Henry Schein Reports First-Quarter 2023 Financial Results
- First-quarter 2023 net sales of
$3.1 billion decreased 3.8% compared with first-quarter 2022; internal sales increased 6.3% in local currencies excluding sales of personal protective equipment (PPE) products and COVID-19 test kits - First-quarter GAAP diluted EPS of
$0.91 compared with first-quarter 2022 GAAP diluted EPS of$1.30 - First-quarter non-GAAP diluted EPS of
$1.21 compared with first-quarter 2022 non-GAAP diluted EPS of$1.44 - Updating full-year 2023 non-GAAP diluted EPS guidance to
$5.18 to$5.35 , reflecting an estimated$0.05 to$0.10 first year dilution from the Biotech Dental acquisition
“We are pleased to report solid financial results for the first quarter of 2023 that are in-line with the expectations we provided at the beginning of the year and reflect the good earnings momentum in our underlying core businesses. Market trends stayed consistent with those we discussed during the previous quarter’s conference call, and as anticipated, our results continued to be impacted by decreased sales of PPE products and COVID-19 test kits. Excluding these product categories, we achieved strong internal sales growth of 6.3% in local currencies. Our financial results were also adversely impacted by acquisition related expenses and foreign exchange,” said
“First quarter sales growth in our Dental business, excluding PPE products, reflects stable patient traffic. Dental merchandise sales were very good, and our dental equipment sales were solid. Traditional equipment sales grew well, while digital equipment sales continued to decrease.
“Our Technology and Value-Added Services business had an excellent quarter. Growth in
“Our Medical business achieved growth of approximately 4%, excluding sales of PPE products and COVID-19 test kits. We expect internal sales growth in our core Medical business to continue to grow, but at a slower pace than last year given the prior year comparison resulting from the significant growth we achieved last year,” concluded
First-Quarter Financial Results
- Total net sales for the quarter were
$3.1 billion , a decrease of 3.8% compared with the first quarter of 2022. The 3.8% decrease included a 3.7% decrease in local currencies excluding acquisitions, 1.4% growth from acquisitions and a 1.5% decrease related to foreign currency exchange1. Sales of PPE products and COVID-19 test kits in the first quarter were$201 million , a decrease of$287 million versus the prior-year period. When excluding sales of PPE products and COVID-19 test kits, first-quarter internal sales growth in local currencies was 6.3% compared with the prior-year period. - GAAP net income for the quarter was
$121 million , or$0.91 per diluted share, compared with first-quarter 2022 GAAP net income of$181 million , or$1.30 per diluted share. - Non-GAAP net income for the quarter was
$161 million , or$1.21 per diluted share, compared with first-quarter 2022 non-GAAP net income of$200 million , or$1.44 per diluted share2. First-quarter 2023 non-GAAP diluted EPS excludes restructuring expenses of$30 million , or$0.16 per diluted share, and amortization expense of acquired intangible assets of$30 million pre-tax, or$0.14 per diluted share, and was negatively impacted by:- an estimated decreased contribution of
$0.24 per diluted share from sales of PPE products and COVID-19 test kits compared with the first quarter last year. - acquisition-related expense of
$0.04 per diluted share, compared with the first quarter last year acquisition-related expense of less than$0.01 per diluted share. - foreign currency exchange of approximately
$0.02 per diluted share versus the first quarter last year.
- an estimated decreased contribution of
- Global Dental sales1 were
$1.9 billion for the quarter, an increase of 3.8% compared with the prior-year period. Internally generated sales increased 4.0% in local currencies and acquisitions contributed 2.3% growth. This growth was offset by a 2.5% decrease related to foreign currency exchange. The 4.0% internal sales increase in local currencies reflects a 1.6% increase inNorth America and 7.6% growth internationally.- Global Dental consumable merchandise internal sales increased by 4.0% in local currencies. Excluding sales of PPE products, internal sales growth was 8.4% in local currencies.
- Global Dental equipment internal sales growth was 3.9% in local currencies.
- Global Medical sales1 were
$1.0 billion for the quarter, a decrease of 17.2% compared with the prior-year period. Internally generated sales decreased 17.1% in local currencies, while foreign currency exchange resulted in a decrease of 0.1%. Internal sales increased 4.2% in local currencies when excluding sales of PPE products and COVID-19 test kits. - Global Technology and Value-Added Services sales1 were
$191 million for the quarter, an increase of 6.8% compared with the prior-year period, driven by the strength ofHenry Schein One . This included 6.5% internal sales growth in local currencies and 1.5% growth from acquisitions, offset by a 1.2% decrease related to foreign currency exchange.
