MELVILLE, New York-- Henry Schein, a provider of health-care products and services to office-based practitioners, has reported financial results for the quarter ended June 27, 2009.
Net sales for the second quarter of 2009 were $1.6 billion, a decrease of 1.8% compared with the second quarter of 2008. This consists of a 7.1% decline related to foreign currency exchange, offset by a 5.3% growth in local currencies.
Income from continuing operations attributable to Henry Schein, Inc. for the second quarter of 2009 was $73.5 million, or $0.81 per diluted share, an increase of 13.1% and 14.1%, respectively, compared with the second quarter of 2008. Income from continuing operations for the second quarter of 2008 has been restated for the adoption of FASB Staff Position APB 14-1, which decreased diluted EPS by approximately $0.01.
"We are pleased to report growth in diluted EPS from continuing operations of 14% and operating margin expansion of 65 basis points," said Stanley M. Bergman, chairman and chief executive officer of Henry Schein.
"Our financial results for the quarter demonstrate a commitment to efficient operations and prudent cash management. The markets Henry Schein serves were largely as we expected them to be during the second quarter."
Dental Group sales of $626 million declined 5.1%, consisting of a 1.5% decline related to foreign currency exchange and a 3.6% decline in local currencies. The 3.6% decline in local currencies included 1.3% growth in Dental consumable merchandise sales and a 17.5% decline in Dental equipment sales and service revenues.
"Dental consumable merchandise sales figures suggest stabilization in the market and dentists continue to be cautious when committing to purchasing equipment," commented Bergman.
Medical Group sales of $351 million increased 8.0%, and were positively impacted by strong sales of consumable products, as well as by sales of products related to the H1N1 virus.
International Group sales of $592 million declined 3.8%, consisting of a 17.2% decline related to foreign currency exchange and 13.4% growth in local currencies. International sales growth in local currencies included particular strength in the company's dental equipment and veterinary businesses.
Technology and Value-Added Services Group sales of $43 million increased 3.5% during the quarter, consisting of a 3.8% decline related to foreign currency exchange and a 7.3% growth in local currencies.
Year-to-date results
For the first half of 2009, net sales of $3.1 billion represent a decrease of 2.0% compared with the first half of 2008. This decrease includes a 7.4% decline related to foreign currency exchange offset by 5.4% growth in local currencies.
Income from continuing operations attributable to Henry Schein for the first half of 2009 was $128.3 million, or $1.43 per diluted share. These results include first quarter 2009 restructuring costs of $4.0 million (or $0.03 per diluted share, after-tax) related to the completion of the expense reduction program announced in November 2008.
Excluding the impact of these restructuring costs, income from continuing operations attributable to Henry Schein for the first half of 2009 was $131.1 million, or $1.46 per diluted share, an increase of 12.5% and 15.9%, respectively, compared with the first half of 2008. Income from continuing operations for the first half of 2008 has been restated for the adoption of FASB Staff Position APB 14-1, which decreased diluted EPS by approximately $0.02.
2009 EPS guidance
Henry Schein affirmed 2009 financial guidance, as follows:
* 2009 diluted EPS attributable to Henry Schein, Inc. is expected to be $3.11 to $3.26, representing growth of 7% to 12% compared with restated 2008 results of $2.92, excluding charges related to the Lehman Brothers bankruptcy as well as restructuring costs. The 2009 guidance also excludes restructuring costs.
* Guidance for 2009 diluted EPS attributable to Henry Schein, Inc. is for current continuing operations including completed or previously announced acquisitions, and does not include the impact of potential future acquisitions, if any.
Second Quarter Conference Call Webcast
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