Full Press Release Details
HENRY SCHEIN REPORTS SECOND QUARTER 2020 FINANCIAL RESULTS
per diluted share from continuing operations of $0.08 versus prior-year GAAP
diluted EPS from continuing operations of $0.78
diluted EPS from continuing operations of $0.00 versus prior-year non-GAAP
diluted EPS from continuing operations of $0.84
maintains a strong balance sheet with access to significant liquidity
MELVILLE, N.Y., August 4, 2020 - Henry Schein, Inc. (Nasdaq: HSIC),
the world's largest provider of health care solutions to office-based dental
and medical practitioners, today reported second quarter 2020 financial results
from continuing operations. Results from continuing operations exclude
contributions from Henry Schein's former Animal Health business, which was spun
off in February 2019 to form a new publicly traded company, Covetrus (Nasdaq:
Net sales for the quarter ended
June 27, 2020, were $1.7 billion, a decrease of 31.2% compared with the second
quarter of 2019 due to the impact of COVID-19. In local currencies, internally
generated sales decreased 30.5%. Acquisition growth was immaterial (See Exhibit
A for details of sales growth and a reconciliation of this non-GAAP measure to
GAAP net loss attributable to Henry
Schein, Inc. from continuing operations for the second quarter of 2020 was
$11.4 million, or a loss of $0.08 per diluted share, compared with prior-year
net income from continuing operations of $116.8 million, or $0.78 per diluted
share. Non-GAAP net income from continuing operations for the second quarter of
2020 was $0.6 million, or $0.00 per diluted share, compared with prior-year
non-GAAP net income from continuing operations of $125.7 million, or $0.84 per
diluted share. Non-GAAP results for the second quarter of 2020 and 2019 exclude
certain items noted in Exhibit B, which provides a reconciliation of GAAP net
income/loss from continuing operations and diluted EPS from continuing
operations to non-GAAP net income and diluted EPS from continuing operations.
"Team Schein rose to the
significant challenges caused by the global COVID-19 pandemic. These efforts
are clear attributes of our corporate culture, which is rooted in care and
respect for one another, as well as a commitment to our customers, suppliers,
investors, and corporate social responsibility," said Stanley M. Bergman,
Chairman of the Board and Chief Executive Officer of Henry Schein. "While
results for the second quarter are reflective of the current challenging
environment, we remain confident in our strategy. Throughout this pandemic, we
have focused our dental and medical practice recovery programs to assist our
customers with solutions ranging from
management of temporary office closures to
safety, new protocol implementation, patient communications, and financial
assistance, among many other solutions to help restore practices.
"Regarding our second quarter
financial results, COVID-19 significantly impacted our worldwide results,
particularly in our Dental business, yet sales improved relative to our
original expectations across all our business groups as we progressed through
the quarter. This was directly related to a resumption of operations for both
our dental and medical customers, which occurred faster than we had
anticipated, first in our international markets and then in North America,"
said Mr. Bergman. "We remain cautiously optimistic about the immediate future
while closely monitoring global diagnosed COVID-19 cases and the potential
impact on customer activity, and focusing on cash management. Our enthusiasm
for both our near- and long-term business prospects remains unchanged."
Dental sales for the second quarter
of 2020 of $941.3 million decreased 41.2% versus the prior year. In local currencies,
internally generated sales decreased 40.1%. Acquisition growth was immaterial.
The 40.1% internal decline in local currencies included a decrease of 46.9% in
North America and a decrease of 29.5% internationally.
In North America, dental consumable
merchandise internal sales in local currencies declined 47.5% and dental
equipment internal sales in local currencies declined 44.9%. Internationally,
dental consumable merchandise internal sales in local currencies declined 29.2%
and dental equipment internal sales in local currencies declined 30.5%.
"We saw positive trends in sales
later in the quarter as practices reopened and patients returned for oral care,
leading to dental sales in the second quarter that were ahead of our original
expectations," noted Mr. Bergman.
Medical sales for the second
quarter of 2020 of $617.8 million decreased 11.4% compared to the same period
last year. There was no acquisition growth in the quarter.
quarter medical sales were fairly resilient, due to strong demand for personal
protective equipment (PPE)," remarked Mr. Bergman. "A portion of physician
offices in North America remained open throughout the quarter, and sales of
consumable merchandise experienced less of a decline than we anticipated. Henry Schein has also worked to
make available a variety of COVID-19 point-of-care diagnostic tests and related
solutions to our medical customers in response to the pandemic."
Technology and Value-Added Services
sales from continuing operations of $105.2 million decreased 15.9% versus the
prior year. In local currencies, internally generated sales decreased 17.0%.
Acquisition growth was immaterial.
"Henry Schein One dental software
sales began to improve as we progressed through the second quarter, in line with
the resumption of dental practice operations. In particular, the monthly trend
for transactional software revenues improved as more patients visited dental
offices worldwide. The ability for dentists to communicate with patients,
providing information on practice reopening plans and safety measures, has been
a critical solution for our customers in response to COVID-19," said Mr.
Bergman. "Dental practices have relied on Henry Schein for practice management,
patient engagement, and demand creation software solutions, as well as
financial services programs as they navigated office closures, staff furloughs,
and a resumption of procedure bookings."
Year-to-Date Financial Results
Net sales from continuing
operations for the first half of 2020 were $4.1 billion, a decrease of
14.5% compared with the first half of 2019. In local currencies,
internally generated sales decreased 14.5%.
GAAP net income attributable to
Henry Schein, Inc. from continuing operations for the first half of 2020 was
$119.2 million, or $0.84 per diluted share, compared with GAAP net income from
continuing operations for the first half of 2019 of $235.2 million, or $1.56
per diluted share. Non-GAAP net income from continuing operations for the first