_______________________
1 See Exhibit A for details of sales growth.
2 See Exhibit B for a reconciliation of GAAP net income and diluted EPS to non-GAAP net income and diluted EPS.
Stock Repurchase Plan
During the first quarter of 2023, the Company repurchased approximately 1.2 million shares of its common stock at an average price of
2023 Financial Guidance
Guidance for 2023 is for current continuing operations as well as completed acquisitions and does not include the impact of future share repurchases, announced or potential future acquisitions, integration and restructuring expenses, and excludes amortization expense of acquired intangible assets. This guidance also assumes that foreign currency exchange rates remain generally consistent with current levels and that end markets remain consistent with current market conditions. While the recently closed Biotech Dental acquisition is now reflected within our guidance, our recently announced acquisition of S.I.N. Implant System is not.
- 2023 sales growth is expected to be approximately 1% to 3% over 2022, unchanged from prior guidance.
- 2023 sales of PPE products are expected to decline about 20% to 25%, unchanged from prior guidance.
- 2023 sales of COVID-19 test kits are now expected to decrease by approximately 65% to 70% from 2022 versus prior guidance for a decrease of approximately 35% to 40%.
- 2023 non-GAAP operating margin is expected to be 10 to 15 basis points below 2022 non-GAAP operating margin of 8.2%, largely a result of lower PPE products and COVID-19 test kit sales and profits, and acquisition-related expenses. 2023 guidance reflects high single-digit to low double-digit growth in non-GAAP operating income over 2022 when excluding the contribution from PPE products and COVID-19 test kits, and acquisition-related expenses.
- 2023 non-GAAP diluted EPS attributable to
Henry Schein, Inc. :- is now expected to be
$5.18 to$5.35 , reflecting growth of -4% to -1% compared with 2022 non-GAAP diluted EPS of$5.38 , which also excludes amortization expense of acquired intangible assets. - includes
$0.05 to$0.10 dilution from the Biotech Dental acquisition, primarily due to non-cash acquisition accounting adjustments for inventory and acquisition-related expenses. - the impact on 2023 non-GAAP diluted EPS from lower contributions to earnings from sales of PPE products and COVID-19 test kits is estimated to be
$0.35 to$0.40 , unchanged from prior guidance.
- is now expected to be
Adjustments to 2023 GAAP Diluted EPS
The Company is providing guidance for 2023 diluted EPS on a non-GAAP basis, as noted above. The Company is not providing a reconciliation of its 2023 non-GAAP guidance to the Company’s projected 2023 diluted EPS prepared on a GAAP basis. This is because the Company is unable to provide without unreasonable effort an estimate of integration and restructuring costs related to an ongoing initiative to drive operating efficiencies, including the corresponding tax effect that will be included in the Company’s 2023 diluted EPS prepared on a GAAP basis. The inability to provide this reconciliation 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.
First-Quarter 2023 Conference Call Webcast
The Company will hold a conference call to discuss first-quarter 2023 financial results today, beginning at
The Company will be posting slides that provide a summary of its first-quarter 2023 financial results on its website at https://www.henryschein.com/us-en/Corporate/investor-presentations.aspx.
About
Henry Schein operates through a centralized and automated distribution network, with a selection of more than 300,000 branded products and Henry Schein corporate brand products in our distribution centers.
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, 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-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; 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; legal, regulatory, compliance, cybersecurity, 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; adverse changes in supplier rebates or other purchasing incentives; risks related to the sale of corporate brand products; 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, recession, fluctuations in energy pricing and the value of the
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 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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except share and per share data)
(unaudited)
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
|
|
2023 |
|
2022 |
||||
|
|
|
|
|
||||
|
Net sales |
$ |
3,060 |
|
|
$ |
3,179 |
|
|
Cost of sales |
|
2,094 |
|
|
|
2,206 |
|
|
Gross profit |
|
966 |
|
|
|
973 |
|
|
Operating expenses: |
|
|
|
||||
|
Selling, general and administrative |
|
717 |
|
|
|
682 |
|
|
Depreciation and amortization |
|
44 |
|
|
|
47 |
|
|
Restructuring costs |
|
30 |
|
|
|
- |
|
|
Operating income |
|
175 |
|
|
|
244 |
|
|
Other income (expense): |
|
|
|
||||
|
Interest income |
|
3 |
|
|
|
2 |
|
|
Interest expense |
|
(14 |
) |
|
|
(7 |
) |
|
Other, net |
|
(1 |
) |
|
|
- |
|
|
Income before taxes, equity in earnings of affiliates and noncontrolling interests |
|
163 |
|
|
|
239 |
|
|
Income taxes |
|
(39 |
) |
|
|
(57 |
) |
|
Equity in earnings of affiliates |
|
4 |
|
|
|
4 |
|
|
Net income |
|
128 |
|
|
|
186 |
|
|
Less: Net income attributable to noncontrolling interests |
|
(7 |
) |
|
|
(5 |
) |
|
Net income attributable to |
$ |
121 |
|
|
$ |
181 |
|
|
|
|
|
|
||||
|
Earnings per share attributable to |
|
|
|
||||
|
|
|
|
|
||||
|
Basic |
$ |
0.92 |
|
|
$ |
1.31 |
|
|
Diluted |
$ |
0.91 |
|
|
$ |
1.30 |
|
|
|
|
|
|
||||
|
Weighted-average common shares outstanding: |
|
|
|
||||
|
Basic |
|
131,365,789 |
|
|
|
137,296,581 |
|
|
Diluted |
|
133,039,886 |
|
|
|
139,237,472 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
|
|
|
|
|
||||
|
|
2023 |
|
2022 |
||||
|
|
(unaudited) |
|
|
||||
|
ASSETS |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
126 |
|
|
$ |
117 |
|
|
Accounts receivable, net of allowance for credit losses of |
|
1,470 |
|
|
|
1,442 |
|
|
Inventories, net |
|
1,918 |
|
|
|
1,963 |
|
|
Prepaid expenses and other |
|
438 |
|
|
|
466 |
|
|
Total current assets |
|
3,952 |
|
|
|
3,988 |
|
|
Property and equipment, net |
|
396 |
|
|
|
383 |
|
|
Operating lease right-of-use assets |
|
280 |
|
|
|
284 |
|
|
|
|
2,917 |
|
|
|
2,893 |
|
|
Other intangibles, net |
|
548 |
|
|
|
587 |
|
|
Investments and other |
|
479 |
|
|
|
472 |
|
|
Total assets |
$ |
8,572 |
|
|
$ |
8,607 |
|
|
|
|
|
|
||||
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
855 |
|
|
$ |
1,004 |
|
|
Bank credit lines |
|
236 |
|
|
|
103 |
|
|
Current maturities of long-term debt |
|
55 |
|
|
|
6 |
|
|
Operating lease liabilities |
|
73 |
|
|
|
73 |
|
|
Accrued expenses: |
|
|
|
||||
|
Payroll and related |
|
231 |
|
|
|
314 |
|
|
Taxes |
|
156 |
|
|
|
132 |
|
|
Other |
|
566 |
|
|
|
592 |
|
|
Total current liabilities |
|
2,172 |
|
|
|
2,224 |
|
|
Long-term debt |
|
1,021 |
|
|
|
1,040 |
|
|
Deferred income taxes |
|
40 |
|
|
|
36 |
|
|
Operating lease liabilities |
|
274 |
|
|
|
275 |
|
|
Other liabilities |
|
368 |
|
|
|
361 |
|
|
Total liabilities |
|
3,875 |
|
|
|
3,936 |
|
|
|
|
|
|
||||
|
Redeemable noncontrolling interests |
|
570 |
|
|
|
576 |
|
|
Commitments and contingencies |
|
|
|
||||
|
|
|
|
|
||||
|
Stockholders' equity: |
|
|
|
||||
|
Preferred stock, |
|
- |
|
|
|
- |
|
|
Common stock, |
|
1 |
|
|
|
1 |
|
|
Additional paid-in capital |
|
- |
|
|
|
- |
|
|
Retained earnings |
|
3,684 |
|
|
|
3,678 |
|
|
Accumulated other comprehensive loss |
|
(213 |
) |
|
|
(233 |
) |
|
|
|
3,472 |
|
|
|
3,446 |
|
|
Noncontrolling interests |
|
655 |
|
|
|
649 |
|
|
Total stockholders' equity |
|
4,127 |
|
|
|
4,095 |
|
|
Total liabilities, redeemable noncontrolling interests and stockholders' equity |
$ |
8,572 |
|
|
$ |
8,607 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
|
|
Three Months Ended |
||||||
|
|
|
|
|
||||
|
|
2023 |
|
2022 |
||||
|
|
|
|
|
||||
|
Cash flows from operating activities: |
|
|
|
||||
|
Net income |
$ |
128 |
|
|
$ |
186 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
52 |
|
|
|
55 |
|
|
Non-cash restructuring charges |
|
7 |
|
|
|
- |
|
|
Stock-based compensation expense |
|
10 |
|
|
|
12 |
|
|
Provision for losses on trade and other accounts receivable |
|
1 |
|
|
|
1 |
|
|
Provision for (benefit from) deferred income taxes |
|
2 |
|
|
|
(3 |
) |
|
Equity in earnings of affiliates |
|
(4 |
) |
|
|
(4 |
) |
|
Distributions from equity affiliates |
|
2 |
|
|
|
4 |
|
|
Changes in unrecognized tax benefits |
|
1 |
|
|
|
4 |
|
|
Other |
|
(1 |
) |
|
|
(7 |
) |
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
||||
|
Accounts receivable |
|
(20 |
) |
|
|
16 |
|
|
Inventories |
|
63 |
|
|
|
(9 |
) |
|
Other current assets |
|
29 |
|
|
|
26 |
|
|
Accounts payable and accrued expenses |
|
(243 |
) |
|
|
(188 |
) |
|
Net cash provided by operating activities |
|
27 |
|
|
|
93 |
|
|
|
|
|
|
||||
|
Cash flows from investing activities: |
|
|
|
||||
|
Purchases of fixed assets |
|
(31 |
) |
|
|
(19 |
) |
|
Payments related to equity investments and business acquisitions, net of cash acquired |
|
(1 |
) |
|
|
(5 |
) |
|
Proceeds from loan to affiliate |
|
2 |
|
|
|
4 |
|
|
Other |
|
(9 |
) |
|
|
(7 |
) |
|
Net cash used in investing activities |
|
(39 |
) |
|
|
(27 |
) |
|
|
|
|
|
||||
|
Cash flows from financing activities: |
|
|
|
||||
|
Net change in bank borrowings |
|
132 |
|
|
|
30 |
|
|
Proceeds from issuance of long-term debt |
|
31 |
|
|
|
- |
|
|
Principal payments for long-term debt |
|
(1 |
) |
|
|
(53 |
) |
|
Proceeds from issuance of stock upon exercise of stock options |
|
1 |
|
|
|
2 |
|
|
Payments for repurchases and retirement of common stock |
|
(100 |
) |
|
|
- |
|
|
Payments for taxes related to shares withheld for employee taxes |
|
(30 |
) |
|
|
(26 |
) |
|
Distributions to noncontrolling shareholders |
|
(4 |
) |
|
|
(5 |
) |
|
Acquisitions of noncontrolling interests in subsidiaries |
|
(8 |
) |
|
|
(10 |
) |
|
Net cash provided by (used in) financing activities |
|
21 |
|
|
|
(62 |
) |
|
|
|
|
|
||||
|
Effect of exchange rate changes on cash and cash equivalents |
|
- |
|
|
|
4 |
|
|
|
|
|
|
||||
|
Net change in cash and cash equivalents |
|
9 |
|
|
|
8 |
|
|
Cash and cash equivalents, beginning of period |
|
117 |
|
|
|
118 |
|
|
Cash and cash equivalents, end of period |
$ |
126 |
|
|
$ |
126 |
|
|
Exhibit A - First Quarter Sales |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
||||||||||||||||||||||
|
2023 First Quarter |
||||||||||||||||||||||
|
Sales Summary |
||||||||||||||||||||||
|
(in millions) |
||||||||||||||||||||||
|
(unaudited) |
||||||||||||||||||||||
|
Q1 2023 over Q1 2022 |
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
|
|
|
|
|
Local Currency Growth |
|
|
|
|
|
|
|||||||||||
|
Global |
Q1 2023 |
|
Q1 2022 |
|
Local Internal Growth |
|
Acquisition Growth |
|
Total Local Currency Growth |
|
Foreign Exchange Impact |
|
Total Sales Growth |
|||||||||
|
Dental Merchandise |
$ |
1,487 |
|
$ |
1,428 |
|
4.0 |
% |
|
2.5 |
% |
|
6.5 |
% |
|
-2.4 |
% |
|
4.1 |
% |
||
|
Dental Equipment |
|
411 |
|
|
|
400 |
|
|
3.9 |
% |
|
1.5 |
% |
|
5.4 |
% |
|
-2.6 |
% |
|
2.8 |
% |
|
Total Dental |
|
1,898 |
|
|
|
1,828 |
|
|
4.0 |
% |
|
2.3 |
% |
|
6.3 |
% |
|
-2.5 |
% |
|
3.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Medical |
|
971 |
|
|
|
1,172 |
|
|
-17.1 |
% |
|
0.0 |
% |
|
-17.1 |
% |
|
-0.1 |
% |
|
-17.2 |
% |
|
Total Health Care Distribution |
|
2,869 |
|
|
|
3,000 |
|
|
-4.3 |
% |
|
1.4 |
% |
|
-2.9 |
% |
|
-1.5 |
% |
|
-4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Technology and Value-Added Services |
|
191 |
|
|
|
179 |
|
|
6.5 |
% |
|
1.5 |
% |
|
8.0 |
% |
|
-1.2 |
% |
|
6.8 |
% |
|
Total Global |
$ |
3,060 |
|
|
$ |
3,179 |
|
|
-3.7 |
% |
|
1.4 |
% |
|
-2.3 |
% |
|
-1.5 |
% |
|
-3.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
Local Currency Growth |
|
|
|
|
|
|
|||||||||||
|
|
Q1 2023 |
|
Q1 2022 |
|
Local Internal Growth |
|
Acquisition Growth |
|
Total Local Currency Growth |
|
Foreign Exchange Impact |
|
Total Sales Growth |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Dental Merchandise |
$ |
896 |
|
|
$ |
868 |
|
|
1.3 |
% |
|
2.5 |
% |
|
3.8 |
% |
|
-0.5 |
% |
|
3.3 |
% |
|
Dental Equipment |
|
248 |
|
|
|
237 |
|
|
2.6 |
% |
|
2.5 |
% |
|
5.1 |
% |
|
-0.9 |
% |
|
4.2 |
% |
|
Total Dental |
|
1,144 |
|
|
|
1,105 |
|
|
1.6 |
% |
|
2.5 |
% |
|
4.1 |
% |
|
-0.6 |
% |
|
3.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Medical |
|
951 |
|
|
|
1,150 |
|
|
-17.3 |
% |
|
0.0 |
% |
|
-17.3 |
% |
|
0.0 |
% |
|
-17.3 |
% |
|
Total Health Care Distribution |
|
2,095 |
|
|
|
2,255 |
|
|
-8.1 |
% |
|
1.3 |
% |
|
-6.8 |
% |
|
-0.3 |
% |
|
-7.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Technology and Value-Added Services |
|
166 |
|
|
|
156 |
|
|
5.4 |
% |
|
1.8 |
% |
|
7.2 |
% |
|
-0.1 |
% |
|
7.1 |
% |
|
|
$ |
2,261 |
|
|
$ |
2,411 |
|
|
-7.2 |
% |
|
1.3 |
% |
|
-5.9 |
% |
|
-0.3 |
% |
|
-6.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
Local Currency Growth |
|
|
|
|
|
|
|||||||||||
|
International |
Q1 2023 |
|
Q1 2022 |
|
Local Internal Growth |
|
Acquisition Growth |
|
Total Local Currency Growth |
|
Foreign Exchange Impact |
|
Total Sales Growth |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Dental Merchandise |
$ |
591 |
|
|
$ |
560 |
|
|
8.1 |
% |
|
2.6 |
% |
|
10.7 |
% |
|
-5.2 |
% |
|
5.5 |
% |
|
Dental Equipment |
|
163 |
|
|
|
163 |
|
|
5.8 |
% |
|
0.0 |
% |
|
5.8 |
% |
|
-5.2 |
% |
|
0.6 |
% |
|
Total Dental |
|
754 |
|
|
|
723 |
|
|
7.6 |
% |
|
2.0 |
% |
|
9.6 |
% |
|
-5.2 |
% |
|
4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Medical |
|
20 |
|
|
|
22 |
|
|
-6.3 |
% |
|
0.0 |
% |
|
-6.3 |
% |
