these acquisitions.

Business Segments

Professional Dental. Products in our Professional Dental business segment include light cured composite filling materials and bonding agents, amalgam alloy filling materials, dental burs, impression materials,

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magnification lenses, and curing lights used in general dentistry; waxes, specialty burs, investment and casting materials, equipment and accessories used in dental laboratories; and disposable infection prevention products for dental equipment and offices.

Our Professional Dental products are primarily manufactured by Kerr Corporation and its affiliates, such as Sybron Canada Limited and KerrHawe. Kerr’s products, which are generally sold through independent dental distributors, are designed to help dentists deliver more effective and efficient treatment to their patients. Kerr has expanded its product line through new product development and through acquisitions.

Expansion of products in this segment through acquisitions include the 1994 purchase of Demetron Research Corp., a manufacturer of lights used by dentists to cure composite filling materials applied to teeth. These products complemented Kerr’s line of composite filling materials, which it enhanced by acquiring E&D Dental Products, Inc. and its line of composites in 1996. Kerr added to its offering of dental lab products with the acquisition of belle de st.claire inc. in 1996. In 1997, it added diamond dental burs to the considerable line of dental burs manufactured by Sybron Canada Limited, with the acquisition of the assets of Precision Rotary Instruments, Inc. In 1999, Pinnacle Products, Inc. became a part of our organization, which enabled us to add dental disposable infection prevention products such as plastic coverings (barriers) for dental equipment and filters for evacuation units to this business segment. In the second quarter of 2000, we added Safe-Wave Products, Inc., a manufacturer of disposable tips and adapters for air/water syringes used in dental operatories. In the first quarter of 2001, we acquired certain assets of the dental division of Special Metals Corporation, a contract manufacturer and supplier of alloy powders used in Kerr’s Tytin^® and Tytin^® FC dental amalgams, assuring continued access to this technology. In the third quarter of 2001, we acquired all of the capital stock of Hawe Neos, a Swiss manufacturer and wholesaler of consumable dental products in the areas of prevention, restoration and pharmaceutical. In February 2002, we acquired certain assets of Surgical Acuity, Inc., a Wisconsin manufacturer of magnification lenses and fiberoptic lighting systems. In the fourth quarter of 2003, we acquired all of the capital stock of SpofaDental a.s., a leading manufacturer of consumable dental supplies in Central and Eastern Europe. In the fourth quarter of 2004, we acquired a business from Bioplant Products, Inc. that manufactures and sells products for use in bone generation following the extraction of a tooth. For a more complete description of our acquisitions during fiscal years 2004, 2003 and 2002, please see Note 15 to our consolidated financial statements in Item 8 of this Annual Report.

Products in the Professional Dental business segment, including dental related infection prevention products, are sold both domestically and internationally through dental distributors. Kerr has approximately 90 sales personnel in the United States and approximately 110 abroad dedicated to the Professional Dental business segment sales.

Our Professional Dental companies are committed to increasing their market share through new product development and promotional activities. Their promotional activities create demand for their new products. The sales growth resulting from this demand is augmented by modest growth in the domestic market for traditional dental consumables. We believe opportunities for growth exist in international markets. As economies in the emerging markets of Eastern Europe, South America and the Far East continue to develop, the demand in those regions for dental products should grow. We also believe our Professional Dental companies are positioned to take advantage of such development due to their extensive experience in selling internationally and the quality of their existing international dealer network.

The Professional Dental business segment accounted for approximately 55.0%, 58.4% and 61.2% of our consolidated net sales in 2004, 2003 and 2002, respectively.

Specialty Products. Products in our Specialty Products business segment include a broad range of orthodontic appliances such as brackets, bands and buccal tubes, wires and elastomeric products as well as endodontic products and implants. Brackets, bands, buccal tubes and wires are manufactured from a variety of metals to exacting specifications for standard use or to meet the custom specifications of a particular orthodontist. Elastomeric orthodontic products include rubber bands and power chains to consolidate space. Products in this

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area also include orthodontic instruments and general orthodontic supply products. These products have historically been manufactured and marketed by Ormco, which sells its products directly to orthodontists. Ormco expanded its orthodontics product line through the acquisition of E.T.M. Corporation (a manufacturer of orthodontic hand instruments) and Allesee Orthodontic Appliances, Inc. (a manufacturer of custom-made positioners, retainers and other accessories) in 1994. In 1998, we significantly enhanced the orthodontics line through a merger with LRS Acquisition Corp., the parent of “A” Company Orthodontics, which is a manufacturer and developer of brackets, archwires and related products. We also expanded our direct business in France by acquiring the Ormodent group of companies, Ormco’s French distributor. In 2000, we again expanded our product line with the acquisition of Professional Positioners, Inc., a manufacturer of orthodontic retainers and positioners and LPI Ormco, the former distributor of Ormco products in Austria. In the first quarter of 2001, we completed the acquisition of certain assets of Optident, Ltd., the former exclusive authorized distributor of Ormco “A” Company products in the United Kingdom. In 2002, we began marketing our Ormco branded orthodontic products in Spain directly through our local sales force, which previously had been associated with our distributor in Spain. For a more complete description of our acquisitions during fiscal years 2004, 2003 and 2002, please see Note 15 to our consolidated financial statements in Item 8 of this Annual Report.

In 1995, we added endodontic products to the Specialty Products segment, which has a separate endodontic direct sales force, with the acquisition of Excellence in Endodontics, Inc., a manufacturer of products for endodontic procedures. We expanded our endodontic product offerings in this segment in 1996 when we acquired the assets of Analytic Technology Corporation, a manufacturer of endodontic equipment. In 1998, we added a line of nickel-titanium endodontic instruments with the acquisition of the dental business of Tycom Corporation. In 1999, we vertically integrated our Tycom product line in Europe with the purchase of Endo Direct Ltd., the exclusive European importer of Tycom’s endodontic products.

In the first fiscal quarter of 2005, we entered into the dental implant market through our acquisition of Innova LifeSciences Corporation, a Canadian manufacturer and seller of dental implants. Innova’s products are sold in North America, the United Kingdom and Australia through a direct sales force of approximately 20 salespersons and through distributors in other countries throughout the world. For a more complete description of our Innova acquisition, please see Note 20 to our consolidated financial statements in Item 8 of this Annual Report.

Orthodontic products in the Specialty Products business segment are marketed by approximately 105 direct salespersons in the United States, Austria, Belgium, Canada, Australia, Germany, France, Ireland, Japan, Mexico, New Zealand, the Netherlands, Portugal, Spain, Switzerland and the United Kingdom, and by dealers and distributors in other parts of the world. Ormco’s direct sales force, dealers and distributors are supported by trade journal advertising, trade shows, seminars and telemarketing.

