Job Cuts on the Way at Henry Schein

Henry Schein Inc. of Melville, NY, one of the world’s largest distributors of dental and medical products and Long Island’s third-biggest company, plans to eliminate 300 jobs around the world. The company attributed the souring economy to its decision to cut  2.5% of its total workforce and to close some smaller facilities.

About 30 to 40 jobs on Long Island, NY will be among those eliminated, chief financial officer Steven Paladino said in an interview. The company employs about 1,000 on Long Island.

“Given the recent changes in the economic climate, we expect that the markets Henry Schein serves will continue to grow, but at a somewhat slower rate during these challenging economic times,” chief executive Stanley Bergman said in a statement.

Henry Schein also lowered its guidance for the current fiscal year.

“While we remain confident in our ability to achieve our financial goals, we are taking these actions in light of our view that sales growth for 2009 may moderate somewhat from what we have experienced over the past several years,” Bergman said.

Bergman called the move “a difficult decision,” but said it will better position the company for the future. Henry Schein also said it took a $4.5 million charge related to money owned to the company by the now bankrupt Lehman Brothers for foreign exchange contracts.

Job cuts or financial setbacks are rare at Henry Schein, which has been growing steadily for years, supplying dental and medical offices with devices and helping those offices plan their business using the latest technology. Paladino said no facilities on Long Island will be closed.

He said the job cuts were prompted by a slowdown in sales of dental equipment, including dental chairs, X-ray machines and lasers.

“What we’re seeing is a bit of a pause,” said Paladino. “We just want to be conservative. Overall, our growth may be slower.”

In the third quarter, Henry Schein said sales were $1.7 billion, an increase of 9.6% compared to the same period last year.

The company said that it earned $68.4 million in the latest quarter, compared with profits of $59.5 million in the third quarter of 2007.

On a per-share basis, Henry Schein earned 75 cents, compared with an earnings per share of 65 cents last year. The company beat analysts’ estimates by 3 cents.

Henry Schein said dental sales rose 4.5% in the quarter, to $645 million. Medical sales declined 4.1% to $427 million. International sales rose 30.7% to $538 million, and sales of technology services increased 28.8% to $41 million.

SOURCE: Newsday