|
-5.3 |
% |
|
-11.6 |
% |
|
Total Health Care Distribution |
|
774 |
|
|
|
745 |
|
|
7.2 |
% |
|
1.9 |
% |
|
9.1 |
% |
|
-5.2 |
% |
|
3.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Technology and Value-Added Services |
|
25 |
|
|
|
23 |
|
|
13.5 |
% |
|
0.0 |
% |
|
13.5 |
% |
|
-8.4 |
% |
|
5.1 |
% |
|
|
$ |
799 |
|
|
$ |
768 |
|
|
7.4 |
% |
|
1.8 |
% |
|
9.2 |
% |
|
-5.2 |
% |
|
4.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Note: Certain prior period amounts have been reclassified to conform to the current period presentation. |
||||||||||||||||||||||
|
Exhibit B |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
2023 First Quarter |
||||||||
|
Reconciliation of reported GAAP net income and diluted EPS attributable to |
||||||||
|
to non-GAAP net income and diluted EPS attributable to |
||||||||
|
(in millions, except per share data) |
||||||||
|
(unaudited) |
||||||||
|
|
|
First Quarter |
|
|||||
|
|
|
|
|
|
|
|
% |
|
|
|
|
2023 |
|
|
2022 |
|
Growth |
|
|
Net income attributable to |
$ |
121 |
|
$ |
181 |
|
(32.8) |
% |
|
Diluted EPS attributable to |
$ |
0.91 |
|
$ |
1.30 |
|
(30.0) |
% |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
Restructuring costs, net of tax (1) |
$ |
21 |
|
$ |
- |
|
|
|
|
Acquisition intangible amortization, net of tax (2) |
|
19 |
|
|
20 |
|
|
|
|
Non-GAAP adjustments to net income |
$ |
40 |
|
$ |
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments to diluted EPS |
$ |
0.30 |
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income attributable to |
$ |
161 |
|
$ |
200 |
|
(19.6) |
% |
|
Non-GAAP diluted EPS attributable to |
$ |
1.21 |
|
$ |
1.44 |
|
(16.0) |
% |
Management believes that non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures. Net income growth rates are based on actual values and may not recalculate due to rounding. Amounts may not sum due to rounding.
|
(1) |
Restructuring Costs |
|
|
|
|
|
||
|
|
|
|
|
|
|
|||
|
The following table presents details of our restructuring costs: |
|
|
|
|
|
|||
|
|
|
|
First Quarter |
|||||
|
|
|
|
2023 |
|
|
2022 |
||
|
|
Restructuring costs - pre-tax, as reported |
$ |
30 |
|
|
$ |
- |
|
|
|
Income tax benefit |
|
(8 |
) |
|
|
- |
|
|
|
Amount attributable to noncontrolling interests |
|
(1 |
) |
|
|
- |
|
|
|
Restructuring costs, net |
|
21 |
|
|
|
- |
|
Q1 2023 restructuring costs primarily consisted of employee severance and costs related to the exit of facilities.
|
(2) |
Acquisition Intangible Amortization |
|
|
|
|
|
||
|
|
|
|
|
|
|
|||
|
The following table presents details of amortization of acquired intangible assets: |
||||||||
|
|
|
|
First Quarter |
|||||
|
|
|
|
2023 |
|
|
2022 |
||
|
|
Acquisition intangible amortization - pre-tax, as reported |
$ |
30 |
|
|
$ |
32 |
|
|
|
Income tax benefit |
|
(7 |
) |
|
|
(8 |
) |
|
|
Amount attributable to noncontrolling interests |
|
(4 |
) |
|
|
(4 |
) |
|
|
Acquisition intangible amortization, net |
|
19 |
|
|
|
20 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230507005031/en/
Investors
Ronald N. South
Senior Vice President and Chief Financial Officer
ronald.south@henryschein.com
(631) 843-5500
Vice President, Investor Relations and Strategic Financial Project Officer
graham.stanley@henryschein.com
(631) 843-5500
Media
Vice President, Global Corporate Media Relations
annmarie.gothard@henryschein.com
(631) 390-8169
Source: