Sybron Dental Specialties, Inc. Reports Second Quarter Fiscal 2005 Financial Results

Sybron Dental Specialties, Inc. Reports Second Quarter Fiscal
2005 Financial Results 


ORANGE, Calif., April 25  /PRNewswire-FirstCall/ -- Sybron Dental Specialties,
Inc. (NYSE:SYD), a leading manufacturer of a broad range of value-added
products for the professional dental market and the specialty markets of
orthodontics, endodontics, implants and infection prevention, announced today
its financial results for its fiscal year 2005 second quarter, which ended on
March 31, 2005.

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  SECOND QUARTER RESULTS


Net sales for the second quarter of fiscal 2005 totaled $165.1 million, an
increase of 9.4% over the $150.9 million in net sales in the corresponding
prior year period.  Sybron's internal net sales, which exclude currency
fluctuations and includes only the organic growth of acquisitions made in the
past twelve months, grew 5.6% in the second quarter.  The internal net sales
growth rate of the Company's consumable products was 6.2%.  The sales of these
products accounted for 97% of the Company's total sales in the quarter.

Net income for the second quarter of fiscal 2005 was $19.4 million, an increase
of 11.0% over net income of $17.5 million in the same period of the prior year.
 Fully diluted earnings per share totaled $0.47 in the second quarter of fiscal
2005, an increase of 6.8% over earnings of $0.44 per diluted share in the same
period of the previous year.

In the second quarter of fiscal 2005, Sybron generated $13.7 million in free
cash flow, defined as cash flows from operating activities of $16.6 million
minus capital expenditures of $2.9 million.  This compares with free cash flow
of $4.9 million in the same period of the previous year (cash flows from
operating activities of $7.6 million minus capital expenditures of $2.7
million).

"During the second quarter, we saw a continuation of the positive trends that
have driven our strong performance for the past several quarters," said Floyd
W. Pickrell, Jr., Chief Executive Officer of Sybron Dental Specialties. "The
Damon 3 bracket is having a positive impact on the adoption rate for the Damon
system, and through the first half of fiscal 2005 we have continued to convert
accounts to the Damon system at a robust rate.  We are also continuing to get
an excellent response to our innovative new products in categories such as
composites and self-adhesive cements.  The general dental products that have
been launched within the past year have generated over $7.0 million in revenue
during the first two quarters of fiscal 2005, and we believe the demand for a
number of them will continue to be solid for years to come."

SEGMENT HIGHLIGHTS

During the second quarter, the internal net sales of the Company's Specialty
Products segment grew 8.9% over the same period in the prior year. The
highlight of the quarter was the Fourth Annual Users Conference for the Damon
System, which had almost three times as many attendees as last year's
conference.  The Company continues to see strong demand for its Damon self-
ligating brackets, the sales of which in the second quarter increased
substantially over the second quarter of the prior fiscal year.  The Company's
new Elements Obturation device also contributed to the increase in the internal
net sales of the Specialty Products segment and helped drive a double-digit
year-over-year increase in the segment's sales of its endodontic products.

In the second quarter, internal net sales of the Company's Professional Dental
segment increased 2.8% over the same period in the prior year. Internal net
sales of Professional Dental consumable products increased 4.7%. Sales in the
quarter were positively impacted by continued solid sales of Premise(TM)
nanocomposite and MaxCem(TM) self-adhesive cement.  The Company was also
pleased with the response to two new products launched during the second
quarter: OptiDam(TM), a 3-dimensional rubber dental dam used in restorative
procedures; and CompoRoller(TM), a composite modeling instrument, which is
frequently being purchased in tandem with Premise nanocomposite.

SECOND QUARTER FINANCIAL HIGHLIGHTS

The Company incurred approximately $600,000 in the quarter in charges related
to the consolidation of its Demetron and Orascoptic operations into one
facility.  Approximately $100,000 of these expenses was included in the cost of
goods sold and the remaining $500,000 was included in selling, general and
administrative expenses.  The consolidation is proceeding on schedule, and the
Company continues to expect annual savings of approximately $500,000 upon
completion of the consolidation in the fourth quarter of fiscal 2005.

Gross margins in the second quarter of 2005 were 56.5%, compared with 54.7% in
the same period of the previous year.  The increase in overall gross margin is
primarily attributable to increased manufacturing efficiencies resulting from
facility rationalization efforts, as well as more favorable foreign currency
rates.

Selling, general and administrative expenses (SG&A) were $60.3 million, or
36.5% of net sales, in the second quarter of 2005, compared with $51.1 million,
or 33.9% of net sales, in the same period of the prior year. The increase in
SG&A as a percentage of sales was primarily attributable to the impairment of
an asset; the addition of Innova LifeSciences, which has SG&A expenses as a
percent of sales that are higher than the Company's other operations; the
expenses associated with the Demetron/Orascoptic consolidation; CFO transition
costs; and increased internal and external resources involved in evaluating M&A
opportunities.

