Full Press Release Details
HENRY SCHEIN REPORTS FOURTH QUARTER 2020 FINANCIAL RESULTS
FROM CONTINUING OPERATIONS
net sales growth of 18.6% in fourth quarter 2020 versus prior-year
Record total net sales growth for second half of 2020
GAAP diluted EPS from continuing operations of $0.99 versus prior-year
GAAP diluted EPS from continuing
operations of $2.25, which included a net gain on sale of equity investments
Non-GAAP diluted EPS from continuing operations of $1.00 versus prior-year
non-GAAP diluted EPS from
continuing operations of $0.97
Introduces guidance for 2021 non-GAAP diluted EPS from continuing operations
Henry Schein, Inc. (Nasdaq: HSIC), the world's largest provider of health care
solutions to office-based dental and medical practitioners, today reported fourth quarter 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: CVET).
Total net sales for the quarter ended December 26, 2020,
were $3.2 billion, an increase of 18.6% compared with the
fourth quarter of 2019, driven by sales of personal protective equipment (PPE)
and COVID-19 related products. The 18.6%
increase included 17.1% internal growth in local currencies, 0.3%
growth from acquisitions and 1.2% growth related to
foreign currency exchange.
(See Exhibit A for details of sales growth).
GAAP net income attributable to Henry Schein, Inc. from continuing operations
for the fourth quarter of 2020 was
$0.99 per diluted share, compared with prior-year GAAP net income from continuing
operations of $330.6
million, or $2.25 per diluted share, which included a net gain on sale of equity
investments of approximately $186.8 million,
or $1.27 per diluted share.
Non-GAAP net income from continuing operations for the fourth quarter
million, or $1.00 per diluted share, compared with prior-year non-GAAP net income
from continuing operations of $143.0
million, or $0.97 per diluted share. Exhibit B provides a reconciliation of GAAP
net income and diluted EPS from continuing
operations to non-GAAP net income and diluted EPS from continuing operations.
Operating margin was unfavorably
impacted by significant inventory adjustments associated with PPE and COVID-19
related products, and lower supplier
rebates, partially offset by lower expenses as a percentage of sales. Operating margin was also negatively
cash intangible asset impairment charge of approximately $18.1 million, or $0.07
per diluted share. Both GAAP and non-
GAAP net income for the fourth quarter 2020 were favorably impacted
by income tax resolutions in the U.S. and
internationally, which lowered income tax expense by approximately $14.6 million, or $0.10 per diluted share.
"Against the backdrop of a most challenging year in our history due to
the COVID-19 pandemic, with an
unprecedented human toll and economic impact worldwide,
Henry Schein's unwavering focus on our customers, along with
our resilience and agility, enabled us to deliver fourth quarter total net sales growth of 18.6%. In addition, we
record total net sales growth for the second half of 2020 as our end markets
and we recognize the
commitment and sacrifice of our Team Schein Members globally," said Stanley M. Bergman, Chairman of the Board and
Chief Executive Officer of Henry Schein.
"We were successful in supporting practices that were initially open for emergency
services and also assisting customers preparing to restore practices
to increased operating capacity as restrictions eased. Over
time, we expect that patient traffic will improve to pre-COVID-19 levels."
"I remain confident that Henry Schein is well-positioned for future continued
success given the breadth of our
products, services and support across the global dental and medical markets,"
Mr. Bergman continued.
Dental sales for the fourth quarter of 2020 of $1.8 billion increased
7.2% versus the prior-year. In local currencies,
internally generated sales increased 5.1% with 0.4%
growth from acquisitions and 1.7% growth related to foreign currency
internal growth in local currencies included a decline of 0.7%
in North America and an increase of
14.2% internationally.
Global dental consumable merchandise internal sales increased by 10.0%
in local currencies. Excluding PPE and
COVID-19 related products, sales increased by 5.0%. In North America,
dental consumable merchandise internal sales in
local currencies increased 5.3%, or 0.4% excluding PPE and COVID-19
related products, and dental equipment internal sales
in local currencies decreased 13.2%. Dental equipment sales performance
was impacted by a difficult prior-year comparison.
In addition, we believe some practices potentially held off on year-end equipment purchases as U.S.
tax incentives may be
more favorable in 2021. Internationally, dental consumable merchandise internal sales in local currencies increased 16.7%, or
11.4% excluding PPE and COVID-19 related products, and dental equipment internal sales
in local currencies increased
"We reported strong overall global dental sales growth in the fourth quarter. High-acuity procedures, including dental
specialties and restorative procedures, also contributed to year-over-year sales growth.
The 5.0% quarterly growth rate for
global dental consumable sales is among the highest recorded by Henry Schein
since 2017. International sales results for both
consumable merchandise and equipment were strong. Dental patient traffic has remained at stable
levels compared to the
third quarter of 2020,
even in countries experiencing more stringent lockdown rules, with
the exception of the U.K.," noted
Medical sales for the fourth quarter of 2020 of $1.2 billion increased 48.5%
compared with the same period last year,
growth in local currencies with 0.3%
growth related to foreign currency exchange.
acquisition growth in the quarter.
"Our Medical business experienced strong year-over-year sales growth in the fourth quarter driven