Divestiture Cuts into Schein Bottom Line
Melville, NY-based medical, dental, and veterinary supplier Henry Schein (Nasdaq: HSIC) posted a 13% rise in third-quarter sales for continuing operations and a 17% increase in net income for those operations. But when its hospital supply business, which the company has up for sale, is included, net income declined 16%.
For the 13 weeks ended Sept. 24, Schein reported net income from continuing operations of $36.4 million on sales of nearly $1.13 billion. The hospital supply business accounted for additional net sales of approximately $37 million and a loss of approximately $10 million. The company also expects to report an additional loss from discontinued operations once the sale of the business is completed.
“The hospital business does not focus on our core customer, namely the office-based practitioner, and therefore provides little or no synergies with our core operations,” chairman/CEO Stanley Bergman said in a statement.
3Q Sales and Earnings Down at Blair
Third-quarter net sales at Warren, PA-based Blair Corp. (Amex: BL) slipped 8%, to $98.1 million for the three months ended Sept. 30. The apparel and home goods merchant blames the decline on lower-than-anticipated response to its letter mailings and the closing of its Crossing Pointe women’s apparel catalog this past March.
Net income took a tumble too: It dropped 52%, to $1.4 million from $2.9 million a year ago. This was due to $3.1 million in expenses associated with Blair’s sale of its proprietary credit portfolio to a subsidiary of Alliance Data Systems Corp. The deal is scheduled to close in the fourth quarter. Without these expenses, net income would have increased 17%, to $3.4 million.
During the third quarter of 2005, Blair completed its stock tender buyback of 4.4 million shares of outstanding common stock at $42 per share, for an aggregate price of $184.8 million. The total cost of the tender offer transaction, including legal and professional fees, was $188.95 million.