Research and development expenditures were $3.4 million in the second quarter
of 2005, compared with $3.1 million of expenditures in the same period of the
prior year.

Operating income for the second quarter of 2005 was $32.9 million, compared to
$31.5 million in the second quarter of 2004.  Earnings before interest, taxes,
depreciation and amortization (EBITDA) for the quarter were $37.1 million. 
Operating income was 20.0% and EBITDA was 22.5% of net sales for the quarter,
compared with 20.8% and 23.3%, respectively, in the same period of 2004. 
Second quarter 2005 EBITDA is calculated by adding net income of $19.4 million,
income taxes of $9.1 million, net interest expense of $5.1 million, and
depreciation and amortization of approximately $4.2 million, less other income
of approximately $0.7 million.  Second quarter 2004 EBITDA of $35.1 million is
calculated by adding net income of $17.5 million, income taxes of $8.6 million,
net interest expense of $5.2 million, and depreciation and amortization of
approximately $3.8 million.

Sybron's effective tax rate in the second quarter of fiscal 2005 was 32%,
compared with 33% in the second quarter of fiscal 2004.

Net trade receivables were $108.0 million and days sales outstanding (DSOs)
were 56.3 days at March 31, 2005, which compares with the 56.7 days at March
31, 2004.  DSOs also decreased from the 61.7 days at December 31, 2004.

Net inventory was $102.6 million at the end of the second quarter and inventory
days were 145 days, which compares to 122 days at March 31, 2004 and 149 days
at December 31, 2004.  As expected, inventory days declined from the end of the
previous quarter and are expected to continue to decline as the Company works
off inventory built ahead of the expiration of its contract with the union
members at its Romulus, Michigan facility.  Effective February 1, 2005, the
Company entered into a new multi-year contract with the union.

Please refer to the supplemental schedules provided on the Financial Report's
section of Sybron's Investor Relations web site
(http://www.sybrondental.com/investors/index.html) that detail the calculation
of the Company's DSOs and inventory days.

Capital expenditures were $2.9 million in the second quarter of fiscal 2005,
compared with $2.7 million in the same period of the previous year.

The average debt outstanding for the quarter was $237.9 million with an average
interest rate of 7.85%.  The Company paid down $14.5 million in debt during the
quarter, leaving total debt outstanding at March 31, 2005 of $230.8 million.

Sybron's cash and cash equivalents balance was $47.6 million at March 31, 2005,
compared with $49.6 million at December 31, 2004.  The Company continues to
maintain a larger than usual cash balance at several of its foreign
subsidiaries as it evaluates the impact of the American Jobs Creation Act of
2004, which allows for the repatriation of foreign earnings at favorable tax
rates.

Sybron's capital structure was 39.2% debt and 60.8% equity at March 31, 2005. 
This compares with 50.1% debt and 49.9% equity at March 31, 2004.

OUTLOOK

For the third quarter of fiscal 2005, Sybron expects revenue to range from $160
million to $165 million, and diluted earnings per share to range from $0.44 to
$0.48.

Sybron also revised its revenue and EPS estimates for the full fiscal year
2005.  Sybron now expects revenue to range from $630 million to $640 million
(with internal net sales growth at the high end of the Company's historical
4%-6% internal net sales growth rate), and diluted earnings per share to range
from $1.70 to $1.78.

Commenting on the outlook for Sybron, Mr. Pickrell said, "We believe we are
still in the early stages of generating demand for products such as the Damon 3
bracket, Elements Obturation device, Premise nanocomposite and MaxCem cement,
and that they will continue to pick up market share in their respective
categories.  We also have an excellent pipeline of new products that are
scheduled for launch during the second half of fiscal 2005, such as a more
powerful version of our industry-leading curing light, an extension to the
MaxCem product line, and the first self-ligating buccal tubes specifically
designed for use with the Damon system.  Collectively, we believe our new
product lineup will enable Sybron to continue driving consistent growth in
sales, earnings and cash flow."

NON-GAAP FINANCIAL MEASURES

The Company has included information concerning EBITDA and free cash flow
because management believes that certain investors use this information as
measures of a company's performance and ability to service its debt.  EBITDA
and free cash flow should not be considered as alternatives to, or more
meaningful than, net income as an indicator of Sybron's operating performance
or cash flows as a measure of liquidity.  EBITDA and free cash flow have not
been prepared in accordance with generally accepted accounting principals
(GAAP).  EBITDA and free cash flow, as presented by Sybron, may not be
comparable to similarly titled measures reported by other companies.

