Henry Schein Reports Record Third-Quarter 2021 Financial Results From Continuing Operations
Henry Schein reported record third-quarter net sales of $3.2 billion, marking an 11.9% increase year-over-year. GAAP diluted EPS rose to $1.15 from $0.99, while non-GAAP diluted EPS reached $1.10, up from $1.03. The company raised its 2021 non-GAAP diluted EPS guidance to between $4.27 and $4.35, reflecting a growth of 44% to 46% compared to 2020. Preliminary guidance for 2022 indicates mid to high single-digit growth over the 2021 guidance. Strong sales growth was seen across Global Dental and Medical segments.
- Total net sales up 11.9% to $3.2 billion.
- GAAP diluted EPS increased to $1.15, up 16.2% year-over-year.
- Non-GAAP diluted EPS rose to $1.10, a 6.8% increase year-over-year.
- Increased 2021 guidance for non-GAAP diluted EPS to $4.27 - $4.35, growth of 44% - 46% from 2020.
- Unable to provide GAAP diluted EPS guidance due to ongoing restructuring costs.
- Sales growth impacted by equipment manufacturing and office construction delays.
-
Total net sales of
$3.2 billion 11.9% versus prior year -
GAAP diluted EPS from continuing operations of
$1.15 $0.99 -
Non-GAAP diluted EPS from continuing operations of
$1.10 $1.03 -
Increases 2021 guidance for non-GAAP diluted EPS from continuing operations to a range of
$4.27 $4.35 - Introduces preliminary guidance for 2022 non-GAAP diluted EPS from continuing operations reflecting mid to high single-digit growth over 2021 guidance for non-GAAP diluted EPS from continuing operations
Total net sales for the quarter ended
GAAP net income attributable to
“Today we reported record third-quarter financial results, driven by a keen focus on execution by Team Schein and steady patient traffic, resulting in excellent momentum across the entire company. We believe that patient traffic was generally similar to the previous quarter for our dental customers and is improving for our medical customers. Compared with the year-ago quarter, Henry Schein’s worldwide internal sales in local currencies increased a robust
Global Dental sales for the third quarter of 2021 of
Global Dental consumable merchandise internal sales growth was
“North America dental consumable merchandise internal sales growth in local currencies with and without PPE and COVID-19 related products was solid in the third quarter. Consumable merchandise sales continued to improve, which we believe were bolstered by a steady flow of patient traffic,” said
Global Medical sales for the third quarter of 2021 of
“Global Medical internal sales growth in local currencies for the third quarter was once again very strong, with and without sales of PPE and COVID-19 related products. Trends in the physician office, ambulatory surgery center and alternate care markets all were positive, and we have increased the number of accounts we serve and further penetrated existing accounts,” said
Global Technology and Value-Added Services sales of
“Global Technology and Value-Added Services sales growth was driven by the acquisitions we made over the past year in software analytics and by expanding our range of dental practice solutions. We also saw solid sales growth in Dentrix technical support, our Dentrix Ascend cloud solution and our Software of Excellence business in the UK,” added
Stock Repurchase Plan
During the third quarter of 2021, the Company repurchased approximately 650,000 shares of its common stock at an average price of
Year-to-Date Financial Results
Net sales from continuing operations for the first nine months of 2021 were
GAAP net income attributable to
2021 Financial Guidance
Henry Schein today increases guidance for 2021 non-GAAP diluted EPS from continuing operations. At this time, the Company is not providing guidance for 2021 GAAP diluted EPS from continuing operations as it is unable to provide without unreasonable effort an estimate of costs related to an ongoing restructuring initiative, including the corresponding tax effect. Financial guidance is as follows:
-
2021 non-GAAP diluted EPS from continuing operations is expected to be
$4.27 $4.35 44% to46% compared with 2020 non-GAAP diluted EPS from continuing operations of$2.97 $3.85
- Guidance for 2021 non-GAAP diluted EPS is for current continuing operations as well as completed or previously announced acquisitions and does not include the impact of future share repurchases, potential future acquisitions, if any, or restructuring expenses. Guidance also assumes that foreign currency exchange rates are generally consistent with current levels, that end markets remain stable and are consistent with current market conditions, and that there are no material adverse market changes associated with COVID-19.
