Exhibit 99.1

 

Sirona Reports Record Fiscal 2012 Fourth Quarter and Full Year Results

 

•

Fourth quarter revenues of $247.4 million, up 13.1% compared to prior year, or up 23.4% constant currency. Fiscal year 2012 revenues increased 7.2%, or up 12.6% constant currency.

 

•

Fourth quarter operating income, excluding amortization* of $11.7 million, totaled $57.1 million, up 25.5% compared to prior year (excluding a non-cash compensation charge). Fiscal 2012 operating income, excluding amortization* of $47.9 million, totaled $233.7 million, up 5.0% compared to prior year (excluding a non-cash compensation charge).

 

•

Sirona announces fiscal 2013 guidance: revenue growth of 9% to 11% constant currency, and EPS on a non-GAAP adjusted basis^ in a range of $3.33 to $3.43 (reflecting growth of approximately 10% to 13%).

Long Island City, New York, November 16, 2012 – Sirona (Nasdaq: SIRO), the dental technology leader, today announced its financial results for the quarter and fiscal year ended September 30, 2012.

Fourth Quarter Fiscal 2012 vs. Fourth Quarter Fiscal 2011 Financial Results Revenue was $247.4 million, an increase of $28.6 million or up 13.1% (and up 23.4% on a constant currency basis). The Company’s business segments grew as follows: CAD/CAM Systems increased 25.6% (up 36.5% on a constant currency basis), Treatment Centers increased 13.2% (up 28.0% on a constant currency basis), Imaging Systems increased 6.9% (up 14.0% on a constant currency basis), and Instruments increased 1.0% (up 14.0% on a constant currency basis).

Revenue in the United States increased 34.1%, while revenues outside the United States increased 5.7% (up 19.2% constant currency), with particularly robust performance in the Asia-Pacific region.

Gross profit was $132.1 million, up $21.4 million. Gross profit margin was 53.4% in the fourth quarter of Fiscal 2012, compared to 50.6% in the prior year. Gross profit margin as a percent of sales was positively impacted by better segment gross profit margin and lower amortization.

 

*	Operating income plus amortization and constant currency growth and results are non-GAAP financial measures that exclude certain items. Please refer to ”Reconciliation of GAAP and non-GAAP Information (unaudited)” in the attached exhibits for a description of these items.

^

This metric is a new, non-GAAP financial measure that excludes certain items. Please refer to ”Reconciliation of GAAP and non-GAAP Information (unaudited)” in the attached exhibits for a description of these items. The 10% to 13% growth rate for non-GAAP Adjusted EPS compares this new metric for fiscal 2013 guidance to fiscal 2012 non-GAAP Adjusted EPS re-calculated on the same basis.

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Fourth quarter 2012 operating income excluding amortization expense was $57.1 million (operating income of $45.4 million plus amortization expense of $11.7 million), compared to $45.5 million (operating income of $25.0 million plus amortization expense of $13.9 million, plus a $6.6 million non-cash compensation charge) in the fourth quarter of 2011.

Net income for the fourth quarter of 2012 was $34.7 million, or $0.62 per diluted share, versus $13.8 million, or $0.24 per diluted share in the prior year period. Non-GAAP earnings per diluted share for the fourth quarter of 2012 was $0.71 compared to $0.68 in the prior year quarter.

At September 30, 2012, the Company had cash and cash equivalents of $151.1 million and total debt of $75.5 million, resulting in net cash of $75.6 million. This compares to net debt of $22.5 million at September 30, 2011.

Jost Fischer, Chairman and CEO of Sirona commented: “We had an outstanding fourth quarter, with every segment of our business growing double digits, constant currency and strong operating income growth. Fiscal 2012 was another year of double digit constant currency revenue growth for Sirona, where we exceeded sales expectations. We posted record revenues and earnings, strengthened our balance sheet, extended our global leadership position and introduced the revolutionary Omnicam. Our 12.6% constant currency revenue growth was particularly noteworthy compared to a record setting fiscal 2011 in which Sirona grew over 16% constant currency.”

