SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2020

The Company has numerous operating businesses covering a wide range of dental consumable products, dental technology, and dental equipment products primarily serving the professional dental market, and certain healthcare products. Professional dental products represented approximately 90% and 92% of net sales for the three months ended March 31, 2020 and 2019, respectively.

The operating businesses are combined into two operating groups, which generally have overlapping 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 segments are consistent with those described in the Company’s most recently filed Form 10-K, in the summary of significant accounting policies.

The Company evaluates performance of the segments based on the groups’ net sales and segment adjusted operating income. The Company also evaluates segment performance based on each segment’s adjusted operating income before provision for income taxes and interest. Segment adjusted operating income is defined as operating income before income taxes and before certain corporate headquarter unallocated costs, restructuring and other costs, interest expense, interest income, other expense (income), net, amortization of intangible assets, and depreciation resulting from the fair value step-up of property, plant and equipment from acquisitions. The Company’s segment adjusted operating income is considered a non-GAAP measure. A description of the products and services provided within each of the Company’s two operating segments is provided below.

Technologies & Equipment

This segment is responsible for the worldwide design, manufacture, sales and distribution of the Company’s Dental Technology & Equipment Products and Healthcare Consumable Products. These products includes dental implants, CAD/CAM systems, orthodontic clear aligners, imaging systems, treatment centers, instruments, as well as consumable medical device products.

Consumables

This segment is responsible for the worldwide design, manufacture, sale and distribution of the Company’s Dental Consumable Products which include preventive, restorative, endodontic, and laboratory dental products.

The Company’s segment information was as follows:

Net Sales


	Three Months Ended March 31,
(in millions)	2020		2019

Technologies & Equipment	$	520.3	$	520.8
Consumables	354.0		425.4
Total net sales	$	874.3	$	946.2

Segment Adjusted Operating Income


	Three Months Ended March 31,
(in millions)	2020		2019

Technologies & Equipment	$	111.1	$	71.8
Consumables	61.6		105.7
Segment adjusted operating income	172.7		177.5

Reconciling items expense (income):
All other ^(a)	49.7		59.7
Goodwill impairment	156.6		—
Restructuring and other costs	42.5		20.5
Interest expense	6.7		8.4
Interest income	(0.4)		(1.1)
Other expense (income), net	(1.4)		(13.8)
Amortization of intangible assets	47.2		48.2
Depreciation resulting from the fair value step-up of property, plant, and equipment from business combinations	1.5		1.8
(Loss) income before income taxes	$	(129.7)	$	53.8

^(a) Includes the results of unassigned Corporate headquarters costs and inter-segment eliminations.