2022 Financial Guidance
Henry Schein today introduces preliminary guidance for 2022 non-GAAP diluted EPS from continuing operations. At this time, the Company is not providing guidance for 2022 GAAP diluted EPS from continuing operations as it is unable to provide without unreasonable effort an estimate of restructuring costs for 2021, including the corresponding tax effect, which serves as the basis for 2022 GAAP diluted EPS guidance. Financial guidance is as follows:
- Growth in 2022 non-GAAP diluted EPS from continuing operations in the mid to high single digits over 2021 non-GAAP diluted EPS from continuing operations.
- Preliminary guidance for 2022 non-GAAP diluted EPS growth is for current continuing operations as well as completed or previously announced acquisitions and does not include the impact of future share repurchases, potential future acquisitions, if any, or restructuring expenses. Preliminary guidance also assumes that foreign currency exchange rates are generally consistent with current levels, that end markets remain stable and are consistent with current market conditions, and that there are no material adverse market changes associated with COVID-19.
Adjustments to Projected 2021 and 2022 Non-GAAP Diluted EPS
The Company has provided guidance for 2021 and preliminary guidance for 2022 diluted EPS from continuing operations on a non-GAAP basis, as noted above. A reconciliation to the Company’s projected 2021 diluted EPS from continuing operations prepared on a GAAP basis is not provided because the Company is unable to provide without unreasonable effort an estimate of costs related to an ongoing restructuring initiative to mitigate stranded costs and drive additional operating efficiencies, including the corresponding tax effect that will be included in the Company’s 2021 diluted EPS from continuing operations prepared on a GAAP basis. A reconciliation to the Company’s projected 2022 diluted EPS from continuing operations prepared on a GAAP basis is not provided because the Company is unable to provide without unreasonable effort an estimate of restructuring costs for 2021, including the corresponding tax effect, which serves as a basis of 2022 GAAP diluted EPS guidance. The inability to provide these reconciliations is due to the uncertainty and inherent difficulty of predicting the occurrence, magnitude, financial impact and timing of related costs. Management does not believe these items are representative of the Company’s underlying business performance. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
Third-Quarter 2021 Conference Call Webcast
The Company will hold a conference call to discuss third-quarter 2021 financial results today, beginning at
About
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
For more information, visit Henry Schein at www.henryschein.com, Facebook.com/HenrySchein, and @HenrySchein on Twitter.
Cautionary Note Regarding Forward-Looking Statements and Use of Non-GAAP Financial Information
In accordance with the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995, we provide the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied herein. All forward-looking statements made by us are subject to risks and uncertainties and are not guarantees of future performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These statements include EPS guidance and are generally identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “to make” or other comparable terms. A fuller discussion of our operations, financial condition and status of litigation matters, including factors that may affect our business and future prospects, is contained in documents we have filed with the
Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: risks associated with COVID-19 and any variants thereof, as well as other disease outbreaks, epidemics, pandemics, or similar wide spread public health concerns and other natural disasters or acts of terrorism; our dependence on third parties for the manufacture and supply of our products; our ability to develop or acquire and maintain and protect new products (particularly technology products) and technologies that achieve market acceptance with acceptable margins; transitional challenges associated with acquisitions, dispositions and joint ventures, including the failure to achieve anticipated synergies/benefits; financial and tax risks associated with acquisitions, dispositions and joint ventures; certain provisions in our governing documents that may discourage third-party acquisitions of us; effects of a highly competitive (including, without limitation, competition from third-party online commerce sites) and consolidating market; the potential repeal or judicial prohibition on implementation of the Affordable Care Act; changes in the health care industry; risks from expansion of customer purchasing power and multi-tiered costing structures; increases in shipping costs for our products or other service issues with our third-party shippers; general global macro-economic and political conditions, including international trade agreements and potential trade barriers; failure to comply with existing and future regulatory requirements; risks associated with the EU Medical Device Regulation; failure to comply with laws and regulations relating to health care fraud or other laws and regulations; failure to comply with laws and regulations relating to the confidentiality of sensitive personal information or standards in electronic health records or transmissions; changes in tax legislation; litigation risks; new or unanticipated litigation developments and the status of litigation matters; cyberattacks or other privacy or data security breaches; risks associated with our global operations; our dependence on our senior management, as well as employee hiring and retention; and disruptions in financial markets. The order in which these factors appear should not be construed to indicate their relative importance or priority.
