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Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Dentsply Sirona, Inc. (XRAY)

December 21, 2018

NEW YORK, Dec. 20, 2018 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Dentsply Sirona, Inc. (“Dentsply” or the “Company”) (Nasdaq: XRAY) in the United States District Court for the Eastern District of New York, on behalf of a class consisting of investors who purchased or otherwise acquired securities of Dentsply between February 20, 2014 through August 7, 2018 (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. The action also asserts claims under Section 11, 12 and 15 of the Securities Act of 1933 on behalf of all persons who purchased or otherwise acquired the common stock of Dentsply in exchange for their shares of the common stock of Sirona in connection with the Acquisition.

The Complaint alleges that Defendants falsely represented the drivers of the Company’s financial performance. Defendants attributed the Company’s financial performance to the Company’s “innovation,” “operational improvement efforts,” “new products,” and “continued investments in sales and marketing” and told investors that these factors helped the Company succeed despite the “highly competitive” market for its products. However, the Company’s financial results had been buoyed by an anticompetitive scheme among the Company’s three primary distributors that suppressed competition in the dental supply market and artificially inflated the price of dental supplies sold by Dentsply. Moreover, Defendants concealed that an exclusive distribution arrangement that Sirona had with one of its distributors, Patterson Companies, Inc. (“Patterson”), required Patterson to regularly make large minimum purchases regardless of demand and, as a result, by 2015, Patterson had been supplied with so much excess inventory that it could not be sold. This channel-stuffing rendered the Company’s reported sales, financial results and guidance materially false and misleading. In addition, the Company represented that it reported its financial statements, including its goodwill, in accordance with generally accepted accounting principles, or GAAP. In reality, the Company’s reported goodwill was artificially inflated and not reported in accordance with GAAP because it did not reflect the financial impact of the anticompetitive scheme.

The truth about the Company’s financial condition and business was revealed in a series of corrective disclosures. In a series of disclosures culminating on August 7, 2018, the Company disclosed that it was subject of an investigation by the SEC, announced the surprise departure of the Company’s top three executives, repeatedly downwardly revised its guidance, and reported several quarters of disappointing financial results and significant goodwill impairment charges that were attributed to, among other things, an “increase in competition” and destocking from the Company’s dealer partners, including Patterson. When the truth concerning the fraud and its impact on the Company’s financial condition was revealed to investors, Dentsply stock declined by over 45% from its Class Period high.

Investors who purchased or otherwise acquired shares during the Class Period should contact the Firm prior to the February 19, 2019 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.

Please visit our website at http://www.gme-law.com for more information about the firm.

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