EX-99.1 2 exhibit991_4q18.htm PRESS RELEASE DATED FEBRUARY 20, 2019  

 

  

 

   
  release
 

 

 

 
FOR IMMEDIATE RELEASE

 

 

HENRY SCHEIN REPORTS RECORD FOURTH QUARTER AND FULL YEAR 2018

FINANCIAL RESULTS

 

·          Q4 GAAP net income per diluted share of $0.87 versus prior-year GAAP net loss per share of $0.06

·          Q4 non-GAAP diluted EPS of $1.12 versus prior-year non-GAAP diluted EPS of $0.97

·          Introduces 2019 non-GAAP diluted EPS guidance from continuing operations, reflecting 7% to 9% growth over 2018 non-GAAP diluted EPS from continuing operations

·          Provides unaudited financial information for the years 2016, 2017 and 2018, and for each quarter of 2018 on a continuing operations basis

 

MELVILLE, N.Y., February 20, 2019 – Henry Schein, Inc. (Nasdaq: HSIC), the world’s largest provider of health care solutions to office-based dental and medical practitioners, today reported record fourth quarter financial results.

Net sales for the quarter ended December 29, 2018 were $3.4 billion, an increase of 1.7% compared with the fourth quarter of 2017. This consisted of 3.3% growth in local currencies and a 1.6% decline related to foreign currency exchange. In local currencies, internally generated sales increased 2.1% and acquisition growth was 1.2% (see Exhibit A for details of sales growth).

Net income attributable to Henry Schein, Inc. for the fourth quarter of 2018 was $133.0 million, or $0.87 per diluted share, compared with a prior-year net loss of $8.5 million, or $0.06 per share. Non-GAAP net income for the fourth quarter of 2018 was $171.6 million, or $1.12 per diluted share, compared with non-GAAP net income of $152.1 million, or $0.97 per diluted share, for the fourth quarter of 2017. Non-GAAP results for the fourth quarter of 2018 and 2017 exclude certain items noted in Exhibit B, which provides a reconciliation of GAAP net income and diluted EPS to non-GAAP net income and diluted EPS.

“This has been a historic year at Henry Schein as we further positioned the company to advance our 2018 to 2020 strategic plan. This included the creation of our Henry Schein One dental technology business, the spin-off of our animal health business into Covetrus (Nasdaq: CVET) and restructuring efforts, which together are strategically positioning Henry Schein for continued success,” said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein. “We thank our Team Schein Members across the globe for their significant contributions to these important efforts.”

 

 

 

 

Mr. Bergman continued, “As we begin 2019, we are most excited about the future of Henry Schein. We believe the long-term business opportunities remain attractive in the global markets for Dental and Medical offices as well as alternate sites of care. We offer the broadest range of solutions in the markets we serve, including medical and dental supply chain and specialty solutions, as well as dental technology through Henry Schein One. Looking ahead, we are confident that we are well-positioned to deliver continued revenue and profitability growth for Henry Schein’s Dental and Medical businesses with long-term organic sales growth goals of one to two percentage points above underlying market growth rates, supplemented by strategic acquisitions.”

Dental sales of $1.7 billion decreased 0.2%, consisting of 1.8% growth in local currencies and a 2.0% decline related to foreign currency exchange. In local currencies, internally generated sales increased 1.5% and acquisition growth was 0.3%. The 1.5% internal growth in local currencies included 0.6% growth in North America and 2.8% growth internationally.

“Fourth quarter dental consumables internal sales growth in North America of 2.5% in local currencies was impacted by a soft end market, most notably in November and December. We believe we continue to gain market share in the North America dental consumable merchandise market. Dental equipment sales declined by 3.5% in local currencies as we faced a tough prior-year comparison when adjusted internal growth in local currencies exceeded 19%,” commented Mr. Bergman. “Internationally, internal sales growth in local currencies increased 3.4% for dental consumables and increased 1.3% for dental equipment.”

Animal Health sales of $877.6 million decreased 1.4%, consisting of 0.7% growth in local currencies and a 2.1% decline related to foreign currency exchange. In local currencies, internally generated sales decreased 0.6% and acquisition growth was 1.3%. The decline of 0.6% internal sales in local currencies included a decline of 1.9% in North America and 0.8% growth internationally. On a normalized basis, adjusting for manufacturer switches between direct and agency sales, internal sales growth in local currencies in North America was 2.1%.

“The completed spin-off of our Animal Health business into a new publicly traded company, Covetrus, has created a significant global technology-enabled provider of products and services for the companion animal health market. Going forward, we believe these customers will benefit from a unique platform of enhanced insight, multi-channel client engagement and integrated services,” commented Mr. Bergman.

Medical sales of $684.8 million increased 7.5% on an as-reported basis and also for internally generated sales in local currencies. Acquisition growth of 0.1% was offset by a decline of 0.1% in foreign currency exchange.