We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control or predict. Accordingly, any forward-looking statements contained herein should not be relied upon as a prediction of actual results. We undertake no duty and have no obligation to update forward-looking statements.
Included within the press release are non-GAAP financial measures that supplement the Company’s Consolidated Statements of Income prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Company’s actual results prepared under GAAP to exclude certain items. In the schedules attached to this press release, the non-GAAP measures have been reconciled to and should be considered together with the Consolidated Statements of Income. Management believes that non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
3,178,315 |
|
$ |
2,840,146 |
|
$ |
9,070,499 |
|
$ |
6,953,416 |
|||
Cost of sales |
|
|
2,266,170 |
|
|
2,085,878 |
|
|
6,377,752 |
|
|
4,998,868 |
|||
|
|
Gross profit |
|
|
912,145 |
|
|
754,268 |
|
|
2,692,747 |
|
|
1,954,548 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Selling, general and administrative |
|
|
701,499 |
|
|
559,605 |
|
|
2,038,292 |
|
|
1,572,732 |
||
|
Restructuring costs (credits) |
|
|
(175) |
|
|
6,992 |
|
|
3,360 |
|
|
27,713 |
||
|
|
Operating income |
|
|
210,821 |
|
|
187,671 |
|
|
651,095 |
|
|
354,103 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Interest income |
|
|
1,409 |
|
|
2,294 |
|
|
4,749 |
|
|
7,481 |
||
|
Interest expense |
|
|
(6,550) |
|
|
(11,111) |
|
|
(19,411) |
|
|
(29,409) |
||
|
Other, net |
|
|
403 |
|
|
(1,699) |
|
|
1,066 |
|
|
(2,210) |
||
|
|
Income from continuing operations before taxes, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
equity in earnings of affiliates and noncontrolling interests |
|
206,083 |
|
|
177,155 |
|
|
637,499 |
|
|
329,965 |
||
Income taxes |
|
|
(49,276) |
|
|
(29,005) |
|
|
(153,988) |
|
|
(65,965) |
|||
Equity in earnings of affiliates |
|
|
5,349 |
|
|
3,663 |
|
|
17,550 |
|
|
7,808 |
|||
Gain on sale of equity investment |
|
|
7,318 |
|
|
- |
|
|
7,318 |
|
|
- |
|||
Net income from continuing operations |
|
|
169,474 |
|
|
151,813 |
|
|
508,379 |
|
|
271,808 |
|||
Income (loss) from discontinued operations, net of tax |
|
|
- |
|
|
(29) |
|
|
- |
|
|
274 |
|||
Net income |
|
|
169,474 |
|
|
151,784 |
|
|
508,379 |
|
|
272,082 |
|||
|
Less: Net income attributable to noncontrolling interests |
|
|
(7,188) |
|
|
(10,087) |
|
|
(24,380) |
|
|
(10,921) |
||
Net income attributable to |
|
$ |
162,286 |
|
$ |
141,697 |
|
$ |
483,999 |
|
$ |
261,161 |
|||
Amounts attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations |
|
$ |
162,286 |
|
$ |
141,726 |
|
$ |
483,999 |
|
$ |
260,887 |
|||
Discontinued operations |
|
|
- |
|
|
(29) |
|
|
- |
|
|
274 |
|||
Net income attributable to |
|
$ |
162,286 |
|
$ |
141,697 |
|
$ |
483,999 |
|
$ |
261,161 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share from continuing operations attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.16 |
|
$ |
1.00 |
|
$ |
3.44 |
|
$ |
1.83 |
||
|
Diluted |
|
$ |
1.15 |
|
$ |
0.99 |
|
$ |
3.40 |
|
$ |
1.82 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share from discontinued operations attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
||
|
Diluted |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.16 |
|
$ |
1.00 |
|
$ |
3.44 |
|
$ |
1.83 |
||
|
Diluted |
|
$ |
1.15 |
|
$ |
0.99 |
|
$ |
3.40 |
|
$ |