The market for traditional orthodontics products is relatively mature domestically, and is experiencing modest growth. We expect the international market for orthodontics products to be a growth opportunity as interest in orthodontics for cosmetic reasons grows worldwide. We believe Ormco is well positioned to compete both domestically and internationally because its marketing philosophy is geared toward making orthodontic practices more efficient through product innovation and customer service.

Ormco’s endodontic sales team sells our endodontic products both directly to end-users and through distributors (which had previously been handled primarily by our Professional Dental business segment). The endodontic team has approximately 20 direct salespersons in the United States. The sales force markets our endodontic products directly to endodontic specialists in the United States and Canada and provides support to our dealers and helps sell products to the general dental community through a dealer network in those countries. In other parts of the world, our endodontic products are sold by dealers and distributors.

The Specialty Products business segment accounted for approximately 45.0%, 41.6% and 38.8% of our consolidated net sales in 2004, 2003 and 2002, respectively.

Financial information about our business segments is presented in Note 17 to our consolidated financial statements in Item 8 of this Annual Report.

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We believe we are well positioned to take advantage of the opportunities that exist to grow our business, such as the opportunities that we think will arise from the trends of an increasing worldwide population, growth in the population of people 65 and older, natural teeth being retained longer, and increased spending on dental health in developing nations.

International

In addition to the United States, products in our Professional Dental business segment are manufactured at facilities in Canada, Switzerland, Czech Republic, Italy and Mexico. These products are sold internationally through dealers, and supported by sales offices in Europe, Japan and Australia. The products in our Specialty Products business segment are manufactured in the United States, Canada and Mexico and sold internationally through a combination of a direct sales force and a distribution network to orthodontists, endodontic specialists, oral surgeons and periodontists.

Domestic and international sales of our products by business segment are as follows:

Our international business is subject to the risk of fluctuations in the exchange rates of various foreign currencies and other risks associated with foreign trade. For the years 2004, 2003 and 2002, our net sales outside the United States accounted for approximately 46%, 43%, and 41%, respectively, of consolidated net sales. See Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations “International Operations” and Item 7A — Quantitative and Qualitative Disclosures About Market Risk for further information concerning the possible effects of foreign currency fluctuations and currency hedges intended to mitigate their impact.

We have included other financial information about our business segments and foreign operations in Note 17 to our consolidated financial statements in Item 8 of this Annual Report.

Competition

We compete against numerous other companies in our business segments, some of which have substantially greater financial and other resources than us. We believe the breadth of our product lines and the strength of our well established brands provide us with a competitive advantage. Our widely recognized Kerr and Ormco brand names have been used for more than 100 years and 40 years, respectively. We believe these strong brands, our leading market positions and our programs to educate dental practitioners about techniques and products provide us with an excellent platform to pursue our growth initiatives. There can be no assurance, however, that we will maintain our competitive advantages or that we will not encounter increased competition in the future.

Our principal competitors in the Professional Dental business segment are Dentsply International Inc., 3M ESPE, and Ivoclar Vivadent Group. In the Specialty Products business segment, we compete with numerous companies in the United States. We compete primarily on the basis of product quality, the level of customer

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service, price and new product offerings. Our competitors include 3M Unitek (an affiliate of 3M Company), GAC International (a subsidiary of Dentsply), American Orthodontics, Nobel Biocare and Straumann.

Research and Development

We have a number of research and development programs in our business segments, which we consider to be of importance in maintaining our market positions. We spent approximately $11.5 million, $10.2 million and $10.4 million on research and development in 2004, 2003 and 2002, respectively.

Our research and development expenditures by business segment are as follows:

Our business segments devote resources to the development and introduction of new products. These efforts are critical to meeting the needs of today’s dentists, endodontists and orthodontists. In the Professional Dental segment, product development requires diverse technical expertise and knowledge of various market trends, which we possess. Kerr takes advantage of its expertise and knowledge by working closely with dentists to develop new and improved products. The sales from recently introduced products, such as our Premise nanocomposite, the LEDemetron 1 curing light, the OptiDisc polishing disc and CaviWipes disinfecting towelettes have contributed to Kerr’s total net sales. In the Specialty Products segment, Ormco’s sales force maintains direct contact with orthodontists to identify market trends. Ormco works closely with orthodontists to improve existing products and develop new products primarily through programs such as its Insider program in which selected orthodontists assist Ormco in designing, developing and ultimately educating users on new product and technique innovations. In recent years, Ormco has introduced a number of new products, which have contributed significantly to its sales. Examples of those products include the Damon^™ 3 brand self-ligating bracket, the Elements Obturation device (the newest product in our Elements equipment series), the re-engineered Inspire Ice product line, Damon^™ 2 brand self-ligating bracket, the Synthesis brand straight wire appliance, the Titanium Orthos^® brand orthodontic bracket, and the K-3 NiTi rotary files.

Employees

Our companies employed 4,140 people at September 30, 2004. In the United States, the Professional Dental segment’s 157 hourly employees at the Romulus, Michigan facility are members of the United Auto Workers Union. Our current labor contracts relating to that facility will expire on January 31, 2005. We are currently in negotiations to extend the union agreements until January 31, 2008. Many of our non-management employees in Europe are subject to national labor contracts, which are negotiated from time to time at the national level between the national labor union and employees’ council. Once national contracts are set, further negotiation can take place at the local level. Such negotiations can affect local operations. We have had no work stoppages related to national contracts. We believe our relations with employees are generally good.

Patents, Trademarks and Licenses

Our subsidiaries’ products are sold under a variety of trademarks and trade names. We own all of the trademarks and trade names we believe to be material to the operation of their businesses, including the Kerr^®, Orascoptic^®, KerrHawe^®, Demetron^®, SpofaDental^®, Pinnacle^®, Ormco^®, SybronEndo^®, AOA^®, Damon^™, Metrex^®, and Innova^™ trademarks, each of which we believe to have widespread name brand recognition in their respective field and all of which we intend to continue to protect. Our subsidiaries also own various patents, employ various patented processes, and from time to time acquire licenses from owners of patents to apply patented processes to their operations or to sell patented products. Except for the trademarks referred to above, we do not believe any single patent, trademark or license is material to the operations of our business as a whole.

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Regulation

Medical Devices

Certain of our products are medical devices that are subject to regulation by the United States Food and Drug Administration (the “FDA”) and by the counterpart agencies of the foreign countries where our products are sold. Some of the regulatory requirements of these foreign countries are more stringent than those applicable in the United States. Our medical devices distributed in the European countries are CE marked per the European Medical Device Directives, 93/42/EEC. Products that are CE marked may move freely in the twenty five European Union States and the three European Economic Area States. Our worldwide facilities that are engaged in the manufacturing of Class IIa and Class IIb medical devices as defined by the European Medical Device Directives are ISO 13485 certified. Additionally, our medical devices distributed in Canada are licensed according to the Canadian Medical Device Regulations. Each facility manufacturing or distributing Class II and Class III medical devices holds a Certificate of Registration for a Quality Management System as defined in the Canadian Medical Devices Regulations. Pursuant to the Federal Food, Drug, and Cosmetic Act (the “FDCA”), the FDA regulates virtually all phases of the manufacture, sale, and distribution of medical devices, including their introduction into interstate commerce, manufacture, advertising, labeling, packaging, marketing, distribution and record keeping. Pursuant to the FDCA and FDA regulations, certain facilities of our operating subsidiaries are registered with the FDA as medical device manufacturing establishments. The FDA and our ISO Notified Bodies regularly inspect our registered and/or certified facilities.

