8-K
HENRY SCHEIN INC (HSIC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 2, 2022
Henry Schein, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
0-27078
(Commission
File Number)
11-3136595
(IRS Employer
Identification No.)
135 Duryea Road
,
Melville
,
New York
(Address of principal executive offices)
11747
(Zip Code)
Registrant’s telephone number, including area code: (
631
)
843-5500
(Former name or former address, if changed since last
report.)
Check the appropriate box
below if the
Form 8-K filing is intended to simultaneously satisfy
the filing obligation of
the registrant under any
of the following provisions:
☐
Written communications pursuant
to Rule 425
under the Securities
Act (17 CFR 230.425)
☐
Soliciting material pursuant to
Rule 14a-12 under
the Exchange Act (17
CFR 240.14a-12)
☐
Pre-commencement communications pursuant to
Rule 14d-2(b) under
the Exchange Act
(17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to
Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to
Section 12(b) of the
Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Common Stock, par value $.01 per share
HSIC
The
Nasdaq
Global Select Market
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act
of 1933 (§230.405 of this chapter) or Rule 12b-2
of the Securities Exchange Act of 1934 (§240.12b-2 of
this chapter).
Emerging growth company
☐
If an
emerging
growth
company,
indicate by
check mark
if the
registrant has
elected not
to use
the
extended transition
period
for complying
with any
new
or
revised
financial accounting standards provided pursuant to Section 13(a) of
the Exchange Act.
☐
Item 2.02.
Results of Operations and Financial Condition.
On August 2, 2022, Henry Schein, Inc. issued a press release reporting the financial results for the three
and six months ended June 25, 2022.
The full text of the press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
The information in this Item 2.02 and the press release attached as Exhibit 99.1 are considered furnished to
the Securities and Exchange Commission and are not deemed filed for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended.
Item 9.01.
Financial Statements and Exhibits
(a)
Not applicable.
(b)
Not applicable.
(c)
Not applicable.
(d)
Exhibit 99.1 – Press Release dated August 2, 2022.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
HENRY SCHEIN, INC.
By:
/s/ Ronald N. South
Ronald N. South
Senior Vice President and
Chief Financial Officer
(Authorized Signatory and Principal
Financial and Accounting Officer)
August 2, 2022
EXHIBIT INDEX
Exhibit No.
Description
Press Release dated August 2, 2022.
exhibit991
-1-
more
FOR IMMEDIATE RELEASE
HENRY SCHEIN REPORTS RECORD SECOND-QUARTER 2022 FINANCIAL RESULTS
●
Second-quarter net sales of $3.0 billion up 2.1% compared with second-quarter
2021;
internal sales up 6.7%
in local currencies when excluding sales of PPE and other COVID-19 related products
●
GAAP diluted EPS of $1.16 compared with second-quarter 2021 GAAP diluted EPS
of $1.10 and second-
quarter 2021 non-GAAP diluted EPS of $1.11
●
Affirms full-year 2022 GAAP diluted EPS guidance range of $4.75
to $4.91, reflecting growth of 7% to 10%
over full-year 2021 GAAP diluted EPS and growth of 5% to 9% over full-year 2021 non-GAAP
diluted EPS
MELVILLE, N.Y.,
August 2, 2022 –
Henry Schein, Inc. (Nasdaq: HSIC), the world’s largest provider of health care
solutions to office-based dental and medical practitioners, today reported record second-quarter
financial results.
“We are pleased to report record second-quarter financial results that reflect good underlying momentum in the
business and execution of our strategy,” said Stanley M. Bergman, Chairman
of the Board and Chief Executive Officer of
Henry Schein. “Our solid operational execution this quarter and our results demonstrate
the strength of our business.
While
we are maintaining our full-year 2022 diluted EPS guidance range of $4.75
to $4.91,
we are adjusting our expectations for
full-year sales growth to reflect changes including a continued strengthening
of the U.S. dollar and declining demand for
COVID-19 test kits.
“Our Global Dental business once again was driven by strong equipment
sales as dentists continued to invest in their
practices. Consumable merchandise internal sales growth in local
currencies excluding personal protective equipment (PPE)
and COVID-19 related products was impacted by an increase in patient
appointment cancellations and staff shortages, which
we believe were related to COVID-19 infections.
