Sirona Dental Systems Earnings Call Nuggets: Omnicam vs. Bluecam Sales and Standalone Scanners

Sirona Dental Systems, Inc. (NASDAQ:SIRO) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.

Omnicam vs. Bluecam Sales

Ross Taylor – CL King: Just maybe two or three quick questions. First, I wonder if you can give any color on what your mix of Omnicam versus Bluecam sales was in the quarter and whether you expect that might change much now that some of the capacity constraints seems to be have gone away?

Jost Fischer – Chairman and CEO: Good morning, Ross. This is Jost. Yes, we, of course, have a ramp-up in our Omnicam going on and therefore, the number of Omnicams were moving up throughout the quarter, but there was a very significant and solid demand for our other products in there, including the Bluecam.

Ross Taylor – CL King: Also, you mentioned that your new agreement with Patterson a few times. Can you give any color as to how that’s changing how you all are going to market and how it’s impacting or expanding demand? You did mention it a few times, and it sounds like it has been a nice benefit for you?

Jost Fischer – Chairman and CEO: Ross, we put all eggs in one basket in the U.S., expanded our agreement to include our entire product line, extended the exclusivity to 2017 and Patterson has committed to very challenging goals with us together and from that point, we now have the full attention of their sales force, and we are pretty well set up in this thing as you can see by 29% growth evidenced in this quarter.

Ross Taylor – CL King: Just two last questions quickly. The pull-forward in the U.S., how significant do you think that was and do you think we’ll kind of see a pretty dramatic step-down in that growth rate in the next – here in the March quarter? And I don’t know if you gave any color on how some of the European markets performed in the quarter, but just wondered about your sense of how the economies there might be impacting your business and that’s all of my questions.

Jost Fischer – Chairman and CEO: Talking about the U.S. and the pull-forward, yes, the implementation of the medical tax certainly had some pull-forward effect from the end user side of it as evidenced by an exceptional 29% growth that we had. So, from that prospection, yes. So, do not expect us to have 29% growth next quarter, but we see still very good end user demand for Sirona products in there. So, we’re confident going forward about the market in the U.S. Second, Europe, Europe remains stable. I think there is no change in the story. Germany was up for the quarter and this one saw in general though, you had some weaker countries in Europe as we evidenced by lower sales in the U.K. and in Spain, but we do not reflect the very big part of our sales, so Europe is stable heading into IDS, we think that was solid performance here.

Ross Taylor – CL King: Congratulations on a terrific past 11 years.

Standalone Scanners

Steve Beuchaw – Morgan Stanley: I’ll risk sounding a little sentimental and freely admit I am going to miss you. Really wish you all the best and thanks so much for such a terrific run there.

Jost Fischer – Chairman and CEO: Thank you Steve, I really appreciate it.

Steve Beuchaw – Morgan Stanley: I wonder as we go forward here in 2013, if you could spend a little time thinking about the impact of Omnicam, maybe the different way than we’ve talked about lately. I wonder with Omnicam, do you think any differently about the opportunity for standalone scanners, the scanners without (NASDAQ:MILL). Is there a case, as the Company thinks more and more about integration with Omnicam and other parts of the portfolio across the entire portfolio to think more about a different strategy that could include trying to reach out without a (NASDAQ:MILL) in the office?

Jost Fischer – Chairman and CEO: Steve both. Frist thing, we believe the largest market opportunity is in chair-side CAD/CAM and in the combination of the technologies with Imaging and the surrounding services that Sirona has to offer. That is by far the largest opportunity, number one. Number two, camera-only just taking the scan and then delivering this via email to a lab. There is a market for that. The market has not been very strong in the past. Do we see potential there? Yes, we do, but this will not reach the opportunity that we have in chair-side CAD/CAM.

Steve Beuchaw – Morgan Stanley: There was a question asked earlier about Europe and I want to ask the same thing about the U.S. market. We talked in the past quarters about the underlying strength of the U.S. market, how that has reaccelerated. I understand in this quarter we had a couple of unique items with Section 179 and then med-tech tax. Could you comment on how you see that market trending excluding the impact of those one-time items around the end of the year?

Jost Fischer – Chairman and CEO: So, when we talk about the general market condition, we feel they are stable. There is stable traffic in the dental offices. When we look further into the technology part of it, I think we have a good market. There is good demand for Sirona products over and above that year-end frenzy about the med tax that we’ve seen. So, from our point of view we are very well positioned in the U.S. and we expect that market for technology to grow for Sirona.