New quarter, familiar fortunes for Henry Schein

Henry Schein CEO Stanley BergmanStanley Bergman: Henry Schein can do even better, especially in domestic Dental sales.

It was another solid spring for Henry Schein Inc., which reported its second-quarter financials to investors Thursday.

Setting the tone in the quarter ended June 25 were year-over-year gains in net sales and income, with each of the Melville-based healthcare-products provider’s individual business segments reporting improved bottom lines.

Company-wide net sales for the second quarter were reported at $2.9 billion, a 9.3 percent increase over reported net sales in 2Q 2015. The increase overcame a 0.4 percent sales decline related to foreign currency-exchange rates, a familiar bugaboo for the multinational conglomerate.

Net income for the second quarter was reported at $120.1 million, or $1.46 per diluted share, marking year-over-year quarterly income growth of 1.8 percent and earnings-per-share growth of 4.3 percent. Excluding one-time pretax restructuring costs of $20.4 million, second-quarter net income was a robust $135.4 million and EPS was $1.64 – chunky 9.9 percent and 12.3 percent increases, respectively, over 2Q 2015.

Henry Schein also benefited during the second quarter from a tax-audit settlement that reduced income-tax expense by $4.5 million, or 5 cents per diluted share.

Among the reported highlights from Henry Schein’s disparate business units: Second-quarter Dental sales increased 4 percent year-over-year, to $1.4 billion; Animal Health sales increased 14 percent, to $853.6 million; and Medical sales increased 14.5 percent, to $538.8 million.

Despite the bullish returns – the latest in a string of stellar quarterly earnings reports – Chairman and CEO Stanley Bergman said Henry Schein can do better, especially regarding domestic Dental sales, which grew only 2 percent, while international sales of dental products climbed at a 4.2 percent clip.

“North America dental sales were below our expectations in the second quarter,” Bergman noted. “However, sales in our Medical, Animal Health and Technology and Value-Added Services business were strong.”

Second-quarter Technology and Value-Added Services sales increased 19.6 percent year-over-year, according to Wednesday’s report, eclipsing $107 million.

That tech-services growth – combined with the strong returns by the Dental, Animal Health and Medical units – helped Henry Schein accumulate $5.6 billion in net sales over the first two quarters of 2016, a 9.7 percent increase over sales recorded over the first half of 2015.

Also skyrocketing over the first six months of 2016 is net income – $233.8 million, a 5.6 percent increase over the first six months of 2015 – and earnings per diluted share, which at $2.83 represents an 8 percent leap over the first half of last year.

And the Fortune 500 company – Long Island’s largest public company, revenue-wise, and the self-billed “world’s largest provider of healthcare products and services to office-based dental, animal health and medical practitioners” – shows no signs of slowing, according to its CEO.

“Our business model has served us well during periods of sustained economic expansion as well as in times of uncertainty in our markets,” Bergman said Wednesday. “We believe our business model and strategic plan, including our continued investments, will drive our growth over the long term, and we remain extremely well-positioned in each of the vertical markets we serve.”