The FDA classifies medical devices into Class I, II, or III. Pursuant to section 510(k) of the FDCA, the manufacturer or initial distributor of a Class I or II device that is initially introduced commercially on or after May 28, 1976 must notify the FDA of its intent to commercially introduce the device through the submission of a premarket notification (a “510(k)”). Before commercial distribution can begin, the FDA must review the 510(k) and clear the device for commercial distribution. The FDA normally has 90 days to review the 510(k) and grant or deny clearance to market on the basis that it is or is not substantially equivalent to a device marketed before May 28, 1976. Alternatively, the FDA may postpone a final decision and require the submission of additional information, which may include clinical data. If additional information is required, review and clearance of a 510(k) may be significantly delayed. In order to clear a Class I or II device for marketing, the FDA must determine, from the information contained in the 510(k) and any additional information that is submitted, that the device is substantially equivalent to one or more Class I or II devices that are legally marketed in the United States. Certain Class I devices are exempt from the 510(k) premarket notification requirement and manufacturers of such products may proceed to market without any submission to the FDA. If a device is not considered “substantially equivalent,” it is regulated as a Class III medical device. In general, a Class III medical device must be expressly approved by the FDA for commercial distribution pursuant to the submission of a premarket approval application (“PMA”). A PMA must contain, among other information, substantial information about the manufacture of the device and data from adequate and well-controlled clinical trials that demonstrate that the device is both safe and effective. The PMA approval process is substantially more complex and lengthy than the 510(k) premarket notification process.

A medical device, whether exempt from premarket notification, cleared for marketing under the 510(k) pathway, or cleared pursuant to a PMA approval, is subject to ongoing regulatory oversight by the FDA to ensure compliance with regulatory requirements, including, but not limited to, product labeling requirements and limitations, including those related to promotion and marketing efforts, current good manufacturing practices and quality system requirements, record keeping, and medical device (adverse event) reporting.

All of our dental and orthodontic treatment products and high level disinfectants and sterilants, sold in the United States, are regulated as Class I or Class II medical devices by the FDA. In Canada, our high level disinfectants and sterilants, hard surface disinfectants and topical anti microbial infection prevention products, are regulated as drug products and are required to hold a Drug Identification Number (DIN) prior to sale. Our manufacturing facilities for these products are required to comply with the Good Manufacturing Practices for drug products as defined in Part C of the Canadian Food and Drug Regulations.

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Dental mercury is currently regulated by the FDA as a Class I device (not exempt from the 510(k) premarket notification requirement), and amalgam alloy is regulated as a Class II device. On February 20, 2002, the FDA published for comment a guidance in which it proposes to regulate encapsulated mercury and amalgam alloy, like those sold by Kerr, as a single Class II device. It also proposed the reclassification of dental mercury as a Class II device, so as to conform to the Class II designation for amalgam alloy and to the proposed Class II designation for encapsulated mercury and amalgam alloy. As Class II devices, encapsulated mercury and amalgam alloy will be subject to special controls. The special controls may include, among other things, recommendations and guidance for the form and content of product labeling. The guidance document contains proposed recommendations regarding the handling and storage of encapsulated mercury and amalgam alloy, as well as warnings to be added to the labeling.

All dental amalgam filling materials, including Kerr’s dental amalgam products, contain mercury. The use of mercury in various products, including dental amalgams, is being examined by various groups and U.S. and foreign governmental agencies as a part of an effort to reduce the amount of mercury to which individuals are exposed and that is discharged into the environment. We are aware of at least one foreign government agency that, as a result of a study it conducted, has proposed a plan that would discontinue the use of amalgams once a suitable alternative is found.

Various groups, who have expressed concerns about the health effects allegedly caused by the mercury in amalgams, are active in lobbying state, federal and foreign lawmakers and regulators to pass laws or adopt regulatory changes or recommendations regarding the use of dental amalgams. To date, these efforts have resulted in restrictions on or recommendations against the use of amalgams in certain clinical situations in some states and countries. The actions have generally been taken to reduce human exposure to mercury where other safe and practical alternatives to dental amalgam exist.

In the United States, the FDA’s Dental Devices Panel, the National Institute of Health and the United States Public Health Service have indicated that the use of amalgams does not cause verifiable adverse effects in patients who have amalgam fillings. All of these agencies have recommended further research on the subject and, in large part because of their initiatives, research with respect to potential health effects of dental amalgams is ongoing at various places around the world.

Over-the-Counter Drug Products

Certain of our products, namely our topical antimicrobial infection prevention products, are subject to regulation by the FDA as over-the-counter drug products. In order to market a product as an over-the-counter drug, we are required to comply with current Good Manufacturing Practice regulations for drug products, which include certain requirements relating to testing and labeling of these products. Each new product is listed with the FDA; however, there is no requirement for premarket submissions or approvals as long as the product is recognized as safe and effective by the FDA.

Federal Insecticide, Fungicide and Rodenticide Act

Certain of our infection prevention products are classified as pesticides and are subject to regulation by the United States Environmental Protection Agency (“EPA”) under the Federal Insecticide, Fungicide and Rodenticide Act (“FIFRA”) and by various state environmental agencies under the laws of those states. Under FIFRA, no one may sell, distribute or use a pesticide unless it is registered with the EPA. Registration includes approval by the EPA of the product’s label, including the claims and instructions for use. The producer of a pesticide must provide data from tests performed according to EPA guidelines. These tests are designed to determine whether a pesticide has the potential to cause adverse effects on humans, wildlife, plants and possible ground or surface water contamination. Testing must also be submitted to support the claims on the product labeling. Separate registrations must be obtained from the EPA and each state in which the product is sold. Registrations must be renewed annually. The regulations also require producers to report adverse events associated with their products to the EPA. Failure to pay registration fees or provide necessary testing data, or

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evidence that the product is the cause of an adverse effect on humans or the environment, could result in fines and/or the cancellation of a FIFRA registration.