“Our Global Medical business had another excellent quarter with double-digit
internal sales growth in local
currencies when excluding PPE and COVID-19 related products. During
the second quarter,
we had strong sales of point-of-
care diagnostic tests including flu test kits, as well as generic pharmaceuticals
and equipment. Patient traffic was bolstered by
a high number of visits for seasonal influenza.
“We are pleased with the good growth in our Technology & Value
-Added Services business where,
once again,
North America and International sales increased by double-digit percentages. Henry
Schein One sales growth accelerated
-2-
more
compared with prior-year growth, and we are seeing healthy demand
from our national DSO accounts for these solutions,”
concluded Mr. Bergman.
Second-Quarter Financial Results
●
Total
net sales
for the quarter ended June 25, 2022,
were $3.0 billion, up 2.1% compared with the second quarter of
- The 2.1% increase included 2.4% internal growth in local currencies,
2.1% growth from acquisitions, and a
2.4% decrease related to foreign currency exchange. (See Exhibit
A for details of sales growth.)
Second-quarter
internal sales growth in local currencies excluding sales of PPE and COVID-19
related products was 6.7% compared
with the prior year.
●
GAAP net income
attributable to Henry Schein, Inc. for the second quarter of 2022
was $160 million, or $1.16 per
diluted share, compared with second-quarter 2021 GAAP net income
attributable to Henry Schein, Inc. of $156
million, or $1.10 per diluted share, and second-quarter 2021 non-GAAP
net income attributable to Henry Schein, Inc.
of $157 million, or $1.11 per diluted share. (See Exhibit B for a reconciliation of GAAP net income and diluted
EPS
to non-GAAP net income and diluted EPS.)
●
Global Dental sales
for the second quarter of 2022 of $1.9 billion decreased 3.1%
compared with the prior-year
period. Internally generated sales in local currencies decreased 0.3%, with 0.7%
growth from acquisitions and a 3.5%
decrease related to foreign currency exchange. The 0.3% internal sales decrease
in local currencies included a 1.1%
decrease in North America and 1.0% growth internationally.
●
Global Dental consumable merchandise internal sales
decreased by 2.2% in local currencies.
Excluding
sales of PPE and COVID-19 related products, internal sales growth in
local currencies was 2.4%.
Global
Dental equipment internal sales growth
was 7.0% in local currencies.
●
North America dental consumable merchandise internal sales in local currencies
decreased 3.5% and
increased 2.2% when excluding sales of PPE and COVID-19 related products. North
America dental
equipment internal sales in local currencies increased 8.1%.
●
International dental consumable merchandise internal sales in
local currencies decreased 0.3% and
increased 2.7% when excluding sales of PPE and COVID-19 related products. International
dental
equipment internal sales in local currencies increased 5.5%.
●
Global Medical sales
for the second quarter of 2022 of $1.0 billion increased 10.3%
compared with the same period
last year. Internally generated sales in local currencies increased 6.7%, with 3.9%
growth from acquisitions and a
0.3% decrease related to foreign currency exchange. Internal sales
in local currencies increased 13.6% excluding
sales of PPE and COVID-19 related products.
●
Global Technology and Value
-Added Services sales
of $181 million increased 18.1% compared with the prior-
year quarter,
driven by Henry Schein One.
This included 10.8% internal sales growth in local currencies,
8.8%
growth from acquisitions, and a 1.5% decline related to foreign
currency exchange.
-3-
more
Year
-to-Date Financial Results
●
Total
net sales
for the first half of 2022 were $6.2 billion, an increase of 5.4%
compared with the first half of 2021.
The 5.4% increase included 5.0% internal growth in local currencies, 2.3%
growth from acquisitions,
and a 1.9%
decrease related to foreign currency exchange.
First-half internal sales growth in local currencies excluding sales
of
PPE and COVID-19 related products was 7.5% compared with the prior year.
●
GAAP net income
attributable to Henry Schein, Inc. for the first half of 2022 was
$341 million, or $2.46 per diluted
share, compared with first half 2021 GAAP net income attributable
to Henry Schein, Inc. of $322 million, or $2.26
per diluted share, and first half 2021 non-GAAP net income attributable
to Henry Schein, Inc. of $335 million, or
$2.35 per diluted share. Non-GAAP results for the first half of 2021
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.
Stock Repurchase Plan
During the second quarter of 2022, the Company repurchased approximately
1.3 million shares of its common stock
at an average price of $81.42 per share, for a total of $110
million. The impact of the repurchase of shares on second-quarter
diluted EPS was immaterial. At quarter-end, Henry Schein had approximately
$90 million authorized and available for future
stock repurchases.