“We were pleased with robust growth in our Medical sales for the quarter. The North America Medical market continues to experience a rapid evolution as health care providers pursue the best ways to deliver services at lower costs and with better outcomes,” remarked Mr. Bergman. “Henry Schein is benefiting from the shift in care from high-cost acute settings to lower-cost sub-acute care sites, such as the physician offices, urgent care sites and ambulatory care centers that we serve. Our track record in serving large group networks with supply chain, education, technology and support services continues to be a solid competitive advantage.”

Technology and Value-Added Services sales of $139.1 million increased 21.4%, consisting of 22.1% growth in local currencies and a 0.7% decline related to foreign currency exchange. In local currencies, internally generated sales increased 0.5% and acquisition growth was 21.6%.

 

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“Growth in Technology and Value-Added Services was primarily driven by the formation of Henry Schein One. North America internal sales growth in local currencies was flat, reflecting lower sales from technology support and financing services revenue associated with the decline in dental equipment sales. As we look ahead to 2019, we believe our Henry Schein One dental software solutions will drive growth for this business group as practices leverage tools to enhance practice efficiency and patient communication. International Technology and Value-Added Services internal sales increased 2.8% in local currencies,” said Mr. Bergman.

 

Stock Repurchase Plan

The Company repurchased approximately 997,000 shares of its common stock during the fourth quarter at an average price of $86.14 per share, or approximately $86 million. The impact of the repurchase of shares on fourth quarter 2018 diluted EPS was immaterial. On December 13, 2018, Henry Schein announced that its Board of Directors authorized the repurchase of up to $400 million of shares of the Company’s common stock. At fiscal year-end, Henry Schein had approximately $400 million authorized and available for future stock repurchases.

 

Full Year 2018 Results

Net sales for the full year ended December 29, 2018 were $13.2 billion, an increase of 5.9% compared with 2017. This consisted of 5.2% growth in local currencies and an increase of 0.7% related to foreign currency exchange. In local currencies, internally generated sales increased 3.4% and acquisition growth was 1.8% (see Exhibit A for details of sales growth).

Net income attributable to Henry Schein, Inc. for 2018 was $535.9 million, or $3.49 per diluted share, an increase of 31.9% and 35.8%, respectively, compared with 2017. On a non-GAAP basis, net income attributable to Henry Schein, Inc. for 2018 was $635.3 million, or $4.13 per diluted share, an increase of 11.4% and 14.7%, respectively, compared with 2017 on a non-GAAP basis. Non-GAAP results for 2018 and 2017 exclude certain items noted in Exhibit B, which provides a reconciliation of GAAP net income and diluted EPS to non-GAAP net income and diluted EPS.

 

Restructuring Program

Henry Schein previously disclosed a comprehensive restructuring initiative designed to increase profitability by improving business efficiencies, reducing redundancies and maximizing the Company's infrastructure.

The Company recorded a pretax restructuring charge in the fourth quarter of 2018 of $35.4 million, or $0.17 per diluted share. The charge for the full year was $62.9 million on a pretax basis, or $0.31 per diluted share. These charges primarily include severance pay, facility closing costs, and outside professional and consulting fees directly related to the restructuring. Henry Schein is extending the restructuring initiative into the first half of 2019 as it identifies further cost saving opportunities.

 

 

 

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2019 EPS Guidance

Henry Schein today introduced 2019 financial guidance. At this time the Company is not providing GAAP guidance as it is unable to provide an accurate estimate of costs related to restructuring and the Animal Health spin-off on full-year 2019 financial results. Guidance is as follows:

 

·          2019 non-GAAP diluted EPS from continuing operations attributable to Henry Schein, Inc. is expected to be $3.38 to $3.46, reflecting growth of 7% to 9% compared with 2018 non-GAAP diluted EPS from continuing operations of $3.17. The Company’s Animal Health business was spun off to shareholders as of February 7, 2019, and that business will be classified as a discontinued operation for all current and prior periods presented.

 

·          Guidance for 2019 non-GAAP 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.

 

The Company has provided guidance for 2019 diluted EPS on a non-GAAP basis as noted above. A reconciliation to the Company’s projected 2019 diluted EPS prepared on a GAAP basis is not provided because the Company is unable to provide such reconciliation for an estimate of restructuring and Animal Health spin-off related costs without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact, and the periods in which the non-GAAP adjustments may be recognized.

            The Company’s 2019 diluted EPS prepared on a GAAP basis will include the impact of such items as restructuring charges, spin-off expenses, any litigation settlement expenses, and the tax effect of all such items. 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.

                 To facilitate comparisons against past results, Henry Schein is providing unaudited financial information in Exhibit C for the years 2016, 2017 and 2018, and in Exhibit D for each quarter of 2018 that provide unaudited preliminary estimates of our results of operations (GAAP and non-GAAP) on a continuing operations basis for the periods presented.

 

 

 

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Fourth Quarter and Full Year 2018 Conference Call Webcast

The Company will hold a conference call to discuss fourth quarter and full year 2018 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 a solutions company for health care professionals powered by a network of people and technology.

