Full Press Release Details
HENRY SCHEIN REPORTS RECORD THIRD QUARTER 2020 FINANCIAL RESULTS FROM CONTINUING
Internal sales growth in local currencies of 13.0% driven by personal protective equipment and COVID-19-
GAAP diluted EPS from continuing operations of $0.99 versus prior-year GAAP
diluted EPS from continuing
Non-GAAP diluted EPS from continuing operations of $1.03 versus prior-year
non-GAAP diluted EPS from
continuing operations of $0.90
Strong balance sheet bolstered by quarterly cash flow from operations of $261.3 million
Henry Schein, Inc. (Nasdaq: HSIC), the world's largest provider of health care
solutions to office-based dental and medical practitioners, today reported record third 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: CVET).
Net sales for the quarter ended September 26, 2020, were $2.8 billion,
an increase of 13.2%
compared with the third
quarter of 2019. The 13.2% increase included 13.0%
internal growth in local currencies, 0.1% growth from acquisitions
0.1% growth related to foreign currency exchange.
(See Exhibit A for details of sales growth and a reconciliation of
GAAP measure to GAAP sales).
GAAP net income attributable to Henry Schein, Inc. from
continuing operations for the third quarter of 2020 was
$141.7 million, or $0.99 per diluted share, compared with prior-year GAAP
net income from continuing operations of $134.9
million, or $0.91 per diluted share. Non-GAAP net income from
continuing operations for the third quarter of 2020 was
$147.0 million, or $1.03 per diluted share, compared with prior-year non-GAAP
net income from continuing operations of
$134.3 million, or $0.90 per diluted share. Non-GAAP results for the third
quarter of 2020 and 2019 exclude certain items
noted in Exhibit B, which provides a reconciliation of GAAP
net income from continuing operations and diluted EPS from
continuing operations to non-GAAP net income and diluted EPS from
continuing operations. Both GAAP and non-GAAP
net income for the third quarter 2020 were favorably impacted by
a U.S. federal income tax settlement reached during the
quarter, which lowered income tax expense by approximately $15.6 million, or $0.11 per
"2020 has been an extraordinarily challenging and unpredictable year for our team,
customers and suppliers.
commend the work and sacrifice of Team Schein to support business continuity for our customers.
disruption to the supply chain and as suppliers reacted to increased demand
for personal protective equipment (PPE) and
shortages of raw materials our markets experienced significant price volatility.
As a result of the hard work and dedication of
the team throughout the COVID-19 crisis, we were ready
to assist our dental and medical customers, many of whom were
subject to work restrictions and faced severe challenges, as they returned
to their offices to provide safe, quality clinical
care," said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry
in sales that began late in the second quarter continued into the third quarter, with growth over the
prior year driven by sales
of PPE and COVID-19-related products.
This growth, coupled with the various actions we took earlier in the year
operating expenses, resulted in diluted EPS that grew 8.8% on a GAAP
basis and 14.4% on a non-GAAP basis.
margin was primarily negatively impacted by significant inventory cost adjustments
associated with PPE and COVID-19
related products, offset by lower expenses.
Most of the temporary expense-reduction initiatives have now ended, and
although we expect PPE and COVID-19-related product sales to positively
impact dental and medical consumable
merchandise sales into the future, we expect overall sales growth to
moderate from the third quarter.
"We remain committed to the well-being of Team Schein and our disciplined strategy that is focused on the success
helping practitioners to efficiently manage their practices while providing
quality care, as the driver of
long-term profitable growth of the company.
Given the challenging macro environment that started with the onset of the
pandemic, earlier this year we paused our long-standing program
of strategic acquisitions.
as global business conditions
have improved, we will resume these activities.
We now have significant opportunities to allocate capital in support of our
strategic plan, with the goal of maintaining a strong balance sheet and increasing
operating cash flow over time," said Mr.
Dental sales for the third quarter of 2020 of $1.6 billion increased 6.7%
versus the prior year. In local currencies,
internally generated sales increased 6.5% with 0.1% growth from acquisitions
and 0.1% growth related to foreign currency
internal growth in local currencies included an increase of 6.3% in
North America and an
6.9% internationally.
In North America, dental consumable merchandise internal sales in
local currencies increased 8.1% and dental
equipment internal sales in local currencies increased 0.2%. Internationally, dental consumable merchandise internal
local currencies increased 11.1%
and dental equipment internal sales in local currencies declined 6.9%.
"Customer demand for PPE and COVID-19-related products increased as patients
began to return to dental practices
globally, resulting in strong consumable merchandise sales growth. While recent growth in COVID-19 cases and infection
rates are creating renewed uncertainty in certain geographies, the current
global dental end markets
overall and are generally stable," noted Mr. Bergman.
Medical sales for the third quarter of 2020 of $1.0 billion increased 27.8%
compared to the same period last year,
consisting of 27.7% growth in local currencies and 0.1% growth related
to foreign currency exchange.
acquisition growth in the quarter.