07.20.23
Rank: #28 (Last year: #26)
$3.92 Billion
Prior Fiscal: $4.23 Billion
Percentage Change: -7.3%
R&D Expenditure: $174M
Best FY22 Quarter: Q2 $1.0B
Latest Quarter: Q1 $978M
No. of Employees: 15,000
Global Headquarters: Charlotte, N.C.
KEY EXECUTIVES:
Simon Campion, President and CEO
Glenn Coleman, Exec. VP and CFO
Erania Brackett, Sr. VP, Orthodontic Aligner Solutions & Customer Experience, and Head of Sustainability
Andreas Frank, Exec. VP, Chief Business Officer
It began in relatively harmless fashion on April 11, when dental equipment and consumables giant Dentsply Sirona announced its finance leader Jorge Gomez, who had been the company’s finance chief since 2019, tendered his resignation to become the CFO of pharmaceutical firm Moderna. At the time, no eyebrows were raised.
A week later, pulses quickened just a little when Dentsply revealed CEO Don Casey had been terminated and removed from the board of directors. Casey had been at the company’s helm since 2018. Board member and former Hillrom chief executive John Groetelaars quickly assumed the CEO role in the interim as the search for a permanent leader began.
On May 10, the plot thickened. Dentsply filed a Form 12a-25 Notification of Late filing for its Q1 report to the SEC because the board of directors had initiated an internal investigation into financial reporting matters. The focus of the investigation was, according to the filing, “use of incentives to sell products to distributors in the third and fourth quarters of 2021 and whether those incentives were appropriately accounted for and the impact of those sales was adequately disclosed in the company’s periodic reports filed with the SEC.” The filing also cited allegations some senior management members directed use of the incentives and other actions to achieve their 2021 compensation targets.
The very next day, former CFO Jorge Gomez resigned from Moderna. And on Aug. 9, Dentsply filed a Form 8-K to reveal chief accounting officer Ranjit Chadha had left the company in an agreed separation. A Sept. 2 Form 8-K then signaled Senior VP and Chief Commercial Officer Walter Petersohn’s departure, shortly following another filing describing a negotiation of various agreements with noteholders for an extension of Q1 and Q2 2022 financial delivery to Nov. 7. They also received a consent fee of 20 basis points of the principal amount of outstanding notes under the agreements.
In the meantime in August, BD executive VP and president of the Medical segment was appointed as Denstply’s new CEO. In September, Integra LifeSciences Executive VP and COO Glenn Coleman was welcomed as the new CFO.
Dentsply’s internal investigation officially closed on Oct. 29 with another SEC filing. The company said it found no evidence of intentional wrongdoing or fraud from its former top executives, but did discover they violated their company’s code of ethics.
The investigation uncovered Dentsply’s North American distributors were offered incremental incentives, including extended payment terms, to buy products for the company to meet certain internal sales metrics in Q3 and Q4 2021, according to the Form 8-K. It goes on to say the incentives were offered in conjunction with net sales of about $38 million and $70 million in Q3 and Q4 2021, respectively. However, the investigation in North America didn’t find evidence former CEO Don Casey or former CFO Jorge Gomez directed this, nor was Dentsply’s accounting firm informed of the incremental incentive arrangements.
The internal investigation did reveal problems with Dentsply’s China operations. It concluded that employees in China processed returns and/or exchanges that weren’t in accordance with provisions contained in existing distributor agreements and sales contracts in the country. The employees also didn’t provide information requested by Dentsply’s local accounting organization regarding the returns and/or exchanges.
“The China Investigation also determined that these actions by certain members of the Company’s local commercial team in China, as well as the former Chief Financial Officer and the head of the company’s Asia-Pacific commercial organization, violated the company’s Code of Ethics and Business Conduct,” the Form 8-K went on to describe.
Adding insult to injury, Denstply’s fiscal year 2022 sales fell 7.3% to $3.92 billion under the—now adjusted to reflect the accurate total of $4.23 billion—prior year. The company’s annual report cites weaker retail performance in various product groups and lower wholesale CAD/CAM equipment volumes. Dentsply attributed this to higher CAD/CAM dealer inventory at the fiscal year’s start which, despite being reduced throughout the year, resulted in about $60 million held in inventory. Ongoing supply chain woes also curtailed the ability to fulfill some Equipment & Instruments orders, particularly for imaging equipment. Higher Orthodontics sales somewhat tempered this decline.
Technologies & Equipment revenue sank 7.4% to $2.3 billion despite higher Orthodonics demand and a benefit from price increases. In addition to the aforementioned high dealer CAD/CAM machine inventory, continuing electronic component shortages due to a constraining supply chain environment and the impact of COVID-19 on the Chinese market stifled growth.
Primescan Connect, a laptop-based version of the company’s intraoral scanner, launched in September. Powered by DS Core, the scanner can be used for restorative indications, implantology, orthodontics, and sleep appliances. It connects with a specified laptop to save space when not in use and helps collaborating with the dental lab by offering validated workflows to all major lab software, according to Dentsply.
Consumables proceeds fell 7.1% to reach $1.6 billion of revenue. Dentsply’s annual report points to lower U.S. and China Endodontic & Restorative sales due to the COVID-19 pandemic as the main cause for the decrease.
