Henry Schein to Ditch Wholesale Ultrasound Business

Medical, dental and veterinary supplies distributor Henry Schein announced Nov. 24 that it is no longer selling ultrasound equipment on a wholesale basis. The company had previously said it would eliminate some lower-margin pharmaceutical products from its product lines; Henry Schein’s Medical Group had sold about $13 million of ultrasound equipment during 2008.

Henry Schein says the change will result in a loss of approximately $6.5 million for the year—primarily related to the write-down of intangible assets during the fourth quarter. The operating results of the discontinued ultrasound wholesale business will be reported separately for all prior periods.

Earlier this month, Henry Schein reported third quarter sales of $1.7 billion, an increase of 9.6% compared with the third quarter of 2007. The company posted a third-quarter net profit of $68.4 million, compared with $59.6 million a year ago.

At the same time, the company cut its 2009 profit outlook based on slowing sales, and said it’s planning to lay off about 300 workers, or about 2.5% of its workforce, spread across all business units and locations. What’s more, Henry Schein will close several smaller facilities before the end of this year.

Costs associated with the restructuring will run $22 million to $25 million. When complete, the Melville, NY-based company expects to save about $24 million to $27 million.

“This is a difficult decision, but by taking these steps to reduce costs, Henry Schein will remain well positioned to help our customers operate more successful practices and deliver high quality care to patients,” chairman/CEO Stanley M. Bergman said in a release.

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