1.82 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Basic |
|
|
139,377 |
|
|
142,362 |
|
|
140,661 |
|
|
142,553 |
||
|
Diluted |
|
|
141,079 |
|
|
143,091 |
|
|
142,179 |
|
|
143,308 |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain prior period amounts have been reclassified to conform to the current period presentation. |
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CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
||
|
|
|
|
|
2021 |
|
2020 |
||
|
|
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|||
Current assets: |
|
|
|
|
|
|
|||
|
Cash and cash equivalents |
|
$ |
119,133 |
|
$ |
421,185 |
||
|
Accounts receivable, net of reserves of |
|
|
1,551,946 |
|
|
1,424,787 |
||
|
Inventories, net |
|
|
1,784,050 |
|
|
1,512,499 |
||
|
Prepaid expenses and other |
|
|
457,232 |
|
|
432,944 |
||
|
|
|
Total current assets |
|
|
3,912,361 |
|
|
3,791,415 |
Property and equipment, net |
|
|
355,675 |
|
|
342,004 |
|||
Operating lease right-of-use assets |
|
|
329,886 |
|
|
288,847 |
|||
|
|
|
2,779,234 |
|
|
2,504,392 |
|||
Other intangibles, net |
|
|
645,832 |
|
|
479,429 |
|||
Investments and other |
|
|
397,764 |
|
|
366,445 |
|||
|
|
|
Total assets |
|
$ |
8,420,752 |
|
$ |
7,772,532 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|||
Current liabilities: |
|
|
|
|
|
|
|||
|
Accounts payable |
|
$ |
1,057,127 |
|
$ |
1,005,655 |
||
|
Bank credit lines |
|
|
59,394 |
|
|
73,366 |
||
|
Current maturities of long-term debt |
|
|
9,638 |
|
|
109,836 |
||
|
Operating lease liabilities |
|
|
77,383 |
|
|
64,716 |
||
|
Accrued expenses: |
|
|
|
|
|
|
||
|
|
Payroll and related |
|
|
345,438 |
|
|
295,329 |
|
|
|
Taxes |
|
|
157,446 |
|
|
138,671 |
|
|
|
Other |
|
|
594,979 |
|
|
595,529 |
|
|
|
|
Total current liabilities |
|
|
2,301,405 |
|
|
2,283,102 |
Long-term debt |
|
|
705,540 |
|
|
515,773 |
|||
Deferred income taxes |
|
|
37,248 |
|
|
30,065 |
|||
Operating lease liabilities |
|
|
270,152 |
|
|
238,727 |
|||
Other liabilities |
|
|
388,211 |
|
|
392,781 |
|||
|
|
|
Total liabilities |
|
|
3,702,556 |
|
|
3,460,448 |
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interests |
|
|
612,582 |
|
|
327,699 |
|||
Commitments and contingencies |
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|||
|
Preferred stock, |
|
|
|
|
|
|
||
|
|
none outstanding |
|
|
- |
|
|
- |
|
|
Common stock, |
|
|
|
|
|
|
||
|
|
139,129,543 outstanding on |
|
|
|
|
|
|
|
|
|
142,462,571 outstanding on |
|
|
1,391 |
|
|
1,425 |
|
|
Additional paid-in capital |
|
|
- |
|
|
- |
||
|
Retained earnings |
|
|
3,594,238 |
|
|
3,454,831 |
||
|
Accumulated other comprehensive loss |
|
|
(137,640) |
|
|
(108,084) |
||
|
|
|
|
|
3,457,989 |
|
|
3,348,172 |
|
|
Noncontrolling interests |
|
|
647,625 |
|
|
636,213 |
||
|
|
|
Total stockholders' equity |
|
|
4,105,614 |
|
|
3,984,385 |
|
|
Total liabilities, redeemable noncontrolling interests and stockholders' equity |
|
$ |
8,420,752 |
|
$ |
7,772,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income |
|
$ |
169,474 |
|
$ |
151,784 |
|
$ |
508,379 |
|
$ |
272,082 |
|||
|
Income (loss) from discontinued operations |
|
|
- |
|
|
(29) |
|
|
- |
|
|
274 |
|||
|
Income from continuing operations |
|
|
169,474 |
|
|
151,813 |
|
|
508,379 |
|
|
271,808 |
|||
|
Adjustments to reconcile net income to net cash provided by |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Depreciation and amortization |
|
|
51,555 |
|
|
44,569 |
|
|
150,833 |
