MELVILLE, N.Y., Nov. 6, 2017 /PRNewswire/ -- Henry Schein,
Inc. (Nasdaq: HSIC), the world's largest provider of health care
products and services to office-based dental, animal health, and
medical practitioners, today reported record third quarter
financial results. All per share figures in this news release
reflect the 2-for-1 common stock split that Henry Schein completed during the third quarter
of 2017.
Net sales for the quarter ended September
30, 2017 were $3.2 billion, an
increase of 10.3% compared with the third quarter of 2016. This
consisted of 8.8% growth in local currencies and a 1.5% increase
related to foreign currency exchange. In local currencies, internal
sales growth was 4.8% and acquisition growth was 4.0% (see Exhibit
A for details of sales growth).
Net income attributable to Henry
Schein, Inc. for the third quarter of 2017 was $138.0 million, or $0.87 per diluted share. Compared with the GAAP
results for the third quarter of 2016, this represents growth of
3.2% and 6.1%, respectively. Compared with the non-GAAP results for
the third quarter of 2016, this represents growth of 0.2% and 3.6%,
respectively. Note that third quarter 2016 non-GAAP results exclude
restructuring costs of $5.4 million
pretax or $0.02 per diluted share
(see Exhibit B for reconciliation of GAAP net income and EPS to
non-GAAP net income and EPS).
"Solid overall sales results for the quarter reflect continued
success with our comprehensive offering of products and value-added
services that drive internal growth, complemented by strategic
acquisitions," said Stanley M.
Bergman, Chairman of the Board and Chief Executive Officer
of Henry Schein. "Third quarter
sales growth was negatively impacted by approximately 30 basis
points due to the recent hurricanes in the U.S. as well as a
difficult comparable in dental equipment sales as we reported
double-digit sales growth in the third quarter of 2016 associated
with a successful sales promotion."
Henry Schein is adjusting its
2017 full year EPS guidance range to reflect growth of
approximately 12% on a GAAP basis, versus the comparable 2016
results. This reflects growth of 8% to 9% on a non-GAAP basis,
which excludes litigation settlement expenses and a fourth quarter
loss associated with Henry Schein's
divestiture of its equity ownership in E4D Technologies, versus the
comparable 2016 results. The Company also is introducing 2018 EPS
guidance that reflects growth of 11% to 14% compared with the
midpoint of the Company's 2017 GAAP guidance range and 7% to 10%
compared with the midpoint of the Company's 2017 non-GAAP guidance
range.
"During 2018 and beyond, we expect to continue to make progress
with our focus on increasing sales of higher-margin products, as
well as improving operating efficiencies to achieve long-term EPS
growth," Mr. Bergman added.
Dental sales of $1.5 billion
increased 11.1%, consisting of 9.1% growth in local currencies and
a 2.0% increase related to foreign currency exchange. In local
currencies, internal sales growth was 1.6% and acquisition growth
was 7.5%. The 1.6% internal growth in local currencies included
0.8% growth in North America and
3.2% growth internationally.
"In North America, dental consumable merchandise internal sales
growth in local currencies was 1.3%, which was negatively impacted
by approximately 140 basis points due to recent hurricanes and the
loss of a previously disclosed large DSO contract. We continue to
expect stable market growth for dental consumable merchandise,"
commented Mr. Bergman. "North
America dental equipment internal sales growth in local
currencies declined by 0.7%, which was negatively impacted by
approximately 170 basis points due to recent hurricanes and the
loss of the previously disclosed DSO contract, and reflects a
difficult prior-year comparison, when we achieved 13.3% growth. We
are fully committed to offering a broad set of solutions to advance
digital dentistry, and are pleased with the initial reception from
customers in North America
following the addition of the full line of Dentsply Sirona dental
equipment."
Henry Schein now has access to a
comprehensive offering of digital prosthetic equipment solutions
and therefore, recently divested its equity investment in E4D
Technologies. This is consistent with the Company's strategy to
offer a comprehensive selection of dental equipment solutions to
customers through an open-architecture market approach. The Company
also now has broad access to digital prosthetic materials and as a
result, recently divested its ownership position in a company that
produces materials used for manufacturing lab restorations and
distributes dental products in China. Henry
Schein believes it continues to be well-positioned in the
global dental lab market, providing solutions for digital
restorations that are outsourced to lab facilities. In addition to
Dentsply Sirona, Henry Schein will
continue to represent the complete lines from other key suppliers,
including 3M, 3Shape, A-dec, Danaher, Ivoclar, Midmark, Planmeca,
and many others.
