Henry Schein’s $11 billion niche

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

BY GREGORY ZELLER// Even for a company as large as Henry Schein, months don’t get much bigger than this.

On April 17, one of Long Island’s best-known brands marked its first month on one of the planet’s most prestigious stock indexes. Henry Schein announced March 16 that it had been selected by S&P Dow Jones Indices to join the S&P 500, following Long Island’s Kimco Realty, Cablevision Systems Corp. and Pall Corp.

Next came word that Henry Schein – self-billed as “the world’s largest provider of healthcare products and services to office-based dental, animal health and medical practitioners” – had been named to Forbes’ first-ever list of America’s Best Employers, unveiled in the magazine’s April 13 issue.

Based on a poll of more than 20,000 employees at U.S. companies, nonprofits and government agencies, the list tallied 500 worker-friendly firms and only two Long Island companies – Henry Schein (No. 203) and Canon USA (No. 464), the U.S. subsidiary of the Japanese conglomerate – made the grade.

Beaming about both honors, Henry Schein CEO Stanley Bergman cited two “extremely positive aspects” of the S&P 500 listing, starting with the quality of the index’s average investor.

“You want long-term shareholders and the S&P 500 has that,” Bergman told Innovate LI. “The Nasdaq does also – very stable stockholders who don’t generally share stock [in index funds] and are good representatives of the investment community.”

The second benefit of the S&P 500 listing, Bergman noted, is it “lends credibility to the hard work we’ve been doing for decades by really explaining to investors that Henry Schein is a solid investment vehicle.”

Adding to that fiscal endorsement is the fact that Henry Schein didn’t actively seek placement on the S&P 500. Outside forces acted to get the Melville company onto the prestigious index, making it even more of an honor, according to Bergman.

“You don’t actively campaign for something like this,” he said. “But the Nasdaq is interested in having more of its companies on the S&P 500, and they actively push to have their companies listed. In that context, I’m sure they made sure the S&P people knew who we are.”

Investors certainly know who Henry Schein is, and Bergman credits that to the company’s listing on the Nasdaq, where HSIC shares were trading north of $142.50 this week, just pennies off their 52-week high of $143.89. The Nasdaq is home to such public companies as Microsoft, Starbucks, Apple and Facebook, Bergman noted, the “new economy” firms Henry Schein wants to be associated with.

But as gratified as the company is with its listings, Bergman – who doubles as Henry Schein’s chairman of the board – is more proud of cracking the America’s Best Employers list. Because it’s based on employee input, the Forbes honor “goes to the heart of the success of Henry Schein,” Bergman said.

The CEO cited five key constituents driving his company, including suppliers, customers, investors and the firm’s philanthropic efforts, with the firm’s 18,000 employees at 450 international locations at the heart of the list.

“Our team is our most important asset, bar none,” Bergman said. “Without great morale on the team, there’s no way you’d be successful in this industry. The engagement of people who really want to work as a team and really want to help our suppliers and customers is why we’re successful.”

What’s next for Henry Schein “is actually quite boring,” according to the CEO: The company has “always been very clear with Wall Street,” and the plan moving forward is to “continue doing what we do.”

“We might not give the biggest return on investment, but we always give our investors a solid return, with a relatively stable increase in earnings year after year,” Bergman said.

And Henry Schein is well-positioned to continue that roll, he added, not only because it supplies increasingly important oral-care products – “Good oral care is critical to the whole healthcare continuum,” Bergman noted – but because its primary focus is wellness, a staple of national healthcare-reform efforts.

“The healthcare system today can’t afford to continue as it does, focusing on sick care,” Bergman said. “Healthcare reform is about treating people before they’re sick … and we’re in the business of wellness and prevention.

“The key is to continue growing our business in terms of geography and the products our customers need to operate their businesses,” he added. “We’re in a great position. Our markets are niche, but you add them all together and that’s how you get $11 billion in sales.”