Full Press Release Details
HENRY SCHEIN REPORTS RECORD FOURTH QUARTER 2019 FINANCIAL RESULTS
FROM CONTINUING OPERATIONS
EPS from continuing operations of $2.25, up 192.2%
over prior-year quarter, reflecting, among other things, a net gain on
sale of equity investments
diluted EPS from continuing operations of $0.97, up 9.0%
over prior-year quarter
guidance range for 2020 non-GAAP diluted EPS from continuing operations of $3.65 to $3.75
MELVILLE, N.Y., February 20, 2020 - Henry Schein, Inc. (Nasdaq: HSIC),
the world's largest provider of health care solutions to office-based dental
and medical practitioners, today reported record 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:
Net sales from continuing operations
for the quarter ended December 28, 2019, were $2.7 billion, an increase of 7.9%
compared with the fourth quarter of 2018. The 7.9% increase included 8.9%
growth in local currencies and a 1.0% decline related to foreign currency
exchange. In local currencies, internally generated sales increased 5.8% and
growth from acquisitions was 3.1%. Excluding sales to Covetrus under the
transition services agreement entered into in connection with the Animal Health
spin-off, internal sales growth in local currencies was approximately 4.9% (see
Exhibit A for details of sales growth).
Net income attributable to Henry
Schein, Inc. from continuing operations for the fourth quarter of 2019 was
$330.6 million, or $2.25 per diluted share, compared with prior-year net income
from continuing operations of $117.8 million, or $0.77 per diluted share.
Fourth quarter 2019 results include a net gain on sale of equity investments of
approximately $186.8 million, or $1.27 per diluted share, as well as a
reduction in estimated restructuring costs of $1.1 million, or $0.01 per
diluted share. Excluding these items, non-GAAP net income from continuing
operations for the fourth quarter of 2019 was $143.0 million, or $0.97 per
diluted share, compared with non-GAAP net income from continuing operations of
$136.2 million, or $0.89 per diluted share, for the fourth quarter of 2018.
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
"As our fourth quarter 2019 results
attest, Henry Schein delivered an excellent conclusion to a transformative year
in which we strategically positioned our business for continued success in the
markets we serve," said
Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry
Schein. "Strong revenue growth in our Medical and Technology and Value-Added
Services businesses were a particular highlight, along with sales of North
America Dental Equipment and International Consumable Merchandise. We continue
to execute on our strategic plan and remain optimistic about the Company's
prospects in 2020 and beyond."
Dental sales of $1.7 billion
increased 2.9%, consisting of 4.2% growth in local currencies and a 1.3%
decline related to foreign currency exchange. In local currencies, internally
generated sales increased 2.5% and growth from acquisitions was 1.7%.
"North America dental consumable
merchandise internal sales in local currencies were essentially flat in the
fourth quarter, reflecting soft end-market demand from independent dental
practices. Dental equipment internal sales increased by a healthy 7.2% in local
currencies, primarily driven by high-tech equipment sales," commented Mr.
"Internationally, dental consumable
merchandise internal sales in local currencies had growth of 4.4%, driven by
broad-based strength across most of our business. Dental equipment internal
sales in local currencies decreased by 0.8%, as we faced a difficult prior-year
comparison when internal sales growth in local currencies was 7.5%. The sales
decrease was also due in part to soft macroeconomic conditions in Australia,"
Medical sales of $788.7 million
increased 15.2%, with no impact from foreign currency exchange. Internally generated
sales increased 10.2% and growth from acquisitions was 5.0%, primarily driven
by the contribution from North American Rescue.
"We believe our Medical business
continued to gain market share, with internal sales in local currencies up
double-digits in the fourth quarter," remarked Mr. Bergman. "Our focus on
providing a wide array of solutions, services, and support to a broad spectrum
of health care customers has enabled the Company to grow its presence in the
Medical market and positions Henry Schein well for the future."
Technology and Value-Added Services
sales from continuing operations of $137.1 million increased 20.0%, consisting
of 20.3% growth in local currencies and a 0.3% decline related to foreign
currency exchange. In local currencies, internally generated sales increased
9.4% and growth from acquisitions was 10.9%, primarily driven by the
contribution from Lighthouse 360.
"North America Technology and
Value-Added Services internal sales growth in local currencies was a strong
8.7% as the business benefited from service revenue associated with a product
migration, as well as from solid financial services revenue. Internationally,
Technology and Value-Added Services internal sales increased 13.4% in local
currencies, led by strong financial services revenue," said Mr. Bergman.
"Henry Schein One continues to
advance its platform of delivering integrated
technology to enhance dental practice management and allow dentists to focus on
delivering quality patient care," Mr. Bergman continued.
Stock Repurchase Plan
The Company repurchased approximately
2.9 million shares of its common stock during the fourth quarter at an average
price of $69.05 per share, for a total of $200 million. The impact of the
repurchase of shares on fourth quarter 2019 diluted EPS was immaterial.
For fiscal year 2019, the Company
repurchased approximately 8.2 million shares for a total of $525 million. At
fiscal year-end, Henry Schein had $275 million authorized and available for
future stock repurchases.
2019 Financial Results
Net sales from continuing operations
for the year ended December 28, 2019, were $10.0 billion, an increase of
6.0% compared with 2018. This consisted of 7.7% growth in local currencies