- Total net sales of $3.2 billion up 11.9% versus prior
year
- GAAP diluted EPS from continuing operations of $1.15 versus
prior-year GAAP diluted EPS from continuing operations of
$0.99
- Non-GAAP diluted EPS from continuing operations of $1.10
versus prior-year non-GAAP diluted EPS from continuing operations
of $1.03
- Increases 2021 guidance for non-GAAP diluted EPS from
continuing operations to a range of $4.27 to $4.35
- Introduces preliminary guidance for 2022 non-GAAP diluted
EPS from continuing operations reflecting mid to high single-digit
growth over 2021 guidance for non-GAAP diluted EPS from continuing
operations
Henry Schein, Inc. (Nasdaq: HSIC), the world’s largest provider
of health care solutions to office-based dental and medical
practitioners, today reported record third-quarter financial
results from continuing operations. Results from continuing
operations exclude contributions from Henry Schein’s former Animal
Health business, which was spun off in February 2019 to form a new
publicly traded company, Covetrus (Nasdaq: CVET).
Total net sales for the quarter ended September 25, 2021, were
$3.2 billion, up 11.9% compared with the third quarter of 2020. The
11.9% increase included 7.2% internal growth in local currencies,
3.9% growth from acquisitions and 0.8% growth related to foreign
currency exchange. (See Exhibit A for details of sales growth.)
GAAP net income attributable to Henry Schein, Inc. from
continuing operations for the third quarter of 2021 was $162.3
million, or $1.15 per diluted share, compared with prior-year GAAP
net income attributable to Henry Schein, Inc. from continuing
operations of $141.7 million, or $0.99 per diluted share. Non-GAAP
net income from continuing operations for the third quarter of 2021
was $154.8 million, or $1.10 per diluted share, compared with
prior-year non-GAAP net income from continuing operations of $147.0
million, or $1.03 per diluted share. Exhibit B provides a
reconciliation of GAAP net income and diluted EPS from continuing
operations to non-GAAP net income and diluted EPS from continuing
operations.
“Today we reported record third-quarter financial results,
driven by a keen focus on execution by Team Schein and steady
patient traffic, resulting in excellent momentum across the entire
company. We believe that patient traffic was generally similar to
the previous quarter for our dental customers and is improving for
our medical customers. Compared with the year-ago quarter, Henry
Schein’s worldwide internal sales in local currencies increased a
robust 7.2%, or 6.3% excluding sales of personal protective
equipment (PPE) and COVID-19 related products,” said Stanley M.
Bergman, Chairman of the Board and Chief Executive Officer of Henry
Schein. “Our third quarter financial results are solid with growth
in diluted EPS from continuing operations of 16.2% on a GAAP basis
and 6.8% on a non-GAAP basis.”
Global Dental sales for the third quarter of 2021 of $1.8
billion increased 10.5% versus the prior-year period. In local
currencies, internally generated sales increased 5.2% with 3.9%
growth from acquisitions and 1.4% growth related to foreign
currency exchange. The 5.2% internal growth in local currencies
included growth of 4.7% in North America and 5.9%
internationally.
Global Dental consumable merchandise internal sales growth was
2.9% in local currencies. Excluding sales of PPE and COVID-19
related products, internal sales growth in local currencies was
4.8%. In North America, dental consumable merchandise internal
sales in local currencies increased 3.9%, and 5.7% when excluding
sales of PPE and COVID-19 related products, and dental equipment
internal sales in local currencies increased 7.8%. Internationally,
dental consumable merchandise internal sales in local currencies
increased 1.3%, and 3.5% when excluding sales of PPE and COVID-19
related products, and dental equipment internal sales in local
currencies increased 23.9%.
“North America dental consumable merchandise internal sales
growth in local currencies with and without PPE and COVID-19
related products was solid in the third quarter. Consumable
merchandise sales continued to improve, which we believe were
bolstered by a steady flow of patient traffic,” said Mr. Bergman.
“North America dental equipment sales growth reflected strong sales
of high-technology equipment and modest growth of traditional
equipment sales which remain impacted by equipment manufacturing
and office construction delays. Overall gains in consumable
merchandise and equipment sales in North America and International
markets reflect the continuing recovery of underlying markets.”
Global Medical sales for the third quarter of 2021 of $1.2
billion increased 15.5% versus the comparable period last year,
consisting of 13.1% internal growth in local currencies and 2.4%
growth from acquisitions. There was no impact related to foreign
currency exchange. Excluding sales of PPE and COVID-19 related
products, internal sales in local currencies increased 8.3%.