Mr. Fischer continued: “For the year, Treatment Centers and CAD/CAM led our growth, up 15.1% and 13.9% respectively on a constant currency basis. Revenue growth was particularly strong in non-European international markets, led again by the Asia-Pacific region. The U.S. continues to improve for us, accelerating for the third consecutive quarter, ending up a robust 11.4% for the year. Although Germany was down due to a difficult IDS comparison to last year, we had our second best year ever in Germany, and the rest of Europe grew this quarter and for the year, on a constant currency basis. We ended our year with an unprecedented celebration at CEREC 27.5 where we received a standing ovation from a crowd of around 4,000 dental professionals with the launch of the revolutionary Omnicam. With the investment in our global sales and service infrastructure continuing to pay dividends and innovation as our top priority, we expect our momentum to continue into next year as reflected in our revenue guidance.”

Fiscal 2013 Guidance

Management anticipates fiscal year 2013 constant currency revenue growth to be in the range of 9% to 11%, and EPS on a non-GAAP adjusted basis^ in a range of $3.33 to $3.43 (reflecting growth of approximately 10% to 13%).

 

^

This metric is a new, non-GAAP financial measure that excludes certain items. Please refer to “Reconciliation of GAAP and non-GAAP Information (unaudited)” in the attached exhibits for a description of these items. The 10% to 13% growth rate for non-GAAP Adjusted EPS compares this new metric for fiscal 2013 guidance to fiscal 2012 non-GAAP Adjusted EPS re-calculated on the same basis.

 

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Fiscal 2012 vs. Fiscal 2011 Financial Results

Revenue was $979.4 million, an increase of $65.5 million or up 7.2% (up 12.6% on a constant currency basis). The Company’s business segments grew as follows: CAD/CAM Systems increased 9.1% (up 13.9% on a constant currency basis), Imaging Systems increased 7.4% (up 11.5% on a constant currency basis), Treatment Centers increased 7.2% (up 15.1% on a constant currency basis), and Instruments increased 0.2% (up 7.5% on a constant currency basis).

Revenue in the United States increased 11.4%, while revenues outside the United States increased 5.5% (up 13.2% constant currency), with particularly robust performance in the Asia-Pacific region.

Gross profit was $524.0 million, up $40.3 million. Gross profit margin was 53.5% for Fiscal 2012, compared to 52.9% in the prior year. Gross profit margin as a percent of sales was positively impacted by lower amortization.

Fiscal 2012 operating income excluding amortization expense was $233.7 million (operating income of $185.7 million plus amortization expense of $47.9 million). This compares to 2011 operating income excluding amortization and a non-cash compensation charge of $222.5 million (operating income of $160.9 million plus amortization expense of $54.9 million, plus the $6.6 million charge).

Conference Call/Webcast Information

Sirona will hold a conference call to discuss its financial results at 8:30 a.m. Eastern Time on November 16, 2012. The teleconference can be accessed by calling +1 800.299.7635 (domestic) or +1 617.786.2901 (international) using passcode # 43749778. The webcast will be available via the Internet at http://ir.sirona.com and a presentation relating to the call will be available on our website. A replay of the conference call will be available through November 23, 2012 by calling +1 888 286 8010 (domestic) or +1 617 801 6888 (international) using passcode #17050016. A web archive will be available for 30 days at www.sirona.com.

About Sirona Dental Systems, Inc.

Sirona, the dental technology leader, has served dealers and dentists worldwide for more than 130 years. Sirona develops, manufactures, and markets a complete line of dental products, including CAD/CAM restoration systems (CEREC), digital intra-oral, panoramic and 3D imaging systems, dental treatment centers and handpieces. Visit http://www.sirona.com for more information about Sirona and its products.

Contact information:

Joshua Zable

Vice President, Investor Relations

+1 718 482 2184

joshua.zable@sirona.com

 