With more than 18,000 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 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® and the Nasdaq 100® indexes, Henry Schein is headquartered in Melville, N.Y., and has operations or affiliates in 31 countries. The Company's sales from continuing operations reached $9.4 billion in 2018, and have grown at a compound annual rate of approximately 13% 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.

 

 

 

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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, dispositions and joint ventures, including the failure to achieve anticipated synergies/benefits; financial and tax risks associated with acquisitions, dispositions and joint ventures; litigation risks; new or unanticipated litigation developments; the dependence on our continued product development, technical support and successful marketing in the technology segment; our dependence on third parties for certain technologically advanced components; 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.

 

 

CONTACTS:   Investors 

Steven Paladino

Executive Vice President and Chief Financial Officer

steven.paladino@henryschein.com

(631) 843-5500

 

Carolynne Borders

Vice President, Investor Relations

carolynne.borders@henryschein.com

(631) 390-8105

             

Media

Ann Marie Gothard

Vice President, Corporate Media Relations

annmarie.gothard@henryschein.com

(631) 390-8169

 

(TABLES TO FOLLOW)

  

 

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HENRY SCHEIN, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Years Ended

 

 

 

 

 

December 29,

 

December 30,

 

December 29,

 

December 30,

 

 

 

 

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

3,375,202

 

$

3,318,054

 

$

13,201,995

 

$

12,461,543

Cost of sales

 

 

2,465,342

 

 

2,417,098

 

 

9,606,911

 

 

9,062,440

 

 

Gross profit

 

 

909,860

 

 

900,956

 

 

3,595,084

 

 

3,399,103

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

674,738

 

 

659,765

 

 

2,701,876

 

 

2,534,409

 

Litigation settlements

 

 

-

 

 

-

 

 

38,488

 

 

5,325

 

Transaction costs related to Animal Health spin-off

 

 

20,086

 

 

-

 

 

38,756

 

 

-

 

Restructuring costs

 

 

35,401

 

 

-

 

 

62,912

 

 

-

 

 

Operating income

 

 

179,635

 

 

241,191

 

 

753,052

 

 

859,369

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

5,807

 

 

4,349

 

 

21,236

 

 

17,553

 

Interest expense

 

 

(22,320)

 

 

(16,598)

 

 

(78,786)

 

 

(53,654)

 

Other, net

 

 

648

 

 

(909)

 

 

(154)

 

 

(420)

 

 

Income before taxes and equity in earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

of affiliates

 

 

163,770

 

 

228,033

 

 

695,348

 

 

822,848

Income taxes

 

 

(31,408)

 

 

(206,230)

 

 

(155,492)

 

 

(362,506)

Equity in earnings of affiliates

 

 

6,648

 

 

4,343

 

 

22,270

 

 

16,587

Loss on sale of equity investment

 

 

-

 

 

(17,636)

 

 

-

 

 

(17,636)

Net income

 

 

139,010

 

 

8,510

 

 

562,126

 

 

459,293

 

Less: Net income attributable to noncontrolling interests

 

 

(6,037)

 

 

(17,045)

 

 

(26,245)

 

 

(52,994)

Net income (loss) attributable to Henry Schein, Inc.

 

$

132,973

 

$

(8,535)

 

$

535,881

 

$

406,299

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share attributable to Henry Schein, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.88

 

$

(0.06)

 

$

3.51

 

$

2.59

 

Diluted

 

$

0.87

 

$

(0.06)

 

$

3.49

 

$

2.57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

151,757

 

 

155,104

 

 

152,656

 

 

156,787

 

Diluted

 

 

152,991

 

 

155,104

 

 

153,707

 

 

158,208

 

Note: Certain prior period amounts have been reclassified to conform to the current period presentation.

 

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HENRY SCHEIN, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 29,

 

December 30,

 

 

 

 

 

2018

 

2017

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

80,209

 

$

174,658

 

Accounts receivable, net of reserves of $60,533 and $53,832

 

 

1,603,711

 

 

1,522,807

 

Inventories, net

 

 

1,970,742

 

 

1,933,803

 

Prepaid expenses and other

 

 

520,558

 

 

454,752

 

 

 

Total current assets

 

 

4,175,220

 

 

4,086,020

Property and equipment, net

 

 

382,398

 

 

375,001

Goodwill

 

 

2,820,295

 

 

2,301,331

Other intangibles, net

 

 

584,244

 

 

669,641

Investments and other

 

 

538,370

 

 

432,002

 

 

 

Total assets

 

$

8,500,527

 

$

7,863,995

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

1,227,209

 

$

1,153,012

 

Bank credit lines

 

 

951,458

 

 

741,653

 

Current maturities of long-term debt

 

 

8,955

 

 

16,659

 

Accrued expenses:

 

 

 

 

 

 

 

 

Payroll and related

 

 