Mr. Bergman continued, "In local currencies, international
dental consumable merchandise internal sales growth was 3.4% and
international dental equipment internal sales growth was 2.6%."
Animal Health sales of $882.6
million increased 11.7%, consisting of 9.9% growth in local
currencies and a 1.8% increase related to foreign currency
exchange. In local currencies, internal sales growth was 8.0% and
acquisition growth was 1.9%. The 8.0% internal growth in local
currencies included 9.0% growth in North
America, which was negatively impacted by approximately 50
basis points due to recent hurricanes, and 6.9% growth
internationally.
"Global Animal Health internal sales growth in local currencies
reflects strong execution across our global business," commented
Mr. Bergman. "We believe these gains are due to the breadth of our
value-added solutions offering, including an enhanced product
portfolio featuring software, diagnostic equipment, and surgical
instruments."
Medical sales of $690.8 million
increased 8.0%, consisting of 7.9% growth in local currencies, and
a 0.1% increase related to foreign currency exchange. In local
currencies, internal sales growth was 7.8%, which was negatively
impacted by approximately 25 basis points due to recent hurricanes,
and acquisition growth was 0.1%.
"The large group practice segment of the market contributed to
solid sales growth in our Medical group during the quarter. This
success reflects our commitment to solutions that help customers
provide quality care and increase value in the delivery of health
care services," remarked Mr. Bergman.
Technology and Value-Added Services sales of $109.0 million increased 4.1%, including 3.7%
growth in local currencies and a 0.4% increase related to foreign
currency exchange. In local currencies, internal sales growth was
3.0% and acquisition growth was 0.7%.
"In North America, Technology and Value-Added Services internal
sales growth of 2.0% in local currencies was impacted by lower
dental software sales and financial services revenue, which is
primarily related to lower dental equipment sales versus the prior
year third quarter," said Mr. Bergman. "In international markets,
we delivered solid internal sales growth in local currencies of
8.7%, highlighted by strong veterinary software revenue."
Stock Repurchase Plan
The Company announced that
during the third quarter it spent approximately $125.0 million to repurchase approximately 1.4
million shares of its common stock. The impact of the repurchase of
shares on third quarter 2017 diluted EPS was immaterial. At the
close of the third quarter, Henry
Schein had approximately $425.0
million authorized for future repurchases of its common
stock.
Year-to-Date Results
Net sales for the first nine
months of 2017 were $9.1 billion, an increase of 8.2% compared
with the first nine months of 2016. This consisted of 8.4%
growth in local currencies and a decline of 0.2% related to foreign
currency exchange. In local currencies, internal sales growth
was 5.0% and acquisition growth was 3.4% (see Exhibit A for details
of sales growth).
Net income attributable to Henry Schein, Inc. for the
first nine months of 2017 was $414.8 million,
or $2.61 per diluted share on a GAAP basis, an increase
of 12.9% and 17.0%, respectively, compared with the first nine
months of 2016. Excluding the second quarter 2017 litigation
settlement expense of $5.3 million
pretax or $0.02 per diluted share,
non-GAAP net income attributable to Henry Schein,
Inc. for the first nine months of 2017 was $418.0 million
or $2.63 per diluted share, an increase of 7.2% and
11.0%, respectively, compared with non-GAAP results for the first
nine months of 2016, which excluded restructuring costs (see
Exhibit B for reconciliation of GAAP net income and EPS to non-GAAP
net income and EPS).
2017 EPS Guidance
Henry
Schein today adjusted its 2017 full year diluted EPS
guidance range and now expects the following:
- 2017 GAAP diluted EPS attributable to Henry Schein, Inc., which includes litigation
settlement expenses, is expected to be $3.46
to $3.48. This guidance reflects growth of approximately 12%
compared with 2016 GAAP diluted EPS of $3.10. The prior 2017 GAAP diluted EPS guidance
range was $3.57 to $3.63.