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This press release contains forward-looking information about Sirona Dental Systems, Inc.’s financial results, guidance and estimates, business prospects, and products and services that involve substantial risks and uncertainties or 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 such forward-looking statements. You can identify these statements by the use of words such as “may,” “could,” “estimate,” “will,” “believe,” “anticipate,” “think,” “intend,” “expect,” “project,” “plan,” “target,” “forecast”, and similar words and expressions which identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not guarantees of future performance and involve known and unknown risks and uncertainties, and other factors. Readers are cautioned not to place undue reliance on such statements, which speak only as of the date hereof. For a discussion of such risks, uncertainties and other matters that could cause actual results to differ materially, including risks relating to, among other factors, the market for dental product and services, pricing, future sales volume of the Company’s products, the possibility of changing economic, market and competitive conditions, dependence on products, dependence on key personnel, technological developments, intense competition, market uncertainties, dependence on distributors, ability to manage growth, dependence on key suppliers, dependence on key members of management, government regulation, acquisitions and affiliations and currency exchange rate fluctuations, readers are urged to carefully review and consider various disclosures made by the Company in its Annual Report on Form 10-K and in its reports on Forms 10-Q and 8-K filed with the U.S. Securities and Exchange Commission, which can be accessed through the SEC’s website, www.sec.gov. This presentation contains non GAAP financial measures, which should not be viewed in isolation and do not purport to be an alternative to net income (loss) as an indicator of operating performance or an alternative to cash flows from operating activities as a measure of liquidity. The Company assumes no obligation to and expressly disclaims any obligation to update or revise any forward-looking statements contained in this document to reflect new information or future events or developments after the date any such statement is made.

 

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SIRONA DENTAL SYSTEMS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF INCOME

 

		UNAUDITED Three months ended September 30,								Year ended September 30,
		2012				2011				2012				2011
		$’000s (except per share amounts)								$’000s (except per share amounts)
Revenue		$	247,364			$	218,797			$	979,351			$	913,866
Cost of sales			115,285				108,080				455,400				430,214
Gross profit			132,079				110,717				523,951				483,652
Selling, general and administrative expense			76,912				74,637				295,659				277,081
Research and development			12,606				13,485				52,622				55,530
Provision for doubtful accounts and notes receivable			(338	)			62				(75	)			96
Net other operating income			(2,500	)			(2,500	)			(10,000	)			(10,000	)
Operating income			45,399				25,033				185,745				160,945
Loss/(gain) on foreign currency transactions, net			(382	)			2,864				5,873				(5,668	)
Loss on derivative instruments			(2,147	)			2,140				(1,961	)			3,302
Interest expense, net			984				1,020				3,767				3,883
Other expense/(income)			(529	)			39				(257	)			(101	)
Income before taxes			47,473				18,970				178,323				159,529
Income tax provision			12,622				4,821				42,718				35,744
Net income			34,851				14,149				135,605				123,785
Less: Net income attributable to noncontrolling interests			115				391				1,773				1,992
Net income attributable to Sirona Dental Systems, Inc.		$	34,736			$	13,758			$	133,832			$	121,793
Income per share (attributable to Sirona Dental Systems, Inc. common shareholders):
- Basic		$	0.63			$	0.25			$	2.41			$	2.19
- Diluted		$	0.62			$	0.24			$	2.36			$	2.13
Weighted average shares—basic			55,128,904				56,080,442				55,524,188				55,735,422
Weighted average shares—diluted			56,388,273				57,466,184				56,755,396				57,292,996

 

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SIRONA DENTAL SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		September 30, 2012				September 30, 2011
		$ ‘000s (except per share amounts)
ASSETS
Current assets
Cash and cash equivalents		$	151,088			$	345,859
Accounts receivable, net of allowance for doubtful accounts of $1,408 and $1868, respectively			132,569				97,853
Inventories, net			81,007				93,028
Deferred tax assets			24,781				25,014
Prepaid expenses and other current assets			17,622				15,477
Income tax receivable			2,213				4,193
Total current assets			409,280				581,424
Property, plant and equipment, net of accumulated depreciation and amortization of $125,706 and $111,832, respectively			143,351				131,044
Goodwill			631,077				653,799
Investments			14				2,453
Restricted cash			—				655
Intangible assets, net of accumulated amortization of $446,447 and $412,428, respectively			288,556				346,442
Other non-current assets			9,368				2,884
Deferred tax assets			12,888				7,427
Total assets		$	1,494,534			$	1,726,128
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Trade accounts payable		$	51,961			$	48,697
Short-term debt and current portion of long-term debt			478				368,403
Income taxes payable			14,906				6,811
Deferred tax liabilities			817				1,108
Accrued liabilities and deferred income			118,075				110,207
Total current liabilities			186,237				535,226
Long-term debt			75,000				—
Deferred tax liabilities			122,441				138,327
Other non-current liabilities			16,852				16,978
Pension related provisions			61,629				49,677
Deferred income			40,000				50,000
Total liabilities			502,159				790,208
Shareholders’ equity
Preferred stock ($0.01 par value; 5,000,000 shares authorized; none issued and outstanding)			0				0
Common stock ($0.01 par value; 95,000,000 shares authorized;
56,598,045 shares issued and 55,051,673 shares outstanding at Sept. 30, 2012; 56,292,420 shares issued and 55,815,323 shares outstanding at Sept. 30, 2011			566				563
Additional paid-in capital			699,279				685,617
Treasury stock (at cost)
1,546,372 shares held at cost at Sept. 30, 2012; 477,097 shares held at cost at Sept. 30, 2011			(69,058	)			(19,749	)
Excess of purchase price over predecessor basis			(49,103	)			(49,103	)
Retained earnings			437,471				303,639
Accumulated other comprehensive income/(loss)			(29,797	)			11,309
Total Sirona Dental Systems, Inc. shareholders’ equity			989,358				932,276
Noncontrolling interests			3,017				3,644
Total shareholders’ equity			992,375				935,920
Total liabilities and shareholders’ equity		$	1,494,534			$	1,726,128