279,764

 

 

272,998

 

 

Taxes

 

 

172,165

 

 

188,873

 

 

Other

 

 

579,276

 

 

455,780

 

 

 

Total current liabilities

 

 

3,218,827

 

 

2,828,975

Long-term debt

 

 

1,003,873

 

 

907,756

Deferred income taxes

 

 

31,570

 

 

50,431

Other liabilities

 

 

392,313

 

 

420,285

 

 

 

Total liabilities

 

 

4,646,583

 

 

4,207,447

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 

312,156

 

 

832,138

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

   Preferred stock, $.01 par value, 1,000,000 shares authorized,

 

 

 

 

 

 

 

 

none outstanding

 

 

-

 

 

-

 

Common stock, $.01 par value, 480,000,000 shares authorized,

 

 

 

 

 

 

 

 

151,401,668 outstanding on December 29, 2018 and 240,000,000 shares

 

 

 

 

 

 

 

 

authorized, 153,690,146 outstanding on December 30, 2017

 

 

1,514

 

 

1,537

 

Retained earnings

 

 

3,208,589

 

 

2,940,029

 

Accumulated other comprehensive loss

 

 

(248,771)

 

 

(130,067)

 

 

Total Henry Schein, Inc. stockholders' equity

 

 

2,961,332

 

 

2,811,499

 

Noncontrolling interests

 

 

580,456

 

 

12,911

 

 

 

Total stockholders' equity

 

 

3,541,788

 

 

2,824,410

 

 

Total liabilities, redeemable noncontrolling interests and stockholders' equity

 

$

8,500,527

 

$

7,863,995

 

Note: Certain prior period amounts have been reclassified to conform to the current period presentation.

 

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HENRY SCHEIN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Years Ended

 

 

 

 

 

 

December 29,

 

December 30,

 

December 29,

 

December 30,

 

 

 

 

 

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

139,010

 

$

8,510

 

$

562,126

 

$

459,293

 

Adjustments to reconcile net income to net cash

 

 

 

 

 

 

 

 

 

 

 

 

 

 

provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

52,471

 

 

51,794

 

 

207,560

 

 

193,072

 

 

 

Loss on sale of equity investment

 

 

-

 

 

17,636

 

 

-

 

 

17,636

 

 

 

Stock-based compensation expense

 

 

2,005

 

 

10,307

 

 

36,240

 

 

42,294

 

 

 

Provision for losses on trade and other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

accounts receivable

 

 

7,235

 

 

2,389

 

 

15,105

 

 

9,370

 

 

 

Provision for (benefit from) deferred income taxes

 

 

(34,931)

 

 

(8,115)

 

 

(41,213)

 

 

485

 

 

 

Equity in earnings of affiliates

 

 

(6,648)

 

 

(4,343)

 

 

(22,270)

 

 

(16,587)

 

 

 

Distributions from equity affiliates

 

 

5,777

 

 

6,331

 

 

21,311

 

 

23,157

 

 

 

Changes in unrecognized tax benefits

 

 

(3,503)

 

 

4,335

 

 

(650)

 

 

(2,318)

 

 

 

Provision for (benefit from) transition tax

 

 

(10,000)

 

 

140,000

 

 

(10,000)

 

 

140,000

 

 

 

Other

 

 

(1,397)

 

 

4,890

 

 

(807)

 

 

10,921

 

 

 

Changes in operating assets and liabilities,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  net of acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

8,080

 

 

66,311

 

 

(147,499)

 

 

(160,266)

 

 

 

 

Inventories

 

 

(49,484)

 

 

(202,395)

 

 

(84,784)

 

 

(175,059)

 

 

 

 

Other current assets

 

 

(10,285)

 

 

(14,926)

 

 

(92,059)

 

 

(85,759)

 

 

 

 

Accounts payable and accrued expenses

 

 

195,622

 

 

155,290

 

 

241,646

 

 

89,276

Net cash provided by operating activities

 

 

293,952

 

 

238,014

 

 

684,706

 

 

545,515

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of fixed assets

 

 

(28,811)

 

 

(26,186)

 

 

(90,637)

 

 

(81,501)

 

Payments related to equity investments and business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

acquisitions, net of cash acquired

 

 

(14,245)

 

 

(29,887)

 

 

(61,570)

 

 

(288,673)

 

Proceeds from sale of equity investment

 

 

1,000

 

 

34,048

 

 

1,000

 

 

34,048

 

Repayments from (borrowings for) loan to affiliate

 

 

(1,500)

 

 

1,500

 

 

(25,700)

 

 

6,700

 

Other

 

 

(3,041)

 

 

(956)

 

 

(16,047)

 

 

(12,850)

Net cash used in investing activities

 

 

(46,597)

 

 

(21,481)

 

 

(192,954)

 

 

(342,276)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from (repayments of) bank borrowings

 

 

(193,357)

 

 

109,391

 

 

210,741

 

 

302,941

 

