Henry Schein Reports Fourth Quarter 2020 Financial Results From Continuing Operations
- Total net sales growth of 18.6% in fourth quarter 2020 versus prior-year
- Record total net sales growth for second half of 2020
- GAAP diluted EPS from continuing operations of
$0.99 versus prior-year GAAP diluted EPS from continuing operations of$2.25 , which included a net gain on sale of equity investments of$1.27 - Non-GAAP diluted EPS from continuing operations of
$1.00 versus prior-year non-GAAP diluted EPS from continuing operations of$0.97 - Introduces guidance for 2021 non-GAAP diluted EPS from continuing operations
Total net sales for the quarter ended
GAAP net income attributable to
“Against the backdrop of a most challenging year in our history due to the COVID-19 pandemic, with an unprecedented human toll and economic impact worldwide, Henry Schein’s unwavering focus on our customers, along with our resilience and agility, enabled us to deliver fourth quarter total net sales growth of 18.6%. In addition, we delivered record total net sales growth for the second half of 2020 as our end markets have rebounded, and we recognize the commitment and sacrifice of our Team Schein Members globally,” said
“I remain confident that Henry Schein is well-positioned for future continued success given the breadth of our products, services and support across the global dental and medical markets,”
Dental sales for the fourth quarter of 2020 of
Global dental consumable merchandise internal sales increased by 10.0% in local currencies. Excluding PPE and COVID-19 related products, sales increased by 5.0%. In
“We reported strong overall global dental sales growth in the fourth quarter. High-acuity procedures, including dental specialties and restorative procedures, also contributed to year-over-year sales growth. The 5.0% quarterly growth rate for global dental consumable sales is among the highest recorded by Henry Schein since 2017. International sales results for both consumable merchandise and equipment were strong. Dental patient traffic has remained at stable levels compared to the third quarter of 2020, even in countries experiencing more stringent lockdown rules, with the exception of the U.K.,” noted
Medical sales for the fourth quarter of 2020 of
“Our Medical business experienced strong year-over-year sales growth in the fourth quarter driven by continued demand for PPE and COVID-19 related products, most specifically for COVID-19 test sales. For the second quarter in a row, our global Medical business has achieved over
Technology and Value-Added Services sales of
“Technology and Value-Added Services sales in the quarter were impacted by lower transactional revenue associated with a lower number of patient visits compared to pre-COVID-19 practice volume. We also experienced a difficult prior-year comparison that benefited from hardware upgrades as we helped transition customers to address new operating system requirements. In addition, lower dental equipment sales volume in
2020 Financial Results
Total net sales for 2020 were
GAAP net income attributable to
Stock Repurchase Plan
Prior to the suspension of the Company’s share repurchase program due to COVID-19, for fiscal year 2020 Henry Schein repurchased approximately 1.2 million shares of common stock at an average price of
Financial Guidance
Henry Schein today introduced 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 an accurate estimate of expenses related to an ongoing restructuring initiative in 2021. Financial guidance is as follows:
- 2021 non-GAAP diluted EPS from continuing operations attributable to
Henry Schein, Inc. is expected to be at or above 2019 non-GAAP diluted EPS from continuing operations of$3.51 . The Company believes the comparison to 2019 non-GAAP diluted EPS from continuing operations is most appropriate given the impact of COVID-19 on 2020 results of operations.
- Guidance for 2021 non-GAAP diluted EPS attributable to
Henry Schein, Inc. is for current continuing operations as well as completed or previously announced acquisitions, and does not include the impact of potential future acquisitions, if any, restructuring expenses or share repurchases. Guidance also assumes foreign exchange rates that are generally consistent with current levels, and that end markets remain stable and are consistent with current market conditions. Guidance does not assume any material market changes associated with COVID-19.
Adjustments to Projected 2021 Non-GAAP Diluted EPS
The Company has provided guidance for 2021 non-GAAP diluted EPS from continuing operations, 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 program 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. The inability to provide these reconciliations is due to the uncertainty and inherent difficulty of predicting the occurrence, magnitude, financial impact, and the 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.
