Covetrus reports 2020 sales up 9%, shrinking loss

Photo / William Hall Covetrus' future headquarters, a seven-story, 170,000-square-foot complex at Fore and Mountfort streets in Portland's East End, are beginning to take shape.

Write a Comment

By William Hall

Portland-based Covetrus Inc. (Nasdaq: CVET) on Monday reported 2020 net sales of $4.3 billion, including $1.1 billion in the fourth-quarter — year-over-year increases of 9% and 11% respectively.

For the year, the animal-health company reported a loss of $19 million, or 22 cents per share, compared to $980 million, or $9.14 per share, in the previous year. During 2019, the company recorded a goodwill impairment charge of $939 million.

For the fourth quarter, Covetrus had a loss of $4 million, or 4 cents per share, compared to a loss of $37 million, or 33 cents per share, during Q4 2019.

Covetrus, which provides technology and services to 100,000 veterinary practices around the world, attributed much of its 2020 performance to meeting new customer demands brought on by the pandemic.

“As an essential business, we worked to meet and support our customers’ increased volumes and changing needs, including supporting them with our innovative online pharmacy service and the introduction of our telehealth capability in order to enable uninterrupted patient care,” Covetrus President and CEO Ben Wolin said in a news release Monday.

“We have responded and exceeded expectations across all elements of our strategic plan, and we enter 2021 energized by our customers’ growth, increased opportunities to drive better health outcomes, and the momentum we have created for ourselves in the market.”

Strong sales in the company’s North America, Asia-Pacific and emerging markets offset the impact of its divestiture of a German subsidiary, scil animal care, and the growing cost of overhead and infrastructure, according to the release. Covetrus was formed in 2019 and became independent of a predecessor business in December.

Covetrus ended 2020 with $590 million in liquidity, including $290 million in cash and cash equivalents. The company said it is maintaining its 2021 earnings guidance of $240 million to $250 million.

At mid-morning on Monday, shares of Covetrus were trading for about $35, down from the Friday closing price of $37.16. The company currently has a market capitalization of $4.2 billion.

C-suite appointments

In related news, Covetrus last week added two members to its senior leadership team.

Deborah Sharkey was named as the company’s chief consumer officer, a newly created position. She will be responsible for developing solutions that support and strengthen the relationship between veterinarian and pet owner, according to a news release, and will oversee marketing, product development and strategy for the consumer group within Covetrus’ Global Technology Services unit.

Previously Sharkey ran eBay’s Australia business and was its vice president of local marketplaces. She also served as chief operating officer at DogVacay, which was acquired by Rover.com.

Covetrus also named Link Welborn, D.V.M., as chief veterinary officer in North America. In his role, Welborn will counsel Covetrus on ways to deliver better business outcomes for veterinary practices, according to a separate news release, and will work with the company’s CVO in Europe, Rens van Dobbenburgh.

Welborn is a diplomate of the American Board of Veterinary Practitioners, the owner of six hospitals accredited by the American Animal Hospital Association and a former president of the association.

Covetrus employs 5,500 people worldwide, including about 300 in Portland, where the company is building a 170,000-square-foot headquarters with capacity for 1,500.