“Global Medical internal sales growth in local currencies for
the third quarter was once again very strong, with and without
sales of PPE and COVID-19 related products. Trends in the physician
office, ambulatory surgery center and alternate care markets all
were positive, and we have increased the number of accounts we
serve and further penetrated existing accounts,” said Mr.
Bergman.
Global Technology and Value-Added Services sales of $168.6
million increased 21.9% versus the prior-year quarter and included
6.3% internal sales growth in local currencies, 14.7% growth from
acquisitions and 0.9% growth related to foreign currency
exchange.
“Global Technology and Value-Added Services sales growth was
driven by the acquisitions we made over the past year in software
analytics and by expanding our range of dental practice solutions.
We also saw solid sales growth in Dentrix technical support, our
Dentrix Ascend cloud solution and our Software of Excellence
business in the UK,” added Mr. Bergman.
Stock Repurchase Plan
During the third quarter of 2021, the Company repurchased
approximately 650,000 shares of its common stock at an average
price of $76.77 per share, for a total of approximately $50
million. The impact of the repurchase of shares on third-quarter
diluted EPS was immaterial. At the end of the third quarter, Henry
Schein had approximately $350 million authorized and available for
future stock repurchases.
Year-to-Date Financial Results
Net sales from continuing operations for the first nine months
of 2021 were $9.1 billion, an increase of 30.4% compared with the
first nine months of 2020. The 30.4% increase included 24.0%
internal growth in local currencies, 4.1% growth from acquisitions
and 2.3% growth related to foreign currency exchange.
GAAP net income attributable to Henry Schein, Inc. from
continuing operations for the first nine months of 2021 was $484.0
million, or $3.40 per diluted share, compared with GAAP net income
attributable to Henry Schein, Inc. from continuing operations of
$260.9 million, or $1.82 per diluted share, for the first nine
months of 2020. Non-GAAP net income from continuing operations for
the first nine months of 2021 was $489.9 million, or $3.45 per
diluted share, compared with non-GAAP net income from continuing
operations of $281.7 million, or $1.97 per diluted share, for the
first nine months of 2020. Non-GAAP results for the first nine
months of 2021 and 2020 exclude certain items noted in Exhibit B,
which provides a reconciliation of GAAP net income and diluted EPS
from continuing operations to non-GAAP net income and diluted EPS
from continuing operations.
2021 Financial Guidance
Henry Schein today increases guidance for 2021 non-GAAP diluted
EPS from continuing operations. At this time, the Company is not
providing guidance for 2021 GAAP diluted EPS from continuing
operations as it is unable to provide without unreasonable effort
an estimate of costs related to an ongoing restructuring
initiative, including the corresponding tax effect. Financial
guidance is as follows:
- 2021 non-GAAP diluted EPS from continuing operations is
expected to be $4.27 to $4.35, reflecting growth of 44% to 46%
compared with 2020 non-GAAP diluted EPS from continuing operations
of $2.97. This compares with previous guidance for 2021 non-GAAP
diluted EPS from continuing operations to be at or above
$3.85.
- Guidance for 2021 non-GAAP diluted EPS is for current
continuing operations as well as completed or previously announced
acquisitions and does not include the impact of future share
repurchases, potential future acquisitions, if any, or
restructuring expenses. Guidance also assumes that foreign currency
exchange rates are generally consistent with current levels, that
end markets remain stable and are consistent with current market
conditions, and that there are no material adverse market changes
associated with COVID-19.
2022 Financial Guidance
Henry Schein today introduces preliminary guidance for 2022
non-GAAP diluted EPS from continuing operations. At this time, the
Company is not providing guidance for 2022 GAAP diluted EPS from
continuing operations as it is unable to provide without
unreasonable effort an estimate of restructuring costs for 2021,
including the corresponding tax effect, which serves as the basis
for 2022 GAAP diluted EPS guidance. Financial guidance is as
follows:
- Growth in 2022 non-GAAP diluted EPS from continuing operations
in the mid to high single digits over 2021 non-GAAP diluted EPS
from continuing operations.
- Preliminary guidance for 2022 non-GAAP diluted EPS growth is
for current continuing operations as well as completed or
previously announced acquisitions and does not include the impact
of future share repurchases, potential future acquisitions, if any,
or restructuring expenses. Preliminary guidance also assumes that
foreign currency exchange rates are generally consistent with
current levels, that end markets remain stable and are consistent
with current market conditions, and that there are no material
adverse market changes associated with COVID-19.