|
|
138,515 |
|
|
|
|
Impairment charge on intangible assets |
|
|
- |
|
|
- |
|
|
- |
|
|
2,149 |
|
|
|
|
Gain on sale of equity investment |
|
|
(9,757) |
|
|
- |
|
|
(9,757) |
|
|
- |
|
|
|
|
Stock-based compensation expense (credit) |
|
|
27,546 |
|
|
5,710 |
|
|
57,700 |
|
|
(6,648) |
|
|
|
|
Provision for (benefit from) losses on trade and other accounts receivable |
|
|
(4,723) |
|
|
5,832 |
|
|
(8,795) |
|
|
34,590 |
|
|
|
|
Benefit from deferred income taxes |
|
|
(6,430) |
|
|
(15,322) |
|
|
(725) |
|
|
(48,193) |
|
|
|
|
Equity in earnings of affiliates |
|
|
(5,349) |
|
|
(3,663) |
|
|
(17,550) |
|
|
(7,808) |
|
|
|
|
Distributions from equity affiliates |
|
|
4,288 |
|
|
5,833 |
|
|
15,035 |
|
|
10,053 |
|
|
|
|
Changes in unrecognized tax benefits |
|
|
(193) |
|
|
(19,745) |
|
|
(6,479) |
|
|
(18,365) |
|
|
|
|
Other |
|
|
(3,477) |
|
|
4,567 |
|
|
(48) |
|
|
4,794 |
|
|
|
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(184,720) |
|
|
(299,530) |
|
|
(83,101) |
|
|
(199,858) |
|
|
|
|
Inventories |
|
|
(84,163) |
|
|
(39,530) |
|
|
(207,921) |
|
|
(25,830) |
|
|
|
|
Other current assets |
|
|
44,328 |
|
|
136,870 |
|
|
(41,651) |
|
|
(51,746) |
|
|
|
|
Accounts payable and accrued expenses |
|
|
212,836 |
|
|
283,853 |
|
|
77,021 |
|
|
144,953 |
Net cash provided by operating activities from continuing operations |
|
|
211,215 |
|
|
261,257 |
|
|
432,941 |
|
|
248,414 |
||||
Net cash provided by operating activities from discontinued operations |
|
|
- |
|
|
75 |
|
|
- |
|
|
648 |
||||
Net cash provided by operating activities |
|
|
211,215 |
|
|
261,332 |
|
|
432,941 |
|
|
249,062 |
||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Purchases of fixed assets |
|
|
(16,894) |
|
|
(7,211) |
|
|
(48,706) |
|
|
(37,799) |
|||
|
Payments related to equity investments and business acquisitions, |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
net of cash acquired |
|
|
(119,713) |
|
|
(14,483) |
|
|
(415,365) |
|
|
(52,208) |
||
|
Proceeds from sale of equity investments |
|
|
9,757 |
|
|
- |
|
|
9,757 |
|
|
12,000 |
|||
|
Proceeds from (payments for) loan to affiliate |
|
|
(3,959) |
|
|
278 |
|
|
(5,980) |
|
|
(1,451) |
|||
|
Other |
|
|
(7,073) |
|
|
(2,899) |
|
|
(18,707) |
|
|
(14,498) |
|||
Net cash used in investing activities from continuing operations |
|
|
(137,882) |
|
|
(24,315) |
|
|
(479,001) |
|
|
(93,956) |
||||
Net cash used in investing activities from discontinued operations |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
||||
Net cash used in investing activities |
|
|
(137,882) |
|
|
(24,315) |
|
|
(479,001) |
|
|
(93,956) |
||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net change in bank borrowings |
|
|
(7,747) |
|
|
4,437 |
|
|
(13,128) |
|
|
484,139 |
|||
|
Proceeds from issuance of long-term debt |
|
|
- |
|
|
- |
|
|
200,000 |
|
|
501,421 |
|||
|
Principal payments for long-term debt |
|
|
(1,509) |
|
|
(877) |
|
|
(121,835) |
|
|
(610,457) |
|||
|
Debt issuance costs |
|
|
(1,814) |
|
|
(28) |
|
|
(2,013) |
|
|
(3,683) |
|||
|
Debt extinguishment costs |
|
|
- |
|
|
(401) |
|
|
- |
|
|
(401) |
|||
|
Payments for repurchases and retirement of common stock |
|
|
(50,000) |
|
|
- |
|
|
(251,211) |
|
|
(73,789) |
|||
|
Payments for taxes related to shares withheld for employee taxes |
|
|
(13) |
|
|
(294) |
|
|
(7,372) |
|
|
(14,007) |
|||
|
Distributions to noncontrolling shareholders |
|
|
(4,833) |
|
|
(529) |
|
|
(8,622) |
