Business News

Henry Schein Reports Record Second Quarter Results

2008-08-05 06:00:00

Henry Schein Reports Record Second Quarter Results

Sales increase 19% to $1.6 billion

Diluted EPS from continuing operations up 18% to $0.71

MELVILLE, N.Y.–(EMWNews)–Henry Schein, Inc. (NASDAQ: HSIC), the largest provider of healthcare

products and services to office-based practitioners in the combined

North American and European markets, today reported record

financial results for the quarter ended June 28, 2008.

Net sales for the second quarter of 2008 were $1.6 billion, an increase

of 18.6% compared with the second quarter of 2007. This increase

includes 13.6% local currency growth (4.0% internally generated and 9.6%

from acquisitions) and 5.0% related to foreign currency exchange. (See

Exhibit A for details of sales growth.) The Company previously announced

an initiative of reducing sales of certain lower-margin pharmaceutical

products. Excluding sales of those products, internal net sales growth

in local currencies was 6.6%.

Income from continuing operations for the second quarter of 2008 was

$65.5 million, or $0.71 per diluted share, up 20.3% and 18.3%,

respectively, compared with the prior-year second quarter. There was no

impact from discontinued operations on our 2008 results.

Second quarter financial results reflect a

strong contribution from our International Group, as well as solid

growth in our Dental Group, said Stanley M.

Bergman, Chairman and Chief Executive Officer of Henry Schein. These

results illustrate Henry Scheins ability to

deliver consistent sales and earnings growth.

Dental Group sales of $660 million increased 9.7%, including 8.7% growth

in local currencies (7.2% internally generated and 1.5% from

acquisitions) and 1.0% growth related to foreign currency exchange. Of

the 8.7% local currency growth, Dental consumable merchandise sales

increased 7.9% (6.3% internal growth and 1.6% acquisition growth) and

Dental equipment sales and service revenues were up 11.0% (9.9% internal

growth and 1.1% acquisition growth).

Our Dental Group continues to gain market

share in consumable merchandise and in equipment,

commented Mr. Bergman. We recorded another

quarter of double-digit growth in equipment sales and service revenues,

highlighted by gains in high-tech products, including acceleration in

sales of the E4D CAD/CAM product compared with the first quarter.

Medical Group sales of $329 million declined 8.3% (8.9% decline in

internal growth and 0.6% acquisition growth). Excluding sales of certain

lower-margin pharmaceutical products, noted above, internal Medical

Group net sales growth was approximately 1%.

With the progress we have made under the

Medical One World initiative, coupled with the growth we have seen in

Privileges enrollment, we look forward to capitalizing on future sales

growth opportunities within our Medical Group,

said Mr. Bergman. We are also optimistic

about the upcoming influenza vaccine season, based on current market

conditions and customer order activity.

For the quarter, International Group sales of $615 million increased

55.7%, including 39.7% growth in local currencies (10.9% internally

generated and 28.8% from acquisitions) and 16.0% related to foreign

currency exchange.

Our International Group reported strong

growth in all major markets, highlighted by solid Dental growth,

added Mr. Bergman. We are also pleased to

report that W. & J. Dunlop continues to perform above expectations.

Technology and Value-Added Services Group sales of $41 million increased

29.0%, including 28.6% growth in local currencies (1.8% internally

generated and 26.8% acquisition growth) and 0.4% growth related to

foreign currency exchange.

Results reflect good growth in electronic

and financial services, as well as last years

acquisition of Software of Excellence, a leading supplier of innovative

clinical and practice management solutions to dentists,

stated Mr. Bergman. During the second

quarter we launched Easy Dental 2008, offering dentists increased

functionality and improved productivity.

Year-to-Date Results

For the first six months of 2008, net sales of $3.2 billion represent an

increase of 17.6% compared with the first six months of 2007. This

increase includes 12.8% local currency growth (3.5% internally generated

and 9.3% from acquisitions) and 4.8% related to foreign currency

exchange. Excluding sales of certain lower-margin pharmaceutical

products, noted above, internal net sales growth was 6.0%. Income from

continuing operations for the first six months of 2008 was $117.8

million, reflecting 20.4% growth compared with the prior year. Earnings

per diluted share from continuing operations of $1.28 for the first six

months of 2008 represents 18.5% growth over the comparable period in


Stock Repurchase Plan

Henry Schein announced that it repurchased 602,000 shares of common

stock during the second quarter of 2008 for a total purchase price of

nearly $32 million. Approximately $109 million remains authorized for

future common stock repurchases. The impact of the share repurchases

during the quarter was immaterial to diluted EPS.

2008 EPS Guidance

Henry Schein affirms 2008 financial guidance, as follows:

  • 2008 diluted EPS is expected to be $2.93 to $3.00, representing growth

    of 14% to 16% compared with 2007.

  • This 2008 diluted EPS guidance includes Henry Scheins

    expectation that it will distribute 12 million to 15 million doses of

    influenza vaccine during the year, representing earnings of $0.13 to

    $0.16 per diluted share.

  • 2008 diluted EPS guidance is for current continuing operations

    including completed or previously announced acquisitions, and does not

    include the impact of potential future acquisitions, if any.