Environmental, Health and Safety Matters

Our operations entail a number of environmentally sensitive production processes. Compliance with environmental laws and regulations, along with regulations relating to workplace safety, is a significant factor in our businesses. Our domestic facilities are subject to federal, state and local laws and regulations concerning, among other things, solid and hazardous waste disposal, air emissions and waste water discharge, and our foreign facilities are subject to their respective local laws and regulations regarding the environment. Our operations are also subject to regulation relating to workplace safety, both in the United States and abroad. Violations of any of these laws and regulations or the release of toxic or hazardous materials used in our operations into the environment could expose us to significant liability. Similarly, third party lawsuits relating to environmental and workplace safety issues could result in substantial liability.

Raw Materials

We purchase a wide range of raw materials and supplies from a number of suppliers and do not rely on sole sources to any material extent. We do not foresee any significant difficulty in obtaining necessary materials or supplies.

Reliance on Key Distributors

A substantial portion of our sales is made through major independent distributors. While no single distributor accounted for more than 10% of our sales in 2004, we believe that the loss of either one of our top two distributors, the only distributors who account for more than 5% of our consolidated net sales and who sell primarily into the dental segment, could have a material adverse effect on our results of operations or financial condition until we find alternative means to distribute our products.

Transactions and Agreements Between Apogent and SDS

In order to effect the spin-off in December 2000, Apogent and SDS entered into a number of interrelated agreements. Certain of these agreements define the ongoing relationship between the parties after the spin-off and are briefly described below. Because these agreements were negotiated while we were a wholly-owned subsidiary of Apogent (which is now a wholly-owned subsidiary of Fisher Scientific International Inc.), they are not the result of negotiations between independent parties. In the future, additional or modified agreements, arrangements and transactions may be entered into and such agreements and transactions will be determined through arm’s-length negotiations.

Assignment and Assumption Agreement

Pursuant to the General Assignment, Assumption and Agreement Regarding Litigation, Claims and Other Liabilities, in general, we and our U.S. subsidiaries indemnify Apogent and its subsidiaries and affiliates against liabilities, litigation and claims actually or allegedly arising out of the dental business, including discontinued operations within those business segments. Similarly, Apogent and its U.S. subsidiaries indemnify us and our subsidiaries and affiliates against liabilities, litigation and claims actually or allegedly arising out of Apogent’s laboratory business, including discontinued operations within those business segments, and other items not transferred to us. In circumstances in which any liability of Apogent and SDS is joint, the parties will share responsibility for such liability on a mutually agreed basis consistent with the allocation of the business segments.

Insurance Matters Agreement

An Insurance Matters Agreement governs the rights and obligations of Apogent and us with respect to various pre-existing contracts insuring Apogent and covering risks associated with, or arising out of, the dental business. The types of policies covered by the Insurance Matters Agreement include, without limitation, automobile liability, comprehensive and general liability. The Insurance Matters Agreement also establishes certain procedures for dealing with pending litigation, new litigation and the resolution of disputes between the parties concerning that agreement.

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Available Information

Our Internet address is www.sybrondental.com. There we make available, free of charge, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The information found on our website is not part of this or any other report we file with or furnish to the SEC.

Forward-Looking Statements

All statements other than statements of historical facts included in this Annual Report, including without limitation, statements in Item 1 — Business, Item 3 — Legal Proceedings and Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report, and other statements located elsewhere in this Annual Report, in each case regarding the prospects of our industry and our prospects, plans, financial position, and business strategy, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “goal,” “objective,” “outlook,” “could,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should,” or “will” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully because they:

We believe it is important to communicate expectations to our investors. However, forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by any forward-looking statements. These factors include, among other things, those listed in Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations “Cautionary Factors.” Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results. Those statements, such as the one made in the immediately preceding section, “Business Strategy” regarding our intent to pursue our acquisition strategy, concern, among other things, our intent, belief or current expectations with respect to our operating and growth strategies, our capital expenditures, financing or other matters, regulatory matters pertaining to us specifically and the industry in general, industry trends, competition, risks attendant to foreign operations, reliance on key distributors, litigation, environmental matters, and other factors affecting our financial condition or results of operations. Such forward-looking statements involve certain risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those contemplated in the forward-looking statements.

All subsequent forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements included in this document. These forward-looking statements speak only as of the date of this Annual Report. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise and do not intend to update these statements unless the securities laws require us to do so.

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We operate manufacturing facilities in the United States and certain foreign countries. The following table sets forth information regarding our principal properties by business segment. Properties with less than 20,000 square feet of building space have been omitted from this table.

We consider our plants and equipment to be well maintained and suitable for their purposes. We review our manufacturing capacity periodically and make the determination as to our need to expand or, conversely, rationalize our facilities. We consolidated five of our Eastern European facilities into one site in fiscal 2004, and closed one of our manufacturing facilities in Mexico. In the event that we determine a need to expand our facilities, we expect to fund such expansions through internally generated funds or borrowings under our credit facility, which is described in Note 7 to our consolidated financial statements in Item 8 of this Annual Report. All of our owned domestic properties are encumbered under our credit facility. Our facility in Bioggio, Switzerland is encumbered by a mortgage given to the former shareholder of Hawe Neos as security for certain indemnification obligations we gave to the former shareholder of Hawe Neos.

The facility we closed in Mexico, a 32,000 square foot facility in Tijuana, Mexico is currently held for sale.

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We or our subsidiaries are at any one time parties to a number of lawsuits or subject to claims arising out of our respective operations, including products liability, patent and trademark, or other intellectual property infringement, contractual liability, workplace safety and environmental claims and cases, some of which involve claims for substantial damages. We or our subsidiaries are vigorously defending lawsuits and other claims against us. Pursuant to the agreements described above between Apogent and us relating to the spin-off, we will indemnify Apogent and its subsidiaries against costs and liabilities associated with past or future operations of the dental business, and Apogent will indemnify us and our subsidiaries against costs and liabilities associated with past or future operations of the laboratory business. See Item 1 — Business “Transactions and Agreements Between Apogent and SDS.” of this Annual Report. We believe that any liabilities which might be reasonably expected to result from any of our or our subsidiaries’ pending cases and claims would not have a material adverse effect on our consolidated results of operations or financial condition, even if we are unable to recover amounts that we expect to recover with respect to those pending cases and claims through insurance, indemnification arrangements, or other sources. There can be no assurance as to this, however, or that litigation having such a material adverse effect will not arise in the future. For information about our legal expense related to patent litigation please see Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations “ Overview.”

None.

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Executive Officers of the Registrant

Set forth below are the names, ages, positions and experience of our executive officers. All executive officers hold office at the pleasure of the Board of Directors.

On November 15, 2004 we announced that Greg D. Waller, Vice President-Finance, Chief Financial Officer and Treasurer, intends to retire in 2005. Mr. Waller will remain in his current position until at least April 1, 2005, and possibly longer depending on the progress of our search for his replacement. Subsequent to his retirement, Mr. Waller will remain as a consultant to us for a period of at least one year.

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PART II

Shares of our common stock are traded on the New York Stock Exchange (“NYSE”) under the symbol “SYD.” The following table sets fourth the range of high and low sales prices per share of common stock as reported by the NYSE for each quarter of the two most recent fiscal years.