Adjustments to Projected 2021 and 2022 Non-GAAP Diluted
EPS
The Company has provided guidance for 2021 and preliminary
guidance for 2022 diluted EPS from continuing operations on a
non-GAAP basis, as noted above. A reconciliation to the Company’s
projected 2021 diluted EPS from continuing operations prepared on a
GAAP basis is not provided because the Company is unable to provide
without unreasonable effort an estimate of costs related to an
ongoing restructuring initiative to mitigate stranded costs and
drive additional operating efficiencies, including the
corresponding tax effect that will be included in the Company’s
2021 diluted EPS from continuing operations prepared on a GAAP
basis. A reconciliation to the Company’s projected 2022 diluted EPS
from continuing operations prepared on a GAAP basis is not provided
because the Company is unable to provide without unreasonable
effort an estimate of restructuring costs for 2021, including the
corresponding tax effect, which serves as a basis of 2022 GAAP
diluted EPS guidance. The inability to provide these
reconciliations is due to the uncertainty and inherent difficulty
of predicting the occurrence, magnitude, financial impact and
timing of related costs. Management does not believe these items
are representative of the Company’s underlying business
performance. For the same reasons, the Company is unable to address
the probable significance of the unavailable information, which
could be material to future results.
Third-Quarter 2021 Conference Call Webcast
The Company will hold a conference call to discuss third-quarter
2021 financial results today, beginning at 10:00 a.m. Eastern time.
Individual investors are invited to listen to the conference call
through Henry Schein’s website by visiting
www.henryschein.com/IRwebcasts. In addition, a replay will be
available beginning shortly after the call has ended for a period
of one week.
About Henry Schein, Inc.
Henry Schein, Inc. (Nasdaq: HSIC) is a solutions company for
health care professionals powered by a network of people and
technology. With more than 21,000 Team Schein Members worldwide,
the Company's network of trusted advisors provides more than 1
million customers globally with more than 300 valued solutions that
help improve operational success and clinical outcomes. Our
Business, Clinical, Technology and Supply Chain solutions help
office-based dental and medical practitioners work more efficiently
so they can provide quality care more effectively. These solutions
also support dental laboratories, government and institutional
health care clinics, as well as other alternate care sites.
Henry Schein operates through a centralized and automated
distribution network, with a selection of more than 120,000 branded
products and Henry Schein private-brand products in stock, as well
as more than 180,000 additional products available as special-order
items.
A FORTUNE 500 Company and a member of the S&P 500® index,
Henry Schein is headquartered in Melville, N.Y., and has operations
or affiliates in 32 countries and territories. The Company's sales
reached $10.1 billion in 2020, and have grown at a compound annual
rate of approximately 12 percent since Henry Schein became a public
company in 1995.
For more information, visit Henry Schein at www.henryschein.com,
Facebook.com/HenrySchein, and @HenrySchein on Twitter.
Cautionary Note Regarding Forward-Looking Statements and Use
of Non-GAAP Financial Information
In accordance with the “Safe Harbor” provisions of the Private
Securities Litigation Reform Act of 1995, we provide the following
cautionary remarks regarding important factors that, among others,
could cause future results to differ materially from the
forward-looking statements, expectations and assumptions expressed
or implied herein. All forward-looking statements made by us are
subject to risks and uncertainties and are not guarantees of future
performance. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause our
actual results, performance and achievements or industry results to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. These statements include EPS guidance and are generally
identified by the use of such terms as “may,” “could,” “expect,”
“intend,” “believe,” “plan,” “estimate,” “forecast,” “project,”
“anticipate,” “to be,” “to make” or other comparable terms. A
fuller discussion of our operations, financial condition and status
of litigation matters, including factors that may affect our
business and future prospects, is contained in documents we have
filed with the United States Securities and Exchange Commission, or
SEC, including our Annual Report on Form 10-K, and will be
contained in all subsequent periodic filings we make with the SEC.
These documents identify in detail important risk factors that
could cause our actual performance to differ materially from
current expectations. Forward looking statements include the
overall impact of the Novel Coronavirus Disease 2019 (COVID-19) on
the Company, its results of operations, liquidity, and financial
condition (including any estimates of the impact on these items),
the rate and consistency with which dental and other practices
resume or maintain normal operations in the United States and
internationally, expectations regarding PPE and COVID-19 related
product sales and inventory levels, whether additional resurgences
or variants of the virus will adversely impact the resumption of
normal operations, whether vaccine mandates will adversely impact
the Company (by disrupting our workforce and/or business), whether
supply chain disruptions will adversely impact our business, the
impact of restructuring programs as well as of any future
acquisitions, and more generally current expectations regarding
performance in current and future periods. Forward looking
statements also include the (i) ability of the Company to make
additional testing available, the nature of those tests and the
number of tests intended to be made available and the timing for
availability, the nature of the target market, as well as the
efficacy or relative efficacy of the test results given that the
test efficacy has not been, or will not have been, independently
verified under normal FDA procedures and (ii) potential for the
Company to distribute the COVID-19 vaccines and ancillary
supplies.