 

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SIRONA DENTAL SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		Year ended September 30, 2012				Year ended September 30, 2011
		$’000s
Cash flows from operating activities
Net income		$	135,605			$	123,785
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization			77,749				81,173
Compensation charge paid by shareholders			—				6,625
(Gain)/loss on disposal of property, plant and equipment			(91	)			—
(Gain)/loss on derivative instruments			(1,961	)			3,302
(Gain)/loss on foreign currency transactions			5,873				(5,668	)
Deferred income taxes			(17,274	)			(17,173	)
Amortization of debt issuance cost			631				587
Share-based compensation expense			8,623				7,604
Changes in assets and liabilities
Accounts receivable			(38,301	)			(14,202	)
Inventories			8,824				(19,542	)
Prepaid expenses and other current assets			(1,935	)			8,861
Restricted cash			646				20
Other non-current assets			(290	)			(453	)
Trade accounts payable			4,600				6,191
Accrued interest on long-term debt			—				—
Accrued liabilities and deferred income			(6,674	)			2,566
Other non-current liabilities			15,144				(2,997	)
Income taxes receivable			1,954				(697	)
Income taxes payable			8,246				(1,129	)
Net cash provided by operating activities		$	201,369			$	178,853
Cash flows from investing activities
Investment in property, plant and equipment			(47,131	)			(56,958	)
Proceeds from sale of property, plant and equipment			105				—
Prepayments for other assets			(4,612	)			—
Purchase of intangible assets			(514	)			(203	)
Purchase of long-term investments			—				(145	)
Acquisition of business, net of cash acquired			—				(20,836	)
Sale of business, net of cash sold			—				—
Net cash used in investing activities		$	(52,152	)		$	(78,142	)

 

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		Year ended September 30, 2012				Year ended September 30, 2011
		$’000s
Cash flows from financing activities
Repayments of short-term and long-term debt		$	(434,364	)		$	—
Proceeds from borrowings			138,932				—
Purchase of treasury stock			(49,309	)			(19,465	)
Debt issuance cost			(2,765	)			—
Purchase of shares from noncontrolling interest			—				—
Dividend distributions to noncontrolling interest			(1,689	)			(487	)
Common shares issued under share based compensation plans			3,932				11,138
Tax effect of common shares exercised under share based compensation plans			(181	)			8,501
Net cash used in financing activities		$	(345,444	)		$	(313	)
Change in cash and cash equivalents			(196,227	)			100,398
Effect of exchange rate change on cash and cash equivalents			1,456				(6,306	)
Cash and cash equivalents at beginning of period			345,859				251,767
Cash and cash equivalents at end of period		$	151,088			$	345,859
Supplemental information
Interest paid		$	2,966			$	3,380
Interest capitalized			237				450
Income taxes paid			44,795				46,923
Acquisition of business
Current assets		$	—			$	201
Non-current assets			—				47,255
Current liabilities			—				(269	)
Non-current liabilities			—				(16,139	)
			—				31,048
Cash paid			—				(20,895	)
Fair value of liabilities incurred		$	—			$	10,153
Sale of business, net of cash sold
Current assets		$	—			$	—
Non-current assets			—				—
Current liabilities			—				—
Non-current liabilities			—				—
		$	—			$	—

 

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Reconciliation of GAAP and Non-GAAP Information (unaudited)