Since our inception, we have not paid any dividends on our Common Stock and have no current intention to pay cash dividends on our Common Stock. See Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations “Liquidity and Capital Resources,” and Note 7 to our consolidated financial statements contained in Item 8 of this Annual Report, for a description of certain restrictions on our ability to pay dividends. Subject to such limitations, any future dividends will be at the discretion of our Board of Directors and will depend upon, among other factors, our earnings, financial condition and other requirements.

As of December 6, 2004, there were 592 record holders of our common stock (excluding participants in securities position listings).

Issuer Purchases of Equity Securities

The table below sets forth information with respect to shares repurchased from an employee in the fourth quarter of fiscal 2004 in connection with the payment of withholding taxes and the purchase price due in connection with the exercise of stock options.

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The following table sets forth our selected consolidated financial information for each of the five years in the period ended September 30, 2004. This selected financial information should be read in conjunction with Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations, and our consolidated financial statements and the notes thereto contained in Item 8 of this Annual Report.

Fiscal 2003 – On October 1, 2002, we adopted the provisions of the Statement of Accounting Financial Standards No. 142, and accordingly, discontinued amortizing goodwill and certain other intangible assets in fiscal 2003. Our fiscal 2003 results also include a $0.5 million (after tax) gain on the sale of our San Diego facility and a $0.9 million benefit of a tax settlement in Canada.

Fiscal 2002 – We recorded restructuring charges of approximately $3.7 million ($2.4 million after tax) for the consolidation of our Professional Dental segment’s European operations into our Bioggio, Switzerland facility and refinancing expenses of approximately $13.0 million ($7.9 million after tax) associated with the refinancing of our credit facility.

Fiscal 2001 – We recorded a $2.4 million ($1.5 million after tax) restructuring charge related to the closing of Ormco’s San Diego, California facility.

Fiscal 2000 – We recorded a restructuring charge of $9.3 million ($5.8 million after tax) for the closing of Metrex’s Parker, Colorado facility, and the restructuring of Ormco’s operation in San Diego and Amersfort, as well as inventory and related charges for product exits in 2000 in all three of our then existing business segments.

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General

We are a leading global manufacturer and marketer of a broad range of consumable dental products and related small equipment, and a manufacturer and distributor of products for use in infection prevention in both the medical and dental markets. Prior to December 11, 2000, we were a wholly-owned subsidiary of Apogent Technologies Inc., which is now a wholly-owned subsidiary of Fisher Scientific International Inc. On December 11, 2000, Apogent spun off its dental business by way of a pro rata distribution to its shareholders of all of our outstanding common stock together with related preferred stock purchase rights. As a result of the spin-off, we became an independent, publicly traded company.

Our two business segments are Professional Dental and Specialty Products. In fiscal 2003 we began reporting in the Specialty Products segment the net sales of certain endodontic products whose sales were previously included in the net sales of the Professional Dental segment. At the commencement of the 2004 fiscal year we added to the net sales of the Specialty Products segment the net sales of certain other endodontic products that were also previously included in the net sales reported for the Professional Dental segment. We did not restate the operating results of either the Professional Dental segment or the Specialty Products segment for the periods prior to the periods in which the reporting of the net sales of the endodontic products changed. While it would have been possible to restate the net sales for the prior periods to reflect the change, it was impracticable to restate the prior period operating results as the effect the change in net sales had on selling, general and administrative expenses could not be calculated. The change in the recording of the endodontic products net sales from the Professional Dental segment to the Specialty Products segment did not impact the consolidated results of operations for any of the fiscal year periods reported herein.

Our corporate general and administrative expenses have been allocated to the segments using the same ratio as the ratio of the segment’s net sales to our total net sales. The allocation is made without regard to the level of the benefit each segment received from the corporate expenses. The corporate general and administrative expenses include certain legal and other expenses which may be associated with only one segment. However, as a result of our method of allocating those expenses, a portion of the cost is reflected in both our Professional Dental and Specialty Products segments. For example, in fiscal 2004 expenses of $2.6 million associated with patent litigation involving only the Specialty Products segment were allocated to both the Professional Dental segment (55%) and Specialty Products segment (45%).

The following discussion should be read in conjunction with our consolidated financial statements and the accompanying notes contained in Item 8 of this Annual Report.

Overview

Based upon the information we have available to us, we estimate the growth of the worldwide dental market for the type of products we sell to be between 4% and 6% percent, with the U.S. market growing at the upper end of the range. The factors that we believe will allow the market to continue to grow in the 4% to 6% range are, among others things, a steadily growing demand by consumers for endodontic, periodontic, orthodontic, cosmetic and other specialized procedures in an effort to retain and improve the appearance of their natural teeth; the aging baby-boomer segment of the population who we think are more likely to require repair and reconstructive dental procedures, such as root canals and the placement of crowns or bridges; technological advances in dental products which reduce both the discomfort to the patient and the treatment time thereby attracting more patients;

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an increasing worldwide population, creating more dental patients; and an expected growth in per capita and discretionary incomes in emerging nations which should result in healthcare, including dental services, becoming a greater priority.

Our worldwide net sales grew from $526.4 million in fiscal 2003 to $574.0 million in fiscal 2004, a 9% increase. Our fiscal 2004 net sales increase is due to favorable foreign currency fluctuations of 3.8%, internal growth of 3.1% and acquisitions of 2.1%. Both our overall net sales growth rate and our internal net sales growth rate in fiscal 2004 were less than they were in fiscal 2003, which experienced an overall net sales growth of 15.3% and internal growth rate of 8.4%. We define internal net sales as total net sales excluding foreign currency fluctuations and the impact of acquisitions made in the past twelve months.

The slowness we experienced in our internal net sales growth rate was the result of the negative internal growth experienced by our Professional Dental segment. Our Professional Dental segment had negative internal growth of 2.5% for the 2004 fiscal year. If we exclude equipment sales from the calculation of our Professional Dental segment internal net sales, the segment experienced positive internal growth of 1.3% over the prior year period; although that rate is still below the segment’s historical growth rate of 4% to 6%. The decrease in net sales in fiscal 2004 compared to fiscal 2003 was the greatest in the U.S. market. The decrease was largely due to the decrease in the sales of our LED curing light; the customer purchases made at the end of fiscal 2003 of our Professional Dental segment products in advance of a price increase scheduled to take effect at the beginning of fiscal 2004; the adjustments made by the largest customer of our dental burs in its inventory levels due to a configuration change in the packaging of their products which resulted in a temporary reduction in their purchases of dental burs; a decline in the demand for dental amalgam products; a reduction in the growth of our dental composite products to a single digit increase; and a delay in the launch of our new impression material, impacting the ability to grow what is a significant product line for our Professional Dental segment.