Proceeds from issuance of long-term debt

 

 

-

 

 

-

 

 

115,000

 

 

200,440

 

Debt issuance costs

 

 

(106)

 

 

(219)

 

 

(501)

 

 

(1,990)

 

Principal payments for long-term debt

 

 

(421)

 

 

(519)

 

 

(28,042)

 

 

(60,050)

 

Proceeds from issuance of stock upon exercise

 

 

 

 

 

 

 

 

 

 

 

 

 

 

of stock options

 

 

-

 

 

325

 

 

3,076

 

 

5,266

 

Payments for repurchases of common stock

 

 

(85,894)

 

 

(224,995)

 

 

(200,000)

 

 

(450,000)

 

Payments for taxes related to shares withheld for

 

 

 

 

 

 

 

 

 

 

 

 

 

 

employee taxes

 

 

(120)

 

 

(111)

 

 

(18,023)

 

 

(44,832)

 

Distributions to noncontrolling stockholders

 

 

(1,748)

 

 

(5,213)

 

 

(17,515)

 

 

(29,134)

 

Acquisitions of noncontrolling interests in subsidiaries

 

 

(3,614)

 

 

(7,278)

 

 

(668,512)

 

 

(35,192)

Net cash used in financing activities

 

 

(285,260)

 

 

(128,619)

 

 

(603,776)

 

 

(112,551)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and

 

 

 

 

 

 

 

 

 

 

 

 

 

cash equivalents

 

 

(1,626)

 

 

6,865

 

 

17,575

 

 

21,589

Net change in cash and cash equivalents

 

 

(39,531)

 

 

94,779

 

 

(94,449)

 

 

112,277

Cash and cash equivalents, beginning of period

 

 

119,740

 

 

79,879

 

 

174,658

 

 

62,381

Cash and cash equivalents, end of period

 

$

80,209

 

$

174,658

 

$

80,209

 

$

174,658

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Certain prior period amounts have been reclassified to conform to the current period presentation.

 

 

 

 

 

-9- 

more 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit A - QTD Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Henry Schein, Inc.

2018 Fourth Quarter

Sales Summary

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4 2018 over Q4 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global

Q4 2018

 

Q4 2017

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Dental

$

1,673,733

 

$

1,676,758

 

-0.2%

 

-2.0%

 

1.8%

 

0.3%

 

1.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Animal Health

 

877,608

 

 

889,785

 

-1.4%

 

-2.1%

 

0.7%

 

1.3%

 

-0.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Medical

 

684,799

 

 

636,920

 

7.5%

 

-0.1%

 

7.6%

 

0.1%

 

7.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Health Care Distribution

 

3,236,140

 

 

3,203,463

 

1.0%

 

-1.6%

 

2.6%

 

0.5%

 

2.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

139,062

 

 

114,591

 

21.4%

 

-0.7%

 

22.1%

 

21.6%

 

0.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Global

$

3,375,202

 

$

3,318,054

 

1.7%

 

-1.6%

 

3.3%

 

1.2%

 

2.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

Q4 2018

 

Q4 2017

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Dental

$

1,036,056

 

$

1,030,559

 

0.5%

 

-0.4%

 

0.9%

 

0.3%

 

0.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Animal Health

 

440,043

 

 

448,675

 

-1.9%

 

0.0%

 

-1.9%

 

0.0%

 

-1.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Medical

 

665,752

 

 

617,697

 

7.8%

 

0.0%

 

7.8%

 

0.1%

 

7.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Health Care Distribution

 

2,141,851

 

 

2,096,931

 

2.1%

 

-0.2%

 

2.3%

 

0.1%

 

2.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

118,827

 

 

94,165

 

26.2%

 

-0.1%

 

26.3%

 

26.3%

 

0.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total North America

$

2,260,678

 

$

2,191,096

 

3.2%

 

-0.1%

 

3.3%

 

1.2%

 

2.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

Q4 2018

 

Q4 2017

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Dental

$

637,677

 

$

646,199

 

-1.3%

 

-4.5%

 

3.2%

 

0.4%

 

2.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Animal Health

 

437,565

 

 

441,110

 

-0.8%

 

-4.2%

 

3.4%

 

2.6%

 

0.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Medical

 

19,047

 

 

19,223

 

-0.9%

 

-3.0%

 

2.1%

 

0.0%

 

2.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Health Care Distribution

 

1,094,289

 

 

1,106,532

 

-1.1%

 

-4.3%

 

3.2%

 

1.2%

 

2.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

20,235

 

 

20,426

 

-0.9%

 

-3.7%

 

2.8%

 

0.0%

 

2.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total International

$

1,114,524

 

$

1,126,958

 

-1.1%

 

-4.3%

 

3.2%

 

1.2%

 

2.0%

 

-10- 

more 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit A - YTD Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Henry Schein, Inc.