CONFERENCE CALL AND WEBCAST

The Company will host a conference call on Tuesday, April 26th at 10:00 a.m.
Pacific Time to review the information in this press release and respond to
questions.  The dial-in number for the call is [phone] for domestic
callers and [phone] for international callers.

A recorded replay of the conference call will be offered beginning at 1:30 p.m.
Pacific Time on Tuesday, April 26th via both the Company's website and a
telephone dial-in number.  The telephone dial-in number for the recorded replay
is [phone], passcode 776180 for domestic callers and [phone],
passcode 776180 for international callers.  The telephone replay will be
available through 11:59 p.m. Pacific Time on April 29th, 2005.

The live webcast and archived replay may be accessed in the Investor Relations
section of Sybron Dental's website at http://www.sybrondental.com/.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Statements made in this press release regarding future matters are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995.  Forward-looking statements, including those
dealing with the Company's expectations as to its future revenue; earnings per
share; internal net sales growth; the demand for its products; the introduction
and sales of new products; the success of its self ligating orthodontic
brackets; the benefits it will realize from the closing of its Demetron
facility; and the reduction of its inventory levels are based on the Company's
current expectations.  Our actual results may differ materially from those
currently expected or desired because of a number of risks and uncertainties,
including the level of demand for the Company's products; regulatory
compliance; currency fluctuations; distributor inventory adjustments; the
intensity of competition; and other factors affecting the Company's business
and prospects discussed in the filings made by the Company, from time to time,
with the SEC including the factors discussed in the "Cautionary Factors"
section in Item 7 of the Company's most recent Annual Report on Form 10-K and
its periodic reports on Form 10-Q.  We undertake no obligation to publicly
update any forward-looking statement, whether as a result of new information,
future events or otherwise.

BUSINESS DESCRIPTION

Sybron Dental Specialties and its subsidiaries are leading manufacturers of a
comprehensive line of consumable general dental and specialty products for the
orthodontic, endodontic, implant and infection prevention markets worldwide.

               SYBRON DENTAL SPECIALTIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
                   (in thousands, except per share amounts)
                                 (unaudited)

                              Three Months Ended       Six Months Ended
                                   March 31,               March 31,
                                2005       2004        2005        2004

  Net sales                   $165,056   $150,921    $314,096    $282,778
  Cost of sales:
    Cost of products sold       71,787     66,854     135,460     126,753
    Restructuring charge            84      1,482          84       1,482
       Total cost of sales      71,871     68,336     135,544     128,235
  Gross Profit                  93,185     82,585     178,552     154,543
    Selling, general and
     administrative expenses    59,207     50,800     116,695      98,993
    Restructuring charge           488         --         488          --
    Amortization of intangible
     assets                        559        322       1,056         631
       Total selling, general
       and administrative
       expenses                 60,254     51,122     118,239      99,624
  Operating income              32,931     31,463      60,313      54,919
  Other expense:
    Interest expense            (4,638)    (4,941)     (9,633)   (10,101)
    Amortization of deferred
     financing fees               (416)      (402)       (831)      (809)
    Other, net                     708         11         852        (43)
  Income before income taxes    28,585     26,131      50,701      43,966
  Income taxes                   9,147      8,623      16,224      14,509
    Net income                 $19,438    $17,508     $34,477     $29,457

  Earnings per share:
    Basic earnings per share     $0.49      $0.46       $0.87       $0.77
    Diluted earnings per share   $0.47      $0.44       $0.84       $0.74

  Weighted average basic
   shares outstanding           39,986     38,471      39,732      38,391

  Weighted average diluted
   shares outstanding           41,485     40,166      41,276      40,032



               SYBRON DENTAL SPECIALTIES, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                   (in thousands, except per share amounts)
                                 (unaudited)

                                                   March 31,   September 30,
                                                     2005         2004
                          ASSETS
  Current assets:
    Cash and cash equivalents                      $47,627      $40,602
    Accounts receivable (less allowance
     for doubtful receivables of $2,723
     and $2,094 at March 31, 2005 and
     September 30, 2004, respectively)             108,003      104,148
    Inventories                                    102,637       93,689
    Deferred income taxes                            4,323        3,293
    Prepaid expenses and other current assets       13,793       12,975
       Total current assets                        276,383      254,707
  Property, plant and equipment, net of
   accumulated depreciation of $109,874 and
   $101,934 at March 31, 2005 and
   September 30, 2004, respectively                 84,093       83,121
  Goodwill                                         295,340      268,768
  Intangible assets, net                            34,686       16,178
  Other assets                                      24,085       23,784
       Total assets                               $714,587     $646,558

       LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                               $16,531      $19,512
    Current portion of long-term debt                  846          882
    Income taxes payable                            15,578       17,089
    Accrued payroll and employee benefits           29,266       29,712
    Restructuring reserve                              711          711
    Accrued rebates                                  6,635        9,475
    Accrued interest                                 3,784        3,620
    Other current liabilities                       15,932       12,291
       Total current liabilities                    89,283       93,292
  Long-term debt                                    79,904       69,589
  Senior subordinated notes                        150,000      150,000
  Deferred income taxes                             11,088       12,266
  Other liabilities                                 26,952       22,639
    Total liabilities                              357,227      347,786
  Commitments and contingent liabilities
  Stockholders' equity:
    Preferred stock, $.01 par value;
     authorized 20,000 shares, no shares
     outstanding                                        --           --
    Common stock, $.01 par value;
     authorized 250,000 shares, 40,034
     and 39,307 shares issued and
     outstanding at March 31, 2005 and
     September 30, 2004, respectively                  400          393
  Additional paid-in capital                       109,571       93,817
  Retained earnings                                222,633      188,156
  Accumulated other comprehensive income            24,756       16,406
       Total stockholders' equity                  357,360      298,772
       Total liabilities and
        stockholders' equity                      $714,587     $646,558



               SYBRON DENTAL SPECIALTIES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)
                                 (unaudited)

                                                  Six Months Ended March 31,
                                                     2005           2004
  Cash flows from operating activities:
    Net income                                     $34,477        $29,457
    Adjustments to reconcile net income to
     net cash provided by operating activities:
       Depreciation                                  7,264          6,709
       Amortization of intangible assets             1,056            631
       Amortization of deferred financing fees         831            809
       Loss on sales of property, plant and
        equipment                                       84             26
       Provision for losses on doubtful
        receivables                                    431            415
       Inventory provisions                          3,203          2,124
    Deferred income taxes                             (557)          (998)
    Tax benefit from issuance of stock
     under employee stock option plan                4,736            814
    Changes in assets and liabilities, net
     of effects of businesses acquired:
       Increase in accounts receivable              (1,554)        (1,903)
       Increase in inventories                      (5,843)        (2,772)
       Increase in prepaid expenses and
        other current assets                          (429)        (2,763)
       Decrease in accounts payable                 (3,766)        (4,034)
       Increase (decrease) in income taxes
        payable                                     (2,519)           354
       Increase (decrease) in accrued payroll
        and employee benefits                           54         (1,530)
       Decrease in accrued rebates                  (2,840)        (2,246)
       Decrease in restructuring reserve                --           (406)
       Increase (decrease) in accrued interest         164           (203)
       Increase in other current liabilities           914          1,711
       Net change in other assets and liabilities      721          1,708
         Net cash provided by operating activities  36,427         27,903

  Cash flows from investing activities:
    Capital expenditures                            (6,342)        (5,334)
    Proceeds from sales of property, plant,
     and equipment                                     938            194
    Net payments for businesses acquired           (46,049)            --
    Payments for intangibles                          (849)          (559)
        Net cash used in investing activities      (52,302)        (5,699)

  Cash flows from financing activities:
    Proceeds from credit facility                   86,000         84,000
    Principal payments on credit facility          (75,607)      (106,895)
    Proceeds from long-term debt                        --          2,469
    Principal payments on long-term debt              (292)        (8,730)
    Cash received from exercise of stock options    10,254          3,353
    Cash received from employee stock purchase plan    771            522
        Net cash provided by (used in)
         financing activities                       21,126        (25,281)
  Effect of exchange rate changes on
   cash and cash equivalents                         1,774          1,508
  Net increase (decrease) in cash and
   cash equivalents                                  7,025         (1,569)
  Cash and cash equivalents at
   beginning of period                              40,602         22,868
  Cash and cash equivalents at end of period       $47,627        $21,299



               SYBRON DENTAL SPECIALTIES, INC. AND SUBSIDIARIES
                               INTERNAL GROWTH
                       For periods ended March 31, 2005

                     Professional   Specialty    Total
                        Dental       Products     SDS

  Quarter                2.8%         8.9%        5.6%
  Year to date           3.0%         9.6%        6.1%


                            Total SDS
                       Foreign     Domestic

  Quarter                2.8%         8.0%
  Year to date           4.1%         7.9%


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DATASOURCE: Sybron Dental Specialties, Inc.



CONTACT:  Gregory D. Waller, Chief Financial Officer of Sybron Dental

Specialties, Inc., [phone]



Web site:  http://www.sybrondental.com/investors/index.html 

Web site:  http://www.sybrondental.com/ 

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