Risk factors and uncertainties that could cause actual results
to differ materially from current and historical results include,
but are not limited to: risks associated with COVID-19 and any
variants thereof, as well as other disease outbreaks, epidemics,
pandemics, or similar wide spread public health concerns and other
natural disasters or acts of terrorism; our dependence on third
parties for the manufacture and supply of our products; our ability
to develop or acquire and maintain and protect new products
(particularly technology products) and technologies that achieve
market acceptance with acceptable margins; transitional challenges
associated with acquisitions, dispositions and joint ventures,
including the failure to achieve anticipated synergies/benefits;
financial and tax risks associated with acquisitions, dispositions
and joint ventures; certain provisions in our governing documents
that may discourage third-party acquisitions of us; effects of a
highly competitive (including, without limitation, competition from
third-party online commerce sites) and consolidating market; the
potential repeal or judicial prohibition on implementation of the
Affordable Care Act; changes in the health care industry; risks
from expansion of customer purchasing power and multi-tiered
costing structures; increases in shipping costs for our products or
other service issues with our third-party shippers; general global
macro-economic and political conditions, including international
trade agreements and potential trade barriers; failure to comply
with existing and future regulatory requirements; risks associated
with the EU Medical Device Regulation; failure to comply with laws
and regulations relating to health care fraud or other laws and
regulations; failure to comply with laws and regulations relating
to the confidentiality of sensitive personal information or
standards in electronic health records or transmissions; changes in
tax legislation; litigation risks; new or unanticipated litigation
developments and the status of litigation matters; cyberattacks or
other privacy or data security breaches; risks associated with our
global operations; our dependence on our senior management, as well
as employee hiring and retention; and disruptions in financial
markets. The order in which these factors appear should not be
construed to indicate their relative importance or priority.
We caution that these factors may not be exhaustive and that
many of these factors are beyond our ability to control or predict.
Accordingly, any forward-looking statements contained herein should
not be relied upon as a prediction of actual results. We undertake
no duty and have no obligation to update forward-looking
statements.
Included within the press release are non-GAAP financial
measures that supplement the Company’s Consolidated Statements of
Income prepared under generally accepted accounting principles
(GAAP). These non-GAAP financial measures adjust the Company’s
actual results prepared under GAAP to exclude certain items. In the
schedules attached to this press release, the non-GAAP measures
have been reconciled to and should be considered together with the
Consolidated Statements of Income. Management believes that
non-GAAP financial measures provide investors with useful
supplemental information about the financial performance of our
business, enable comparison of financial results between periods
where certain items may vary independent of business performance
and allow for greater transparency with respect to key metrics used
by management in operating our business. These non-GAAP financial
measures are presented solely for informational and comparative
purposes and should not be regarded as a replacement for
corresponding, similarly captioned, GAAP measures.
HENRY SCHEIN, INC. CONSOLIDATED
STATEMENTS OF INCOME (in thousands, except per share
data) (unaudited)
Three Months Ended
Nine Months Ended
September 25,
September 26,
September 25,
September 26,
2021
2020
2021
2020
Net sales
$
3,178,315
$
2,840,146
$
9,070,499
$
6,953,416
Cost of sales
2,266,170
2,085,878
6,377,752
4,998,868
Gross profit
912,145
754,268
2,692,747
1,954,548
Operating expenses:
Selling, general and administrative
701,499
559,605
2,038,292
1,572,732
Restructuring costs (credits)
(175)
6,992
3,360
27,713
Operating income
210,821
187,671
651,095
354,103
Other income (expense):
Interest income
1,409
2,294
4,749
7,481
Interest expense
(6,550)
(11,111)
(19,411)
(29,409)
Other, net
403
(1,699)
1,066
(2,210)
Income from continuing operations before
taxes,
equity in earnings of affiliates and
noncontrolling interests
206,083
177,155
637,499
329,965
Income taxes
(49,276)
(29,005)
(153,988)
(65,965)
Equity in earnings of affiliates
5,349
3,663
17,550
7,808
Gain on sale of equity investment
7,318
-
7,318
-
Net income from continuing operations
169,474
151,813
508,379
271,808
Income (loss) from discontinued
operations, net of tax
-
(29)
-
274
Net income
169,474
151,784
508,379
272,082
Less: Net income attributable to
noncontrolling interests
(7,188)
(10,087)
(24,380)
(10,921)
Net income attributable to Henry Schein,
Inc.
$
162,286
$
141,697
$
483,999
$
261,161
Amounts attributable to Henry Schein
Inc.:
Continuing operations
$
162,286
$
141,726
$
483,999
$
260,887
Discontinued operations
-
(29)
-
274
Net income attributable to Henry Schein,
Inc.
