Henry Schein, Inc. (HSIC) has reported 7.13 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $139.22 million, or $1.73 a share in the quarter, compared with $129.95 million, or $1.56 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $151.28 million, or $1.88 a share compared with $139.26 million or $1.67 a share, a year ago.
Revenue during the quarter grew 9.47 percent to $3,120.93 million from $2,850.92 million in the previous year period. Gross margin for the quarter contracted 42 basis points over the previous year period to 27.62 percent. Total expenses were 93.14 percent of quarterly revenues, up from 92.96 percent for the same period last year. That has resulted in a contraction of 18 basis points in operating margin to 6.86 percent.
Operating income for the quarter was $213.98 million, compared with $200.69 million in the previous year period.
"We are pleased to report record financial results for the 2016 fourth quarter and full year. The markets we serve are experiencing consistent growth, and we remain focused on gaining share across all our business units while executing against our financial objectives," said Stanley M. Bergman, chairman of the board and chief executive officer of Henry Schein.
For financial year 2017, the company forecasts diluted earnings per share to be in the range of $7.17 to $7.30.
Working capital declines
Henry Schein, Inc. has witnessed a decline in the working capital over the last year. It stood at $1,022.13 million as at Dec. 31, 2016, down 5.72 percent or $61.97 million from $1,084.10 million on Dec. 26, 2015. Current ratio was at 1.45 as on Dec. 31, 2016, down from 1.50 on Dec. 26, 2015.
Cash conversion cycle (CCC) has increased to 34 days for the quarter from 31 days for the last year period. Days sales outstanding were almost stable at 20 days for the quarter, when compared with the last year period.
Days inventory outstanding has increased to 36 days for the quarter compared with 33 days for the previous year period. At the same time, days payable outstanding was almost stable at 21 days for the quarter, when compared with the previous year period.
Debt increases substantially
Henry Schein, Inc. has witnessed an increase in total debt over the last one year. It stood at $1,218.86 million as on Dec. 31, 2016, up 50.53 percent or $409.14 million from $809.71 million on Dec. 26, 2015. Total debt was 18.11 percent of total assets as on Dec. 31, 2016, compared with 12.45 percent on Dec. 26, 2015. Debt to equity ratio was at 0.44 as on Dec. 31, 2016, up from 0.28 as on Dec. 26, 2015. Interest coverage ratio deteriorated to 21.59 for the quarter from 28.04 for the same period last year.
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