Henry Schein earnings up on growth, acquisitions
Henry Schein Inc., Long Island's largest public company based on revenue, Monday reported second quarter increases in net sales and profit driven by growth in its animal health business and acquisitions in its dental products unit.
The Melville-based distributor of health care products to office-based practitioners posted net income of $116.2 million, or $1.35 cents per diluted share, increases of 7.2 percent and 9.8 percent, respectively, versus the year-ago quarter.
Net sales rose 9.3 percent to $2.6 billion, the company said.
"We gained market share in our dental group with growth in North America exceeding 8 percent and international growth above 9 percent," chief executive Stanley M. Bergman said in a statement. "North America internal dental merchandise sales growth was bolstered by strategic acquisitions, and equipment sales and service revenue growth was nearly 11 percent in local currencies. International dental growth also reflects strategic acquisitions. . . . We expanded our reach in France and entered Brazil, our first operation in South America."
Dental sales climbed 8.6 percent, with foreign currency exchange accounting for 1.1 percent of that growth. Of the 7.5 percent increase based on local currencies, acquisition growth accounted for 4.9 percent.
Animal health sales increased 13.2 percent to $754.5 billion versus the 2013 quarter.
In a conference call, Bergman said that the company expected to "maintain market share in animal health" despite last month's announcement by manufacturer IDEXX Laboratories Inc. that it will stop distributing veterinary products through Henry Schein. IDEXX products accounted for about $150 million in annual revenue for Schein, which said it will offer customers alternative items in 2015.
"This is not the first time at all a manufacturer has decided to change a distribution arrangement," Bergman said.
Commenting on the company's medical business, Bergman said that pre-bookings of seasonal flu vaccines were running at 8 million to 9 million doses for the coming flu season, in line with last year. The company also raised the lower end of its 2014 diluted earnings per share guidance range from $5.29 to $5.39, to $5.33 to $5.39.
In a research note, ISI Group LLC analyst Michael Cherny highlighted the company's "solid total organic growth" of 4.3 percent, which excludes acquisitions.
Shares of Henry Schein closed down 63 cents to $116.76 Monday on the Nasdaq stock market.