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August 5, 2022

Covetrus reports modest increase in net sales, shrinks loss for Q2

Photo / William Hall Covetrus, which has nearly completed construction of a new headquarters building in Portland, reported Q2 results on Thursday.

In what could be one of its last reports as a public company, Portland-based Covetrus Inc. (Nasdaq: CVET) said Thursday its second-quarter net sales rose 2% from the total during the same period last year.

The animal-health company also shrank its quarterly loss to $4 million, of 3 cents per share, for the three-month period that ended June 30, 2022. That’s down from a loss of $31 million, or 23 cents per share, during last year’s second quarter.

The improvement in net loss was driven primarily by a $12 million decrease in income taxes, a $9 million increase in gross profit, a $4 million decrease in selling, general and administrative expenses, and a $2 million decrease in net interest expense, according to a news release.

Covetrus said its organic net sales grew 9% in North America, but were partially offset by more modest trends in the company’s Asia-Pacific and emerging markets (up 2% year-over-year) and in Europe (down 1% year-over-year).

“Our team executed well during the second quarter and delivered results consistent with our expectations despite end-market and macroeconomic turbulence, which masked some of the operational progress we have made this year in furthering adoption of our technology stack, growing our proprietary brands and managing corporate costs,” said Ben Wolin, Covetrus president and CEO.

“We remain focused on executing our strategic plan, delivering against our innovation agenda and advancing our mission to drive positive outcomes for veterinarians, their practices and patients around the globe."

Covetrus, which provides a wide range of technology, supplies and services to veterinary practices, is in the process of going private. In May, the company said it had agreed to sell to a pair of private equity firms in a $4 billion, all-cash transaction.

Clayton, Dubilier & Rice, headquartered in New York, and San Francisco-based TPG Capital plan to purchase all outstanding stock of Covetrus for $21 a share. The deal is still pending.

Covetrus was formed in 2019 from the merger of Portland-based Vets First Choice, a veterinary technology company, and the animal-health division of Melville, N.Y.-based Henry Schein Inc. (Nasdaq: HSIC).

The company has over 5,500 employees and serves more than 100,000 veterinary practices globally.

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