We expect to continue to experience a decline in the net sales of our LED curing light, which was introduced in the first quarter of fiscal 2003 and generated significant net sales during the 2003 fiscal year. Unlike our consumable product sales which generate consistent sales as the products cannot be reused, a curing light has a life span of 4 to 5 years. As a result, the sales made of that product in fiscal 2003 were not repeated in fiscal 2004 and are expected to continue to decline. We anticipate the sales of Premise, our new dental composite, and Kavitan LC, our new glass ionomer, will be additive to the sales of our other dental composites, resulting in greater growth in fiscal 2005 for that product line. Likewise, StandOut, our new impression material is expected to increase the sales of our impression materials. We expect the sales of our dental burs to return to their normal levels as the packaging reconfiguration for our largest customer has been completed.

As a result of the various measures we have undertaken, we anticipate that our internal growth rate in fiscal 2005 will return to our historical levels.

In contrast to the decrease in the internal net sales growth rate of our Professional Dental segment, our Specialty Products segment had an internal growth rate in fiscal 2004 of 10.8%. The majority of the growth occurred in the U.S. market which had an internal net sales growth of 13.5%, while the internal net sales growth in all other markets grew at 7.9%. The internal net sales growth rates in fiscal 2003 were 7.9% for the U.S. market and 10.3% for all other markets. The increase in net sales is a result, in part, of an increase in demand for our Damon 2 self-ligating bracket; the net sales of our Inspire® Ice clear-ceramic bracket, which was introduced in the first quarter of 2004; the sales of our Damon 3 self-ligating bracket which was introduced in the third quarter of fiscal 2004; the increase in sales of our Ni-Ti endodontic files; and an increase in the sales of certain of our orthodontic arch wires.

We intend to continue to focus our selling efforts on the Damon self-ligating bracket system and our Inspire Ice and Titanium Orthos^® brackets. We believe those product lines present us with a series of differentiated products which will continue to create selling opportunities that will allow us to achieve internal sales growth in 2005 at the upper end of our historical 4% to 6% internal growth rate; although reductions in the payments under certain governmental health reimbursement programs, such as those in Germany where reimbursement programs

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exist, could impact our selling efforts. As we focus on our efforts on our newer products, we expect to experience a decline in our more traditional bracket product line.

Operating income for fiscal 2004 was $113.4 million, representing a slight increase from the corresponding fiscal 2003 period operating income of $112.0 million. As a percent of sales our operating income decreased from 21.3% in fiscal 2003 to 19.8% in fiscal 2004. Our operating income in fiscal 2004 was negatively impacted by $1.5 million incurred in the closure of Ormco’s production facility in Tijuana, Mexico and an increase in our selling, general and administrative expenses due to the costs incurred in the evaluation of prospective mergers and acquisitions, the expense of our Sarbanes-Oxley Section 404 compliance efforts, the charges caused by our foreign currency zero cost collar hedges, and legal expenses associated with certain patent litigation relating to the Specialty Products business segment. We do not expect to incur any significant charges connected to the Tijuana facility closure and anticipate a reduction in the costs associated with the patent litigation in fiscal 2005.

Interest expense in fiscal 2004 was $19.5 million or $2.1 million less than the prior year period. The decrease was a result of lower average debt in the year of $249.1 million, or $66.4 million less than in the prior year period, partially offset by an increase in the average interest rate to 7.7%, from 6.7% in the prior year period. The increase in the average interest rate was the result of the pay down of our floating rate debt, which carried a lower interest rate than our fixed rate debt. We expect to see a slight increase in our average interest rate in fiscal 2005 as we anticipate interest rates will continue to rise and as we continue to pay down our lower interest rate debt.

Income taxes in fiscal 2004 were $30.6 million or 33.0% of income before taxes as compared to income taxes of $32.1 million, or 35.9% of income before taxes in fiscal 2003. The reduction in our tax rate is primarily attributable to the benefits resulting from the consolidation of several of our European facilities into Switzerland, which has a lower tax rate. We do not anticipate any further reduction in our tax rate, unless there is a substantial change in the geographical mix of our products, which we do not expect. We are currently evaluating the impact of the American Jobs Creation Act of 2004 (the “Jobs Creation Act”). Should we decide to repatriate earnings of non-U.S. subsidiaries under the terms of the Jobs Creation Act, there may be an impact on our tax rate.

Year Ended September 30, 2004 Compared to the Year Ended September 30, 2003

Net Sales

Overall Company. Net sales for the twelve months ended September 30, 2004 increased by $47.6 million, or 9.0%, from the corresponding 2003 fiscal year.

Professional Dental. Increased net sales in the Professional Dental segment resulted primarily from: (a) the net sales of products from acquired companies (approximately $12.9 million), (b) net sales of new products (approximately $11.2 million), and (c) favorable foreign currency fluctuations (approximately $10.0 million). The increase in net sales was partially offset by: (a) decreased net sales of existing products (approximately $19.6 million), (b) a decrease in net sales due to the transfer to the Specialty Products segment (approximately $4.9 million) of the European endodontic product sales, and (c) increased rebate payments (approximately $1.3 million).

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Specialty Products. Increased net sales in the Specialty Products segment resulted primarily from: (a) net sales of new products (approximately $11.2 million), (b) favorable foreign currency fluctuations (approximately $10.3 million), (c) increased net sales of existing products (approximately $9.6 million), (d) an increase in net sales due to the transfer from the Professional Dental segment (approximately $4.9 million) of the European endodontic product sales, and (e) decreased rebate payments (approximately $3.3 million).

Gross Profit

Overall Company. Gross profit for the twelve months ended September 30, 2004 increased by $25.5 million or 8.8% from the corresponding fiscal 2003 period. Our gross profit as a percent of sales remained relatively stable in fiscal 2004 when compared to fiscal 2003. We expect a slight improvement in our gross margin in fiscal 2005, as a result of the foreign currency hedges we have in effect for fiscal 2005.

Professional Dental. Increased gross profit in the Professional Dental segment resulted primarily from: (a) gross profit derived from the net sales of products of acquired companies (approximately $6.7 million), (b) gross profit relating to new products (approximately $6.4 million), (c) favorable foreign currency fluctuations (approximately $5.1 million), and (d) favorable manufacturing variances (approximately $1.6 million). The increase in gross profit was partially offset by: (a) decreased net sales of existing products (approximately $11.9 million), (b) a decrease in sales of higher margin products (approximately $1.5 million), (c) increased rebate (approximately $1.3 million), (d) decreased gross profit due to the transfer to the Specialty Products segment (approximately $1.2 million) of the European endodontic product line, and (e) inventory adjustments (approximately $0.4 million).

