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DENTSPLY International (XRAY) |
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WIKI ANALYSIS
DENTSPLY International Inc. (NASDAQ:XRAY) is the world's largest manufacturer of dental products, such as dental anesthetics and artificial teeth, by revenue.[1] DENTSPLY's sells its products to dentists, dental hygienists, dental schools, and laboratories. [2]
DENTSPLY International, Inc. engages in the design, development, manufacture, and marketing of dental consumables, dental laboratory products, and dental specialty products worldwide. Its dental consumable products include dental sundries, such as dental anesthetics, prophylaxis paste, dental sealants, impression materials, restorative materials, bone grafting materials, tooth whiteners, and topical fluoride; and small equipment products, including high and low speed handpieces, intraoral curing light systems, and ultrasonic scalers and polishers used in dental offices for treatment of patients. XRAY’s specialty dental products include endodontic instruments and materials, implants and related products, and orthodontic appliances and accessories. Its products are used for specific purposes within the dental office and laboratory settings.
The company markets its products primarily to dentists, dental hygienists, dental assistants, dental laboratories, and dental schools. It distributes its products through domestic and foreign distributors, dealers, and importers, as well as directly through sales staff.
With customers in 120 countries, XRAY's revenues are geographically diverse. The company's customers can be segmented into two groups -- those in developed countries and those in developing countries. Customers in developed countries require a wide variety of products, including those associated with higher end, cosmetic and restorative procedures, whereas demand in developing countries is limited to basic products like fillings and anesthetics. The company's management expects that continued growth of personal incomes in developing countries with rapidly developing economies, such as China and India, will lead to greater demand for its more advanced products.
Business Overview
DENTSPLY was founded in 1983 and is headquartered in York, Pennsylvania.
Business & Financial Metrics[3]
In 2009, DENTSPLY generated a net income of $274.3 million on revenues of $2.16 billion. This represents a 3.1% decrease in net income on a 1.5% dip in total revenues from 2008, when the company earned $283.3 million on revenues of $1.04 billion.
Business Segments[3]
XRAY's products fall into one of three categories:
- Dental Consumables (32.9% of 2009 revenue): consist of dental sundries and small equipment used in dental offices. Dental sundry includes products such as dental anesthetics, pastes, dental sealants, impression materials, tooth whiteners, and others. Small equipment includes products such as high and low speed hand pieces (for removing cavities), ultrasonic scalers (used to remove plaque from teeth), and polishers. [4]
- Dental Laboratory Products (23.2% of 2009 revenue): products in this category include dental prosthetics, including artificial teeth, precious metal dental alloys, dental ceramics, and crown and bridge materials. Equipment in this category includes computer aided machining (CAM) ceramic systems and porcelain furnaces. [5]
- Dental Specialty Products (41.5% of 2009 revenue): products in this category include root canal instruments and materials, implants, and others.[6]
Trends and Forces
- Seniors spend more on dental care: The populations in several of XRAY's key markets are aging. Chief among these are Japan, Western Europe and the United States. Japan is the fastest aging country in the world. By 2055, estimates place over 40% of the population over the age of 65 [7], while in the majority of Western Europe and other parts of the EU, the segment of the population over 65 has eclipsed the number of adolescents and continues to grow in proportion to the general population. [8] In the U.S. the continued aging of the baby boomers will result in a doubling of the number of Americans over 65 by 2030. [9]. Older patients present a greater revenue opportunity for XRAY, because they spend more on dental care than younger patients. Americans over 65, for instance, spend 23% more per person than those under 65. [10] The teeth of older patients also require more dental procedures.[11]
- Growing personal incomes in emerging markets increase demand for dental products: As personal incomes continue to rise in emerging countries such as China and India, demand of healthcare, including dental services, is growing quickly. [12] The majority of demand in these markets centers on products that are used to treat cavities and perform other basic procedures. As incomes grow in these regions, XRAY's management believes that there will be greater demand for XRAY's more advanced products, which are primarily consumed by developing countries.
Competition
While XRAY has a strong market position, it faces tough competition from divisions of many companies, including:
- Nobel Biocare: a Swedish medical devices company, which offers products such as dental crowns, bridges and implants.
- Straumann Group: a Swiss dental company which produces implants, prosthetics, crowns, and bridges.
- Align Technology (ALGN): designer and manufacturer of the Invisalign system, which corrects misalignment of teeth.
- Danaher (DHR): a diversified manufacturer which has operations in Professional Instrumentation, Medical Technologies, Industrial Technologies, and Tools & Components.
References
- ↑ XRAY 2006 10k, Item 1
- ↑ XRAY 2006 10k, Item 1
- ↑ 3.0 3.1 3.2 XRAY 2009 10-K pg. 65
- ↑ XRAY 2006 10k, Item 1
- ↑ XRAY 2006 10k, Item 1
- ↑ XRAY 2006 10k, Item 1
- ↑ "Tokyo's neon lights to dim as Japan Ages," September 21, 2007, Reuters.com
- ↑ "A portrait of Europe's aging population," Business Week, October 9, 2007
- ↑ XRAY 2006 10-K
- ↑ Medical Expenditure Panel Survey
- ↑ XRAY 2006 10k, Item 1
- ↑ XRAY 2006 10k, Item 1
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