Henry Schein, with 1,400 LI employees, launching cost-cutting program
Henry Schein Inc. said it will not be moving from its Melville headquarters. Credit: Barry Sloan
Henry Schein Inc., Long Island’s largest public company, is launching a cost-cutting initiative “to rationalize its operations” by year’s end, the medical and dental supply distributor said in a government filing Monday.
The Melville company, which has 1,430 employees on Long Island and about 22,000 worldwide, did not provide details on the program or whether layoffs would be required.
Shares of Henry Schein climbed 0.7 percent to close Monday at $76.31. The stock has fallen about 14 percent in the past 12 months.
The filing said the company currently is unable to estimate the costs associated with the program, but it would make an amended filing with the Securities and Exchange Commission that includes estimates of those expenses.
In a June 29 interview at Newsday, Henry Schein chief executive Stanley M. Bergman said the company is committed to keeping its headquarters on Long Island.
“We’re not moving our headquarters from here,” he said.
But he said the company is still considering where to add additional space for technology functions.
Stanley M. Bergman, chairman and chief executive of Henry Schein Inc. in Melville. Credit: Newsday / J. Conrad Williams Jr.
“We’re undergoing a study on our real estate expansion,” he said. “We need more space ... Do we add people here, or do we add them elsewhere?”
In a research note, Jeff D. Johnson, an analyst at Robert W. Baird & Co. Inc., discounted speculation that Monday’s restructuring announcement and other recent moves to revamp Henry Schein were being driven by activist investors.
“Instead,” Johnson said, Monday’s announcement related to decisions that “management has hinted were forthcoming for the past two quarters.”
In April the company announced two major strategic efforts to redesign the company.
In one initiative, Henry Schein unveiled a plan to spin off its unit that provides products to veterinarians’ offices, which accounted for 28 percent of 2017 sales, and combine it with Vets First Choice, based in Portland, Maine.
In the other, the company said it would roll its dental software unit into a majority-owned joint venture with El Segundo, California-based Internet Brands, the operator of automotive, legal, travel, home and health websites.
“With all this recent activity, we’re not surprised that management may now be seeing many facility and/or personnel redundancies that have to be addressed,” Johnson said.
The analyst added that given Henry Schein’s “strong history of execution,” he’s not convinced activist investors “could add much value” to the stock.
Henry Schein is the largest local public company based on 2017 revenue of about $12.5 billion, more than triple No. 2 Broadridge Financial Solutions Inc., based in Lake Success.
