Henry Schein profits from continued medical supply business growth in Q1
Henry Schein Inc. reported an increase in profit as its medical supply segment continues to grow and the company doubles down on its dental equipment business.
The Melville, N.Y.-based supply distributor reported a profit of $140.7 million for the first quarter ended April 1, up from 23.7% over the same period last year. Net sales across its medical, dental and animal health segments were $2.9 billion, an increase of 7.7% compared to the first quarter of 2016.
Henry Schein's global medical sales were $598.9 million, an increase of 11.3% from last year. The company's global medical sales boost reflected a surge in patient traffic to physician offices during the first quarter, said CEO Stanley Bergman, which has been a trend with the push toward more value-based care. It also benefited from the consolidation of large group practices and developing their integrated delivery networks, he said. Technology and value-added services sales reached $106 million, up 4.2% from last year.
"We are well positioned to help primary care practices and ambulatory surgery centers operate efficiently so our customers can focus on patient outcomes," Bergman said in a statement. "We believe that promoting wellness and prevention is key to the future of an improving health care landscape."
In its earnings report, Henry Schein announced that it reached a three-year agreement with Dentsply Sirona, the largest manufacturer of dental equipment in the world, effective Sept. 1. It will allow them to distribute Dentsply's full line of dental equipment in the U.S.
Global sales of $1.4 billion in Henry Schein's dental segment jumped 7.9% from last year, largely due to international sales growth. The agreement with Dentsply will bolster moderate U.S. dental equipment sales, the company said.
"In North America, technology and value-added services sales growth in local currencies of 3.4% reflects some softness in financial services revenue, primarily related to lower North America dental equipment sales," Bergman said.
Global sales in the company's animal health business reached $812.9 million, marking a 5.4% increase from last year. While U.S. sales growth for that segment slowed during the quarter, international growth in local currencies was at a multiyear high, the company said.
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