Henry Schein experienced a strong first quarter as sales climbed across its segments.
The medical-surgical distributor reported profits of $113.8 million in the three months ended March 26, up 10% over the same time last year. Sales were also up 10%, at $2.7 billion across all segments, including the company's dental, animal health, medical and technology businesses.
Melville, N.Y.-based Schein reported medical sales of $538.1 million, up 21.3% from the same quarter last year. Foreign currency exchange rates offset sales by less than 0.5%, as most of the company's medical sales are U.S.-based.
Medical sales grew about 11.2%, when accounting for joint sales with Dublin, Ohio-based Cardinal Health, which sold its physician office business to Schein in 2014. The implementation of that sales partnership is nearly complete.
This represents the fifth consecutive quarter of double-digit medical sales gains for Schein, which CEO Stanley Bergman has repeatedly attributed to success with large group practices and integrated delivery networks. Health systems have increasingly turned to distributors like Schein as they look to extend supply chain efficiency from their hospitals into non-acute settings.
Though the Cardinal partnership has consistently bolstered Henry Schein's sales, Bergman noted that Cardinal's recent win of Kaiser Permanente's business from rival Owens & Minor likely won't have an effect on Henry Schein. Most of Kaiser's supply needs appear to be bulk, while Schein's side of the deal involves its expertise in shipping in smaller quantities to smaller facilities.
Sales increased 18.6% to $101.7 million in Schein's technology and value-added services segment, which includes medical, dental and animal health products. Foreign currency exchange offset sales by about 1.3%. The company recently completed a number of acquisitions in this segment related to animal health.
Schein expects adjusted diluted earnings per share this year to be $6.55 to $6.65, representing growth of about 10% to 12% from last year. Restructuring costs, which offset sales gains last year, are expected to be between $0.10 to $0.13 per diluted share.
The company has seen some executives moves recently. Last month, David McKinley, formerly president of Schein's medical group, was promoted to the newly created position of chief commercial officer. At the same time, it was announced that Karen Prange, a senior vice president at Boston Scientific Corp., will join the company as executive vice president and CEO of its global animal health and medical group.