- 2017 non-GAAP diluted EPS, which excludes litigation settlement
expenses and a fourth quarter loss associated with Henry Schein's divestiture of its equity
ownership in E4D Technologies, is expected to be $3.59 to $3.61. This guidance reflects growth of
8% to 9% compared with 2016 non-GAAP diluted EPS of $3.31, which excluded restructuring charges of
$0.21 per diluted share. The prior
2017 non-GAAP diluted EPS guidance range was $3.59 to $3.65.
- The Company notes that fiscal year 2017 includes one less week
than fiscal year 2016.
- Guidance for 2017 GAAP and non-GAAP diluted EPS is for current
continuing operations as well as completed or previously announced
acquisitions, and does not include the impact of potential future
acquisitions, if any. Guidance also assumes foreign exchange rates
that are generally consistent with current levels.
2018 EPS Guidance
Henry
Schein today introduced 2018 financial guidance, as
follows:
- 2018 diluted EPS attributable to Henry
Schein, Inc. is expected to be $3.85
to $3.96. This guidance reflects growth of 11% to 14%
compared with the midpoint of the Company's 2017 GAAP guidance
range and growth of 7% to 10% compared with the midpoint of the
Company's 2017 non-GAAP guidance range.
- Guidance for 2018 diluted EPS attributable to Henry Schein, Inc. is for current continuing
operations as well as completed or previously announced
acquisitions, and does not include the impact of potential future
acquisitions, if any. Guidance also assumes foreign exchange rates
that are generally consistent with current levels.
Third Quarter 2017 Conference Call Webcast
The Company
will hold a conference call to discuss third quarter 2017 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 at www.henryschein.com. In addition, a
replay will be available beginning shortly after the call has
ended.
About Henry Schein,
Inc.
Henry Schein, Inc.
(Nasdaq: HSIC) is the world's largest provider of health care
products and services to office-based dental, animal health, and
medical practitioners. The Company also serves dental
laboratories, government and institutional health care clinics, and
other alternate care sites. A Fortune 500® Company and a
member of the S&P 500® and the Nasdaq 100® indexes,
Henry Schein employs more than
22,000 Team Schein Members and serves more than 1 million
customers.
The Company offers a comprehensive selection of products and
services, including value-added solutions for operating efficient
practices and delivering high-quality care. 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. The
Company also offers its customers exclusive, innovative technology
solutions, including practice management software and e-commerce
solutions, as well as a broad range of financial services.
Headquartered in Melville,
N.Y., Henry Schein has
operations or affiliates in 33 countries. The Company's sales
reached a record $11.6 billion in
2016, and have grown at a compound annual rate of approximately 15%
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 are identified by the use of such terms as "may,"
"could," "expect," "intend," "believe," "plan," "estimate,"
"forecast," "project," "anticipate" or other comparable
terms. A full discussion of our operations and financial
condition, 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, 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.
Risk factors and uncertainties that could cause actual results
to differ materially from current and historical results include,
but are not limited to: effects of a highly competitive and
consolidating market; our dependence on third parties for the
manufacture and supply of our products; our dependence upon sales
personnel, customers, suppliers and manufacturers; our dependence
on our senior management; fluctuations in quarterly earnings; 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 conditions; risks associated with currency
fluctuations; risks associated with political and economic
uncertainty; disruptions in financial markets; volatility of the
market price of our common stock; changes in the health care
industry; implementation of health care laws; failure to comply
with regulatory requirements and data privacy laws; risks
associated with our global operations; transitional challenges
associated with acquisitions and joint ventures, including the
failure to achieve anticipated synergies; financial risks
associated with acquisitions and joint ventures; litigation risks;
the dependence on our continued product development, technical
support and successful marketing in the technology segment;
increased competition by third party online commerce sites; risks
from disruption to our information systems; cyberattacks or other
privacy or data security breaches; certain provisions in our
governing documents that may discourage third-party acquisitions of
us; and changes in tax legislation. 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.
