CHARLOTTE, N.C., Aug. 04, 2022 (GLOBE NEWSWIRE) — DENTSPLY SIRONA Inc. (Nasdaq: XRAY) today is providing a business update.
As previously disclosed, the Audit and Finance Committee of the Company’s Board of Directors (the “Audit Committee”) is conducting an internal investigation regarding certain financial reporting matters. The investigation is ongoing and therefore the Company expects that it will not be in a position to file its Quarterly Report on Form 10-Q for the period ended June 30, 2022, (the “Second Quarter 10-Q”) by the August 9, 2022, deadline.
Select Preliminary Second Quarter 2022 Results
The Company’s operational performance improved sequentially in the quarter with net sales and adjusted EPS expected to be above preliminary first quarter 2022 results. While net sales declined year-over-year due to the unfavorable impact of foreign exchange, the business delivered organic sales growth driven by solid European regional performance and demand in strategic areas of the business, most notably, CAD/CAM, Equipment & Instruments, and Restorative and Preventive Consumables.
As anticipated, in the second quarter, the Company saw normalizing dealer inventory levels in the U.S. as well as realized benefits from recent product launches and pricing adjustments. The Company continued to experience macro headwinds including ongoing supply shortages and softness in sales in China due to COVID-related shutdowns.
As a result, Dentsply Sirona expects to report second quarter 2022 net sales of greater than $1,005 million. Additionally, diluted EPS is expected to be at or above $0.26 and adjusted EPS at or above $0.60.
The second quarter gross margin and adjusted EPS were favorably impacted by the timing of certain expenses which will be reflected in the third and fourth quarters.
For the full year 2022 outlook, the Company’s assumptions outlined on May 10, 2022, remain intact with the exception of foreign exchange. Management expects to provide an updated full year 2022 outlook after filing its Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (the “First Quarter 10-Q”) and the Second Quarter 10-Q (collectively with the First Quarter 10-Q, the “Quarterly Reports”).
Consistent with the Company’s commitment to return cash to shareholders, Dentsply Sirona’s Board of Directors declared a quarterly cash dividend of $0.125 per share of common stock, an indicated annual rate of $0.50 per share. The dividend is payable October 14, 2022, to holders of record as of September 30, 2022.
The Audit Committee continues to work diligently with independent counsel and advisors to complete its previously announced investigation as soon as possible. However, the Company cannot predict the duration or outcome of the investigation. Due to the pendency of the investigation, the Company has not yet filed its First Quarter 10-Q and does not believe it will file its Second Quarter 10-Q on a timely basis. In the course of the investigation, the Company has also evaluated certain other accounting practices. As a result of this review, the Company anticipates certain adjustments will be made to the previously announced preliminary first quarter financial results, and the Company is currently evaluating whether fiscal year 2021 reported financial results also require adjustments.
The Company will work to finalize its financial statements and review of internal controls and procedures, including the evaluation of any deficiencies in internal controls over financial reporting, as soon as practicable.
As previously disclosed, the Company has voluntarily contacted the SEC to advise it that an internal investigation is underway, and the Audit Committee intends to provide additional information to the SEC as its investigation proceeds. The Company intends to fully cooperate with the SEC regarding this matter.
Nasdaq Compliance Update
On May 18, 2022, the Company announced it received a written notification from The Nasdaq Stock Market (“Nasdaq”) on May 12, 2022, indicating that the Company is no longer in compliance with Nasdaq Listing Rules because the Company had not timely filed its First Quarter 10-Q. In response to the notification and pursuant to the Nasdaq Listing Rules, the Company submitted a plan to regain compliance and it targeted filing the Quarterly Reports by August 14, 2022. The Nasdaq staff granted the Company an extension of time through August 14, 2022, in which to file the Quarterly Reports. The Company has notified Nasdaq that it no longer expects that it will be able to file the Quarterly Reports by August 14, 2022, and will submit an updated compliance plan to Nasdaq. If Nasdaq accepts the updated plan to be submitted by the Company, Nasdaq can grant an extension of time for shares of the Company’s common stock to remain listed for up to 180 calendar days from the First Quarter 10-Q’s original filing deadline to regain compliance, which would be November 7, 2022.
About Dentsply Sirona
Dentsply Sirona is the world’s largest manufacturer of professional dental products and technologies, with over a century of innovation and service to the dental industry and patients worldwide. Dentsply Sirona develops, manufactures, and markets a comprehensive solutions offering including dental and oral health products as well as other consumable medical devices under a strong portfolio of world class brands. Dentsply Sirona’s products provide innovative, high-quality and effective solutions to advance patient care and deliver better and safer dental care. Dentsply Sirona’s headquarters is located in Charlotte, North Carolina. The Company’s shares are listed in the United States on Nasdaq under the symbol XRAY. Visit www.dentsplysirona.com for more information about Dentsply Sirona and its products.