$
162,286
$
141,697
$
483,999
$
261,161
Earnings per share from continuing
operations attributable to Henry Schein, Inc.:
Basic
$
1.16
$
1.00
$
3.44
$
1.83
Diluted
$
1.15
$
0.99
$
3.40
$
1.82
Earnings per share from discontinued
operations attributable to Henry Schein, Inc.:
Basic
$
-
$
-
$
-
$
-
Diluted
$
-
$
-
$
-
$
-
Earnings per share attributable to
Henry Schein, Inc.:
Basic
$
1.16
$
1.00
$
3.44
$
1.83
Diluted
$
1.15
$
0.99
$
3.40
$
1.82
Weighted-average common shares
outstanding:
Basic
139,377
142,362
140,661
142,553
Diluted
141,079
143,091
142,179
143,308
Note: Certain prior period amounts have
been reclassified to conform to the current period
presentation.
HENRY SCHEIN, INC. CONSOLIDATED
BALANCE SHEETS (in thousands, except share and per share
data)
September 25,
December 26,
2021
2020
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
119,133
$
421,185
Accounts receivable, net of reserves of
$73,095 and $88,030
1,551,946
1,424,787
Inventories, net
1,784,050
1,512,499
Prepaid expenses and other
457,232
432,944
Total current assets
3,912,361
3,791,415
Property and equipment, net
355,675
342,004
Operating lease right-of-use assets
329,886
288,847
Goodwill
2,779,234
2,504,392
Other intangibles, net
645,832
479,429
Investments and other
397,764
366,445
Total assets
$
8,420,752
$
7,772,532
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
1,057,127
$
1,005,655
Bank credit lines
59,394
73,366
Current maturities of long-term debt
9,638
109,836
Operating lease liabilities
77,383
64,716
Accrued expenses:
Payroll and related
345,438
295,329
Taxes
157,446
138,671
Other
594,979
595,529
Total current liabilities
2,301,405
2,283,102
Long-term debt
705,540
515,773
Deferred income taxes
37,248
30,065
Operating lease liabilities
270,152
238,727
Other liabilities
388,211
392,781
Total liabilities
3,702,556
3,460,448
Redeemable noncontrolling interests
612,582
327,699
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value,
1,000,000 shares authorized,
none outstanding
-
-
Common stock, $0.01 par value, 480,000,000
shares authorized,
139,129,543 outstanding on September 25,
2021 and
142,462,571 outstanding on December 26,
2020
1,391
1,425
Additional paid-in capital
-
-
Retained earnings
3,594,238
3,454,831
Accumulated other comprehensive loss
(137,640)
(108,084)
Total Henry Schein, Inc. stockholders'
equity
3,457,989
3,348,172
Noncontrolling interests
647,625
636,213
Total stockholders' equity
4,105,614
3,984,385
Total liabilities, redeemable
noncontrolling interests and stockholders' equity
$
8,420,752
$
7,772,532
HENRY SCHEIN, INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands, unaudited)
Three Months Ended
Nine Months Ended
September 25,
September 26,
September 25,
September 26,
2021
2020
2021
2020
Cash flows from operating
activities:
Net income
$
169,474
$
151,784
$
508,379
$
272,082
Income (loss) from discontinued
operations
-
(29)
-
274
Income from continuing operations
169,474
151,813
508,379
271,808
Adjustments to reconcile net income to net
cash provided by
Depreciation and amortization
51,555
44,569
150,833
138,515
Impairment charge on intangible assets
-
-
-
2,149
Gain on sale of equity investment
(9,757)
-
(9,757)
-
Stock-based compensation expense
(credit)
27,546
5,710
57,700
(6,648)
Provision for (benefit from) losses on
trade and other accounts receivable
(4,723)
5,832
(8,795)
34,590
Benefit from deferred income taxes
(6,430)
(15,322)
(725)
(48,193)
Equity in earnings of affiliates
(5,349)
(3,663)
(17,550)
(7,808)
Distributions from equity affiliates
4,288
5,833
15,035
10,053
Changes in unrecognized tax benefits
(193)
(19,745)
(6,479)
(18,365)
Other
(3,477)
4,567
(48)
4,794
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable
(184,720)
(299,530)
(83,101)
(199,858)
Inventories
(84,163)
(39,530)
(207,921)
(25,830)
Other current assets
44,328
136,870
(41,651)