Restructuring Program
Henry Schein is today also announcing a company-wide restructuring plan
that is focused on funding the priorities of
the strategic plan and streamlining operations and other initiatives
to increase efficiency.
The Company expects to record restructuring charges in 2022 and 2023, however
an estimate of the amount of these
charges
has not yet been determined. Any restructuring charges
are expected primarily to include severance pay and facility-
related costs.
The expense savings realized from this plan are expected to mainly
affect 2023 and beyond.
Financial Guidance
Henry Schein today provides
full-year 2022 financial guidance, as follows:
●
Affirms
guidance for full-year 2022 GAAP diluted EPS attributable
to Henry Schein, Inc. of $4.75
to $4.91,
reflecting growth of 7% to 10% compared with 2021 GAAP
diluted EPS of $4.45 and growth of 5% to 9% compared
with 2021 non-GAAP diluted EPS of $4.52.
●
Updates full-year 2022 expected sales growth to be approximately
3% to 6% over 2021. This compares with previous
guidance for growth of 5% to 8% over 2021 and reflects adverse effects from foreign exchange
rates and a decrease
in anticipated sales of PPE and COVID-related products, including COVID-19
test kits. Sales of COVID-19 test kits
are now expected to decline 25% to 30% from 2021, versus a previously
estimated decline of 15% to 25%.
-4-
more
●
Affirms expectations for full-year 2022 operating margin expansion of 39-44 basis
points over 2021 GAAP operating
margin and expansion of 20-25 basis points over 2021 non-GAAP operating margin.
Guidance for 2022 GAAP diluted EPS and sales growth is for completed
or previously announced acquisitions and
does not include potential future acquisitions or restructuring expenses. Guidance
also assumes that foreign currency
exchange rates will remain generally consistent with current levels,
that end markets will remain stable and consistent with
current market conditions,
and that there are no material adverse market changes associated with COVID-19.
Second-Quarter 2022 Conference Call Webcast and Presentation
The Company will hold a conference call to discuss second-quarter 2022 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.
The Company will be posting slides that provide a summary of its second-quarter
2022 financial results on its
website at https://www.henryschein.com/us-en/Corporate/investor-presentations.aspx
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 22,000 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 $12.4 billion in 2021, and
have grown at a compound annual rate of approximately 12.5 percent since Henry
Schein became a public company in 1995.
For more information, visit Henry Schein at www.henryschein.com, Facebook.com/HenrySchein,
Instagram.com/HenrySchein,
and Twitter.com/HenrySchein
.
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-
-5-
more
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 personal protective equipment (“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 have
continued access to a variety of COVID-19 test types,
expectations regarding COVID-19 test sales, demand and inventory levels,
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; 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 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 and domestic
macroeconomic and political conditions, including
inflation, deflation,
fluctuations in the value of the U.S. dollar as compared to foreign currencies
and changes to other
economic indicators,
international trade agreements, potential trade barriers and terrorism;
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 collection, storage and processing of sensitive personal information or
standards in electronic health records or
transmissions; changes in tax legislation; risks related to product liability, intellectual property and other claims;
litigation
risks; new or unanticipated litigation developments and the status
of litigation matters; risks associated with customs policies
or legislative import restrictions; cyberattacks or other privacy or data
security breaches; risks associated with our global
operations; our dependence on our senior management, employee hiring and
retention, and our relationships with customers,
suppliers and manufacturers; 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 except as required by law.
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 the
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
-6-
more
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
Ronald N. South
Senior Vice President and Chief Financial Officer
ronald.south@henryschein.com
(631) 845-2802
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
(TABLES TO FOLLOW)
-7-
more
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED
STATEMENTS
OF INCOME
(in millions,
except share and per share data)
(unaudited)
Three Months Ended
Six Months Ended
June 25,
June 26,
June 25,
June 26,
2022
2021
2022
2021
Net sales
$
3,030
$
2,967
$
6,209
$
5,892
Cost of sales
2,085
2,076
4,291
4,110
Gross profit
945
891
1,918
1,782
Operating expenses:
Selling, general and administrative
680
635
1,362
1,249
Depreciation and amortization
45
45
92
89
Restructuring costs
-
1
-
4
Operating income
220
210
464
440
Other income (expense):
Interest income
3
1
5
3
Interest expense
(9)
(7)
(16)
(13)
Other, net
-
1
-
1
Income before taxes, equity in earnings of affiliates
and noncontrolling interests
214
205
453
431
Income taxes
(52)
(47)
(109)
(104)
Equity in earnings of affiliates
5
6
9
12
Net income
167
164
353
339
Less: Net income attributable to noncontrolling interests
(7)
(8)
(12)
(17)
Net income attributable to Henry Schein, Inc.