Specialty Products. Increased gross profit in the Specialty Products segment resulted primarily from: (a) favorable foreign currency fluctuations (approximately $10.3 million), (b) gross profit relating to new products (approximately $6.5 million), (c) increased net sales of existing products (approximately $5.3 million), (d) decreased rebate (approximately $3.3 million), (e) increased gross profit due to the transfer from the Professional Dental segment (approximately $1.2 million) of the European endodontic product line, and (f) inventory adjustments (approximately $0.2 million). The increase in gross profit was partially offset by: (a) a decrease in sales of higher margin products (approximately $2.1 million), (b) costs related to the closure of the manufacturing facility in Mexico (approximately $1.5 million), (c) increased royalty expense (approximately $0.7 million), and (d) unfavorable manufacturing variances (approximately $0.5 million).

Selling, General and Administrative Expenses

Overall Company. Selling, general and administrative expenses for the fiscal year ended September 30, 2004 increased by $24.1 million or 13.5% from the corresponding fiscal 2003 period. As previously discussed,

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all corporate general and administrative expenses are allocated to the Professional Dental and Specialty Products segments in proportion to each segment’s net sales, regardless of the extent to which a particular expense may relate to one segment or the other. The total allocation increased from $22.5 million in fiscal 2003 to $27.0 million in fiscal 2004. The largest contributors to the increase in corporate office general and administrative expenses were an increase in legal expenses (approximately $2.6 million) and an increase in expenses related to our efforts to fully document and test our internal control over financial reporting (approximately $1.3 million). The increase in legal expenses was predominately caused by the increase in expenses associated with certain patent litigation to which we are a party. We do not anticipate our patent litigation expenses to continue at the same level in fiscal 2005.

Professional Dental. Increased selling, general and administrative expenses in the Professional Dental segment resulted primarily from: (a) expenses of an acquired company (approximately $4.6 million), (b) an increase in expenses relating to foreign currency fluctuations (approximately $3.7 million), (c) increased selling and marketing expenses (approximately $1.1 million), and (d) increased general and administrative expenses (approximately $0.8 million). The increase in selling, general and administrative expenses was partially offset by: (a) the absence of restructuring charges in fiscal 2004 (approximately $0.3 million) and (b) a reduction of research and development expenses (approximately $0.1 million).

Specialty Products. Increased selling, general and administrative expenses in the Specialty Products segment resulted primarily from: (a) increased selling and marketing expenses (approximately $6.2 million), due to the increase in net sales, (b) increased general and administrative expenses (approximately $5.1 million), (c) increased expenses related to foreign currency fluctuations (approximately $1.9 million), and (d) increased research and development expenses (approximately $1.1 million).

Operating Income

As a result of the foregoing, operating income for the fiscal year ended September 30, 2004 increased by 1.2% or $1.4 million from operating income for the corresponding 2003 period.

Interest Expense

Interest expense was $19.5 million in 2004, a decrease of $2.1 million from the corresponding 2003 period. The decrease resulted from reduced average debt balances from $315.5 million in fiscal 2003 to $249.1 million in fiscal 2004, partially offset by an increase in the average interest rate on debt from 6.7% in fiscal 2003 to 7.7% in fiscal 2004 on our long term debt. The debt that was repaid in fiscal 2004 was adjustable rate debt with a lower average interest rate than the remaining debt.

Income Taxes

Taxes on income in 2004 were $30.6 million, or 33.0% of income before taxes, a decrease of $1.5 million from the prior year taxes on income of $32.1 million, or 35.9% of income before taxes. The reduction in our tax rate in fiscal 2004 from the prior fiscal year is primarily attributable to the benefits resulting from the consolidation of several of our European facilities into Switzerland, which has a lower tax rate.

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Year Ended September 30, 2003 Compared to the Year Ended September 30, 2002

Net Sales

Overall Company. Net sales for the twelve months ended September 30, 2003 increased by $69.7 million, or 15.3%, from the corresponding 2002 fiscal year.

Professional Dental. Increased net sales in the Professional Dental segment resulted primarily from: (a) net sales of new products (approximately $16.2 million), (b) favorable foreign currency fluctuations (approximately $12.6 million), (c) the net sales of products from acquired companies (approximately $6.9 million), (d) increased net sales of existing products (approximately $4.2 million), and (e) decreased rebate payments (approximately $0.7 million). The increase in net sales was offset by a decrease in net sales due to the transfer to the Specialty Products segment (approximately $12.5 million) of the endodontic product sales.

Specialty Products. Increased net sales in the Specialty Products segment resulted primarily from: (a) increased net sales of existing products (approximately $22.6 million), (b) an increase in net sales due to the transfer from the Professional Dental segment (approximately $11.1 million) of the endodontic product sales, (c) favorable foreign currency fluctuations (approximately $8.9 million), and (d) net sales of new products (approximately $4.6 million). The increase in net sales was offset by increased rebate payments (approximately $5.6 million).

Gross Profit

Overall Company. Gross profit for the twelve months ended September 30, 2003 increased by $35.0 million or 13.7% from the corresponding fiscal 2002 period.

Professional Dental. Increased gross profit in the Professional Dental segment resulted primarily from: (a) gross profit relating to new products (approximately $9.0 million), (b) favorable foreign currency fluctuations (approximately $6.3 million), (c) gross profit derived from the net sales of products from acquired companies (approximately $4.2 million), (d) increased net sales of existing products (approximately $2.7 million), and (e) decreased rebate (approximately $0.7 million). The increase in gross profit was partially offset by: (a) decreased gross profit due to the transfer to the Specialty Products segment (approximately $7.8 million) of the endodontic product line, (b) unfavorable manufacturing variances (approximately $2.2 million), (c) a decrease in sales of higher margin products (approximately $1.2 million), (d) increased royalty expense (approximately $0.8 million), and (e) inventory adjustments (approximately $0.1 million). The decrease in gross margin percent is attributable to the transfer of the endodontic product line to the Specialty Products segment, product mix and unfavorable manufacturing variances from decreased manufacturing volumes in certain facilities due to our increased focus on inventory management.

Specialty Products. Increased gross profit in the Specialty Products segment resulted primarily from: (a) increased net sales of existing products (approximately $12.0 million), (b) favorable foreign currency

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fluctuations (approximately $8.8 million), (c) increased gross profit due to the transfer from the Professional Dental segment (approximately $6.5 million) of the endodontic product line, (d) favorable manufacturing variances (approximately $2.8 million), and (e) gross profit relating to new products (approximately $2.8 million). The increase in gross profit was partially offset by: (a) increased rebate (approximately $5.6 million), (b) increased royalty expense (approximately $1.6 million), (c) inventory adjustments (approximately $1.1 million), and (d) a decrease in sales of higher margin products (approximately $0.4 million).

Selling, General and Administrative Expenses

Overall Company. Selling, general and administrative expenses for the fiscal year ended September 30, 2003 increased by $15.2 million or 9.3% from the corresponding fiscal 2002 period.