(51,746)
Accounts payable and accrued expenses
212,836
283,853
77,021
144,953
Net cash provided by operating activities
from continuing operations
211,215
261,257
432,941
248,414
Net cash provided by operating activities
from discontinued operations
-
75
-
648
Net cash provided by operating
activities
211,215
261,332
432,941
249,062
Cash flows from investing
activities:
Purchases of fixed assets
(16,894)
(7,211)
(48,706)
(37,799)
Payments related to equity investments and
business acquisitions,
net of cash acquired
(119,713)
(14,483)
(415,365)
(52,208)
Proceeds from sale of equity
investments
9,757
-
9,757
12,000
Proceeds from (payments for) loan to
affiliate
(3,959)
278
(5,980)
(1,451)
Other
(7,073)
(2,899)
(18,707)
(14,498)
Net cash used in investing activities from
continuing operations
(137,882)
(24,315)
(479,001)
(93,956)
Net cash used in investing activities from
discontinued operations
-
-
-
-
Net cash used in investing activities
(137,882)
(24,315)
(479,001)
(93,956)
Cash flows from financing
activities:
Net change in bank borrowings
(7,747)
4,437
(13,128)
484,139
Proceeds from issuance of long-term
debt
-
-
200,000
501,421
Principal payments for long-term debt
(1,509)
(877)
(121,835)
(610,457)
Debt issuance costs
(1,814)
(28)
(2,013)
(3,683)
Debt extinguishment costs
-
(401)
-
(401)
Payments for repurchases and retirement of
common stock
(50,000)
-
(251,211)
(73,789)
Payments for taxes related to shares
withheld for employee taxes
(13)
(294)
(7,372)
(14,007)
Distributions to noncontrolling
shareholders
(4,833)
(529)
(8,622)
(3,995)
Acquisitions of noncontrolling interests
in subsidiaries
(49,162)
-
(50,292)
(14,934)
Proceeds from Henry Schein Animal Health
Business
-
75
-
139
Net cash provided by (used in) financing
activities from continuing operations
(115,078)
2,383
(254,473)
264,433
Net cash used in financing activities from
discontinued operations
-
(75)
-
(648)
Net cash provided by (used in) financing
activities
(115,078)
2,308
(254,473)
263,785
Effect of exchange rate changes on cash
and cash equivalents from
continuing operations
(6,350)
(1,940)
(1,519)
8,507
Effect of exchange rate changes on cash
and cash equivalents from
discontinued operations
-
-
-
-
Net change in cash and cash equivalents
from continuing operations
(48,095)
237,385
(302,052)
427,398
Net change in cash and cash equivalents
from discontinued operations
-
-
-
-
Cash and cash equivalents, beginning of
period
167,228
296,110
421,185
106,097
Cash and cash equivalents, end of
period
$
119,133
$
533,495
$
119,133
$
533,495
Exhibit A - Third Quarter Sales
Henry Schein, Inc.
2021 Third Quarter
Sales Summary
(in thousands)
(unaudited)
Q3 2021
over Q3 2020
Global
Q3 2021
Q3 2020
Total Sales Growth
Foreign Exchange
Growth
Local Currency Growth
Acquisition Growth
Local Internal Growth
Dental Merchandise
$
1,417,742
$
1,300,379
9.0%
1.4%
7.6%
4.7%
2.9%
Dental Equipment
405,152
349,474
15.9%
1.3%
14.6%
0.7%
13.9%
Total Dental
1,822,894
1,649,853
10.5%
1.4%
9.1%
3.9%
5.2%
Medical
1,186,812
1,027,146
15.5%
0.0%
15.5%
2.4%
13.1%
Total Health Care Distribution
3,009,706
2,676,999
12.4%
0.8%
11.6%
3.4%
8.2%
Technology and value-added services
168,609
138,355
21.9%
0.9%
21.0%
14.7%
6.3%
Total excluding Corporate TSA Revenue
3,178,315
2,815,354
12.9%
0.9%
12.0%
3.9%
8.1%
Corporate TSA revenues (1)
-
24,792
n/a
n/a
n/a
n/a
n/a
Total Global
$
3,178,315
$
2,840,146
11.9%
0.8%
11.1%
3.9%
7.2%
North
America
Q3 2021
Q3 2020
Total Sales
Growth
Foreign Exchange
Growth
Local Currency Growth
Acquisition Growth
Local Internal Growth
Dental Merchandise
$
878,286
$
791,107
11.0%
0.4%
10.6%
6.7%
3.9%
Dental Equipment
236,345
217,729
8.6%
0.8%
7.8%
0.0%
7.8%
Total Dental
1,114,631
1,008,836
10.5%
0.5%
10.0%
5.3%
4.7%
Medical
1,163,799
1,002,741
16.1%
0.0%
16.1%
2.5%
13.6%
Total Health Care Distribution
2,278,430
2,011,577
13.3%
0.3%
13.0%
