The good times roll on at Henry Schein, with the Melville healthcare products distributor reporting record first-quarter results.
Net sales for the quarter ended March 28 were $2.5 billion, a 1.4 percent increase over the same quarter a year earlier. The company also recorded a healthy increase in net income: Excluding pretax restructuring costs of $6.9 million, first-quarter net income was $108.4 million ($1.28 per diluted share), a 6.2 percent increase over 1Q 2014 net income (up 8.5 percent per diluted share), according to a company release.
The strong numbers cap a quarter in which Henry Schein – self-billed as “the world’s largest provider of healthcare products and services to office-based dental, animal health and medical practitioners” – was honored by Forbes as one of America’s Best Employers and earned a place on the S&P 500, the prestigious stock index tracking the biggest market-capitalization companies trading on the Nasdaq and the New York Stock Exchange.
The first quarter wasn’t perfect. Stanley Bergman, Henry Schein’s CEO and chairman of the board, cited “challenges in our International Dental business,” with global dental sales declining to $1.3 billion, down 3.6 percent from 1Q 2014. The company cited a drop in international dental merchandise sales, with Bergman specifically noting the “softness” of local currencies in Germany, the United Kingdom and Australia.
Also, the company’s overall sales growth was somewhat hampered by a stronger U.S. dollar, especially against the euro, Bergman said.
But “the global markets we serve continued to be healthy during the quarter,” the CEO added in a written statement, and the company expects those dental sales to bite back in the second quarter, following a strong showing at the biennial International Dental Show, which was held in Germany in March.
“We look forward to the positive impact,” Bergman said.
International Dental aside, Henry Schein’s other business groups all logged solid first-quarter performances. Animal Health sales hit $684.3 million, a year-over-year 1Q jump of 4.6 percent; Medical sales were $443.5 million, an increase of 11.6 percent; and Technology and Value-Added Services sales were recorded as $85.7 million, a 5.4 percent increase from last year, according to the company statement.
Also in the first quarter, Henry Schein announced it was repurchasing approximately 542,000 shares of common stock at an average share price of $139.67. The company called the $75.7 million buyback’s effect on 1Q earnings-per-share “immaterial,” and said it was planning to repurchase another $224 million worth of common stock.
Bergman said following the strong first-quarter performance, Henry Schein was affirming its 2015 guidance range, with the Fortune 500 company predicting diluted earnings-per-share between $5.90 and $6. That would represent EPS growth of 8 to 10 percent over 2014’s performance, the company said.