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Henry Schein reports higher sales, but lower profit after litigation costs

The Melville-based distributor of dental, medical and animal health products, Long Island's largest public company, had revenue of $3.3 billion and net income of $122 million in the quarter.

Henry Schein headquarters in Melville on March 28.

Henry Schein headquarters in Melville on March 28. Photo Credit: Barry Sloan

Henry Schein Inc., Long Island's largest public company, Tuesday reported third quarter revenue grew 3.8 percent to $3.3 billion, but that profit declined in part because of costs to settle litigation.

The Melville-based distributor of dental, medical and animal health products posted net income of $121.5 million, or 79 cents per diluted share, declines of 12 percent and 9 percent compared with the previous year's quarter.

The company said it took a $38.5 million charge, first announced in August, to settle a federal class action antitrust lawsuit.

The earnings report for the quarter ended Sept. 29 comes as the company undertakes a restructuring plan and a spin off and merger of its animal health business.

The company said it expects to take a one-time restructuring charge of $45 million to $55 million in 2018 worth 22 to 27 cents per diluted share for severance payments, facility closings and other costs.

In April, Henry Schein announced plans to spin off its animal health business and merge it with privately held Vets First Choice, creating a new public company, Vets First Corp. That spinoff, which will be majority-owned by Henry Schein shareholders, is expected by year's end.

"We believe there are exciting opportunities ahead for Henry Schein's businesses as we execute on our strategic goals," chairman and chief executive Stanley M. Bergman said in a statement.

In a research note, Evercore CSI analyst Ross Muken said slower dental and animal health sales plus foreign exchange transactions hurt Henry Schein's quarterly results.

"We expect the core growth shortfall to hit shares today," he said. 

Sales of dental supplies, the company's biggest business, increased 2.4 percent to $1.5 billion.

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