MELVILLE, N.Y., Feb. 15, 2012 /PRNewswire/ --Henry Schein, Inc. (NASDAQ: HSIC), the largest provider of healthcare products and services to office-based practitioners, today reported record financial results for the quarter ended December 31, 2011.
The Company is on a 52/53 week fiscal year ending on the last Saturday in December, and 2011 had an extra selling week compared with 2010. This extra selling week occurred in the fourth quarter of 2011. In order to facilitate more meaningful comparisons, the Company is providing a separate estimate of the impact of the extra week on sales growth and is providing internal sales growth in local currencies excluding that extra week.
Net sales for the fourth quarter of 2011 were $2.3 billion, an increase of 15.6% compared with the fourth quarter of 2010. This consists of internal growth of 5.3%, acquisition growth of 4.7%, a decline related to foreign currency exchange of 0.1% and growth due to the extra week of 5.7% (see Exhibit A for details of sales growth).
Net income attributable to Henry Schein, Inc. for the fourth quarter of 2011 was $104.7 million or $1.15 per diluted share, an increase of 12.6% and 15.0%, respectively, compared with the fourth quarter of 2010.
"We are delighted to have gained market share in all of our business groups during the fourth quarter, with overall mid-single digit internal sales growth complemented by strategic acquisitions. Also, we are proud that net sales for the year exceeded $8.5 billion for the first time," said Stanley M. Bergman, Chairman and Chief Executive Officer of Henry Schein. "Overall our view is that the markets we serve are modestly improving, and we look forward to a return to historic market growth of 5% to 6% annually over the longer term."
North American Dental sales of $806.6 million increased 11.9%, including internal growth of 4.5%, a decline related to foreign currency exchange of 0.1% and growth due to the extra week of 7.5%.
"Results in our North American Dental group were strong across the board, and reflect steady patient traffic to dental offices and higher demand for dental equipment," commented Mr. Bergman. "Dental internal growth in local currencies of 4.5% includes 4.8% growth in Dental consumable merchandise sales and 3.8% growth in Dental equipment sales and services revenues, excluding the impact of the extra week."
North American Medical sales of $373.3 million increased 13.9%, including internal growth of 7.1%, acquisition growth of 0.7% and growth due to the extra week of 6.1%. There was no meaningful impact on sales growth from seasonal influenza vaccine products.
"During the fourth quarter we distributed approximately 1.7 million doses of seasonal influenza vaccines, as planned, bringing our total for the year to 11.6 million doses with sales of $88.3 million," remarked Mr. Bergman. "We are most pleased with the performance of our North American Medical group during the quarter, with internal growth well in excess of our estimate for market growth."
North American Animal Health sales of $255.9 million increased 14.9%, including internal growth of 7.2% and growth due to the extra week of 7.7%.
"We also continue to be very pleased with the results from our North American Animal Health business, and believe our performance remains well in excess of market growth," commented Mr. Bergman. "We recently acquired all of Oak Hill Capital Partners' interest in Butler Schein Animal Health, and now own 71.7% of that business. Butler Schein Animal Health is one of the anchors in our leading global animal health business, which has annual sales of approximately $2 billion."
International sales of $833.8 million increased 20.0%, including internal growth of 4.8%, acquisition growth of 12.2% and growth due to the extra week of 3.0%. There was no net impact from foreign currency exchange during the quarter.
"Results for our International group feature solid sales growth to our dental, medical and veterinary customers, complemented by the acquisition of Provet Holdings in Australia and New Zealand," added Mr. Bergman. "Early in January we acquired Veterinary Instrumentation, the leading supplier of surgical instruments and implants to veterinary surgeons in the United Kingdom with sales of approximately $11 million. We look forward to bringing the Veterinary Instrumentation portfolio of high-quality specialty surgical products to a growing number of professionals across Europe, the U.S. and Australasia."
Technology and Value-Added Services sales of $70.7 million increased 23.1% during the quarter, including internal growth of 2.4%, acquisition growth of 14.2% and growth due to the extra week of 6.5%.
"We remain very pleased with the performance of our Technology and Value-Added Services group, with strong sales growth including strategic acquisitions," explained Mr. Bergman. "Fourth quarter results include particular strength in our electronic services and financial services businesses."
