The company states that an increase in dental sales is due to “healthy patient traffic” to practices and “sales of high-tech equipment.”
Henry Schein Inc. (NASDAQ: HSIC), the world's largest provider of health care products and services to office-based dental, animal health, and medical practitioners, reported record first quarter financial results on May 3, 2016.
Net sales for the quarter ended March 26, 2016, were $2.7 billion, an increase of 10.1% compared with the first quarter of 2015. This consisted of 12.0% growth in local currencies and a 1.9% decline related to foreign currency exchange. In local currencies, internally generated sales increased 9.3% and acquisition growth was 2.7%.
Net income attributable to Henry Schein Inc. for the first quarter of 2016 was $113.8 million, or $1.37 per diluted share. Excluding restructuring costs of $4.1 million pretax or $0.04 per diluted share, adjusted net income attributable to Henry Schein Inc. for the first quarter of 2016 was $116.8 million or $1.41 per diluted share. This represents growth of 7.7% and 10.2%, respectively, compared with the first quarter of 2015, excluding restructuring costs (see Exhibit B for reconciliation of GAAP net income and EPS to non-GAAP adjusted net income and EPS).
"We are pleased with our first-quarter financial results, and we believe we gained market share in each of our business groups. The global markets we serve remained generally healthy, and although we faced continued headwinds from foreign currency exchange in our international business, the impact was far less than in 2015," said Stanley M. Bergman, chairman of the board and chief executive officer of Henry Schein. "Double-digit growth in adjusted diluted EPS represents a solid start to the year. We also are pleased to affirm guidance for 2016 adjusted diluted EPS, which represents growth of 10% to 12% compared with adjusted 2015 results."
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Dental sales of $1.3 billion increased 4.1%, consisting of 6.1% growth in local currencies and a 2.0% decline related to foreign currency exchange. In local currencies, internally generated sales increased 4.9% and acquisition growth was 1.2%. The 4.9% internal growth in local currencies included 6.4% growth in North America and 2.3% growth internationally.
"In North America, consumable merchandise internal sales growth in local currencies was 4.6%, which we believe reflects continued healthy patient traffic to dental offices as well as market share gains. Equipment sales and service internal sales growth in local currencies of 13.5% was excellent and was driven by sales of high-tech equipment," commented Mr. Bergman. "International consumable merchandise internal sales growth in local currencies was 1.6% and was led by France, Australia and Spain. International equipment sales and service internal sales in local currencies increased 4.3% over the prior year, with particular strength in Germany, France and Australia."
"During the quarter we expanded our presence in Japan by acquiring a 50% interest in the One Piece subsidiary of J. Morita, one of the world's largest manufacturers and distributors of dental equipment and supplies," he added. "We also signed an agreement to acquire a majority interest in Dental Cremer, a distributor of dental supplies and equipment in Brazil."—Henry Schein press release 3 May 2016
Editor’s note: To view the entire release, including detailed financial data, click here.