 

Full Year 2018

 

Sales Summary

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Full Year 2018 over Full Year 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global

Full Year 2018

 

Full Year 2017

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Dental

$

6,348,945

 

$

6,048,813

 

5.0%

 

0.8%

 

4.2%

 

1.2%

 

3.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Animal Health

 

3,682,639

 

 

3,476,635

 

5.9%

 

1.3%

 

4.6%

 

2.5%

 

2.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Medical

 

2,661,166

 

 

2,497,994

 

6.5%

 

0.1%

 

6.4%

 

0.1%

 

6.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Health Care Distribution

 

12,692,750

 

 

12,023,442

 

5.6%

 

0.8%

 

4.8%

 

1.4%

 

3.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

509,245

 

 

438,101

 

16.2%

 

0.4%

 

15.8%

 

12.3%

 

3.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Global

$

13,201,995

 

$

12,461,543

 

5.9%

 

0.7%

 

5.2%

 

1.8%

 

3.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

Full Year 2018

 

Full Year 2017

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Dental

$

3,867,118

 

$

3,700,364

 

4.5%

 

0.0%

 

4.5%

 

1.2%

 

3.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Animal Health

 

1,865,316

 

 

1,792,896

 

4.0%

 

0.0%

 

4.0%

 

2.7%

 

1.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Medical

 

2,581,696

 

 

2,423,893

 

6.5%

 

0.0%

 

6.5%

 

0.1%

 

6.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Health Care Distribution

 

8,314,130

 

 

7,917,153

 

5.0%

 

0.0%

 

5.0%

 

1.2%

 

3.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

426,653

 

 

363,391

 

17.4%

 

0.0%

 

17.4%

 

14.6%

 

2.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total North America

$

8,740,783

 

$

8,280,544

 

5.6%

 

0.1%

 

5.5%

 

1.8%

 

3.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

Full Year 2018

 

Full Year 2017

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Dental

$

2,481,827

 

$

2,348,449

 

5.7%

 

1.9%

 

3.8%

 

1.2%

 

2.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Animal Health

 

1,817,323

 

 

1,683,739

 

7.9%

 

2.6%

 

5.3%

 

2.4%

 

2.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Medical

 

79,470

 

 

74,101

 

7.2%

 

4.9%

 

2.3%

 

0.0%

 

2.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Health Care Distribution

 

4,378,620

 

 

4,106,289

 

6.6%

 

2.2%

 

4.4%

 

1.7%

 

2.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

82,592

 

 

74,710

 

10.6%

 

2.8%

 

7.8%

 

0.7%

 

7.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total International

$

4,461,212

 

$

4,180,999

 

6.7%

 

2.3%

 

4.4%

 

1.6%

 

2.8%

 

 

-11- 

more 

 

Exhibit B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Henry Schein, Inc.

2018 Fourth Quarter and Full Year 2018

Reconciliation of GAAP results of net income (loss) attributable to Henry Schein, Inc. to

non-GAAP results of net income attributable to Henry Schein, Inc.

(in thousands, except per share data)

(unaudited)

 

 

Fourth Quarter

 

 

 

Full Year

 

 

 

2018

 

 

2017

 

% Growth

 

 

 

2018

 

 

2017

 

% Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (loss) attributable to Henry Schein, Inc.

$

132,973

 

$

(8,535)

 

1,658.0

%

 

$

535,881

 

$

406,299

 

31.9

%

Diluted earnings (loss) attributable to Henry Schein, Inc.

$

0.87

 

$

(0.06)

 

1,550.0

%

 

$

3.49

 

$

2.57

 

35.8

%

Non-GAAP Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring costs - Pre-tax (1)

$

35,401

 

$

 

 

 

 

 

$

62,912

 

$

 

 

 

 

Income tax benefit for restructuring costs (1)

 

(8,850)

 

 

 

 

 

 

 

 

(15,728)

 

 

 

 

 

 

Litigation settlements - Pre-Tax (2)

 

 

 

 

 

 

 

 

 

 

38,488

 

 

5,325

 

 

 

Income tax benefit for litigation settlements (2)

 

 

 

 

 

 

 

 

 

 

(9,622)

 

 

(2,130)

 

 

 

Transaction costs related to Animal Health spin-off (3)

 

20,086

 

 

 

 

 

 

 

 

38,756

 

 

 

 

 

 

Income tax benefit for Animal Health transaction costs (3)

 

(502)

 

 

 

 

 

 

 

 

(1,823)

 

 

 

 

 

 

One time tax on reorganization related to HS One (4)

 

 

 

 

 

 

 

 

 

 

3,914

 

 

 

 

 

 

Transition tax on repatriated foreign earnings (5)

 

 

 

 

140,000

 

 

 

 

 

(10,000)

 

 

140,000

 

 

 

Loss on sale of equity investment (6)

 

 

 

 

17,636

 

 

 

 

 

 

 

 

17,636

 

 

 

Deferred tax adjustment (7)

 

 

 

 

2,952

 

 

 

 

 

 

 

 

2,952

 

 

 

International legal entity reorganization (8)

 

(10,649)

 

 

 

 

 

 

 

 

(10,649)

 

 

 

 

 

 

One-time tax charge related to the Animal Health spin-off (9)

 

3,135

 

 

 

 

 

 

 

 

3,135

 

 

 

 

 

 

Total non-GAAP adjustments to Net Income

$

38,621

 

$

160,588

 

 

 

 

$

99,383

 

$

163,783

 

 

 

Non-GAAP adjustments to diluted EPS

$

0.25

 

$

1.03

 

 

 

 

$

0.65

 

$

1.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Net Income attributable to Henry Schein, Inc.

