They’re off to the races once again at Henry Schein Inc., where healthy increases in net sales and net income highlighted a strong first quarter.
Coming off a stellar 2015, the aggressively expanding Melville-based healthcare products distributor reported net sales of $2.7 billion for the quarter ended March 26, an increase of 10.1 percent over net sales reported in 1Q 2015. The sales spike came despite a 1.9 percent decline in foreign currency exchange rates, a longtime bugaboo for the multinational distributor.
First-quarter net income rose to $113.8 million (or $1.37 per diluted share), a 7.7 percent increase over 1Q 2015 reported net income; excluding some $4.1 million in pretax restructuring costs, the company’s first-quarter net income was actually $116.8 million ($1.41 per diluted share), a 10.2 percent jump over 1Q 2015.
Stanley Bergman, chairman and CEO of the self-billed “world’s largest provider of healthcare products and services to office-based dental, animal health and medical practitioners,” said company principals were “pleased” with the financials in a quarter where the Long Island stalwart continued to make progress around the globe.
“The global markets we serve remain generally healthy,” Bergman told investors Tuesday. “Although we faced continued headwinds from foreign currency exchange in our international business, the impact was far less than in 2015.”
Company officials “believe we gained market share in each of our business groups,” Bergman added, leading to that 10.2 percent growth in adjusted diluted per-share earnings. Emboldened by the growth, Henry Schein affirmed its 2016 EPS guidance, which is still in the $6.55 to $6.65 range – a projected 10 to 12 percent rise over 2015’s adjusted diluted EPS of $5.96.
Bergman characterized it as “a solid start to the year.”
First-quarter sales of dental products were reported at $1.3 billion, up 4.1 percent over 1Q 2015. The increase included sales and service spikes in France, Australia, Germany and Spain, while the company’s 1Q dental-products performance was highlighted by Henry Schein’s acquisition of 50 percent interest in One Piece, a subsidiary of Japanese conglomerate J. Morita Corp.
Animal health sales also surged in the quarter ended March 26, increasing 12.7 percent globally. Bergman credited “multiple strategic acquisitions” made in Europe and elsewhere throughout 2015.
First-quarter technology and value-added service sales leapt 18.6 percent year-over-year, to $101.7 million, but the biggest sales increase percentage- and revenue-wise was recorded by Henry Schein’s medical products business group. The company reported a 21.3 percent jump in global medical sales between 1Q 2015 and 1Q 2016, rising to $583.1 million.
The spike marked the fifth consecutive quarter of double-digit gains in medical sales. Bergman credited “continued success with large group practices and integrated delivery networks.”
In Tuesday’s financials rundown, Henry Schein also recapped its first quarter stock repurchasing plan. Between Jan. 1 and March 26, the company repurchased roughly 664,000 shares of common stock at an average price of $150.51 per share – a $100 million investment that diluted earnings per share less than one cent – and still has approximately $300 million reserved for future common stock repurchases.