3.9%
9.1%
Technology and value-added services
147,644
120,949
22.1%
0.2%
21.9%
16.9%
5.0%
Total excluding Corporate TSA Revenue
2,426,074
2,132,526
13.8%
0.3%
13.5%
4.6%
8.9%
Corporate TSA revenues (1)
-
-
n/a
n/a
n/a
n/a
n/a
Total North America
$
2,426,074
$
2,132,526
13.8%
0.3%
13.5%
4.6%
8.9%
International
Q3 2021
Q3 2020
Total Sales Growth
Foreign Exchange
Growth
Local Currency Growth
Acquisition Growth
Local Internal Growth
Dental Merchandise
$
539,456
$
509,272
5.9%
2.8%
3.1%
1.8%
1.3%
Dental Equipment
168,807
131,745
28.1%
2.2%
25.9%
2.0%
23.9%
Total Dental
708,263
641,017
10.5%
2.7%
7.8%
1.9%
5.9%
Medical
23,013
24,405
-5.7%
1.8%
-7.5%
0.0%
-7.5%
Total Health Care Distribution
731,276
665,422
9.9%
2.7%
7.2%
1.7%
5.5%
Technology and value-added services
20,965
17,406
20.4%
5.1%
15.3%
0.0%
15.3%
Total excluding Corporate TSA Revenue
752,241
682,828
10.2%
2.8%
7.4%
1.7%
5.7%
Corporate TSA revenues (1)
-
24,792
n/a
n/a
n/a
n/a
n/a
Total International
$
752,241
$
707,620
6.3%
2.6%
3.7%
1.7%
2.0%
(1) Corporate TSA revenues represents
sales of certain products to Covetrus under the transition services
agreement entered into in connection with the Animal Health
spin-off, which ended in December 2020.
Exhibit A - Year-to-Date Sales
Henry Schein, Inc.
2021 Third Quarter
Year-to-Date
Sales Summary
(in thousands)
(unaudited)
Q3 2021 Year-to-Date over Q3
2020 Year-to-Date
Global
Q3 2021
Q3 2020
Total Sales Growth
Foreign Exchange
Growth
Local Currency Growth
Acquisition Growth
Local Internal Growth
Dental Merchandise
$
4,344,933
$
3,194,015
36.0%
3.6%
32.4%
5.9%
26.5%
Dental Equipment
1,177,233
872,206
35.0%
4.5%
30.5%
0.7%
29.8%
Total Dental
5,522,166
4,066,221
35.8%
3.8%
32.0%
4.8%
27.2%
Medical
3,084,677
2,445,644
26.1%
0.2%
25.9%
2.2%
23.7%
Total Health Care Distribution
8,606,843
6,511,865
32.2%
2.5%
29.7%
3.8%
25.9%
Technology and value-added services
463,656
375,547
23.5%
1.6%
21.9%
9.0%
12.9%
Total excluding Corporate TSA Revenue
9,070,499
6,887,412
31.7%
2.4%
29.3%
4.1%
25.2%
Corporate TSA revenues (1)
-
66,004
n/a
n/a
n/a
n/a
n/a
Total Global
$
9,070,499
$
6,953,416
30.4%
2.3%
28.1%
4.1%
24.0%
North
America
Q3 2021
Q3 2020
Total Sales Growth
Foreign Exchange
Growth
Local Currency Growth
Acquisition Growth
Local Internal Growth
Dental Merchandise
$
2,612,142
$
1,894,097
37.9%
0.8%
37.1%
8.6%
28.5%
Dental Equipment
674,879
519,057
30.0%
1.4%
28.6%
0.0%
28.6%
Total Dental
3,287,021
2,413,154
36.2%
0.9%
35.3%
6.8%
28.5%
Medical
3,006,699
2,377,357
26.5%
0.0%
26.5%
2.3%
24.2%
Total Health Care Distribution
6,293,720
4,790,511
31.4%
0.5%
30.9%
4.5%
26.4%
Technology and value-added services
399,478
327,374
22.0%
0.2%
21.8%
10.0%
11.8%
Total excluding Corporate TSA Revenue
6,693,198
5,117,885
30.8%
0.5%
30.3%
4.9%
25.4%
Corporate TSA revenues (1)
-
-
n/a
n/a
n/a
n/a
n/a
Total North America
$
6,693,198
$
5,117,885
30.8%
0.5%
30.3%
4.9%
25.4%
International
Q3 2021
Q3 2020
Total Sales Growth
Foreign Exchange
Growth
Local Currency Growth
Acquisition Growth
Local Internal Growth
Dental Merchandise
$
1,732,791
$
1,299,918
33.3%
7.7%
25.6%
1.9%
23.7%
Dental Equipment
502,354
353,149
42.2%
8.9%
33.3%
1.8%
31.5%
Total Dental
2,235,145
1,653,067
35.2%
7.9%
27.3%
2.0%
25.3%
Medical
77,978
68,287
14.2%
7.8%
6.4%
0.0%
6.4%
Total Health Care Distribution
2,313,123
1,721,354
34.4%
8.0%
26.4%
1.8%
24.6%
Technology and value-added services
64,178
48,173
33.2%
10.1%
23.1%
3.3%
19.8%
Total excluding Corporate TSA Revenue
2,377,301
1,769,527
34.3%
8.0%
26.3%
1.8%
24.5%
Corporate TSA revenues (1)
-
66,004
n/a
n/a
n/a
n/a
n/a
Total International
$
2,377,301
$
1,835,531
29.5%
7.7%
21.8%
1.8%
20.0%
(1) Corporate TSA revenues represents
sales of certain animal health products to Covetrus under the
transition services agreement entered into in connection with the
Animal Health Spin-off, which ended in December 2020.