$

171,594

 

$

152,053

 

12.9

%

 

$

635,264

 

$

570,082

 

11.4

%

Non-GAAP diluted EPS attributable to Henry Schein, Inc.

$

1.12

 

$

0.97

 

15.5

%

 

$

4.13

 

$

3.60

 

14.7

%

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 Q4 2018 restructuring costs of $35,401, net of $8,850 tax benefit, resulting in an after-tax effect of $26,551 and full year 2018 restructuring costs of $62,912, net of $15,728 tax benefit, resulting in an after-tax effect of $47,184.

 

(2)   Represents a Q3 2018 pre-tax charge of $38,488 related to a litigation settlement, net of a tax benefit of $9,622, resulting in a net after-tax charge of $28,866 and a Q1 2017 pre-tax charge of $5,325 related to a litigation settlement, net of a tax benefit of $2,130, resulting in a net after-tax charge of $3,195.

 

(3)   Represents Q4 2018 transaction costs associated with the spin-off of our Animal Health business of $20,086, net of $502 tax benefit, resulting in an after-tax effect of $19,584. For the full year 2018, such transaction costs are $38,756, net of $1,823 tax benefit, resulting in an after-tax effect of $36,933.

 

(4)   Represents a Q3 2018 one-time-charge of $3,914 to income tax expense as a result of a reorganization of legal entities related to forming Henry Schein One.

 

(5)   Represents a Q3 2018 net credit of $10,000 related to a change in the estimate of the transition tax on deemed repatriated foreign earnings and a Q4 2017 charge of $140,000 related to the original estimate of the transition tax on deemed repatriated foreign earnings.

 

(6)   Represents a Q4 2017 loss on divestiture of an equity ownership in E4D.  There was no tax benefit recognized related to this loss.

 

(7)   Represents Q4 2017 one-time charge of $2,952 to income tax expense for the revaluation of deferred taxes associated with U.S. tax reform legislation.

 

(8)   Represents a $10,649 effect on income resulting from an income tax credit of $13,852, net of noncontrolling interest of $3,203, in Q4 2018 originating from a legal entity reorganization outside the United States.

 

(9)   Represents a Q4 2018 one-time charge of $3,135 to income tax expense as a result of a reorganization of legal entities completed in preparation for the Animal Health spin-off.

 

 

-12- 

more 

 

Exhibit C

 

 

 

 

 

 

 

 

 

 

 

 

 

Henry Schein, Inc. (Continuing Operations)

Consolidated Statement of Income (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Year ended

 

 

 

 

 

 

 

 

 

Currency: $000

 

December 29, 2018

 

December 30, 2017

 

December 31, 2016

Net sales

$

9,417,602

$

8,883,438

$

8,218,886

Cost of sales

 

(6,506,857)

 

(6,136,776)

 

(5,612,979)

Gross profit

 

2,910,745

 

2,746,662

 

2,605,907

Operating expenses:

 

 

 

 

 

 

Selling, general and administrative

 

(2,217,272)

 

(2,071,575)

 

(1,975,444)

Litigation settlement costs

 

(38,488)

 

(5,325)

 

-

Restructuring costs

 

(54,367)

 

-

 

(38,622)

Operating income

 

600,618

 

669,762

 

591,841

Other income (expense):

 

 

 

 

 

 

Interest Income

 

15,489

 

12,438

 

8,360

Interest Expense

 

(76,016)

 

(51,067)

 

(29,936)

Other, net

 

(3,259)

 

(1,339)

 

2,871

Income before taxes

 

536,832

 

629,794

 

573,136

Income taxes

 

(107,431)

 

(308,974)

 

(169,311)

Equity in earnings of affiliates

 

21,036

 

(2,344)

 

17,110

Net income

 

450,437

 

318,476

 

420,935

Net income attributable to noncontrolling interest

 

(19,723)

 

(25,304)

 

(19,651)

Net Income Attributable to Continuing Operations -- GAAP

$

430,714

$

293,172

$

401,284

 

 

 

 

 

 

 

Shares outstanding (000s)

 

153,707

 

158,208

 

163,724

 

 

 

 

 

 

 

EPS Attributable to Continuing Operations -- GAAP

$

2.80

$

1.85

$

2.45

 

 

 

 

 

 

 

Non-GAAP adjustments attributable to Continuing Operations:

 

 

 

 

 

 

Restructuring costs (net of $13.6 million tax and $9.7 million tax for FY18 and FY16, respectively)

 

40,775

 

 

 

28,967

Litigation settlements (net of $9.6 million tax and $2.1 million tax for FY18 and FY17, respectively)

 

28,866

 

3,195

 

 

One-time tax for Henry Schein One legal entity reorganization

 

3,914

 

 

 

 

Change in estimate of transition tax on repatriated foreign earnings

 

(10,000)

 

140,000

 

 

Loss on sale of equity investment

 

 

 

17,636

 

 

Deferred tax adjustment resulting from Tax Act

 

 

 

2,952

 

 

Tax credit (net of noncontrolling interest) from international legal entity reorganization

 

(10,649)

 

 

 

 

One-time tax for Animal Health legal entity reorganization

 

3,135

 

 

 

 

 

 

 

 

 

 

 

Net Income Attributable to Continuing Operations -- Non-GAAP

$

486,755

$

456,955

$

430,251

 

 

 

 

 

 

 

EPS Attributable to Continuing Operations -- Non-GAAP

$

3.17

$

2.89

$

2.63

 

-13- 

more 

 

Exhibit D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Henry Schein, Inc. (Continuing Operations)

Consolidated Statement of Income (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended

 

Year ended

 

 

 

 

 

 

 

 

 

 

 

 

Currency: $000

 

March 31, 2018

 

June 30, 2018

 

September 29, 2018

 

December 29, 2018

 

 

December 29, 2018

Net sales

$

2,273,451

$

2,316,031

$

2,355,564

$

2,472,556

 

$

9,417,602

Cost of sales

 

(1,554,320)

 

(1,597,704)

 

(1,633,206)

 

(1,721,627)

 

 

(6,506,857)

Gross profit

 

719,131

 

718,327

 

722,358

 

750,929

 

 

2,910,745

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

(554,213)

 

(552,723)

 

(552,051)

 

(558,285)

 

 

(2,217,272)

Litigation settlement costs

 

-

 

-

 

(38,488)

 

-

 

 

(38,488)

Restructuring costs

 

(2,675)

 

(8,497)

 

(8,551)

 

(34,644)

 

 

(54,367)

Operating income

 

162,243

 

157,107

 

123,268

 

158,000

 

 

600,618

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

3,453

 

3,725

 

3,928

 

4,383

 

 

15,489

Interest Expense

 

(16,904)

 

(17,235)

 

(20,430)

 

(21,447)

 

 

(76,016)

Other, net

 

(751)

 

(434)

 

(589)

 

(1,485)

 

 

(3,259)

Income before taxes

 

148,041

 

143,163

 

106,177

 

139,451

 

 

536,832

Income taxes

 

(36,142)

 

(33,880)

 

(16,634)

 

(20,775)

 

 

(107,431)

Equity in earnings of affiliates

 

2,819

 

5,312

 

6,698

 

6,207

 

 

21,036

Net income

 

114,718

 

114,595

 

96,241

 

124,883

 

 

450,437

Net income attributable to noncontrolling interest

 

(3,183)

 

(3,955)

 

(5,477)

 

(7,108)

 

 

(19,723)

Net Income Attributable to Continuing Operations -- GAAP

$

111,535

$

110,640

$

90,764

$

117,775

 

$

430,714

 

 

 

 

 

 

 

 

 

 

 

 

Shares outstanding (000s)

 

154,130

 

154,189

 

153,614

 

152,991

 

 

153,707

 

 

 

 

 

 

 

 

 

 

 

 

EPS Attributable to Continuing Operations -- GAAP

$

0.72

$

0.72

$

0.59

$

0.77

 

$

2.80

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments attributable to Continuing Operations:

 

 

 

 

 

 

 

 

 

 

 

Restructuring costs, net of tax

 

2,033

 

6,373

 

6,413

 

25,956

 

 

40,775

Litigation settlements, net of tax

 

 

 

 

 

28,866

 

 

 

 

28,866

One-time tax for Henry Schein One legal entity reorganization

 

 

 

 

 

3,914

 

 

 

 

3,914

Change in estimate of transition tax on repatriated foreign earnings

 

 

 

 

 

(10,000)

 

 

 

 

(10,000)

Tax credit (net of noncontrolling interest) from international legal entity reorganization

 

 

 

 

 

 

 

(10,649)

 

 

(10,649)

One-time tax for Animal Health legal entity reorganization

 

 

 

 

 

 

 

3,135

 

 

3,135

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Attributable to Continuing Operations -- Non-GAAP

$

113,568

$

117,013

$

119,957

$

136,217

 

$

486,755

 

 

 

 

 

 

 

 

 

 

 

 

EPS Attributable to Continuing Operations -- Non-GAAP

$

0.74

$

0.76

$

0.78

$

0.89

 

$

3.17

 

 

-14-

###