Professional Dental. Increased selling, general and administrative expenses in the Professional Dental segment resulted primarily from: (a) increased general and administrative expenses of approximately $6.9 million primarily attributable to higher incentive compensation related to the improved performance in fiscal 2003 over fiscal 2002, (b) an increase in expenses relating to foreign currency fluctuations (approximately $3.9 million), and (c) expenses of acquired companies (approximately $3.0 million). The increase in selling, general and administrative expenses was partially offset by: (a) decreased amortization expense of goodwill and other intangible assets (approximately $6.3 million), (b) the absence of restructuring charges in fiscal 2003 (approximately $3.3 million), (c) decreased research and development expenses (approximately $0.3 million), and (d) decreased selling and marketing expenses (approximately $0.1 million).

Specialty Products. Increased selling, general and administrative expenses in the Specialty Products segment resulted primarily from: (a) increased selling and marketing expenses (approximately $6.2 million), consistent with the increase in sales, (b) increased general and administrative expenses of approximately $6.0 million primarily attributable to higher incentive compensation related to the improved performance in fiscal 2003 over fiscal 2002, and (c) increased expenses related to foreign currency fluctuations (approximately $2.0 million). The increase in selling, general and administrative expenses was partially offset by: (a) a decrease in amortization expense of goodwill and other intangible assets (approximately $2.6 million) and (b) decreased research and development expenses (approximately $0.2 million).

Other, Net

Included in other, net for the fiscal year ended September 30, 2003 is a gain from the sale of our San Diego facility for approximately $0.8 million.

Operating Income

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As a result of the foregoing, operating income for the fiscal year ended September 30, 2003 increased by 21.4% or $19.8 million from operating income for the corresponding 2002 period.

Interest Expense

Interest expense was $21.6 million in 2003, a decrease of $4.3 million from the corresponding 2002 period. The decrease resulted from reduced average debt balances from $350.6 million in fiscal 2002 to $315.5 million in fiscal 2003, and reduced average interest rates from 7.3% in fiscal 2002 to 6.7% in fiscal 2003 on our credit facility.

Income Taxes

Taxes on income in 2003 were $32.1 million, or 35.9% of income before taxes, an increase of $11.4 million from the prior year taxes on income of $20.7 million, or 39.0% of income before taxes. Excluding a benefit of a tax settlement in Canada of $0.9 million, the taxes on income were $33.0 million in 2003. The increase in taxes was primarily due to higher taxable earnings, partially offset by the decrease in our effective tax rate due to lower foreign tax rates.

Critical Accounting Estimates

We believe the following critical accounting estimates, among others, affect significant judgments and estimates used in the preparation of our consolidated financial statements. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for determining the carrying values of assets and liabilities that are not readily apparent from other sources and are inherently uncertain. As a result, changes in estimates, assumptions and general market conditions on which our judgments and estimates are based, could cause actual results to differ materially from future expected results.

At October 1, 2004, the discount rate was 6.25%. To the extent the discount rate increases or decreases, the projected pension obligation is decreased or increased, accordingly. The estimated effect of a 1.0% decrease in the discount rate would increase the projected pension benefit obligation by $23.8 million and increase annual pension expense by $3.4 million.

The expected long-term rate of return on the pension plan assets is the weighted average rate of the long-term investment return expected on those assets. To the extent the actual rate of return on assets realized over the course of a year is greater than the assumed rate, that year’s annual pension expense is not affected. Rather, the gain would reduce future pension expense over a period of approximately 12 to 18 years. As of October 1, 2004, we utilized 8.75% as the expected long-term rate of return on plan assets. The estimated effect of a 1.0% decrease in the expected long-term rate of return on plan assets would decrease the projected pension obligation by $2.7 million and increase annual pension expense by $0.1 million.

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The assumed average rate of compensation increase is the average annual compensation increase expected over the remaining employment periods for the participating employees. At October 1, 2004, we utilized a rate of 4.0%. This rate is utilized principally in calculating the pension obligation and annual pension expense. The estimated effect of a 1.0% increase in the assumed rate of compensation increase would increase the projected pension obligation by $2.1 million and increase annual pension expense by $0.5 million.

Based on market conditions, and based on information from our actuaries and investment advisors, we increased our discount rate from 6.0% to 6.25% as of June 30, 2004. We maintained our expected rate of compensation increase at 4.0% and our expected return on plan assets at 8.75%.

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Acquisitions

As discussed in Item 1 — Business “Research and Development,” we have maintained an active program of development and introduction of new products. We believe that introducing new products is important to maintain our competitive position. We have also pursued numerous acquisition opportunities, completing 30 acquisitions since 1993. Acquisitions completed since the beginning of fiscal 2002 are as follows:

These acquisitions included in our business segments are consistent with our strategy of acquiring product lines that can be manufactured in existing facilities, sold through existing sales and distribution networks or that expand our geographic reach. We intend to continue to seek out acquisition candidates consistent with our strategy. However, there can be no assurance of the number or size of future acquisitions.

Restructuring Charges

In fiscal 2004, we implemented and completed a plan to close our facility in Tijuana, Mexico by the end of the first quarter of fiscal 2005, and as a result of this plan, recorded restructuring charges of $1.5 million ($1.0 million after tax) in the fiscal year ended September 30, 2004. The charges are comprised of severance and termination costs associated with the 246 employees whose employment we terminated as a result of the closure and recorded as a component of cost of goods sold in the fiscal year. Of the $1.5 million in restructuring charges $0.3 million remains in accrued liabilities until all severance is paid.

In September 2002, we recorded a restructuring charge of approximately $3.7 million ($2.4 million after tax). The charge is primarily comprised of severance and termination costs associated with the 71 employees whose employment we terminated as a result of the consolidation of several of our European facilities into our Hawe Neos facility in Switzerland. Of the $3.7 million restructuring charge, approximately $3.1 million is related to cash payments for severance and contractual obligations, $0.3 million for the cash payment of tax liabilities included in income taxes payable while the balance of approximately $0.3 million relates to non-cash charges. We completed the 2002 restructuring in fiscal 2004, and made an adjustment to restructuring charges of approximately $0.2 million, primarily for the over accruals for anticipated costs associated with severance and related costs. A balance of $0.3 million remains in our accrued tax liability until it is remitted.

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The 2002 restructuring charge activity since September 30, 2002 and its components are as follows:

In June 1998, we recorded a restructuring charge of approximately $14.6 million (approximately $10.7 million after tax) for the rationalization of certain acquired companies, combination of certain duplicate production facilities, movement of certain customer service and marketing functions, and the exiting of several product lines. In fiscal 2004 we made an adjustment to restructuring charges of approximately $0.2 million to adjust the accrual primarily representing over accruals for anticipated costs associated with the restructuring activity. A balance of $0.7 million remains in accrued tax liability until it is remitted or the tax period ends.

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The 1998 restructuring charge activity since June 30, 1998 and its components are as follows: