Full Press Release Details
HENRY SCHEIN REPORTS RECORD FIRST QUARTER RESULTS
Adjusted EPS up 10.2% to $1.41
Affirms 2016 guidance range
MELVILLE, N.Y., May 3, 2016 - Henry Schein, Inc. (NASDAQ: HSIC),
the world's largest provider of health care products and services to
office-based dental, animal health and medical practitioners, today reported
record first quarter financial results.
Net sales for the quarter ended March
26, 2016 were $2.7 billion, an increase of 10.1% compared with the first
quarter of 2015. This consisted of 12.0% growth in local currencies and a 1.9%
decline related to foreign currency exchange. In local currencies, internally
generated sales increased 9.3% and acquisition growth was 2.7% (see Exhibit A
for details of sales growth).
Net income attributable to Henry
Schein, Inc. for the first quarter of 2016 was $113.8 million, or $1.37 per
diluted share. Excluding restructuring costs of $4.1 million pretax or $0.04
per diluted share, adjusted net income attributable to Henry Schein, Inc. for
the first quarter of 2016 was $116.8 million or $1.41 per diluted share. This
represents growth of 7.7% and 10.2%, respectively, compared with the first
quarter of 2015, excluding restructuring costs (see Exhibit B for
reconciliation of GAAP net income and EPS to non-GAAP adjusted net income and
"We are pleased with our first-quarter
financial results, and we believe we gained market share in each of our
business groups. The global markets we serve remained generally healthy, and
although we faced continued headwinds from foreign currency exchange in our
international business, the impact was far less than in 2015," said Stanley M.
Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein. "Double-digit
growth in adjusted diluted EPS represents a solid start to the year. We also are
pleased to affirm guidance for 2016 adjusted diluted EPS, which represents
growth of 10% to 12% compared with adjusted 2015 results."
Dental sales of $1.3 billion
increased 4.1%, consisting of 6.1% growth in local currencies and a 2.0%
decline related to foreign currency exchange. In local currencies, internally
generated sales increased 4.9% and acquisition growth was 1.2%. The 4.9%
internal growth in local currencies included 6.4% growth in North America and 2.3%
growth internationally.
"In North America, consumable
merchandise internal sales growth in local currencies was 4.6%, which we
believe reflects continued healthy patient traffic to dental offices as well as
market share gains. Equipment sales and service internal sales growth in local
currencies of 13.5% was excellent and was driven by sales of high-tech equipment,"
commented Mr. Bergman. "International consumable merchandise internal sales
growth in local currencies was 1.6% and was led by France, Australia and Spain.
International equipment sales and service internal sales in local currencies increased
4.3% over the prior year, with particular strength in Germany, France and
"During the quarter we expanded our
presence in Japan by acquiring a 50% interest in the One Piece subsidiary of J.
Morita, one of the world's largest manufacturers and distributors of dental
equipment and supplies," he added. "We also signed an agreement to acquire a
majority interest in Dental Cremer, a distributor of dental supplies and equipment
Animal Health sales of $771.4 million
increased 12.7%, consisting of 15.6% growth in local currencies and a 2.9%
decline related to foreign currency exchange. In local currencies, internally
generated sales increased 9.8% and acquisition growth was 5.8%. The 9.8%
internal growth in local currencies included 16.7% growth in North America and
3.1% growth internationally.
"Normalizing Animal Health results to
account for the impact of certain products switching between agency sales and direct
sales, internal sales growth in local currencies was 5.2% for the quarter,
including 7.4% growth in North America," commented Mr. Bergman. "Growth in our
Animal Health group benefitted from multiple strategic acquisitions made during
2015, in particular in Europe."
Medical sales of $538.1 million
increased 21.3%, consisting of 21.5% growth in local currencies and a 0.2%
decline related to foreign currency exchange. In local currencies, sales
increased 21.5%, all internally generated.
"When normalizing results for the
impact of agency sales in the prior year, North America Medical internal sales
growth was 11.2%. This represents the fifth consecutive quarter of
double-digit sales gains. This growth reflects continued success with
large group practices and integrated delivery networks," remarked Mr. Bergman.
Technology and Value-Added Services
sales of $101.7 million increased 18.6%, including 19.9% growth in local
currencies and a 1.3% decline related to foreign currency exchange. In local
currencies, internally generated sales increased 7.5% and acquisition growth
"North America Technology and
Value-Added Services internal sales growth was 8.0% in local currencies, representing
the highest growth rate in nearly two years and reflecting particular strength
in software and financial services. International internal growth in local
currencies was 5.1%," commented Mr. Bergman. "Early in the quarter, we
completed the acquisition of a majority interest in Vetstreet, a leading
domestic provider of marketing solutions and health information analytics, and
a month later we acquired RxWorks, a practice management software company
serving veterinarians in Australia, New Zealand, the U.K. and the Netherlands.
Both transactions strengthen our position of leadership and add value to our
customers worldwide."
The Company announced that it
repurchased approximately 664,000 shares of its common stock during the first
quarter at an average price of $150.51 per share, or approximately $100 million.
The impact of the repurchase of shares on first-quarter diluted EPS was less
than one cent. At the close of the first quarter, Henry Schein had
approximately $300 million authorized for future repurchases of its common stock.
affirms 2016 financial guidance, as follows:
Company expects adjusted diluted EPS attributable to Henry Schein, Inc. to be
$6.55 to $6.65, which represents growth of 10% to 12% compared with 2015 adjusted
diluted EPS of $5.96. (See Exhibit C for reconciliation of 2016 GAAP EPS
guidance and growth rates to non-GAAP guidance and growth rates.)
adjusted diluted EPS attributable to Henry Schein, Inc. is for current
continuing operations as well as completed or previously announced
acquisitions, and does not include the impact of potential future acquisitions,