Fourth Quarter 2020 Conference Call Webcast
The Company will hold a conference call to discuss fourth quarter 2020 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, 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.
(TABLES TO FOLLOW)
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CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||
|
(in thousands, except per share data) |
||||||||||||
|
|
Three Months Ended |
|
Years Ended |
|||||||||
|
|
|
|
|
|
|
|
|
|||||
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
3,165,725 |
|
$ |
2,668,941 |
|
$ |
10,119,141 |
|
$ |
9,985,803 |
|
|
Cost of sales |
|
2,306,014 |
|
|
1,858,343 |
|
|
7,304,798 |
|
|
6,894,917 |
|
|
Gross profit |
|
859,711 |
|
|
810,598 |
|
|
2,814,343 |
|
|
3,090,886 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
674,131 |
|
|
615,323 |
|
|
2,246,947 |
|
|
2,357,920 |
|
|
Restructuring costs (credits) |
|
4,380 |
|
|
(1,059) |
|
|
32,093 |
|
|
14,705 |
|
|
Operating income |
|
181,200 |
|
|
196,334 |
|
|
535,303 |
|
|
718,261 |
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
2,361 |
|
|
3,389 |
|
|
9,842 |
|
|
15,757 |
|
|
Interest expense |
|
(11,968) |
|
|
(9,333) |
|
|
(41,377) |
|
|
(50,792) |
|
|
Other, net |
|
(1,663) |
|
|
(907) |
|
|
(3,873) |
|
|
(2,919) |
|
|
Income from continuing operations before taxes, equity in earnings of affiliates and noncontrolling interests |
|
169,930 |
|
|
189,483 |
|
|
499,895 |
|
|
680,307 |
|
|
Income taxes |
|
(29,409) |
|
|
(42,189) |
|
|
(95,374) |
|
|
(159,515) |
|
|
Equity in earnings of affiliates |
|
4,536 |
|
|
3,129 |
|
|
12,344 |
|
|
17,900 |
|
|
Net gain on sale of equity investments |
|
1,572 |
|
|
186,769 |
|
|
1,572 |
|
|
186,769 |
|
|
Net income from continuing operations |
|
146,629 |
|
|
337,192 |
|
|
418,437 |
|
|
725,461 |
|
|
Income (loss) from discontinued operations, net of tax |
|
712 |
|
|
(747) |
|
|
986 |
|
|
(6,323) |
|
|
Net income |
|
147,341 |
|
|
336,445 |
|
|
419,423 |
|
|
719,138 |
|
|
Less: Net income attributable to noncontrolling interests |
|
(4,708) |
|
|
(6,583) |
|
|
(15,629) |
|
|
(24,770) |
|
|
Plus: Net loss attributable to noncontrolling interests from discontinued operations |
|
- |
|
|
- |
|
|
- |
|
|
366 |
|
|
Net income attributable to |
$ |
142,633 |
|
$ |
329,862 |
|
$ |
403,794 |
|
$ |
694,734 |
|
|
Amounts attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
141,921 |
|
$ |
330,609 |
|
$ |
402,808 |
|
$ |
700,691 |
|
|
Discontinued operations |
|
712 |
|
|
(747) |
|
|
986 |
|
|
(5,957) |
|
|
Net income attributable to |
$ |
142,633 |
|
$ |
329,862 |
|
$ |
403,794 |
|
$ |
694,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share from continuing operations attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.00 |
|
$ |
2.27 |
|
$ |
2.83 |
|
$ |
4.74 |
|
|
Diluted |
$ |
0.99 |
|
$ |
2.25 |
|
$ |
2.81 |
|
$ |
4.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share from discontinued operations attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.01 |
|
$ |
(0.01) |
|
$ |
0.01 |
|
$ |
(0.04) |
|
|
Diluted |
$ |
- |
|
$ |
(0.01) |
|
$ |
0.01 |
|
$ |
(0.04) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.00 |
|
$ |
2.27 |
|
$ |
2.83 |
|
$ |
4.70 |
|
|
Diluted |
$ |
1.00 |
|
$ |
2.24 |
|
$ |
2.82 |
|
$ |
4.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
142,379 |
|
|
145,404 |
|
|
142,504 |
|
|
147,817 |
|
|
Diluted |
|
143,328 |
|
|
147,078 |
|
|
143,404 |
|
|
149,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
CONSOLIDATED BALANCE SHEETS |
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|
(in thousands, except share and per share data) |
||||||
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|
|
|
|
||
|
|
|
2020 |
|
2019 |
||
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
421,185 |
|
$ |
106,097 |
|
Accounts receivable, net of reserves of |
|
|
1,424,787 |
|
|
1,246,246 |
|
Inventories, net |
|
|
1,512,499 |
|
|
1,428,799 |
|
Prepaid expenses and other |
|
|
432,944 |
|
|
445,360 |
|
Total current assets |
|
|
3,791,415 |
|
|
3,226,502 |
|
Property and equipment, net |
|
|
342,004 |
|
|
329,645 |
|
Operating lease right-of-use assets, net |
|
|
288,847 |
|
|
231,662 |
|
|
|
|
2,504,392 |
|
|
2,462,495 |
|
Other intangibles, net |
|
|
479,429 |
|
|
572,878 |
|
Investments and other |
|
|
366,445 |
|
|
327,919 |
|
Total assets |
|
$ |
7,772,532 |
|
$ |
7,151,101 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,005,655 |
|
$ |
880,266 |
|
Bank credit lines |
|
|
73,366 |
|
|
23,975 |
|
Current maturities of long-term debt |
|
|
109,836 |
|
|
109,849 |
|
Operating lease liabilities |
|
|
64,716 |
|
|
65,349 |
|
Accrued expenses: |
|
|
|
|
|
|
|
Payroll and related |
|
|
295,329 |
|
|
265,206 |
|
Taxes |
|
|
138,671 |
|
|
165,171 |
|
Other |
|
|
595,529 |
|
|
528,553 |
|
Total current liabilities |
|
|
2,283,102 |
|
|
2,038,369 |
|
Long-term debt |
|
|
515,773 |
|
|
622,908 |
|
Deferred income taxes |
|
|
30,065 |
|
|
64,989 |
|
Operating lease liabilities |
|
|
238,727 |
|
|
176,267 |
|
Other liabilities |
|
|
392,781 |
|
|
331,173 |
|
Total liabilities |
|
|
3,460,448 |
|
|
3,233,706 |
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interests |
|
|
327,699 |
|
|
287,258 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
Preferred stock, |
|
|
- |
|
|
- |
|
Common stock, |
|
|
1,425 |
|
|
1,434 |
|
Additional paid-in capital |
|
|
- |
|
|
47,768 |
|
Retained earnings |
|
|
3,454,831 |
|
|
3,116,215 |
|
Accumulated other comprehensive loss |
|
|
(108,084) |
|
|
(167,373) |
|
|
|
|
3,348,172 |
|
|
2,998,044 |
|
Noncontrolling interests |
|
|
636,213 |
|
|
632,093 |
|
Total stockholders' equity |
|
|
3,984,385 |
|
|
3,630,137 |
|
Total liabilities, redeemable noncontrolling interests and stockholders' equity |
|
$ |
7,772,532 |
|
$ |
7,151,101 |
|
|
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|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||
|
(in thousands) |
||||||||||||
|
|
|
Three Months Ended |
|
Years Ended |
||||||||
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
147,341 |
|
$ |
336,445 |
|
$ |
419,423 |
|
$ |
719,138 |
|
Income (loss) from discontinued operations |
|
|
712 |
|
|
(747) |
|
|
986 |
|
|
(6,323) |
|
Income from continuing operations |
|
|
146,629 |
|
|
337,192 |
|
|
418,437 |
|
|
725,461 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
47,023 |
|
|
48,732 |
|
|
185,538 |
|
|
184,942 |
|
Impairment charge on intangible assets |
|
|
18,126 |
|
|
- |
|
|
20,275 |
|
|
- |
|
Gain on sale of equity investments |
|
|
(2,096) |
|
|
(250,167) |
|
|
(2,096) |
|
|
(250,167) |
|
Stock-based compensation expense |
|
|
15,436 |
|
|
11,810 |
|
|
8,788 |
|
|
44,920 |
|
Provision for losses on trade and other accounts receivable |
|
|
547 |
|
|
5,036 |
|
|
35,137 |
|
|
12,612 |
|
Benefit from deferred income taxes |
|
|
(4,784) |
|
|
(589) |
|
|
(52,977) |
|
|
(4,057) |
|
Equity in earnings of affiliates |
|
|
(4,536) |
|
|
(3,129) |
|
|
(12,344) |
|
|
(17,900) |
|
Distributions from equity affiliates |
|
|
5,949 |
|
|
3,556 |
|
|
16,002 |
|
|
71,469 |
|
Changes in unrecognized tax benefits |
|
|
(6,516) |
|
|
(1,594) |
|
|
(24,881) |
|
|
1,941 |
|
Other |
|
|
10,876 |
|
|
7,806 |
|
|
5,012 |
|
|
5,684 |
|
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
10,509 |
|
|
42,695 |
|
|
(189,349) |
|
|
(72,689) |
|
Inventories |
|
|
(5,987) |
|
|
(60,391) |
|
|
(31,817) |
|
|
14,702 |
|
Other current assets |
|
|
45,267 |
|
|
13,057 |
|
|
(6,479) |
|
|
(57,291) |
|
Accounts payable and accrued expenses |
|
|
68,662 |
|
|
141,284 |
|
|
224,273 |
|
|
160,851 |
|
Net cash provided by operating activities from continuing operations |
|
|
345,105 |
|
|
295,298 |
|
|
593,519 |
|
|
820,478 |
|
Net cash provided by (used in) operating activities from discontinued operations |
|
|
4,743 |
|
|
(2,738) |
|
|
5,391 |
|
|
(166,391) |
|
Net cash provided by operating activities |
|
|
349,848 |
|
|
292,560 |
|
|
598,910 |
|
|
654,087 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of fixed assets |
|
|
(11,030) |
|
|
(27,263) |
|
|
(48,829) |
|
|
(76,219) |
|
Proceeds (payments) related to equity investments and business acquisitions, net of cash acquired |
|
|
(7,965) |
|
|
1,214 |
|
|
(60,173) |
|
|
(655,879) |
|
Proceeds from sale of equity investment |
|
|
2,020 |
|
|
296,751 |
|
|
14,020 |
|
|
307,251 |
|
Proceeds from (repayments to) loan to affiliate |
|
|
208 |
|
|
265 |
|
|
(1,243) |
|
|
16,713 |
|
Other |
|
|
(4,296) |
|
|
(1,927) |
|
|
(18,794) |
|
|
(14,175) |
|
Net cash provided by (used in) investing activities from continuing operations |
|
|
(21,063) |
|
|
269,040 |
|
|
(115,019) |
|
|
(422,309) |
|
Net cash used in investing activities from discontinued operations |
|
|
- |
|
|
- |
|
|
- |
|
|
(2,064) |
|
Net cash provided by (used in) investing activities |
|
|
(21,063) |
|
|
269,040 |
|
|
(115,019) |
|
|
(424,373) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in bank borrowings |
|
|
(439,057) |
|
|
(84,066) |
|
|
45,082 |
|
|
(927,912) |
|
Proceeds from issuance of long-term debt |
|
|
- |
|
|
- |
|
|
501,421 |
|
|
741 |
|
Principal payments for long-term debt |
|
|
(759) |
|
|
(250,692) |
|
|
(611,216) |
|
|
(260,944) |
|
Debt issuance costs |
|
|
(196) |
|
|
- |
|
|
(3,879) |
|
|
(391) |
|
Debt extinguishment costs |
|
|
- |
|
|
- |
|
|
(401) |
|
|
- |
|
Proceeds from issuance of stock upon exercise of stock options |
|
|
- |
|
|
- |
|
|
- |
|
|
34 |
|
Payments for repurchases of common stock |
|
|
- |
|
|
(200,000) |
|
|
(73,789) |
|
|
(525,000) |
|
Payments for taxes related to shares withheld for employee taxes |
|
|
(292) |
|
|
(63) |
|
|
(14,299) |
|
|
(10,814) |
|
Distribution received related to Animal Health Spin-off |
|
|
- |
|
|
- |
|
|
- |
|
|
1,120,000 |
|
Proceeds related to Animal Health Share Sale |
|
|
- |
|
|
- |
|
|
- |
|
|
361,090 |
|
Proceeds from (distributions to) noncontrolling shareholders |
|
|
(3,891) |
|
|
(1,931) |
|
|
(7,886) |
|
|
51,498 |
|
Acquisitions of noncontrolling interests in subsidiaries |
|
|
(4,604) |
|
|
- |
|
|
(19,538) |
|
|
(2,358) |
|
Proceeds from (payments to) Henry Schein Animal Health Business |
|
|
2,572 |
|
|
(2,738) |
|
|
2,711 |
|
|
(169,295) |
|
Net cash used in financing activities from continuing operations |
|
|
(446,227) |
|
|
(539,490) |
|
|
(181,794) |
|
|
(363,351) |
|
Net cash provided by (used in) financing activities from discontinued operations |
|
|
(4,743) |
|
|
2,738 |
|
|
(5,391) |
|
|
147,371 |
|
Net cash used in financing activities |
|
|
(450,970) |
|
|
(536,752) |
|
|
(187,185) |
|
|
(215,980) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents from continuing operations |
|
|
9,875 |
|
|
5,993 |
|
|
18,382 |
|
|
14,394 |
|
Effect of exchange rate changes on cash and cash equivalents from discontinued operations |
|
|
- |
|
|
- |
|
|
- |
|
|
(2,240) |
|
Net change in cash and cash equivalents from continuing operations |
|
|
(112,310) |
|
|
30,841 |
|
|
315,088 |
|
|
49,212 |
|
Net change in cash and cash equivalents from discontinued operations |
|
|
- |
|
|
- |
|
|
- |
|
|
(23,324) |
|
Cash and cash equivalents, beginning of period |
|
|
533,495 |
|
|
75,256 |
|
|
106,097 |
|
|
56,885 |
|
Cash and cash equivalents, end of period |
|
$ |
421,185 |
|
$ |
106,097 |
|
$ |
421,185 |
|
$ |
106,097 |
|
Exhibit A - Fourth Quarter Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
2020 Fourth Quarter |
||||||||||||||||
|
Sales Summary |
||||||||||||||||
|
(in thousands) |
||||||||||||||||
|
(unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2020 over Q4 2019 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global |
Q4 2020 |
|
Q4 2019 |
|
Total Sales |
|
Foreign |
|
Local |
|
Acquisition |
|
Local |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental |
$ |
1,846,372 |
|
$ |
1,722,154 |
|
7.2% |
|
1.7% |
|
5.5% |
|
0.4% |
|
5.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
1,171,373 |
|
|
788,659 |
|
48.5% |
|
0.3% |
|
48.2% |
|
0.0% |
|
48.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care Distribution |
|
3,017,745 |
|
|
2,510,813 |
|
20.2% |
|
1.3% |
|
18.9% |
|
0.3% |
|
18.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
138,711 |
|
|
137,102 |
|
1.2% |
|
0.7% |
|
0.5% |
|
1.2% |
|
-0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
3,156,456 |
|
|
2,647,915 |
|
19.2% |
|
1.2% |
|
18.0% |
|
0.4% |
|
17.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
9,269 |
|
|
21,026 |
|
-55.9% |
|
0.0% |
|
-55.9% |
|
0.0% |
|
-55.9% |
|
|
Total Global |
$ |
3,165,725 |
|
$ |
2,668,941 |
|
18.6% |
|
1.2% |
|
17.4% |
|
0.3% |
|
17.1% |
|
|
|
Q4 2020 |
|
Q4 2019 |
|
Total Sales |
|
Foreign |
|
Local |
|
Acquisition |
|
Local |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental |
$ |
1,058,367 |
|
$ |
1,061,077 |
|
-0.3% |
|
0.1% |
|
-0.4% |
|
0.3% |
|
-0.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
1,137,313 |
|
|
769,135 |
|
47.9% |
|
0.0% |
|
47.9% |
|
0.0% |
|