|
|
(3,995) |
|||
|
Acquisitions of noncontrolling interests in subsidiaries |
|
|
(49,162) |
|
|
- |
|
|
(50,292) |
|
|
(14,934) |
|||
|
Proceeds from Henry Schein Animal Health Business |
|
|
- |
|
|
75 |
|
|
- |
|
|
139 |
|||
Net cash provided by (used in) financing activities from continuing operations |
|
|
(115,078) |
|
|
2,383 |
|
|
(254,473) |
|
|
264,433 |
||||
Net cash used in financing activities from discontinued operations |
|
|
- |
|
|
(75) |
|
|
- |
|
|
(648) |
||||
Net cash provided by (used in) financing activities |
|
|
(115,078) |
|
|
2,308 |
|
|
(254,473) |
|
|
263,785 |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents from |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
continuing operations |
|
|
(6,350) |
|
|
(1,940) |
|
|
(1,519) |
|
|
8,507 |
|||
Effect of exchange rate changes on cash and cash equivalents from |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
discontinued operations |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|||
Net change in cash and cash equivalents from continuing operations |
|
|
(48,095) |
|
|
237,385 |
|
|
(302,052) |
|
|
427,398 |
||||
Net change in cash and cash equivalents from discontinued operations |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
||||
Cash and cash equivalents, beginning of period |
|
|
167,228 |
|
|
296,110 |
|
|
421,185 |
|
|
106,097 |
||||
Cash and cash equivalents, end of period |
|
$ |
119,133 |
|
$ |
533,495 |
|
$ |
119,133 |
|
$ |
533,495 |
||||
Exhibit A - Third Quarter Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2021 Third Quarter |
|||||||||||||||
Sales Summary |
|||||||||||||||
(in thousands) |
|||||||||||||||
(unaudited) |
|||||||||||||||
Q3 2021 over Q3 2020 |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global |
Q3 2021 |
|
Q3 2020 |
|
Total Sales
|
|
Foreign
|
|
Local
|
|
Acquisition
|
|
Local
|
||
Dental Merchandise |
$ |
1,417,742 |
|
$ |
1,300,379 |
|
|
|
|
|
|
|
|
|
|
Dental Equipment |
|
405,152 |
|
|
349,474 |
|
|
|
|
|
|
|
|
|
|
Total Dental |
|
1,822,894 |
|
|
1,649,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
1,186,812 |
|
|
1,027,146 |
|
|
|
|
|
|
|
|
|
|
Total Health Care Distribution |
|
3,009,706 |
|
|
2,676,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
168,609 |
|
|
138,355 |
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
3,178,315 |
|
|
2,815,354 |
|
|
|
|
|
|
|
|
|
|
Corporate |
|
- |
|
|
24,792 |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
Total Global |
$ |
3,178,315 |
|
$ |
2,840,146 |
|
|
|
|
|
|
|
|
|
|
|
Q3 2021 |
|
Q3 2020 |
|
Total Sales
|
|
Foreign
|
|
Local
|
|
Acquisition
|
|
Local
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental Merchandise |
$ |
878,286 |
|
$ |
791,107 |
|
|
|
|
|
|
|
|
|
|
Dental Equipment |
|
236,345 |
|
|
217,729 |
|
|
|
|
|
|
|
|
|
|
Total Dental |
|
1,114,631 |
|
|
1,008,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
1,163,799 |
|
|
1,002,741 |
|
|
|
|
|
|
|
|
|
|
Total Health Care Distribution |
|
2,278,430 |
|
|
2,011,577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
147,644 |
|
|
120,949 |
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
2,426,074 |
|
|
2,132,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
- |
|
|
- |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
$ |
2,426,074 |
|
$ |
2,132,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
Q3 2021 |
|
Q3 2020 |
|
Total Sales
|
|
Foreign
|
|
Local
|
|
Acquisition
|
|
Local
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental Merchandise |
$ |
539,456 |
|
$ |
509,272 |
|
|
|
|
|
|
|
|
|
|
Dental Equipment |
|
168,807 |
|
|
131,745 |
|
|
|
|
|
|
|
|
|
|
Total Dental |
|
708,263 |
|
|
641,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
23,013 |
|
|
24,405 |
|
- |
|
|
|
- |
|
|
|
- |
Total Health Care Distribution |
|
731,276 |
|
|
665,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
20,965 |
|
|
17,406 |
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
752,241 |
|
|
682,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
- |
|
|
24,792 |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
$ |
752,241 |
|
$ |
707,620 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Corporate TSA revenues represents sales of certain products to |
|||||||||||||||
|
|||||||||||||||
Exhibit A - Year-to-Date Sales |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2021 Third Quarter Year-to-Date |
|||||||||||||||
Sales Summary |
|||||||||||||||
(in thousands) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 2021 Year-to-Date over Q3 2020 Year-to-Date |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global |
Q3 2021 |
|
Q3 2020 |
|
Total Sales
|
|
Foreign
|
|
Local
|
|
Acquisition
|
|
Local
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental Merchandise |
$ |
4,344,933 |
|
$ |
3,194,015 |
|
|
|
|
|
|
|
|
|
|
Dental Equipment |
|
1,177,233 |
|
|
872,206 |
|
|
|
|
|
|
|
|
|
|
Total Dental |
|
5,522,166 |
|
|
4,066,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
3,084,677 |
|
|
2,445,644 |
|
|
|
|
|
|
|
|
|
|
Total Health Care Distribution |
|
8,606,843 |
|
|
6,511,865 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
463,656 |
|
|
375,547 |
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
9,070,499 |
|
|
6,887,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
- |
|
|
66,004 |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
Total Global |
$ |
9,070,499 |
|
$ |
6,953,416 |
|
|
|
|
|
|
|
|
|
|
|
Q3 2021 |
|
Q3 2020 |
|
Total Sales
|
|
Foreign
|
|
Local
|
|
Acquisition
|
|
Local
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental Merchandise |
$ |
2,612,142 |
|
$ |
1,894,097 |
|
|
|
|
|
|
|
|
|
|
Dental Equipment |
|
674,879 |
|
|
519,057 |
|
|
|
|
|
|
|
|
|
|
Total Dental |
|
3,287,021 |
|
|
2,413,154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
3,006,699 |
|
|
2,377,357 |
|
|
|
|
|
|
|
|
|
|
Total Health Care Distribution |
|
6,293,720 |
|
|
4,790,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
399,478 |
|
|
327,374 |
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
6,693,198 |
|
|
5,117,885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
- |
|
|
- |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,693,198 |
|
$ |
5,117,885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
Q3 2021 |
|
Q3 2020 |
|
Total Sales
|
|
Foreign
|
|
Local
|
|
Acquisition
|
|
Local
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental Merchandise |
$ |
1,732,791 |
|
$ |
1,299,918 |
|
|
|
|
|
|
|
|
|
|
Dental Equipment |
|
502,354 |
|
|
353,149 |
|
|
|
|
|
|
|
|
|
|
Total Dental |
|
2,235,145 |
|
|
1,653,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
77,978 |
|
|
68,287 |
|
|
|
|
|
|
|
|
|
|
Total Health Care Distribution |
|
2,313,123 |
|
|
1,721,354 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
64,178 |
|
|
48,173 |
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
2,377,301 |
|
|