$
160
$
156
$
341
$
322
Earnings per share attributable to Henry Schein, Inc.:
Basic
$
1.17
$
1.11
$
2.49
$
2.28
Diluted
$
1.16
$
1.10
$
2.46
$
2.26
Weighted-average common
shares outstanding:
Basic
137,350,488
140,358,428
137,323,076
141,316,258
Diluted
138,869,064
141,656,883
139,055,205
142,537,906
Note: Certain prior period amounts have been reclassified to conform to the current period presentation.
-8-
more
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS
(in millions, except share data)
June 25,
December 25,
2022
2021
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
108
$
118
Accounts receivable, net of reserves of $63 and $67
1,409
1,452
Inventories, net
1,823
1,861
Prepaid expenses and other
449
413
Total current assets
3,789
3,844
Property and equipment, net
356
366
Operating lease right-of-use assets
327
325
Goodwill
2,833
2,854
Other intangibles, net
603
668
Investments and other
416
424
Total assets
$
8,324
$
8,481
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
901
$
1,054
Bank credit lines
85
51
Current maturities of long-term debt
4
11
Operating lease liabilities
74
76
Accrued expenses:
Payroll and related
328
385
Taxes
124
137
Other
560
593
Total current liabilities
2,076
2,307
Long-term debt
769
811
Deferred income taxes
33
42
Operating lease liabilities
276
268
Other liabilities
357
377
Total liabilities
3,511
3,805
Redeemable noncontrolling interests
586
613
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,
136,439,560 outstanding on June 25, 2022 and
137,145,558 outstanding on December 25, 2021
1
1
Additional paid-in capital
-
-
Retained earnings
3,834
3,595
Accumulated other comprehensive loss
(241)
(171)
Total Henry Schein, Inc. stockholders' equity
3,594
3,425
Noncontrolling interests
633
638
Total stockholders' equity
4,227
4,063
Total liabilities, redeemable noncontrolling
interests and stockholders' equity
$
8,324
$
8,481
-9-
more
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED
STATEMENTS
OF CASH FLOWS
(in millions, unaudited)
Three Months Ended
Six Months Ended
June 25,
June 26,
June 25,
June 26,
2022
2021
2022
2021
Cash flows from operating activities:
Net income
$
167
$
164
$
353
$
339
Adjustments to reconcile net income to net cash provided by
Depreciation and amortization
53
50
108
99
Stock-based compensation expense
15
17
27
30
Benefit from losses on trade and other accounts receivable
(1)
(1)
-
(4)
Provision for (benefit from) deferred income taxes
(12)
(5)
(15)
6
Equity in earnings of affiliates
(5)
(6)
(9)
(12)
Distributions from equity affiliates
6
6
10
11
Changes in unrecognized tax benefits
(5)
(9)
(1)
(6)
Other
(6)
3
(13)
3
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable
5
(17)
21
102
Inventories
13
(46)
4
(124)
Other current assets
(63)
(41)
(37)
(86)
Accounts payable and accrued expenses
(10)
44
(198)
(136)
Net cash provided by operating activities
157
159
250
222
Cash flows from investing activities:
Purchases of fixed assets
(24)
(18)
(43)
(32)
Payments related to equity investments and business acquisitions,
net of cash acquired
(2)
(92)
(7)
(296)
Proceeds from (payments for) loan to affiliate
2
(2)
6
(2)
Other
(8)
(6)
(15)
(11)
Net cash used in investing activities
(32)
(118)
(59)
(341)
Cash flows from financing activities:
Net change in bank borrowings
-
(5)
30
(5)
Proceeds from issuance of long-term debt
-
200
-
200
Principal payments for long-term debt
(4)
(102)
(57)
(120)
Payments for repurchases and retirement of common stock
(110)
(112)
(110)
(201)
Payments for taxes related to shares withheld for employee taxes
(3)
(2)
(29)
(8)
Proceeds from (distributions to) noncontrolling shareholders
(7)
3
(12)
(4)
Acquisitions of noncontrolling interests in subsidiaries
(9)
(1)
(19)
(1)
Net cash used in financing activities
(133)
(19)
(195)
(139)
Effect of exchange rate changes on cash and cash equivalents
(10)
1
(6)
4
Net change in cash and cash equivalents
(18)
23
(10)
(254)
Cash and cash equivalents, beginning of period
126
144
118
421
Cash and cash equivalents, end of period
$
108
$
167
$
108
$
167
-10-
more
Exhibit A - Second Quarter Sales
Henry Schein, Inc.
