Henry Schein, Inc. Announces Record First Quarter Results; Reports 52% Quarterly Net Income Growth
First Quarter Sales Exceed $400 Million>
MELVILLE, N.Y., May 4 /PRNewswire/ -- Henry Schein, Inc. (Nasdaq: HSIC) today announced financial results for the first quarter ended March 28, 1998, compared to restated results for 1997.
For the first quarter of 1998, net sales increased 19% to $403 million from $339 million for the first quarter last year. Excluding merger and integration costs and including pro forma adjustments, net income rose 52% to $8.8 million as compared to $5.8 million for last year's first quarter. The Company reported diluted earnings per share, after adjustments, of $0.23 versus $0.16 in the 1997 first quarter, a 44% increase. Average shares outstanding were 37,606,000 for the quarter, 7% greater than prior year.
Commenting on the financial results, Stanley M. Bergman, Chairman, Chief Executive Officer, and President of Henry Schein, Inc. stated, "We are extremely pleased to begin 1998 with a record performance in the first quarter. Sales exceeded $400 million for the quarter, reflecting 19% growth of which 13% was internally generated. This internal growth rate is well in excess of industry averages."
Mr. Bergman added, "The integration of Sullivan Dental is proceeding extremely well. A highlight of the quarter was the release of the first combined Sullivan-Schein Dental catalogue on March 15, which was very well received by the dental community. The combined company also exhibited at a number of major dental conventions with favorable response. In addition, we successfully consolidated Sullivan's California distribution center into our existing Reno, Nevada facility, and now all orders from the western U.S. are processed through one system. During the quarter, senior management spent considerable time in the field with our over 500 member U.S. Dental field sales force. The benefits of this management focus are evident from our first quarter results, and we are confident that our strategic investment in Sullivan will continue to improve our market share and profitability for the remainder of 1998 and beyond."
Mr. Bergman concluded, "The positive results that we are already seeing from the Sullivan acquisition, and the improvements in margin we are enjoying as a result of the Micro Bio-Medics acquisition are evidence of the success of our investments made during 1997. I am very excited about our prospects for the future."
Henry Schein, Inc. is the largest distributor of healthcare products to office-based healthcare practitioners, including dental practices and laboratories, physician practices and veterinary clinics. The Company, recognized for its excellent customer service and low prices, serves more than 250,000 customers worldwide.
Certain information contained herein includes information that is forward looking. The matters referred to in forward-looking statements may be affected by the risks and uncertainties involved in the company's business. These forward looking statements are qualified in their entirety by the cautionary statements contained in the Company's Securities and Exchange Commission filings.
HENRY SCHEIN, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended March 28, March 29, 1998 1997 (restated) Net sales $403,032 $339,049 Cost of sales 281,541 239,012 Gross profit 121,491 100,037 Operating expenses: Selling, general and administrative 107,225 90,402 Merger and integration costs 3,864 2,527 Operating income 10,402 7,108 Other income (expense): Interest income 1,712 1,537 Interest expense (2,157) (1,020) Other - net 80 (75) Income before taxes on income, minority interest and equity in earnings (losses) of affiliates 10,037 7,550 Taxes on income 4,253 4,008 Minority interest in net income (loss) of subsidiaries 1 (14) Equity in earnings (losses)of affiliates 181 (50) Net income $5,964 $3,506 Adjusted net income: Net income $5,964 $3,506 Adjustments: Merger and integration costs 3,864 2,527 Tax effect on merger and integration costs (1,037) 0 Pro forma tax adjustment - Dentrix 0 (252) Adjusted net income $8,791 $5,781 Adjusted net income per common share: Basic $0.25 $0.17 Diluted $0.23 $0.16 Weighted average shares: Basic 35,518 33,640 Diluted 37,606 35,115 Restated to reflect results of Sullivan Dental Products, Inc. and Micro Bio-Medics, Inc. which were accounted for under the pooling of interests method of accounting. HENRY SCHEIN, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) March 28, December 27, 1998 1997 (unaudited) (audited) ASSETS Current assets: Cash and cash equivalents $12,244 $7,824 Accounts receivable, less reserves of $12,712 and $13,408 respectively 258,136 261,665 Inventories 220,065 212,848 Deferred income taxes 13,358 13,323 Other 40,999 39,396 Total current assets 544,802 535,056 Property and equipment, net of accumulated depreciation of $59,974 and $57,997 respectively 58,301 54,449 Goodwill and other intangibles, net of accumulated amortization of $11,657 and $10,395 respectively 127,054 122,217 Investments and other 28,924 29,472 $759,081 $741,194 LIABILITIES AND STOCK HOLDERS' EQUITY Current liabilities: Accounts payable $116,021 $129,806 Bank credit lines 11,665 11,973 Accruals: Salaries and related expenses 22,967 20,729 Merger and integration costs 13,220 17,056 Other 32,586 39,095 Current maturities of long-term debt 8,361 9,370 Total current liabilities 204,820 228,029 Long-term debt 123,439 93,192 Other liabilities 6,234 6,550 Total liabilities 334,493 327,771 Minority interest 2,267 2,225 Stockholders' equity: Common stock, $.01 par value, authorized 60,000,000; issued and outstanding 35,410,714 and 35,146,892, respectively 354 352 Additional paid-in capital 328,473 322,998 Deferred compensation (1,625) (1,625) Retained earnings 98,202 92,238 Treasury stock, at cost (62,479 shares) (1,156) (1,156) Foreign currency translation adjustment (1,927) (1,609) Total stockholders' equity 422,321 411,198 $759,081 $741,194 SOURCE Henry Schein, Inc.