HISTORICAL

Non-GAAP Adjusted Net Income Financial Measures (unaudited)

 

		Three months ended September 30, 2012
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s
GAAP net income attributable to Sirona Dental Systems, Inc. Shareholders										$	34,736			$	0.62
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	11,419			$	3,092			$	8,327
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of the $-denominated exclusivity fee			(1,356	)			(286	)			(1,070	)
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of short-term intra-group loans			(2,189	)			(467	)			(1,722	)
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	40,271			$	0.71

Note: Effective tax rate of 26.6% for Q4 2012

 

		Three months ended September 30, 2011
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc.										$	13,758			$	0.24
Adjustments
Non-cash compensation charge paid by shareholders			6,625			$	—			$	6,625
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	13,531			$	2,716			$	10,815
Unrealized, non-cash loss/(gain) on revaluation of the carrying value of the $-denominated exclusivity fee			4,216				925				3,291
Unrealized, non-cash loss/(gain) on revaluation of the carrying value of short-term intra-group loans			5,664				1,241				4,423
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	38,912			$	0.68

Note: Effective tax rate of 18.8% for Q4 11, excluding the $6.6 million non-cash compensations expense

 

		Full year ended September 30, 2012
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc. shareholders										$	133,832			$	2.36
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	46,622			$	11,189			$	35,433
Unrealized, non-cash loss/(gain) on revaluation of the carrying value of the $-denominated exclusivity fee			2,559				614				1,945
Unrealized, non-cash loss/(gain) on revaluation of the carrying value of short-term intra-group loans			3,677				882				2,795
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	174,005			$	3.07

Note: Effective tax rate of 24% for FY 2012

 

		Full year ended September 30, 2011
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc.										$	121,793			$	2.13
Adjustments
Non-cash compensation charge paid by shareholders			6,625			$	—			$	6,625
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	53,562			$	11,523			$	42,039
Unrealized, non-cash loss/(gain) on revaluation of the carrying value of the $-denominated exclusivity fee			499				107				392
Unrealized, non-cash loss/(gain) on revaluation of the carrying value of short-term intra-group loans			1,045				225				820
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	171,669			$	3.00

Note: Effective tax rate of 21.5% for the full year FY11, excluding the $6.6 million non-cash compensations expense

 

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Non-GAAP Adjusted Operating Income (unaudited)

 

		Three months ended September 30,								Full year ended September 30,
		2012				2011				2012				2011
		$ millions								$ millions
GAAP operating income		$	45,399			$	25,033			$	185,745			$	160,945
Adjustments
Amortization expense			11,743				13,874				47,949				54,941
Non-cash compensation charge paid by							6,625								6,625
Non-GAAP adjusted operating income		$	57,142			$	45,532			$	233,694			$	222,511

FORWARD-LOOKING

Non-GAAP Adjusted EPS Guidance (unaudited)

 

		Low End of Guidance
		Pre Tax				Tax Impact				After Tax				Per Diluted Share
		$ millions, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc.
Shareholders										$	160			$	2.83
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	38			$	9			$	29
(Gain)/Loss Foreign Currency Transactions, net**			—				—				—
(Gain)/Loss on derivative instruments, net**			—				—				—
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	189			$	3.33

 

		High End of Guidance
		Pre Tax				Tax Impact				After Tax				Per Diluted Share
		$ millions, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc.										$	166			$	2.93
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations			38			$	9			$	29
(Gain)/Loss Foreign Currency Transactions, net**		$	—				—			$	—
(Gain)/Loss on derivative instruments, net**			—				—				—
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	195			$	3.43

 

**	We are unable to provide estimates for these items because we are unable to predict the 2013 and long-term impact of foreign exchange due to unpredictability of future changes in foreign exchange rates.

To supplement our consolidated financial statements, we use the following non-GAAP financial measures: (i) non-GAAP adjusted net income, and non-GAAP adjusted earnings per diluted share, which exclude, as applicable, amortization and depreciation expense resulting from the step-up to fair values of intangible and tangible assets related to past business combinations, unrealized, non-cash loss/(gain) on revaluation of the carrying value of the $-denominated exclusivity fee, unrealized, non-cash loss/(gain) on revaluation of the carrying value of short-term intra-group loans and any related tax effects; and (ii) non-GAAP adjusted operating income, which excludes amortization.

