Henry Schein, Melville, NY, reported record Q2 financial results from continuing operations, according to a press release from the company. Net sales were up 5.7% to $2.4 billion compared to Q2 2018.
The company reported dental sales of $1.6 billion, a 0.7% decrease, consisting of 2.1% growth in local currencies and 2.8% decline related to foreign currency exchange. In local currencies, the company’s internally generated sales increased 0.7% and growth from acquisitions was 1.$%. The 0.7% internal growth in local currencies included 0.3% growth in North America and 1.3% growth internationally.
“In North America, second quarter dental consumables internal sales growth of 1.3% in local currencies compares with a prior-year quarter that had strong sales growth of 4.7%, and is reflective of relatively low end market growth, yet we believe Henry Schein grew slightly faster than the market. Dental equipment internal sales declined by 2.9% in local currencies in the second quarter, mainly due to a decline in high-tech equipment sales,” commented Mr. Bergman.
“Internationally, dental consumables internal sales in local currencies grew by 2.3% and dental equipment internal sales in local currencies declined by 2.0%,” said Stanley M. Bergman, chairman of the board and CEO of Henry Schein.. “While we generated solid double-digit equipment sales growth in the second quarter in Germany and surrounding countries following the International Dental Show in March, this was offset by significantly lower sales in Brazil related to a change in our business model.”
Medical sales of $697.6 million increased 13.6%, consisting of 13.8% growth in local currencies and a 0.2% decline related to foreign currency exchange. In local currencies, internally generated sales increased 7.6% and growth from acquisitions was 6.2%.
“We are pleased with medical internal sales growth of 7.6% in local currencies during the second quarter,” remarked Bergman. “Solid organic growth was complemented by our recent acquisition of North American Rescue. We believe our Medical group is well-positioned with large group practices, independent physician offices and alternate sites of care, with strong customer relationships in each category contributing to our growth.”
Technology and Value-Added Services sales from continuing operations of $125.1 million increased 39.9%, consisting of 41.2% growth in local currencies and a 1.3% decline related to foreign currency exchange. In local currencies, internally generated sales declined by 1.1% and growth from acquisitions was 42.3%. Growth from acquisitions was driven by the formation of Henry Schein One in the third quarter of 2018. Beginning in the third quarter of 2019, sales from Henry Schein One will be a component of internal sales growth.
“North America Technology and Value-Added Services internal sales growth in local currencies declined by 1.8% on an as-reported basis. When normalizing for product switches from direct to agency sales and an ongoing transition of our technology platform to a cloud-based SaaS model, internal sales growth in local currencies increased by 0.7%. The year-over-year growth rate was negatively impacted by a decline in dental equipment sales, which led to lower financial services revenue.
“Internationally, internal Technology and Value-Added Services sales increased by 1.9% in local currencies. We are excited about the foundation we are building with Henry Schein One to deliver end-to-end management and marketing systems to improve digital dental practice workflow and the entire patient experience so that our customers build more successful and efficient practices,” said Mr. Bergman.
