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Updated: November 11, 2020

Covetrus reports 11% sales growth in Q3 results

Covetrus Inc. (Nasdaq: CVET), the Portland-based animal-health company, reported sales were up 11% during the third quarter compared to the same period last year, driven by customer demand that reached pre-pandemic levels in some markets.

Net sales from July to September were $1.13 billion, about $80 million more than analysts' consensus expectations, and an increase from $1.02 billion for Q3 in 2019. The jump reflected “companion animal end-market growth that returned to pre-COVID-19 levels across many of the company’s major geographies” among other factors, Covetrus said in a news release late Tuesday.

After losses in the first two quarters of the year, the company reported a loss for the third quarter of $35 million, or 33 cents per share. That amount is far more than the loss for the third quarter in 2019 of $959 million, or $8.56 per share. The primary driver of the year-over-year improvement was a $939 million goodwill impairment charge recorded last year, the release said.

Adjusting for the charge and factors such as changes in foreign exchange rates, Covetrus recorded earnings of $30 million for Q3 this year, compared to $19 million during the same three months in 2019.

The company had $355 million in cash and $1.14 billion in debt at the end of September 2020, according to the quarterly report. 

In its release, the company estimated earnings for the year at $213 million to $218 million, an increase from the prior guidance range of $200 million to $210 million.

“Around the globe, the Covetrus team continues to rise to the challenge and, despite the adversity created by COVID-19, we successfully executed and delivered strong results during the third quarter,” said Covetrus President and CEO Ben Wolin in the release.

Portrait of Ben Wolin, Covetrus president and CEO.
Courtesy / Covetrus
Ben Wolin, president and CEO of Covetrus Inc.

“It is clear that our focused approach, commitment to our team and our customers, and our investment in service and innovation have served us well and enabled us to win new business and drive greater alignment with our partners.”

Covetrus provides technology, supplies and services to over 100,000 veterinary practices around the world. The company was formed in 2019 by the merger of a Portland startup, Vets First Choice, and a division of New York-based Henry Schein Animal Health.

Covetrus has about 5,500 employees, including more than 300 in Portland, where the company is building a new global headquarters with room for 1,500.

Shares of Covetrus were trading at around $25 by mid-morning on Wednesday, after closing Tuesday at $26.01. The company currently has a market capitalization of $3 billion.

A recent episode of the Mainebiz podcast “The Day That Changed Everything” featured an interview with Wolin, discussing his rapid transition from a board member to CEO. To access the podcast, click here.  

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