1,769,527 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
- |
|
|
66,004 |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
$ |
2,377,301 |
|
$ |
1,835,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Corporate TSA revenues represents sales of certain animal health products to |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit B |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
2021 Third Quarter and Year-to-Date |
||||||||||||||||
Reconciliation of reported GAAP net income from continuing operations and |
||||||||||||||||
diluted EPS from continuing operations attributable to |
||||||||||||||||
to non-GAAP net income from continuing operations and |
||||||||||||||||
diluted EPS from continuing operations attributable to |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
(unaudited) |
||||||||||||||||
|
|
Third Quarter |
|
|
|
Year-to-Date |
|
|||||||||
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
% |
|
|
|
2021 |
|
|
2020 |
|
Growth |
|
|
|
2021 |
|
|
2020 |
Growth |
|
Net income from continuing operations attributable to |
$ |
162,286 |
|
$ |
141,726 |
|
14.5 |
% |
|
$ |
483,999 |
|
$ |
260,887 |
85.5 |
% |
Diluted EPS from continuing operations attributable to |
$ |
1.15 |
|
$ |
0.99 |
|
16.2 |
% |
|
$ |
3.40 |
|
$ |
1.82 |
86.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs (credits) -Pre-tax (1) |
$ |
(175) |
|
$ |
6,992 |
|
|
|
|
$ |
3,360 |
|
$ |
27,713 |
|
|
Income tax expense (benefit) for restructuring costs (1) |
|
44 |
|
|
(1,748) |
|
|
|
|
|
(840) |
|
|
(6,928) |
|
|
Settlement and litigation costs - Pre-tax (2) |
|
- |
|
|
- |
|
|
|
|
|
14,253 |
|
|
- |
|
|
Income tax benefit for settlement and litigation costs (2) |
|
- |
|
|
- |
|
|
|
|
|
(3,548) |
|
|
- |
|
|
Gain on sale of equity investment (3) |
|
(7,318) |
|
|
- |
|
|
|
|
|
(7,318) |
|
|
- |
|
|
Total non-GAAP adjustments to net income from continuing operations |
$ |
(7,449) |
|
$ |
5,244 |
|
|
|
|
$ |
5,907 |
|
$ |
20,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments to diluted EPS from continuing operations |
|
(0.05) |
|
|
0.04 |
|
|
|
|
|
0.04 |
|
|
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income from continuing operations attributable to |
$ |
154,837 |
|
$ |
146,970 |
|
5.4 |
% |
|
$ |
489,906 |
|
$ |
281,672 |
73.9 |
% |
Non-GAAP diluted EPS from continuing operations attributable to |
$ |
1.10 |
|
$ |
1.03 |
|
6.8 |
% |
|
$ |
3.45 |
|
$ |
1.97 |
75.1 |
% |
Management believes that non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures. Earnings per share numbers may not sum due to rounding.
(1) |
Represents Q3 2021 restructuring credits of |
|
(2) |
Represents a YTD 2021 pre-tax charge of |
|
(3) |
In the third quarter of 2021 we received contingent proceeds of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20211102005636/en/
Investors
Executive Vice President and Chief Financial Officer
steven.paladino@henryschein.com
(631) 843-5500
Vice President, Investor Relations and Strategic Financial Project Officer
graham.stanley@henryschein.com
(631) 843-5963
Media
Vice President, Global Corporate Media Relations
annmarie.gothard@henryschein.com
(631) 390-8169
Source:
FAQ
What were Henry Schein's net sales for Q3 2021?
How much did Henry Schein's diluted EPS increase in Q3 2021?
What is Henry Schein's 2021 EPS guidance?
What is the projected growth for Henry Schein's EPS in 2022?
What are the challenges faced by Henry Schein regarding sales growth?