Commencing with fiscal 2013 guidance, and to supplement our business outlook, we use the following non-GAAP financial measures: non-GAAP adjusted net income, and non-GAAP adjusted earnings per diluted share, which exclude, as applicable, amortization and depreciation expense resulting from the step-up to fair values of intangible and tangible assets related to past business combinations, gain/loss on foreign currency transactions, gain/loss on derivative instruments and any related tax effects.

 

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Also set forth above under the heading “FORWARD-LOOKING” are reconciliations of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures.

Management recognizes that the use of these non-GAAP measures has limitations, including the fact that they might not be comparable with similar non-GAAP measures used by other companies and that management must exercise judgment in determining which types of charges and other items should be excluded from its non-GAAP financial measures. Management currently compensates for these limitations by providing full disclosure of each non-GAAP financial measure and a reconciliation to the most directly comparable GAAP measure. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our “core operating performance”. Management believes that “core operating performance” represents Sirona’s operating performance in the ordinary, ongoing and customary course of its operations. Accordingly, management excludes from “core operating performance” the impact of acquisition-related intangible depreciation and amortization in order to compare our underlying financial performance to prior periods, certain charges related to currency revaluation of assets and liabilities that do not reflect our period-to-period core operating performance, and to the extent relevant in a particular period, any other cash or non-cash items that management does not view as indicative of its on-going operating performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal evaluation of period-to-period comparisons. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) they are provided to and used by our institutional investors and the analyst community to facilitate comparisons with prior and subsequent reporting periods. Constant Currency: We have included certain revenue information in this press release on a constant currency basis. This information is a non-GAAP financial measure. We additionally present revenue on a constant currency basis because we believe it facilitates a comparison of our operating results from period to period without regard to changes resulting solely from fluctuations in currency rates.

Sirona calculates constant currency revenue growth by comparing current period revenues to prior period revenues with both periods converted at the U.S. Dollar/Euro average foreign exchange rate for each month of the current period. The average exchange rate for the three months ended September 30, 2012, was $1.25141. The average exchange rate for the fiscal year ended September 30, 2012, was $1.29922 and varied from $1.23114 to $1.37045. For the three months and full year ended September 30, 2011, an average exchange rate converting Euro denominated revenues into U.S. Dollars of $1.41653 and $1.39570, respectively, was applied.

Our forecasted 2013 constant currency net revenue guidance excludes the impact of foreign exchange. We are unable to reconcile our projected 2013 constant currency net revenue growth to our full-year projected 2013 net revenue growth because we are unable to predict the 2013 and long-term impact of foreign exchange due to the unpredictability of future changes in foreign exchange rates. Therefore, we are unable to provide a reconciliation of these measures.

 

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The following is a reconciliation of (i) the historical non-GAAP adjusted earnings per diluted share reporting to (ii) non-GAAP adjusted earnings per diluted share calculated on the same basis as the new metric we announced today for fiscal 2013 guidance.

 

		GAAP Reconciliation to Old Non-GAAP																GAAP Reconciliation to New Non-GAAP
		Three months ended September 30, 2012																Three months ended September 30, 2012
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share				Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount																$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc. Shareholders										$	34,736			$	0.62											$	34,736			$	0.62
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	11,419				3,092				8,327							$	11,419				3,092				8,327
(Gain)/loss on foreign currency transactions, net
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of the $-denominated exclusivity fee			(1,356	)			(286	)			(1,070	)							(1,356	)			(286	)			(1,070	)
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of short-term intra-group loans			(2,189	)			(467	)			(1,722	)							(2,189	)			(467	)			(1,722	)
(Gain)/loss on other foreign currency transactions			—				—				—								3,163				841				2,322
(Gain)/loss on derivative instruments			—				—				—								(2,147	)			(571	)			(1,576	)
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	40,271			$	0.71											$	41,017			$	0.73

 

*	tax impact calculated using an effective tax rate of 26.6%

 

		GAAP Reconciliation to Old Non-GAAP																GAAP Reconciliation to New Non-GAAP
		Three months ended June 30, 2012																Three months ended June 30, 2012
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share				Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount																$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc. Shareholders										$	30,298			$	0.53											$	30,298			$	0.53
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	11,537				2,654				8,883							$	11,537				2,654				8,883
(Gain)/loss on foreign currency transactions, net
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of the $-denominated exclusivity fee			3,153				725				2,428								3,153				725				2,428
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of short-term intra-group loans			4,822				1,109				3,713								4,822				1,109				3,713
(Gain)/loss on other foreign currency transactions			—				—				—								(5,300	)			(1,219	)			(4,081	)
(Gain)/loss on derivative instruments			—				—				—								2,686				618				2,068
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	45,322			$	0.80											$	43,309			$	0.76

 

*	tax impact calculated using an estimated effective tax rate of 23%

 

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		GAAP Reconciliation to Old Non-GAAP																GAAP Reconciliation to New Non-GAAP
		Three months ended March 31, 2012																Three months ended March 31, 2012
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share				Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount																$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc. Shareholders										$	30,521			$	0.54											$	30,521			$	0.54
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	11,707				2,693				9,014							$	11,707				2,693				9,014
(Gain)/loss on foreign currency transactions, net
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of the $-denominated exclusivity fee			(1,742	)			(401	)			(1,341	)							(1,742	)			(401	)			(1,341	)
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of short-term intra-group loans			(2,303	)			(530	)			(1,773	)							(2,303	)			(530	)			(1,773	)
(Gain)/loss on other foreign currency transactions			—				—				—								5,395				1,241				4,154
(Gain)/loss on derivative instruments			—				—				—								(2,936	)			(675	)			(2,261	)
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	36,421			$	0.64											$	38,314			$	0.67

 

*	tax impact calculated using an estimated effective tax rate of 23%

 

		GAAP Reconciliation to Old Non-GAAP																GAAP Reconciliation to New Non-GAAP
		Three months ended December 31, 2011																Three months ended December 31, 2011
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share				Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount																$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc. Shareholders										$	38,277			$	0.67											$	38,277			$	0.67
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	11,959				2,751				9,208							$	11,959				2,751				9,208
(Gain)/loss on foreign currency transactions, net
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of the $-denominated exclusivity fee			2,503				576				1,927								2,503				576				1,927
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of short-term intra-group loans			3,347				770				2,577								3,347				770				2,577
(Gain)/loss on other foreign currency transactions			—				—				—								(3,620	)			(833	)			(2,787	)
(Gain)/loss on derivative instruments			—				—				—								436				100				336
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	51,990			$	0.91											$	49,538			$	0.87

 

*	tax impact calculated using an estimated effective tax rate of 23%

 

 

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		GAAP Reconciliation to Old Non-GAAP																GAAP Reconciliation to New Non-GAAP
		Three months ended September 30, 2011																Three months ended September 30, 2011
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share				Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount																$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc. Shareholders										$	13,758			$	0.24											$	13,758			$	0.24
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	13,531				2,716				10,815							$	13,531				2,716				10,815
(Gain)/loss on foreign currency transactions, net
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of the $-denominated exclusivity fee			4,216				925				3,291								4,216				925				3,291
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of short-term intra-group loans			5,664				1,241				4,423								5,664				1,241				4,423
(Gain)/loss on other foreign currency transactions			—				—				—								(7,016	)			(1,319	)			(5,697	)
(Gain)/loss on derivative instruments			—				—				—								2,140				402				1,738
Non-cash compensation charge paid by shareholders			6,625				—				6,625								6,625				—				6,625
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	38,912			$	0.68											$	34,953			$	0.61

 

*	tax impact calculated using an effective tax rate of 18.8%, excluding the $6.6 million non-cash compensation expense

 

		GAAP Reconciliation to Old Non-GAAP																GAAP Reconciliation to New Non-GAAP
		Three months ended June 30, 2011																Three months ended June 30, 2011
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share				Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount																$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc. Shareholders										$	36,331			$	0.63											$	36,331			$	0.63
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	13,693				3,012				10,681							$	13,693				3,012				10,681
(Gain)/loss on foreign currency transactions, net
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of the $-denominated exclusivity fee			(1,248	)			(275	)			(973	)							(1,248	)			(275	)			(973	)
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of short-term intra-group loans			(1,618	)			(356	)			(1,262	)							(1,618	)			(356	)			(1,262	)
(Gain)/loss on other foreign currency transactions			—				—				—								(569	)			(131	)			(438	)
(Gain)/loss on derivative instruments			—				—				—								1,081				249				832
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	44,776			$	0.78											$	45,170			$	0.78

 

*	tax impact calculated using an estimated effective tax rate of 21.5%

 