Second Quarter Conference Call Webcast

The Company will hold a conference call to discuss second quarter

financial results today, beginning at 10:00 a.m. Eastern time.

Individual investors are invited to listen to the conference call over

the Internet through Henry Scheins Web site

at In

addition, a replay will be available beginning shortly after the call

has ended.

About Henry Schein

Henry Schein, a Fortune 500® company and a

member of the NASDAQ 100® Index, is

recognized for its excellent customer service and highly competitive

prices. The Companys four business groups

Dental, Medical, International and Technology

serve more than 550,000 customers worldwide, including dental

practitioners and laboratories, physician practices and animal health

clinics, as well as government and other institutions.

The Company operates through a centralized and automated distribution

network, which provides customers in more than 200 countries with a

comprehensive selection of more than 90,000 national and Henry Schein

private-brand products in stock, as well as more than 100,000 additional

products available as special-order items.

Henry Schein also offers a wide range of innovative value-added practice

solutions for healthcare professionals, such as ArubA®,

the Companys electronic catalog and ordering

system. Its leading practice-management software solutions have an

installed user base of more than 52,000 practices, including DENTRIX®,

Easy Dental®, Oasis®

and EXACT® for dental practices, MicroMD®

for physician practices, and AVImark® for

animal health clinics.

Headquartered in Melville, N.Y., Henry Schein employs over 12,000 people

and has operations or affiliates in 20 countries. The Companys

net sales reached a record $5.9 billion in 2007. For more information,

visit the Henry Schein Web site at

In accordance with the Safe Harbor

provisions of the Private Securities Litigation Reform Act of 1995, we

provide the following cautionary remarks regarding important factors

that, among others, could cause future results to differ materially from

the forward-looking statements, expectations and assumptions expressed

or implied herein. All forward-looking statements made by us are subject

to risks and uncertainties and are not guarantees of future performance.

These forward-looking statements involve known and unknown risks,

uncertainties and other factors that may cause our actual results,

performance and achievements or industry results to be materially

different from any future results, performance or achievements expressed

or implied by such forward-looking statements. These statements are

identified by the use of such terms as may,

could, expect,

intend, believe,

plan, estimate,

forecast, project,

anticipate or

other comparable terms. A full discussion of our operations and

financial condition, including factors that may affect our business and

future prospects, is contained in documents we have filed with the SEC

and will be contained in all subsequent periodic filings we make with

the SEC. These documents identify in detail important risk factors that

could cause our actual performance to differ materially from current


Risk factors and uncertainties that could cause actual results to differ

materially from current and historical results include, but are not

limited to: competitive factors; changes in the healthcare industry;

changes in regulatory requirements that affect us; risks associated with

our international operations; fluctuations in quarterly earnings; our

dependence on third parties for the manufacture and supply of our

products; transitional challenges associated with acquisitions,

including the failure to achieve anticipated synergies; financial risks

associated with acquisitions; regulatory and litigation risks; the

dependence on our continued product development, technical support and

successful marketing in the technology segment; our dependence upon

sales personnel and key customers; our dependence on our senior

management; possible increases in the cost of shipping our products or

other service trouble with our third-party shippers; risks from rapid

technological change; risks from potential increases in variable

interest rates; possible volatility of the market price of our common

stock; certain provisions in our governing documents that may discourage

third-party acquisitions of us; and changes in tax legislation that

affect us. The order in which these factors appear should not be

construed to indicate their relative importance or priority.

We caution that these factors may not be exhaustive and that many of

these factors are beyond our ability to control or predict. Accordingly,

any forward-looking statements contained herein should not be relied

upon as a prediction of actual results. We undertake no duty and have no

obligation to update forward-looking statements.




(in thousands, except per share data)








Three Months Ended

Six Months Ended

June 28,

June 30,

June 28,

June 30,







Net sales









Cost of sales









Gross profit





Operating expenses:

Selling, general and administrative









Operating income





Other income (expense):

Interest income





Interest expense









Other, net











Income from continuing operations before taxes, minority interest

and equity in earnings (losses) of affiliates





Income taxes









Minority interest in net income of subsidiaries









Equity in earnings (losses) of affiliates











Income from continuing operations






Discontinued operations:

Loss from operations of discontinued components (including

write-down of long-lived assets of $32.7 million)





Income tax benefit







Loss from discontinued operations









Net income










Earnings from continuing operations per share:




















Loss from discontinued operations per share:




















Earnings per share:

Steven Paladino, 631-843-5500
Executive Vice President and Chief

Financial Officer
[email protected]

Goldner, 631-845-2820
Vice President, Investor Relations
[email protected]

Vassallo, 631-843-5562
Vice President, Corporate Communications
[email protected]

free cash grants, free grant money, free money, cash grants, scholarships, business grants, foundation grants, government grants, debt grants, consolidation, college tuition, financial aid, medical grants, personal grants, medical bills, unsecured loans, no interest loans, financing, loans, capital, non profit organizations

Major Newsire & Press Release Distribution with Basic Starting at only $19 and Complete OTCBB / Financial Distribution only $89

Get Unlimited Organic Website Traffic to your Website now offers Organic Lead Generation & Traffic Solutions

Blake Masterson

Freelance Writer, Journalist and Father of 5

Related Articles

Back to top button