DENTSPLY SIRONA (XRAY) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $984 million, down 4.2% year-over-year, mainly due to lower demand in Connected Technology Solutions, while Wellspect Healthcare and Orthodontic and Implant Solutions saw growth.

• Organic sales declined 2.3% year-over-year; adjusted EPS was $0.49, down 4% from Q2 2023, and GAAP net loss was $4 million compared to net income of $86 million last year.

• The company launched phase two of its transformation, targeting $80–$100 million in annualized cost savings over 12–18 months, building on a completed $200 million restructuring program.

• $150 million in share repurchases completed in Q2, with $100 million more planned for Q3, and $380 million to be returned to shareholders in 2024 via buybacks and dividends.

• Strategic initiatives include consolidating product categories, exiting select countries, investing in inside sales, e-commerce, R&D, and issuing a non-renewal notice to Patterson Companies for equipment distribution in the U.S. and Canada.

Financial highlights

• Q2 2024 revenue was $984 million, down 4.2% year-over-year; organic sales down 2.3%.

• Gross margin was 51.9%, down from 53.5% in Q2 2023, primarily due to lower CTS volume and unfavorable mix.

• Adjusted EBITDA margin was 17.5%, down 30 bps year-over-year; adjusted EBITDA was $173 million, down 5.9%.

• Adjusted EPS was $0.49, down 4% year-over-year; operating cash flow was $208 million, doubling year-over-year, with free cash flow conversion at 155%.

• $150 million in share repurchases and $33 million in dividends paid in Q2; cash and equivalents at $279 million as of June 30, 2024.

Outlook and guidance

• Full-year 2024 net sales expected at $3.86–$3.90 billion, with organic sales down 1% to flat; adjusted EPS guidance revised to $1.96–$2.02, up 7–10% year-over-year.

• Adjusted EBITDA margin guidance remains above 18%.

• Q3 sales projected to increase low single digits organically, but decline low single digits on a reported basis.

• Capital expenditures for 2024 projected at $170–$200 million, focused on ERP investments and Wellspect expansion.