Financial Reports: Schein, RedEnvelope

Schein Net Income Down on Fluvirine
Third-quarter net income at Melville, NY-based Henry Schein (Nasdaq: HSIC) fell 29%, to $31.5 million from $44.3 million last year. The medical, dental, and veterinary supplier blamed the decline on this year’s lack of Fluvirin influenza vaccine, of which Schein is the primary distributor in the U.S. The maker of Fluvirin, Chiron Corp., said it would not supply Fluvirin influenza vaccine for the current influenza season.

On a positive note, for the first time in the firm’s history, Schein netted more than $1 billion in quarterly sales. Net sales increased 16%, to $1.03 billion for the three months ended Sept. 25, compared with $892.7 million a year ago. The increase includes 14% local currency growth and nearly 2% related to foreign currency exchange.

Loss Widens at RedEnvelope
San Francisco-based gifts cataloger RedEnvelope (Nasdaq: REDE) endured a case of good news/bad news during its fiscal second quarter ended Sept. 26. The bad news? The company’s net loss widened to $3.9 million, up from the $2.8 million net loss it suffered during the comparable quarter of last year.

An increase in operating expenses reflects costs associated with the proxy solicitation for its recent annual stockholders’ meeting, as well as additional training and staffing at its fulfillment center. The company is also implementing a new warehouse management and materials handling system.

The good news? Net revenue increased 27%, to $10.6 million from $8.3 million last year.

The company is pushing more private-label items, which carry higher margins. Revenue per order rose to $71 from $67 per order a year ago. The gross profit per order was $35, compared with $32 last year.

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Financial Reports: Schein, RedEnvelope

Healthy 2Q Gains for Henry Schein
Melville, NY-based medical, dental, and veterinary marketer Henry Schein (Nasdaq NM: HSIC) posted a 22% gain in second-quarter net sales, to $945.7 million for the three months ended June 26—a company record. This increase includes 20% local currency growth (12% internally generated and 8% from acquisitions net of a divestiture) and 1.5% related to foreign currency exchange. Net income jumped 18%, to $38.7 million from $32.9 million last year.

Breaking it down by segment, dental sales increased 17%. Medical sales increased 24%. Technology and value-added services sales grew 10%, while international sales improved 30%. Schein says it benefited from a favorable currency exchange in combination with growth from strategic acquisitions.

RedEnvelope Lessens Loss
San Francisco-based RedEnvelope (Nasdaq: REDE) narrowed its fiscal first-quarter loss to $952,000 for the three months ended June 27. Last year it lost $1.2 million during the comparable quarter. Net revenue, meanwhile, increased 19% ,to $21.1 million from $17.7 million last year.

Gross margins improved to 53% for the quarter compared with 48.9% last year. At the end of the quarter, RedEnvelope’s customer file totaled about 1.9 million names. In the quarter, RedEnvelope shipped approximately 295,000 orders. Product revenues from customers who receive catalogs increased 29%, and revenue attributed to online marketing channels grew 21%.

RedEnvelope anticipates net revenue for fiscal 2005 of $94 million-$97 million. The net loss for the year is projected to be $2.0 million-$3.0 million.

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