Stock Repurchase Plan
The Company announced that it repurchased 1.1 million shares of its common stock during the fourth quarter at an average price of $61.98 per share, or approximately $68 million. The impact of the repurchase of shares on fourth quarter diluted EPS was less than $0.01. At the close of the fourth quarter, Henry Schein had $100.0 million authorized for future repurchases of its common stock.
Full-Year Results
For the year, net sales of $8.5 billion increased 13.3% compared with 2010. This consists of internal growth of 4.5%, acquisition growth of 4.9%, growth related to foreign currency exchange of 2.4% and growth due to the extra week of 1.5%.
Net income attributable to Henry Schein, Inc. for 2011 was $367.7 million or $3.97 per diluted share, an increase of 10.1% and 10.9%, respectively, compared with adjusted net income for 2010, which excludes restructuring costs of $12.3 million or $0.09 per diluted share. Growth in diluted EPS was 13.8% on an as-reported basis (see Exhibit B for reconciliation of GAAP net income and EPS to non-GAAP adjusted net income and EPS).
2012 EPS Guidance
Henry Schein today affirmed 2012 financial guidance, as follows:
- For 2012 the Company expects diluted EPS attributable to Henry Schein, Inc. to be $4.25 to $4.34, which represents growth of 7% to 9% compared with 2011 results.
- The Company notes that the 2012 fiscal year includes one less week than 2011.
- Guidance for 2012 diluted EPS attributable to Henry Schein, Inc. excludes restructuring costs.
- Guidance for 2012 diluted EPS attributable to Henry Schein, Inc. is for current continuing operations as well as completed or previously announced acquisitions, and does not include the impact of potential future acquisitions, if any.
Strategic Plan
"Executive management of Henry Schein is completing our 2012-2014 strategic plan, which calls for annualized sales to exceed $10 billion by 2015 with improved profitability. At the core of our initiatives to support this plan is the establishment of Global Dental, Global Medical and Global Animal Health business groups, in addition to our Global Technology and Value-Added Services group, while strengthening other company-wide functions," said Mr. Bergman. "These global business groups will provide distinct organizational focus for reaching and serving each of our practitioner segments with the benefits of a global perspective, as well as global product and service offerings and best practices."
He continued, "Among our strategic priorities is optimizing our cost structure and our processes. To that end we will be implementing a restructuring with the goal of improving profitability." The Company noted that it expects to record restructuring charges of approximately $11 million to $13 million, or approximately $0.08 to $0.10 per diluted share, during the first half of 2012 as a result of this action.
Beginning with the reporting of financial results for the first quarter of 2012, net sales and sales comparisons will be provided for each of the global Dental, Medical, Animal Health and Technology and Value-Added Services business groups.
Fourth Quarter Conference Call Webcast
The Company will hold a conference call to discuss fourth quarter financial results today, beginning at 10:00 a.m. Eastern time. Individual investors are invited to listen to the conference call over the Internet through Henry Schein's Web site at www.henryschein.com. In addition, a replay will be available beginning shortly after the call has ended.
About Henry Schein, Inc.
Henry Schein, Inc. (NASDAQ: HSIC), the largest provider of health care products and services to office-based practitioners, is a Fortune 500® company and a member of the NASDAQ 100® Index. The Company is recognized for its excellent customer service and highly competitive prices. Henry Schein's five businesses Dental, Medical, Animal Health, International and Technology serve nearly 775,000 customers worldwide, including dental practitioners and laboratories, physician practices and animal health practices, as well as government and other institutions. The Company operates through a centralized and automated distribution network, which provides customers in more than 200 countries with a comprehensive selection of more than 90,000 national and Henry Schein private-brand products in stock, as well as more than 100,000 additional products available as special-order items. Henry Schein also provides exclusive, innovative technology offerings for dental, medical and veterinary professionals, including value-added practice management software and electronic health record solutions.
Headquartered in Melville, N.Y., Henry Schein employs nearly 15,000 people and has operations or affiliates in 24 countries. The Company's net sales reached a record $8.5 billion in 2011. For more information, visit the Henry Schein Web site at www.henryschein.com.
