07.01.06
$1.7 Billion ($41.3B Total)
Key Executives:
Gary K. Kunkle, Jr, Chairman and CEO
Bret W. Wise, President and Chief Operating Officer
Christopher T. Clark, Senior Vice President
William R. Jellison, Senior VP and Chief Financial Officer
No. of Employees: 8,000
World Headquarters: York, PA
Dentsply, a dental manufacturer that distributes its products to more than 120 countries, faced some major challenges in 2005. Net sales were flat, with a 1.2% increase, and the company’s true financial picture becomes clearer when looking at net income, which decreased by 82%, from $253,000 to a mere $45,000. Amid this news was the retirement of Thomas L. Whiting, Dentsply’s president and chief operating officer, in late 2005.
The reimbursement climate in Germany, the third largest dental market globally, changed dramatically in 2005 as patients incurred more personal cost from dental work and laboratory-based dental work diminished. The impact of this shift greatly affected Dentsply’s bottom line, as this country bears responsibility for 21% of the company’s revenue.
However, Chairman and CEO Gary Kunkle reported, “We are pleased to see an improvement in the German market during the first quarter [of 2006]. While we do not expect 2006 will return to 2004 levels in Germany, we do expect our European growth to benefit from improvements in this important region throughout most of 2006.”
To counterbalance some of the difficulties, Dentsply is striking back by accelerating investment in product R&D, with a major focus on dental restoration. The company has partnered with the Georgia Institute of Technology’s Dental Technology Center for several research activities, and a long-term collaborative agreement was formed with IDMoS Dental Systems Ltd. for commercialization of its cavity detection and monitoring technology. Furthermore, Dentsply continued its joint development agreement with Japanese company Two Cells Co. Ltd. for research on using neurotrophin (BDNF) for periodontal disease.
In keeping with Dentsply’s launch of 30+ products in 2005, the company continues to invest in other emerging technologies that are anticipated to pay off down the line. In one move, the company acquired rights to SATIF, an exclusive titanium-fluoride derivative from European pharmaceutical company Sanofi-Aventis. A dental varnish utilizing this technology may be available by 2008.
The company did have to make some tough strategic decisions last year. In a major move, Dentsply ended up shutting down its dental injectable anesthetic facility after considerably investing in this venture all throughout 2005 and the earlier part of 2006. The company reported that production of the injectable anesthetics would be outsourced after dealing with delays in regulatory approval for the facility. The closing of this facility is anticipated to help earnings in 2006 and slightly increase operating margin rates.
Another area in which the company made certain strides was the formation of a new sales organization, Dentsply North America, in late 2005 to combine field and sales management functions for six US distributor-based businesses.
Finally, the company has continued acquired three new orthodontic companies: GAC SA in Europe, and Raintree Essix and Glenroe Technologies in the United States. These companies contributed 1.4% to 2005 revenue and are expected to perform even better in 2006.
If first quarter 2006 results are any indication, all the changes and investments are slowly starting to pay off. As of March 31, net sales already increased 5.9% over the prior year, from $407 million to $431 million. In addition, net sales (excluding precious metal content) were up 3.9%. Much of this good news is attributable to stronger growth in the European market, though the stronger US dollar somewhat tempered momentum.
“We are also experiencing continued strong performance in the all-ceramic section of our prosthetics business, orthodontics and our implant businesses, as we continue to gain market share in these important categories,” Kunkle said.
Key Executives:
Gary K. Kunkle, Jr, Chairman and CEO
Bret W. Wise, President and Chief Operating Officer
Christopher T. Clark, Senior Vice President
William R. Jellison, Senior VP and Chief Financial Officer
No. of Employees: 8,000
World Headquarters: York, PA
Dentsply, a dental manufacturer that distributes its products to more than 120 countries, faced some major challenges in 2005. Net sales were flat, with a 1.2% increase, and the company’s true financial picture becomes clearer when looking at net income, which decreased by 82%, from $253,000 to a mere $45,000. Amid this news was the retirement of Thomas L. Whiting, Dentsply’s president and chief operating officer, in late 2005.
The reimbursement climate in Germany, the third largest dental market globally, changed dramatically in 2005 as patients incurred more personal cost from dental work and laboratory-based dental work diminished. The impact of this shift greatly affected Dentsply’s bottom line, as this country bears responsibility for 21% of the company’s revenue.
However, Chairman and CEO Gary Kunkle reported, “We are pleased to see an improvement in the German market during the first quarter [of 2006]. While we do not expect 2006 will return to 2004 levels in Germany, we do expect our European growth to benefit from improvements in this important region throughout most of 2006.”
To counterbalance some of the difficulties, Dentsply is striking back by accelerating investment in product R&D, with a major focus on dental restoration. The company has partnered with the Georgia Institute of Technology’s Dental Technology Center for several research activities, and a long-term collaborative agreement was formed with IDMoS Dental Systems Ltd. for commercialization of its cavity detection and monitoring technology. Furthermore, Dentsply continued its joint development agreement with Japanese company Two Cells Co. Ltd. for research on using neurotrophin (BDNF) for periodontal disease.
In keeping with Dentsply’s launch of 30+ products in 2005, the company continues to invest in other emerging technologies that are anticipated to pay off down the line. In one move, the company acquired rights to SATIF, an exclusive titanium-fluoride derivative from European pharmaceutical company Sanofi-Aventis. A dental varnish utilizing this technology may be available by 2008.
The company did have to make some tough strategic decisions last year. In a major move, Dentsply ended up shutting down its dental injectable anesthetic facility after considerably investing in this venture all throughout 2005 and the earlier part of 2006. The company reported that production of the injectable anesthetics would be outsourced after dealing with delays in regulatory approval for the facility. The closing of this facility is anticipated to help earnings in 2006 and slightly increase operating margin rates.
Another area in which the company made certain strides was the formation of a new sales organization, Dentsply North America, in late 2005 to combine field and sales management functions for six US distributor-based businesses.
Finally, the company has continued acquired three new orthodontic companies: GAC SA in Europe, and Raintree Essix and Glenroe Technologies in the United States. These companies contributed 1.4% to 2005 revenue and are expected to perform even better in 2006.
If first quarter 2006 results are any indication, all the changes and investments are slowly starting to pay off. As of March 31, net sales already increased 5.9% over the prior year, from $407 million to $431 million. In addition, net sales (excluding precious metal content) were up 3.9%. Much of this good news is attributable to stronger growth in the European market, though the stronger US dollar somewhat tempered momentum.
“We are also experiencing continued strong performance in the all-ceramic section of our prosthetics business, orthodontics and our implant businesses, as we continue to gain market share in these important categories,” Kunkle said.