The company states that it believes it “outpaced the global dental market.” Read more below.
Henry Schein has reported record third quarter financial results. Net sales for the quarter ended September 24, 2016, were $2.9 billion, an increase of 6.7% compared with the third quarter of 2015. This consisted of 7.7% growth in local currencies and a 1.0% decline related to foreign currency exchange. In local currencies, internally generated sales increased 6.0% and acquisition growth was 1.7%.
Net income attributable to Schein for the third quarter of 2016 was $133.7 million, or $1.63 per diluted share on a generally accepted accounting principles (GAAP) basis. This represents growth of 4.7% and 7.2%, respectively, compared with the third quarter of 2015. Excluding restructuring costs of $5.4 million pretax, or $0.05 per diluted share, adjusted non-GAAP net income attributable to Henry Schein, Inc. for the third quarter of 2016 was $137.7 million, or $1.68 per diluted share. This represents growth of 5.5% and 8.4%, respectively, compared with adjusted non-GAAP results for the third quarter of 2015. Third quarter 2015 adjusted non-GAAP results exclude restructuring costs of $8.4 million pretax or $0.08 per diluted share, as well as a one-time income tax benefit, net of noncontrolling interest, of $3.8 million or $0.05 per diluted share (see Exhibit B for reconciliation of GAAP net income and EPS to adjusted non-GAAP net income and EPS).
"We are pleased to report record financial results for the third quarter. We believe we continue to gain market share in each of our business groups as our company is well served by our diversified portfolio and an expanding global customer base," said Stanley M. Bergman, chairman of the board and CEO of Henry Schein. "We are affirming guidance for 2016 adjusted non-GAAP diluted EPS growth of 10% to 11%, or 7% to 8% on a GAAP basis, compared to 2015 results. In addition, we are pleased to introduce guidance for 2017 diluted EPS that represents growth of 17% to 19% on a GAAP basis, or 9% to 11% on an adjusted non-GAAP basis, both compared with the respective midpoints of 2016 guidance."
Dental sales of $1.3 billion increased 5.1%, consisting of 5.6% growth in local currencies and a 0.5% decline related to foreign currency exchange. In local currencies, internally generated sales increased 3.9% and acquisition growth was 1.7%. The 3.9% internal growth in local currencies included 4.4% growth in North America and 3.1% growth internationally.
"In North America, dental consumable merchandise internal sales growth in local currencies was 1.8%. Our decision to stop selling low-margin precious metals earlier this year negatively impacted our growth by approximately 50 basis points. While the domestic dental consumable merchandise market continued to reflect somewhat slower than historical growth, the market appears to be stable. Dental equipment sales and service internal sales growth in local currencies increased by 13.3%, and reflects acceleration of some sales into the quarter. On an overall basis, we believe we outpaced the global dental market and we believe the fundamentals of our business strategy remain strong," commented Mr. Bergman.
"International consumable merchandise internal sales growth in local currencies was 2.7%, and international equipment sales and service internal sales in local currencies increased 4.2% over the prior year," added Mr. Bergman.
"During the third quarter we announced a definitive agreement to acquire an 80% ownership position in Marrodent, one of Poland's largest full-service dental distributors with 2015 sales of approximately $32 million. Marrodent marks the Company's entry into Poland's dental market, opening opportunities to approximately 20,000 dental offices, and building upon our presence following our 2014 entry into the animal health market in Poland," he added.
Stock repurchase plan
The company announced that it repurchased approximately 1.2 million shares of its common stock during the third quarter at an average price of $163.62 per share, or approximately $193.0 million.
Editor’s note: This article is an edited version of a Schein press release dated November 2, 2016. Read the entire release, including detailed tables, here.