(TABLES TO FOLLOW)
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|
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HENRY SCHEIN,
INC.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(in thousands,
except per share data)
|
(unaudited)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
|
|
September
30,
|
|
September
24,
|
|
September
30,
|
|
September
24,
|
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
3,161,083
|
|
$
|
2,865,148
|
|
$
|
9,143,489
|
|
$
|
8,450,734
|
Cost of
sales
|
|
|
2,325,029
|
|
|
2,077,473
|
|
|
6,645,342
|
|
|
6,083,748
|
|
|
Gross
profit
|
|
|
836,054
|
|
|
787,675
|
|
|
2,498,147
|
|
|
2,366,986
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
622,506
|
|
|
581,584
|
|
|
1,879,969
|
|
|
1,779,583
|
|
Restructuring
costs
|
|
|
-
|
|
|
5,370
|
|
|
-
|
|
|
29,811
|
|
|
Operating
income
|
|
|
213,548
|
|
|
200,721
|
|
|
618,178
|
|
|
557,592
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
4,793
|
|
|
3,141
|
|
|
13,204
|
|
|
10,045
|
|
Interest
expense
|
|
|
(13,428)
|
|
|
(7,488)
|
|
|
(37,056)
|
|
|
(21,982)
|
|
Other, net
|
|
|
(194)
|
|
|
(199)
|
|
|
489
|
|
|
3,206
|
|
|
Income before taxes
and equity in earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
affiliates
|
|
|
204,719
|
|
|
196,175
|
|
|
594,815
|
|
|
548,861
|
Income
taxes
|
|
|
(59,340)
|
|
|
(56,601)
|
|
|
(156,276)
|
|
|
(159,099)
|
Equity in earnings of
affiliates
|
|
|
5,569
|
|
|
5,717
|
|
|
12,244
|
|
|
13,160
|
Net income
|
|
|
150,948
|
|
|
145,291
|
|
|
450,783
|
|
|
402,922
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
(12,917)
|
|
|
(11,578)
|
|
|
(35,949)
|
|
|
(35,360)
|
Net income
attributable to Henry Schein, Inc.
|
|
$
|
138,031
|
|
$
|
133,713
|
|
$
|
414,834
|
|
$
|
367,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Henry Schein, Inc.:
|
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|
|
|
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|
|
|
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|
|
|
|
|
|
|
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|
|
Basic
|
|
$
|
0.88
|
|
$
|
0.83
|
|
$
|
2.64
|
|
$
|
2.26
|
|
Diluted
|
|
$
|
0.87
|
|
$
|
0.82
|
|
$
|
2.61
|
|
$
|
2.23
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
156,914
|
|
|
161,791
|
|
|
157,386
|
|
|
162,600
|
|
Diluted
|
|
|
158,271
|
|
|
163,710
|
|
|
158,866
|
|
|
164,635
|
|
Note: Certain prior
quarter amounts have been reclassified to conform to the current
period presentation.
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|
|
|
|
|
|
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HENRY SCHEIN,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except share and per share data)
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
(unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
79,879
|
|
$
|
62,381
|
|
Accounts receivable,
net of reserves of $96,953 and $90,329
|
|
|
1,544,582
|
|
|
1,254,139
|
|
Inventories,
net
|
|
|
1,692,256
|
|
|
1,635,750
|
|
Prepaid expenses and
other
|
|
|
465,812
|
|
|
360,510
|
|
|
|
Total current
assets
|
|
|
3,782,529
|
|
|
3,312,780
|
Property and
equipment, net
|
|
|
361,708
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|
|
333,906
|
Goodwill
|
|
|
2,224,657
|
|
|
2,019,740
|
Other intangibles,
net
|
|
|
666,997
|
|
|
621,180
|
Investments and
other
|
|
|
450,770
|
|
|
442,790
|
|
|
|
Total
assets
|
|
$
|
7,486,661
|
|
$
|
6,730,396
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,029,138
|
|
$
|
977,249
|
|
Bank credit
lines
|
|
|
631,865
|
|
|
437,476
|
|
Current maturities of