2022 Second Quarter
Sales Summary
(in millions)
(unaudited)
Q2 2022 over Q2 2021
Global
Q2 2022
Q2 2021
Total Sales
Growth
Foreign
Exchange
Growth
Local
Currency
Growth
Acquisition
Growth
Local
Internal
Growth
Dental Merchandise
$
1,441
$
1,508
-4.5%
-3.2%
-1.3%
0.9%
-2.2%
Dental Equipment
412
404
2.2%
-4.8%
7.0%
0.0%
7.0%
Total Dental
1,853
1,912
-3.1%
-3.5%
0.4%
0.7%
-0.3%
Medical
996
902
10.3%
-0.3%
10.6%
3.9%
6.7%
Total Health Care Distribution
2,849
2,814
1.2%
-2.5%
3.7%
1.7%
2.0%
Technology and value-added services
181
153
18.1%
-1.5%
19.6%
8.8%
10.8%
Total Global
$
3,030
$
2,967
2.1%
-2.4%
4.5%
2.1%
2.4%
North America
Q2 2022
Q2 2021
Total Sales
Growth
Foreign
Exchange
Growth
Local
Currency
Growth
Acquisition
Growth
Local
Internal
Growth
Dental Merchandise
$
879
$
902
-2.5%
-0.3%
-2.2%
1.3%
-3.5%
Dental Equipment
245
227
7.6%
-0.5%
8.1%
0.0%
8.1%
Total Dental
1,124
1,129
-0.4%
-0.3%
-0.1%
1.0%
-1.1%
Medical
977
875
11.6%
0.0%
11.6%
4.0%
7.6%
Total Health Care Distribution
2,101
2,004
4.8%
-0.2%
5.0%
2.3%
2.7%
Technology and value-added services
158
131
20.5%
-0.1%
20.6%
10.2%
10.4%
Total North America
$
2,259
$
2,135
5.8%
-0.1%
5.9%
2.8%
3.1%
International
Q2 2022
Q2 2021
Total Sales
Growth
Foreign
Exchange
Growth
Local
Currency
Growth
Acquisition
Growth
Local
Internal
Growth
Dental Merchandise
$
562
$
606
-7.5%
-7.4%
-0.1%
0.2%
-0.3%
Dental Equipment
167
177
-4.7%
-10.3%
5.6%
0.1%
5.5%
Total Dental
729
783
-6.8%
-8.0%
1.2%
0.2%
1.0%
Medical
19
27
-30.4%
-8.3%
-22.1%
0.0%
-22.1%
Total Health Care Distribution
748
810
-7.6%
-8.0%
0.4%
0.2%
0.2%
Technology and value-added services
23
22
3.5%
-9.9%
13.4%
0.0%
13.4%
Total International
$
771
$
832
-7.3%
-8.1%
0.8%
0.2%
0.6%
Note: Certain prior period amounts have been reclassified to
conform to the current period presentation.
-11-
more
Exhibit A - Year
-to-Date Sales
Henry Schein, Inc.