Exhibit B
Henry Schein, Inc.
2021 Third Quarter and
Year-to-Date
Reconciliation of reported
GAAP net income from continuing operations and
diluted EPS from continuing
operations attributable to Henry Schein, Inc.
to non-GAAP net income from
continuing operations and
diluted EPS from continuing
operations attributable to Henry Schein, Inc.
(in thousands, except per
share data)
(unaudited)
Third Quarter
Year-to-Date
%
%
2021
2020
Growth
2021
2020
Growth
Net income from continuing operations
attributable to Henry Schein, Inc.
$
162,286
$
141,726
14.5
%
$
483,999
$
260,887
85.5
%
Diluted EPS from continuing operations
attributable to Henry Schein, Inc.
$
1.15
$
0.99
16.2
%
$
3.40
$
1.82
86.8
%
Non-GAAP Adjustments
Restructuring costs (credits) -Pre-tax
(1)
$
(175)
$
6,992
$
3,360
$
27,713
Income tax expense (benefit) for
restructuring costs (1)
44
(1,748)
(840)
(6,928)
Settlement and litigation costs - Pre-tax
(2)
-
-
14,253
-
Income tax benefit for settlement and
litigation costs (2)
-
-
(3,548)
-
Gain on sale of equity investment (3)
(7,318)
-
(7,318)
-
Total non-GAAP adjustments to net
income from continuing operations
$
(7,449)
$
5,244
$
5,907
$
20,785
Non-GAAP adjustments to diluted EPS
from continuing operations
(0.05)
0.04
0.04
0.15
Non-GAAP net income from continuing
operations attributable to Henry Schein, Inc.
$
154,837
$
146,970
5.4
%
$
489,906
$
281,672
73.9
%
Non-GAAP diluted EPS from continuing
operations attributable to Henry Schein, Inc.
$
1.10
$
1.03
6.8
%
$
3.45
$
1.97
75.1
%
Management believes that non-GAAP financial measures provide
investors with useful supplemental information about the financial
performance of our business, enable comparison of financial results
between periods where certain items may vary independent of
business performance and allow for greater transparency with
respect to key metrics used by management in operating our
business. These non-GAAP financial measures are presented solely
for informational and comparative purposes and should not be
regarded as a replacement for corresponding, similarly captioned,
GAAP measures. Earnings per share numbers may not sum due to
rounding.
(1)
Represents Q3 2021 restructuring credits
of $175, net of $44 tax expense, resulting in an after-tax effect
of $131, and YTD 2021 restructuring costs of $3,360, net of $840
tax benefit, resulting in an after-tax effect of $2,520.
Represents Q3 2020 restructuring costs of $6,992, net of $1,748 tax
benefit, resulting in an after-tax effect of $5,244, and YTD 2020
restructuring costs of $27,713, net of $6,928 tax benefit,
resulting in an after-tax effect of $20,785.
(2)
Represents a YTD 2021 pre-tax charge of
$15,750, net of $1,497 of noncontrolling interests, related to
settlement and litigation costs, net of a tax benefit of $3,548,
resulting in a net after-tax charge of $10,705.
(3)
In the third quarter of 2021 we received
contingent proceeds of $9.8 million from the 2019 sale of Hu-Friedy
resulting in the recognition of an additional after-tax gain of
$7.3 million.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211102005636/en/
Investors Steven Paladino Executive Vice President and Chief Financial
Officer steven.paladino@henryschein.com (631) 843-5500
Graham Stanley Vice President, Investor Relations and Strategic
Financial Project Officer graham.stanley@henryschein.com (631)
843-5963
Media Ann Marie Gothard Vice
President, Global Corporate Media Relations
annmarie.gothard@henryschein.com (631) 390-8169
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