$3.92 Billion
Prior Fiscal: $4.23 Billion
Percentage Change: -7.3%
R&D Expenditure: $174M
Best FY22 Quarter: Q2 $1.0B
Latest Quarter: Q1 $978M
No. of Employees: 15,000
Global Headquarters: Charlotte, N.C.
KEY EXECUTIVES:
Simon Campion, President and CEO
Glenn Coleman, Exec. VP and CFO
Erania Brackett, Sr. VP, Orthodontic Aligner Solutions & Customer Experience, and Head of Sustainability
Andreas Frank, Exec. VP, Chief Business Officer
It began in relatively harmless fashion on April 11, when dental equipment and consumables giant Dentsply Sirona announced its finance leader Jorge Gomez, who had been the company’s finance chief since 2019, tendered his resignation to become the CFO of pharmaceutical firm Moderna. At the time, no eyebrows were raised.
A week later, pulses quickened just a little when Dentsply revealed CEO Don Casey had been terminated and removed from the board of directors. Casey had been at the company’s helm since 2018. Board member and former Hillrom chief executive John Groetelaars quickly assumed the CEO role in the interim as the search for a permanent leader began.
On May 10, the plot thickened. Dentsply filed a Form 12a-25 Notification of Late filing for its Q1 report to the SEC because the board of directors had initiated an internal investigation into financial reporting matters. The focus of the investigation was, according to the filing, “use of incentives to sell products to distributors in the third and fourth quarters of 2021 and whether those incentives were appropriately accounted for and the impact of those sales was adequately disclosed in the company’s periodic reports filed with the SEC.” The filing also cited allegations some senior management members directed use of the incentives and other actions to achieve their 2021 compensation targets.
The very next day, former CFO Jorge Gomez resigned from Moderna. And on Aug. 9, Dentsply filed a Form 8-K to reveal chief accounting officer Ranjit Chadha had left the company in an agreed separation. A Sept. 2 Form 8-K then signaled Senior VP and Chief Commercial Officer Walter Petersohn’s departure, shortly following another filing describing a negotiation of various agreements with noteholders for an extension of Q1 and Q2 2022 financial delivery to Nov. 7. They also received a consent fee of 20 basis points of the principal amount of outstanding notes under the agreements.
In the meantime in August, BD executive VP and president of the Medical segment was appointed as Denstply’s new CEO. In September, Integra LifeSciences Executive VP and COO Glenn Coleman was welcomed as the new CFO.
Dentsply’s internal investigation officially closed on Oct. 29 with another SEC filing. The company said it found no evidence of intentional wrongdoing or fraud from its former top executives, but did discover they violated their company’s code of ethics.
The investigation uncovered Dentsply’s North American distributors were offered incremental incentives, including extended payment terms, to buy products for the company to meet certain internal sales metrics in Q3 and Q4 2021, according to the Form 8-K. It goes on to say the incentives were offered in conjunction with net sales of about $38 million and $70 million in Q3 and Q4 2021, respectively. However, the investigation in North America didn’t find evidence former CEO Don Casey or former CFO Jorge Gomez directed this, nor was Dentsply’s accounting firm informed of the incremental incentive arrangements.
The internal investigation did reveal problems with Dentsply’s China operations. It concluded that employees in China processed returns and/or exchanges that weren’t in accordance with provisions contained in existing distributor agreements and sales contracts in the country. The employees also didn’t provide information requested by Dentsply’s local accounting organization regarding the returns and/or exchanges.
“The China Investigation also determined that these actions by certain members of the Company’s local commercial team in China, as well as the former Chief Financial Officer and the head of the company’s Asia-Pacific commercial organization, violated the company’s Code of Ethics and Business Conduct,” the Form 8-K went on to describe.
Adding insult to injury, Denstply’s fiscal year 2022 sales fell 7.3% to $3.92 billion under the—now adjusted to reflect the accurate total of $4.23 billion—prior year. The company’s annual report cites weaker retail performance in various product groups and lower wholesale CAD/CAM equipment volumes. Dentsply attributed this to higher CAD/CAM dealer inventory at the fiscal year’s start which, despite being reduced throughout the year, resulted in about $60 million held in inventory. Ongoing supply chain woes also curtailed the ability to fulfill some Equipment & Instruments orders, particularly for imaging equipment. Higher Orthodontics sales somewhat tempered this decline.
Technologies & Equipment revenue sank 7.4% to $2.3 billion despite higher Orthodonics demand and a benefit from price increases. In addition to the aforementioned high dealer CAD/CAM machine inventory, continuing electronic component shortages due to a constraining supply chain environment and the impact of COVID-19 on the Chinese market stifled growth.
Primescan Connect, a laptop-based version of the company’s intraoral scanner, launched in September. Powered by DS Core, the scanner can be used for restorative indications, implantology, orthodontics, and sleep appliances. It connects with a specified laptop to save space when not in use and helps collaborating with the dental lab by offering validated workflows to all major lab software, according to Dentsply.
Consumables proceeds fell 7.1% to reach $1.6 billion of revenue. Dentsply’s annual report points to lower U.S. and China Endodontic & Restorative sales due to the COVID-19 pandemic as the main cause for the decrease.