 

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		GAAP Reconciliation to Old Non-GAAP																GAAP Reconciliation to New Non-GAAP
		Three months ended March 31, 2011																Three months ended March 31, 2011
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share				Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount																$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc. Shareholders										$	29,312			$	0.51											$	29,312			$	0.51
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	13,192				2,902				10,290							$	13,192				2,902				10,290
(Gain)/loss on foreign currency transactions, net
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of the $-denominated exclusivity fee			(3,878	)			(853	)			(3,025	)							(3,878	)			(853	)			(3,025	)
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of short-term intra-group loans			(4,347	)			(956	)			(3,391	)							(4,347	)			(956	)			(3,391	)
(Gain)/loss on other foreign currency transactions			—				—				—								3,889				856				3,033
(Gain)/loss on derivative instruments			—				—				—								(1,554	)			(342	)			(1,212	)
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	33,186			$	0.58											$	35,008			$	0.61

 

*	tax impact calculated using an estimated effective tax rate of 21.5%

 

		GAAP Reconciliation to Old Non-GAAP																GAAP Reconciliation to New Non-GAAP
		Three months ended December 31, 2010																Three months ended December 31, 2010
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share				Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount																$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc. Shareholders										$	42,392			$	0.75											$	42,392			$	0.75
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	13,146				2,892				10,254							$	13,146				2,892				10,254
(Gain)/loss on foreign currency transactions, net
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of the $-denominated exclusivity fee			1,408				310				1,098								1,408				310				1,098
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of short-term intra-group loans			1,346				296				1,050								1,346				296				1,050
(Gain)/loss on other foreign currency transactions			—				—				—								(3,515	)			(773	)			(2,742	)
(Gain)/loss on derivative instruments			—				—				—								1,635				360				1,275
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	54,794			$	0.96											$	53,328			$	0.94

 

*	tax impact calculated using an estimated effective tax rate of 21.5%

 

Page 15

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		GAAP Reconciliation to Old Non-GAAP																GAAP Reconciliation to New Non-GAAP
		Year ended September 30, 2012																Year ended September 30, 2012
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share				Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount																$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc. Shareholders										$	133,832			$	2.36											$	133,832			$	2.36
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	46,622				11,189				35,433							$	46,622				11,189				35,433
(Gain)/loss on foreign currency transactions, net
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of the $-denominated exclusivity fee			2,559				614				1,945								2,559				614				1,945
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of short-term intra-group loans			3,677				882				2,795								3,677				882				2,795
(Gain)/loss on other foreign currency transactions			—				—				—								(363	)			30				(392	)
(Gain)/loss on derivative instruments			—				—				—								(1,961	)			(528	)			(1,433	)
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	174,005			$	3.07											$	172,178			$	3.03

 

*	tax impact calculated using an effective tax rate of 24%

 

		GAAP Reconciliation to Old Non-GAAP																GAAP Reconciliation to New Non-GAAP
		Year ended September 30, 2011																Year ended September 30, 2011
		Pre Tax				Tax Impact*				After Tax				Per Diluted Share				Pre Tax				Tax Impact*				After Tax				Per Diluted Share
		$’000s, except per share amount																$’000s, except per share amount
GAAP net income attributable to Sirona Dental Systems, Inc. Shareholders										$	121,793			$	2.13											$	121,793			$	2.13
Adjustments
Amortization and depreciation expense resulting from the step-up to fair values of intangible assets related to past business combinations		$	53,562				11,523				42,039							$	53,562				11,523				42,039
(Gain)/loss on foreign currency transactions, net
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of the $-denominated exclusivity fee			499				107				392								499				107				392
Unrealized, non-cash (gain)/loss on revaluation of the carrying value of short-term intra-group loans			1,046				225				821								1,046				225				821
(Gain)/loss on other foreign currency transactions																			(7,211	)			(1,368	)			(5,843	)
(Gain)/loss on derivative instruments																			3,302				669				2,633
Non-cash compensation charge paid by shareholders			6,625				—				6,625								6,625				—				6,625
Non-GAAP adjusted net income attributable to Sirona Dental Systems, Inc. shareholders										$	171,670			$	3.00											$	168,460			$	2.94

 

*	tax impact calculated using an effective tax rate of 21.5%, excluding the $6.6 million non-cash compensation expense

 

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