Henry Schein announces net sales increase of 13.0% for fourth-quarter 2009

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 26, 2009.

Net sales for the fourth quarter of 2009 were $1.8 billion, an increase of 13.0% compared with the fourth quarter of 2008.  This consists of 8.0% growth in local currencies and 5.0% growth related to foreign currency exchange (see Exhibit A for details of sales growth).

Income from continuing operations attributable to Henry Schein, Inc. for the fourth quarter of 2009 was $86.4 million or $0.94 per diluted share, an increase of 36.9% and 32.4%, respectively, compared with the fourth quarter of 2008.  Current and prior-year results include certain unusual items.  Excluding these items, non-GAAP income from continuing operations was $85.7 million or $0.93 per share, an increase of 8.3% and 5.7%, respectively, compared with the fourth quarter of 2008 (see Exhibit B for reconciliation of GAAP income and EPS from continuing operations to non-GAAP income and EPS from continuing operations).

"We are pleased to report growth in local currencies for each of our four business Groups, with particular strength in our International Group," said Stanley M. Bergman, Chairman and Chief Executive Officer of Henry Schein.  "For the year, despite a challenging macroeconomic environment we posted solid gains in net sales of 5.7% in local currencies."

Dental Group sales of $671.7 million increased 1.5%, consisting of 0.2% growth in local currencies and 1.3% growth related to foreign currency exchange.  The 0.2% growth in local currencies included 4.0% growth in Dental consumable merchandise sales and a 7.2% decline in Dental equipment sales and service revenues.

"Quarterly growth in Dental consumable merchandise provides further evidence of positive market trends and the decline in sales of Dental equipment has improved for two consecutive quarters," commented Mr. Bergman.

Medical Group sales of $368.2 million increased 5.5%.  Excluding sales of seasonal influenza vaccines, which declined from last year's fourth quarter, Medical Group sales increased 8.1%.

"Medical sales growth reflects strong sales of consumable products, as well as sales of products related to the treatment and prevention of the H1N1 virus," said Mr. Bergman.  "During the quarter we announced the formation of Butler Schein Animal Health, which now is in operation as the leading U.S. companion animal health distribution company.  On a worldwide basis, our veterinary business will represent approximately $1.4 billion in annual sales."

International Group sales of $699.1 million increased 32.4%, consisting of 19.3% growth in local currencies and 13.1% growth related to foreign currency exchange.

"For the first time ever our International Group sales were the largest of our four Groups during the quarter, as we reap the benefits of a multi-year global strategy.  Once again we had double-digit sales growth in local currencies in our International dental, medical and veterinary businesses," added Mr. Bergman.

Technology and Value-Added Services Group sales of $47.1 million increased 11.2% during the quarter, consisting of 9.8% growth in local currencies and 1.4% growth related to foreign currency exchange.

"During the quarter we saw continued strong growth in electronic services, as well as solid sales of International software products," explained Mr. Bergman.

Full Year Results

For the 2009 full year, net sales of $6.5 billion represent growth of 2.5% compared with 2008.  This includes 5.7% growth in local currencies and 3.2% decline related to foreign currency exchange.

Income from continuing operations attributable to Henry Schein, Inc. for 2009 was $308.6 million or $3.41 per diluted share, an increase of 24.7% and 25.8%, respectively, compared with 2008.  Excluding unusual items as detailed in Exhibit B, income from continuing operations attributable to Henry Schein, Inc. for 2009 was $289.5 million or $3.20 per diluted share, an increase of 8.7% and 9.6%, respectively, compared with 2008 (see Exhibit B for reconciliation of GAAP income and EPS from continuing operations to non-GAAP income and EPS from continuing operations).

2010 EPS Guidance

Henry Schein today affirmed 2010 financial guidance, as follows:

• 2010 diluted EPS attributable to Henry Schein, Inc. is expected to be $3.40 to $3.56.
  

• Guidance for 2010 diluted EPS attributable to Henry Schein, Inc. is for current continuing operations including Butler Schein Animal Health as well as other completed or previously announced acquisitions, and does not include the impact of potential future acquisitions, if any.
  

• 2010 guidance excludes the impact of restructuring costs which are expected to be in the range of $10-12 million and are expected to occur primarily in the first quarter.

SOURCE Henry Schein, Inc.