long-term debt
|
|
|
17,247
|
|
|
65,923
|
|
Accrued
expenses:
|
|
|
|
|
|
|
|
|
Payroll and
related
|
|
|
251,849
|
|
|
266,463
|
|
|
Taxes
|
|
|
148,627
|
|
|
151,750
|
|
|
Other
|
|
|
358,421
|
|
|
391,785
|
|
|
|
Total current
liabilities
|
|
|
2,437,147
|
|
|
2,290,646
|
Long-term
debt
|
|
|
907,592
|
|
|
715,457
|
Deferred income
taxes
|
|
|
91,786
|
|
|
51,589
|
Other
liabilities
|
|
|
292,179
|
|
|
264,264
|
|
|
|
Total
liabilities
|
|
|
3,728,704
|
|
|
3,321,956
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
|
737,747
|
|
|
607,636
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Preferred stock, $.01 par value, 1,000,000 shares
authorized,
|
|
|
|
|
|
|
|
|
none
outstanding
|
|
|
-
|
|
|
-
|
|
Common stock, $.01
par value, 240,000,000 shares authorized,
|
|
|
|
|
|
|
|
|
156,952,738
outstanding on September 30, 2017 and
|
|
|
|
|
|
|
|
|
158,805,010
outstanding on December 31, 2016
|
|
|
1,570
|
|
|
1,588
|
|
Additional paid-in
capital
|
|
|
-
|
|
|
126,742
|
|
Retained
earnings
|
|
|
3,164,541
|
|
|
2,981,777
|
|
Accumulated other
comprehensive loss
|
|
|
(154,472)
|
|
|
(317,041)
|
|
|
Total Henry Schein,
Inc. stockholders' equity
|
|
|
3,011,639
|
|
|
2,793,066
|
|
Noncontrolling
interests
|
|
|
8,571
|
|
|
7,738
|
|
|
|
Total stockholders'
equity
|
|
|
3,020,210
|
|
|
2,800,804
|
|
|
Total liabilities,
redeemable noncontrolling interests and stockholders'
equity
|
|
$
|
7,486,661
|
|
$
|
6,730,396
|
|
Note: Certain prior
period amounts have been reclassified to conform to the current
period presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HENRY SCHEIN,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
September
30,
|
|
September
24,
|
|
September
30,
|
|
September
24,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
150,948
|
|
$
|
145,291
|
|
$
|
450,783
|
|
$
|
402,922
|
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
48,740
|
|
|
42,431
|
|
|
141,278
|
|
|
125,829
|
|
|
|
Stock-based
compensation expense
|
|
|
12,632
|
|
|
16,171
|
|
|
31,987
|
|
|
43,627
|
|
|
|
Provision for losses
on trade and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
accounts
receivable
|
|
|
2,932
|
|
|
946
|
|
|
6,981
|
|
|
1,736
|
|
|
|
Provision for
(benefit from) deferred income taxes
|
|
|
4,185
|
|
|
(8,767)
|
|
|
8,600
|
|
|
(13,425)
|
|
|
|
Equity in earnings of
affiliates
|
|
|
(5,569)
|
|
|
(5,717)
|
|
|
(12,244)
|
|
|
(13,160)
|
|
|
|
Distributions from
equity affiliates
|
|
|
7,148
|
|
|
5,767
|
|
|
16,826
|
|
|
12,104
|
|
|
|
Changes in
unrecognized tax benefits
|
|
|
974
|
|
|
2,348
|
|
|
(6,653)
|
|
|
4,799
|
|
|
|
Other
|
|
|
1,016
|
|
|
5,484
|
|
|
6,031
|
|
|
7,845
|
|
|
|
Changes in operating
assets and liabilities,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of
acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(106,301)
|
|
|
(74,884)
|
|
|
(229,239)
|
|
|
(131,586)
|
|
|
|
|
Inventories
|
|
|
(88,464)
|
|
|
14,118
|
|
|
27,336
|
|
|
48,513
|
|
|
|
|
Other current
assets
|
|
|
(13,134)
|
|
|
3,095
|
|
|
(70,833)
|
|
|
(35,781)
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
|
116,255
|
|
|
32,346
|
|
|
(63,352)
|
|
|
(75,355)
|
Net cash provided by
operating activities
|
|
|
131,362
|
|
|
178,629
|
|
|
307,501
|
|
|
378,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of fixed
assets
|
|
|
(18,350)
|
|
|
(18,345)
|
|
|
(55,315)
|
|
|
(44,525)
|
|
Payments for equity
investments and business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
acquisitions, net of
cash acquired
|
|
|
(109,200)
|
|
|
(34,102)
|
|
