SEGMENT AND GEOGRAPHIC INFORMATION

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company has numerous operating businesses covering a wide range of products and geographic regions, primarily serving the professional dental market. Professional dental products represented approximately 89% and 97% of sales for the three months ended March 31, 2012 and 2011, respectively.

The operating businesses are combined into operating groups, which have overlapping product offerings, geographical presence, customer bases, distribution channels, and regulatory oversight. These operating groups are considered the Company’s reportable segments as the Company’s chief operating decision-maker regularly reviews financial results at the operating group level and uses this information to manage the Company’s operations. The accounting policies of the groups are consistent with those described in the Company’s most recently filed Form 10-K in the summary of significant accounting policies.  The Company measures segment income for reporting purposes as operating income before restructuring and other costs, interest expense, interest income, other income and expenses and income taxes.

During the three months ended March 31, 2012, the Company realigned reporting responsibilities for multiple locations as a result of changes to the management structure. These changes also helped the Company gain operating efficiencies and effectiveness. The segment information below reflects the revised structure for all periods shown.

Dental Consumable and Laboratory Businesses

This business group includes responsibility for the design, manufacturing, sales and distribution of certain small equipment and chairside consumable products in the United States, Germany and certain other European regions.  It also has responsibility for the sales and distribution of certain Endodontic products in Germany. This business group also includes the responsibility for the design, manufacture, sales and distribution of most dental laboratory products, excluding certain countries. This business group is also responsible for most of the Company’s non-dental business excluding healthcare products.

Orthodontics/Canada/Mexico/Japan

  This business group is responsible for the world-wide manufacturing, sales and distribution of the Company’s Orthodontic products. It also has responsibility for the sales and distribution of most of the Company’s dental products sold in Japan, Canada and Mexico.

Select Distribution Businesses

This business group includes responsibility for the sales and distribution for most of the Company's dental products sold in France, United Kingdom, Italy, Austria and certain other European countries, Middle Eastern countries and Africa.

Implants/Endodontics/Healthcare/Pacific Rim

This business group includes the responsibility for the design, manufacture, sales and distribution of most of the Company’s dental implant and related products. This business group also includes the responsibility for the design and manufacturing of Endodontic products and is responsible for the sales and distribution of the Company’s Endodontic products in the United States, Switzerland, and locations not covered by other selling divisions.  In addition, this business group is also responsible for sales and distribution of certain Endodontic products in Germany, Asia and other parts of the world. Additionally, this business group is responsible for the design and manufacture of certain dental consumables and dental laboratory products and the sales and distribution of most dental products sold in Brazil, Latin America (excluding Mexico), Australia and most of Asia (excluding Japan). This business group is also responsible for the world-wide design, manufacturing, sales and distribution of the Company's healthcare products (non-dental) throughout most of the world.

Significant interdependencies exist among the Company’s operations in certain geographic areas. Inter-group sales are at prices intended to provide a reasonable profit to the manufacturing unit after recovery of all manufacturing costs and to provide a reasonable profit for purchasing locations after coverage of marketing and general and administrative costs.

Generally, the Company evaluates performance of the operating groups based on the groups’ operating income, excluding restructuring and other costs, and net third party sales, excluding precious metal content.

The following tables set forth information about the Company’s operating groups for the three months ended March 31, 2012 and 2011:

Third Party Net Sales

	Three Months Ended
(in thousands)	2012			2011
Dental Consumable and Laboratory Businesses	$	246,931		$	231,120
Orthodontics/Canada/Mexico/Japan	72,902			88,446
Select Distribution Businesses	68,226			69,575
Implants/Endodontics/Healthcare/Pacific Rim	329,668			182,406
All Other (a)	(1,314		)	(1,044		)
Total	$	716,413		$	570,503

(a) Includes amounts recorded at Corporate headquarters.

Third Party Net Sales, Excluding Precious Metal Content

	Three Months Ended
(in thousands)	2012			2011
Dental Consumable and Laboratory Businesses	$	207,484		$	201,108
Orthodontics/Canada/Mexico/Japan	65,841			80,475
Select Distribution Businesses	66,628			67,449
Implants/Endodontics/Healthcare/Pacific Rim	326,986			179,017
All Other (a)	(1,314		)	(1,044		)
Total excluding precious metal content	665,625			527,005
Precious metal content	50,788			43,498
Total including precious metal content	$	716,413		$	570,503

(a) Includes amounts recorded at Corporate headquarters.

Inter-segment Net Sales

	Three Months Ended
(in thousands)	2012			2011
Dental Consumable and Laboratory Businesses	$	48,980		$	48,427
Orthodontics/Canada/Mexico/Japan	1,179			984
Select Distribution Businesses	396			345
Implants/Endodontics/Healthcare/Pacific Rim	35,740			35,985
All Other (a)	67,137			64,520
Eliminations	(153,432		)	(150,261		)
Total	$	—		$	—

(a) Includes amounts recorded at Corporate headquarters and one distribution warehouse not managed by named segments.

Segment Operating Income

	Three Months Ended
(in thousands)	2012			2011
Dental Consumable and Laboratory Businesses	$	61,470		$	55,983
Orthodontics/Canada/Mexico/Japan	366			9,278
Select Distribution Businesses	(1,453		)	(99		)
Implants/Endodontics/Healthcare/Pacific Rim	66,625			54,381
All Other (a)	(38,611		)	(20,326		)
Segment operating income	88,397			99,217
Reconciling Items:
Restructuring and other costs	1,237			633
Interest expense	15,782			6,343
Interest income	(2,297		)	(1,828		)
Other expense (income), net	484			70
Income before income taxes	$	73,191		$	93,999

(a) Includes the results of Corporate headquarters, inter-segment eliminations and one distribution warehouse not managed by named segments.

Assets
(in thousands)	March 31, 2012		December 31, 2011
Dental Consumable and Laboratory Businesses	$	1,064,801	$	1,180,001
Orthodontics/Canada/Mexico/Japan	271,614		328,376
Select Distribution Businesses	203,290		159,210
Implants/Endodontics/Healthcare/Pacific Rim	3,232,374		2,890,880
All Other (a)	242,982		196,931
Total	$	5,015,061	$	4,755,398

(a) Includes the assets of Corporate headquarters, inter-segment eliminations and one distribution warehouse not managed by named segments.