2022 Second Quarter Year
-to-Date
Sales Summary
(in millions)
(unaudited)
Q2 2022 Year
-to Date over Q2 2021 Year
-to-Date
Global
Q2 2022
Q2 2021
Total Sales
Growth
Foreign
Exchange
Growth
Local
Currency
Growth
Acquisition
Growth
Local
Internal
Growth
Dental Merchandise
$
2,867
$
2,929
-2.1%
-2.6%
0.5%
1.0%
-0.5%
Dental Equipment
814
772
5.5%
-3.9%
9.4%
0.1%
9.3%
Total Dental
3,681
3,701
-0.5%
-2.8%
2.3%
0.7%
1.6%
Medical
2,168
1,893
14.5%
-0.2%
14.7%
3.8%
10.9%
Total Health Care Distribution
5,849
5,594
4.6%
-1.9%
6.5%
1.8%
4.7%
Technology and value-added services
360
298
20.7%
-1.1%
21.8%
10.8%
11.0%
Total Global
$
6,209
$
5,892
5.4%
-1.9%
7.3%
2.3%
5.0%
North America
Q2 2022
Q2 2021
Total Sales
Growth
Foreign
Exchange
Growth
Local
Currency
Growth
Acquisition
Growth
Local
Internal
Growth
Dental Merchandise
$
1,745
$
1,736
0.6%
-0.1%
0.7%
1.2%
-0.5%
Dental Equipment
484
438
10.3%
-0.3%
10.6%
0.0%
10.6%
Total Dental
2,229
2,174
2.5%
-0.2%
2.7%
1.0%
1.7%
Medical
2,127
1,838
15.7%
0.0%
15.7%
4.0%
11.7%
Total Health Care Distribution
4,356
4,012
8.6%
-0.1%
8.7%
2.4%
6.3%
Technology and value-added services
314
255
23.0%
0.0%
23.0%
12.6%
10.4%
Total North America
$
4,670
$
4,267
9.4%
-0.1%
9.5%
3.0%
6.5%
International
Q2 2022
Q2 2021
Total Sales
Growth
Foreign
Exchange
Growth
Local
Currency
Growth
Acquisition
Growth
Local
Internal
Growth
Dental Merchandise
$
1,122
$
1,193
-6.0%
-6.2%
0.2%
0.6%
-0.4%
Dental Equipment
330
334
-0.9%
-8.7%
7.8%
0.1%
7.7%
Total Dental
1,452
1,527
-4.9%
-6.7%
1.8%
0.4%
1.4%
Medical
41
55
-25.4%
-6.8%
-18.6%
0.0%
-18.6%
Total Health Care Distribution
1,493
1,582
-5.6%
-6.7%
1.1%
0.4%
0.7%
Technology and value-added services
46
43
7.0%
-7.5%
14.5%
0.0%
14.5%
Total International
$
1,539
$
1,625
-5.3%
-6.8%
1.5%
0.5%
1.0%
Note: Certain prior period amounts have been reclassified to
conform to the current period presentation.
-12-
Exhibit B
Henry Schein, Inc.
2022 Second Quarter
Reconciliation of reported GAAP net income and diluted EPS attributable to
Henry Schein, Inc.
to non-GAAP net income and diluted EPS attributable to Henry Schein,
Inc.
(in millions, except per share data)
(unaudited)
Second Quarter
Year
-to-Date
%
%
2022
2021
Growth
2022
2021
Growth
Net income attributable to Henry Schein, Inc.
$
160
$
156
3.3
%
$
341
$
322
6.1
%
Diluted EPS attributable to Henry Schein, Inc.
$
1.16
$
1.10
5.5
%
$
2.46
$
2.26
8.8
%
Non-GAAP Adjustments
Restructuring costs-Pre-tax (1)
$
-
$
1
$
-
$
4
Income tax benefit for restructuring costs (1)
-
-
-
(1)
Settlement and litigation costs - Pre-tax (2)
-
1
-
14
Income tax benefit for settlement and litigation costs (2)
-
(1)
-
(4)
Total
non-GAAP adjustments to net income
$
-
$
1
$
-
$
13
Non-GAAP adjustments to diluted EPS
-
0.01
-
0.09
Non-GAAP net income attributable to Henry Schein, Inc.
$
160
$
157
2.3
%
$
341
$
335
1.9
%
Non-GAAP diluted EPS attributable to Henry Schein, Inc.
$
1.16
$
1.11
4.5
%
$
2.46
$
2.35
4.7
%
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.
(1)
Represents Q2 2021
restructuring costs and an after-tax effect of
$1 million and YTD 2021 restructuring costs of $4 million, net of $1
million tax expense, resulting in an after-tax effect
of $3 million.
(2)
Represents a Q2 2021 pre-tax charge of $3 million, net of $2 million
of noncontrolling interests, related to settlement and litigation
costs, net of a tax benefit of $1 million resulting in a net after-tax
charge of $0 million.
Represents a YTD 2021 pre-tax charge of
$16 million, net of $2 million of noncontrolling interests, related to settlement and
litigation costs, net of a tax benefit of $4 million,
resulting in a net after-tax charge of $10 million.