|
(258,786)
|
|
|
(126,543)
|
|
Other
|
|
|
(1,822)
|
|
|
(7,001)
|
|
|
(6,694)
|
|
|
(8,766)
|
Net cash used in
investing activities
|
|
|
(129,372)
|
|
|
(59,448)
|
|
|
(320,795)
|
|
|
(179,834)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
(repayments of) bank borrowings
|
|
|
54,288
|
|
|
94,205
|
|
|
193,550
|
|
|
(3,274)
|
|
Proceeds from
issuance of long-term debt
|
|
|
100,440
|
|
|
16,000
|
|
|
200,440
|
|
|
260,000
|
|
Principal payments
for long-term debt
|
|
|
(347)
|
|
|
(1,372)
|
|
|
(59,531)
|
|
|
(9,293)
|
|
Debt issuance
costs
|
|
|
(638)
|
|
|
-
|
|
|
(1,771)
|
|
|
(233)
|
|
Proceeds from
issuance of stock upon exercise
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of stock
options
|
|
|
240
|
|
|
695
|
|
|
4,941
|
|
|
9,754
|
|
Payments for
repurchases of common stock
|
|
|
(124,999)
|
|
|
(192,992)
|
|
|
(225,005)
|
|
|
(350,001)
|
|
Payments for taxes
related to shares withheld for employee taxes
|
|
|
(307)
|
|
|
(548)
|
|
|
(44,721)
|
|
|
(27,115)
|
|
Excess tax benefits
related to stock-based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation
|
|
|
-
|
|
|
(463)
|
|
|
-
|
|
|
(463)
|
|
Distributions to
noncontrolling shareholders
|
|
|
(4,320)
|
|
|
(6,206)
|
|
|
(23,921)
|
|
|
(26,366)
|
|
Acquisitions of
noncontrolling interests in subsidiaries
|
|
|
(23,763)
|
|
|
(15,633)
|
|
|
(27,914)
|
|
|
(51,265)
|
Net cash provided by
(used in) financing activities
|
|
|
594
|
|
|
(106,314)
|
|
|
16,068
|
|
|
(198,256)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
cash
equivalents
|
|
|
2,641
|
|
|
(235)
|
|
|
14,724
|
|
|
4,128
|
Net change in cash
and cash equivalents
|
|
|
5,225
|
|
|
12,632
|
|
|
17,498
|
|
|
4,106
|
Cash and cash
equivalents, beginning of period
|
|
|
74,654
|
|
|
63,560
|
|
|
62,381
|
|
|
72,086
|
Cash and cash
equivalents, end of period
|
|
$
|
79,879
|
|
$
|
76,192
|
|
$
|
79,879
|
|
$
|
76,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain prior
period amounts have been reclassified to conform to the current
period presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit A - QTD
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Schein,
Inc.
|
2017 Third
Quarter
|
Sales
Summary
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2017 over Q3
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
Q3
2017
|
|
Q3
2016
|
|
Total Sales
Growth
|
|
Foreign Exchange
Growth
|
|
Local Currency
Growth
|
|
Acquisition
Growth
|
|
Local Internal
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental
|
$
|
1,478,730
|
|
$
|
1,330,525
|
|
11.1%
|
|
2.0%
|
|
9.1%
|
|
7.5%
|
|
1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Animal
Health
|
|
882,580
|
|
|
790,279
|
|
11.7%
|
|
1.8%
|
|
9.9%
|
|
1.9%
|
|
8.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical
|
|
690,761
|
|
|
639,648
|
|
8.0%
|
|
0.1%
|
|
7.9%
|
|
0.1%
|
|
7.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care
Distribution
|
|
3,052,071
|
|
|
2,760,452
|
|
10.6%
|
|
1.6%
|
|
9.0%
|
|
4.1%
|
|
4.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and
value-added services
|
|
109,012
|
|
|
104,696
|
|
4.1%
|
|
0.4%
|
|
3.7%
|
|
0.7%
|
|
3.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Global
|
$
|
3,161,083
|
|
$
|
2,865,148
|
|
10.3%
|
|
1.5%
|
|
8.8%
|
|
4.0%
|
|
4.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
Q3
2017
|
|
Q3
2016
|
|
Total Sales
Growth
|
|
Foreign Exchange
Growth
|
|
Local Currency
Growth
|
|
Acquisition
Growth
|
|
Local Internal
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental
|
$
|
906,878
|
|
$
|
879,612
|
|
3.1%
|
|
0.4%
|
|
2.7%
|
|
1.9%
|
|
0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Animal
Health
|
|
448,376
|
|
|
403,901
|
|
11.0%
|
|
0.0%
|
|
11.0%
|
|
2.0%
|
|
9.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical
|
|
672,425
|
|
|
622,903
|
|
8.0%
|
|
0.0%
|
|
8.0%
|
|
0.1%
|
|
7.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care
Distribution
|
|
2,027,679
|
|
|
1,906,416
|
|
6.4%
|
|
0.2%
|
|
6.2%
|
|
1.3%
|
|
4.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and
value-added services
|
|
89,881
|
|
|
88,066
|
|
2.1%
|
|
0.1%
|
|
2.0%
|
|
0.0%
|
|
2.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total North
America
|
$
|
2,117,560
|
|
$
|
1,994,482
|
|
6.2%
|
|
0.2%
|
|
6.0%
|
|
1.3%
|
|
4.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
Q3
2017
|
|
Q3
2016
|
|
Total Sales
Growth
|
|
Foreign Exchange
Growth
|
|
Local Currency
Growth
|
|
Acquisition
Growth
|
|
Local Internal
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental
|
$
|
571,852
|
|
$
|
450,913
|
|
26.8%
|
|
5.3%
|
|
21.5%
|
|
18.3%
|
|
3.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Animal
Health
|
|
434,204
|
|
|
386,378
|
|
12.4%
|
|
3.6%
|
|
8.8%
|
|
1.9%
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical
|
|
18,336
|
|
|
16,745
|
|
9.5%
|
|
5.0%
|
|
4.5%
|
|
0.0%
|
|
4.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care
Distribution
|
|
1,024,392
|
|
|
854,036
|
|
19.9%
|
|
4.5%
|
|
15.4%
|
|
10.5%
|
|
4.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and
value-added services
|
|
19,131
|
|
|
16,630
|
|
15.0%
|
|
1.8%
|
|
13.2%
|
|
4.5%
|
|
8.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
International
|
$
|
1,043,523
|
|
$
|
870,666
|
|
19.9%
|
|
4.5%
|
|
15.4%
|
|
10.4%
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit A - YTD
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Schein,
Inc.
|
2017 Third Quarter
Year to Date
|
Sales
Summary
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2017 YTD over
Q3 2016 YTD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global
|
Q3 2017
YTD
|
|
Q3 2016
YTD
|
|
Total Sales
Growth
|
|
Foreign Exchange
Growth
|
|
Local Currency
Growth
|
|
Acquisition
Growth
|
|
Local Internal
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental
|
$
|
4,372,055
|
|
$
|
4,005,468
|
|
9.2%
|
|
0.3%
|
|
8.9%
|
|
6.3%
|
|
2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Animal
Health
|
|
2,586,850
|
|
|
2,415,290
|
|
7.1%
|
|
-1.1%
|
|
8.2%
|
|
1.3%
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical
|
|
1,861,074
|
|
|
1,716,590
|
|
8.4%
|
|
-0.1%
|
|
8.5%
|
|
0.1%
|
|
8.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care
Distribution
|
|
8,819,979
|
|
|
8,137,348
|
|
8.4%
|
|
-0.2%
|
|
8.6%
|
|
3.5%
|
|
5.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and
value-added services
|
|
323,510
|
|
|
313,386
|
|
3.2%
|
|
-0.8%
|
|
4.0%
|
|
0.4%
|
|
3.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Global
|
$
|
9,143,489
|
|
$
|
8,450,734
|
|
8.2%
|
|
-0.2%
|
|
8.4%
|
|
3.4%
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
Q3 2017
YTD
|
|
Q3 2016
YTD
|
|
Total Sales
Growth
|
|
Foreign Exchange
Growth
|
|
Local Currency
Growth
|
|
Acquisition
Growth
|
|
Local Internal
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental
|
$
|
2,669,805
|
|
$
|
2,580,034
|
|
3.5%
|
|
0.1%
|
|
3.4%
|
|
1.6%
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Animal
Health
|
|
1,344,221
|
|
|
1,249,146
|
|
7.6%
|
|
0.0%
|
|
7.6%
|
|
0.8%
|
|
6.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical
|
|
1,806,196
|
|
|
1,662,676
|
|
8.6%
|
|
0.0%
|
|
8.6%
|
|
0.0%
|
|
8.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care
Distribution
|
|
5,820,222
|
|
|
5,491,856
|
|
6.0%
|
|
0.1%
|
|
5.9%
|
|
0.9%
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and
value-added services
|
|
269,226
|
|
|
264,191
|
|
1.9%
|
|
0.0%
|
|
1.9%
|
|
0.0%
|
|
1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total North
America
|
$
|
6,089,448
|
|
$
|
5,756,047
|
|
5.8%
|
|
0.1%
|
|
5.7%
|
|
0.9%
|
|
4.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
Q3 2017
YTD
|
|
Q3 2016
YTD
|
|
Total Sales
Growth
|
|
Foreign Exchange
Growth
|
|
Local Currency
Growth
|
|
Acquisition
Growth
|
|
Local Internal
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental
|
$
|
1,702,250
|
|
$
|
1,425,434
|
|
19.4%
|
|
0.5%
|
|
18.9%
|
|
15.0%
|
|
3.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Animal
Health
|
|
1,242,629
|
|
|
1,166,144
|
|
6.6%
|
|
-2.2%
|
|
8.8%
|
|
1.7%
|
|
7.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical
|
|
54,878
|
|
|
53,914
|
|
1.8%
|
|
-1.3%
|
|
3.1%
|
|
0.0%
|
|
3.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care
Distribution
|
|
2,999,757
|
|
|
2,645,492
|
|
13.4%
|
|
-0.7%
|
|
14.1%
|
|
8.8%
|
|
5.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and
value-added services
|
|
54,284
|
|
|
49,195
|
|
10.3%
|
|
-5.0%
|
|
15.3%
|
|
2.6%
|
|
12.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
International
|
$
|
3,054,041
|
|
$
|
2,694,687
|
|
13.3%
|
|
-0.8%
|
|
14.1%
|
|
8.7%
|
|
5.4%
|
Exhibit
B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Schein,
Inc.
|
2017 Third Quarter
and YTD
|
Reconciliation of
GAAP results of net income attributable to Henry Schein, Inc.
to
|
non-GAAP results of
net income attributable to Henry Schein, Inc.
|
(in thousands, except
per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third
Quarter
|
|
|
|
Year-to-Date
|
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
|
|
|
%
|
|
|
|
2017
|
|
|
2016
|
|
Growth
|
|
|
|
2017
|
|
|
2016
|
|
Growth
|
|
Net Income
attributable to Henry Schein, Inc.
|
$
|
138,031
|
|
$
|
133,713
|
|
3.2
|
%
|
|
$
|
414,834
|
|
$
|
367,562
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
attributable to Henry Schein, Inc.
|
$
|
0.87
|
|
$
|
0.82
|
|
6.1
|
%
|
|
$
|
2.61
|
|
$
|
2.23
|
|
17.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs -
Pre-tax
|
$
|
-
|
|
$
|
5,370
|
|
|
|
|
$
|
-
|
|
$
|
29,811
|
|
|
|
Income tax benefit
for restructuring costs
|
|
-
|
|
|
(1,343)
|
|
|
|
|
|
-
|
|
|
(7,453)
|
|
|
|
Litigation settlement
- Pre-Tax
|
|
-
|
|
|
-
|
|
|
|
|
|
5,325
|
|
|
-
|
|
|
|
Income tax benefit
for litigation settlement
|
|
-
|
|
|
-
|
|
|
|
|
|
(2,130)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-GAAP
adjustments to Net Income
|
$
|
-
|
|
$
|
4,027
|
|
|
|
|
$
|
3,195
|
|
$
|
22,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments to diluted EPS
|
$
|
-
|
|
$
|
0.02
|
|
|
|
|
$
|
0.02
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net
Income attributable to Henry Schein, Inc.
|
$
|
138,031
|
|
$
|
137,740
|
|
0.2
|
%
|
|
$
|
418,029
|
|
$
|
389,920
|
|
7.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
EPS attributable to Henry Schein, Inc.
|
$
|
0.87
|
|
$
|
0.84
|
|
3.6
|
%
|
|
$
|
2.63
|
|
$
|
2.37
|
|
11.0
|
%
|
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.
View original
content:http://www.prnewswire.com/news-releases/henry-schein-reports-record-third-quarter-financial-results-300549885.html
SOURCE Henry Schein, Inc.