Henry Schein, Inc. Announces Record Fourth Quarter And Annual Results
- Reports 27% Quarterly Net Income Growth -
- Annual Sales Exceed $1.5 Billion -
MELVILLE, N.Y., March 2 /PRNewswire/ -- Henry Schein, Inc. (Nasdaq: HSIC) today announced financial results for the fourth quarter and full year ended December 27, 1997, compared to restated results for 1996.
For the three months ended December 27, 1997, net sales increased 18% to $410 million from $349 million for the fourth quarter last year. Excluding merger and integration costs and including pro forma adjustments, net income rose 27% to $14.9 million as compared to $11.8 million for the same quarter last year. The Company reported diluted earnings per share, after adjustments, of $0.40 versus $0.34 in the 1996 fourth quarter, an 18% growth. Average shares outstanding were 37,062,000 for the quarter, 8% greater than prior year.
For the year ended December 27, 1997, net sales rose to $1.52 billion, a 23% increase from $1.23 billion for the full year 1996. Excluding merger and integration costs and including pro forma adjustments, net income increased 32% to $41.7 million compared to $31.6 million last year. Diluted earnings per share, after adjustments, increased by 18% to $1.14 from $0.97 in 1996 on approximately 13% more shares outstanding. The increase in shares primarily related to the Company's follow-on stock offering completed in June of 1996 as well as recent acquisitions.
Commenting on the financial results, Stanley M. Bergman, Chairman, Chief Executive Officer, and President of Henry Schein, Inc., stated, "We are extremely pleased with our performance in the fourth quarter, as well as for the year. Annual sales growth for 1997 was 23% of which 15% was internally generated - well above industry growth. Our 1997 sales of $1.5 billion is over 80% above the reported figure for 1996, and adjusted net income for 1997 was more than double the reported net income for 1996."
Mr. Bergman added, "During the quarter, we successfully completed the acquisition of Sullivan Dental Products, establishing Henry Schein as the leading U.S. dental distributor. The integration process is proceeding extremely well. The combined management team has already implemented a new sales compensation plan, established common pricing through joint direct marketing and convention initiatives, and will shortly issue the first combined Sullivan/Schein catalog. We are beginning to enjoy the benefits of improved operating efficiencies and our expanded field sales and equipment program as a result of this acquisition. We are confident that the strategic investments we made in 1997 will significantly enhance our profitability during 1998 and beyond."
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 Twelve Months Ended
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
1997 1996 1997 1996
(restated) (restated)
Net sales $410,156 $348 994 $ 1,518,123 $ 1,231,848
Cost of sales 284,080 244,755 1,067,299 865,156
Gross profit 126,076 104,239 450,824 366,692
Operating expenses:
Selling, general
and administrative 104,355 87,910 388,394 319,294
Merger and integration
costs 28,708 0 50,779 0
Operating income (loss)(6,987) 16,329 11,651 47,398
Other income (expense)
Interest income 2,204 2,630 7,242 6,353
Interest expense (1,941) (579) (5,541) (4,712)
Other - net 351 805 577 985
Income (loss) before taxes
on income, minority interest
and equity in earnings
of affiliates (6,373) 19,185 13,929 50,024
Taxes on income 1,257 7,186 17,512 18,606
Minority interest in net
income (loss) of
subsidiaries 4 261 (430) 246
Equity in earnings
of affiliates 1,252 484 2,141 1,595
Net income (loss) $(6,382) $12,222 $(1,012) $32,767
Adjusted net income:
Net income (loss) $(6,382) $12,222 $(1,012) $32,767
Adjustments:
Merger and integration
costs 28,708 0 50,779 0
Tax effect on merger and
integration costs (7,397) 0 (8,021) 0
Pro forma tax
adjustment - Dentrix 0 (471) 0 (1,197)
Adjusted net income $14,929 $11,751 $41,746 $31,570
Adjusted net income per common share:
Basic $0.43 $0.35 $1.21 $1.02
Diluted $0.40 $0.34 $1.14 $0.97
Weighted average shares:
Basic 35,002 33,280 34,557 30,912
Diluted 37,062 34,255 36,690 32,400
Restated to reflect results of Sullivan Dental Products, Inc., Micro Bio-
Medics, Inc. and Dentrix Dental Systems, Inc. which were accounted for under
the pooling of interests method of accounting.
HENRY SCHEIN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
Dec. 27, Dec. 28,
1997 1996
(restated)
ASSETS:
Current assets:
Cash and cash equivalents $7,824 $45,814
Accounts receivable, less
reserves of $13,048 and
$9,035 respectively 261,665 207,187
Inventories 212,848 180,750
Deferred income taxes 13,323 7,944
Other 39,396 31,987
Total current assets 535,056 473,682
Property and equipment, net
of accumulated depreciation
of $57,997 and $48,672
respectively 54,449 48,019
Goodwill and other intangibles,
net of accumulated amortization
of $7,903 and $5,976
respectively 122,217 77,718
Investments and other 29,472 29,525
$741,194 $628,944
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $129,806 $120,693
Bank credit lines 11,973 6,716
Accruals:
Salaries and related expenses 20,729 14,146
Other 56,151 36,879
Current maturities of
long-term debt 9,370 8,894
Total current liabilities 228,029 187,328
Long-term debt 93,192 33,283
Other liabilities 6,467 3,444
Total liabilities 327,688 224,055
Minority interest 2,225 5,289
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value,
authorized 60,000,000; issued and
outstanding 35,146,892 and
33,817,550 respectively 352 338
Additional paid-in capital 322,998 314,000
Deferred compensation (1,625) 0
Retained earnings 92,321 89,800
Treasury stock, at cost 62,479
and 281,394 shares
respectively (1,156) (3,902)
Foreign currency translation
adjustment (1,609) (636)
Total stockholders' equity 411,281 399,600
$741,194 $628,944
Restated to reflect results of Sullivan Dental Products, Inc., Micro Bio-
Medics, Inc. and Dentrix Dental Systems, Inc. which were accounted for under
the pooling of interests method of accounting.
SOURCE Henry Schein, Inc.