47.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care Distribution |
|
2,195,680 |
|
|
1,830,212 |
|
20.0% |
|
0.1% |
|
19.9% |
|
0.1% |
|
19.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
119,456 |
|
|
117,608 |
|
1.6% |
|
0.1% |
|
1.5% |
|
0.9% |
|
0.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
2,315,136 |
|
|
1,947,820 |
|
18.9% |
|
0.1% |
|
18.8% |
|
0.2% |
|
18.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
- |
|
|
- |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,315,136 |
|
$ |
1,947,820 |
|
18.9% |
|
0.1% |
|
18.8% |
|
0.2% |
|
18.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
Q4 2020 |
|
Q4 2019 |
|
Total Sales |
|
Foreign |
|
Local |
|
Acquisition |
|
Local |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental |
$ |
788,005 |
|
$ |
661,077 |
|
19.2% |
|
4.3% |
|
14.9% |
|
0.7% |
|
14.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
34,060 |
|
|
19,524 |
|
74.5% |
|
11.4% |
|
63.1% |
|
0.0% |
|
63.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care Distribution |
|
822,065 |
|
|
680,601 |
|
20.8% |
|
4.5% |
|
16.3% |
|
0.7% |
|
15.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
19,255 |
|
|
19,494 |
|
-1.2% |
|
4.4% |
|
-5.6% |
|
2.8% |
|
-8.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
841,320 |
|
|
700,095 |
|
20.2% |
|
4.6% |
|
15.6% |
|
0.6% |
|
15.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
9,269 |
|
|
21,026 |
|
-55.9% |
|
0.0% |
|
-55.9% |
|
0.0% |
|
-55.9% |
|
|
|
$ |
850,589 |
|
$ |
721,121 |
|
18.0% |
|
4.4% |
|
13.6% |
|
0.7% |
|
12.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Corporate TSA revenues represents sales of certain products to |
||||||||||||||||
|
Exhibit A - Full Year Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Full Year 2020 |
||||||||||||||||
|
Sales Summary |
||||||||||||||||
|
(in thousands) |
||||||||||||||||
|
(unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2020 over Full Year 2019 |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global |
Full Year 2020 |
|
Full Year 2019 |
|
Total Sales |
|
Foreign |
|
Local |
|
Acquisition |
|
Local |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental |
$ |
5,912,593 |
|
$ |
6,415,865 |
|
-7.8% |
|
-0.2% |
|
-7.6% |
|
0.4% |
|
-8.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
3,617,017 |
|
|
2,973,586 |
|
21.6% |
|
0.0% |
|
21.6% |
|
0.9% |
|
20.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care Distribution |
|
9,529,610 |
|
|
9,389,451 |
|
1.5% |
|
-0.1% |
|
1.6% |
|
0.5% |
|
1.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
514,258 |
|
|
515,085 |
|
-0.2% |
|
0.1% |
|
-0.3% |
|
2.9% |
|
-3.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
10,043,868 |
|
|
9,904,536 |
|
1.4% |
|
-0.1% |
|
1.5% |
|
0.6% |
|
0.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
75,273 |
|
|
81,267 |
|
-7.4% |
|
0.0% |
|
-7.4% |
|
0.0% |
|
-7.4% |
|
|
Total Global |
$ |
10,119,141 |
|
$ |
9,985,803 |
|
1.3% |
|
-0.1% |
|
1.4% |
|
0.6% |
|
0.8% |
|
|
|
Full Year 2020 |
|
Full Year 2019 |
|
Total Sales |
|
Foreign |
|
Local |
|
Acquisition |
|
Local |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental |
$ |
3,471,521 |
|
$ |
3,911,746 |
|
-11.3% |
|
-0.1% |
|
-11.2% |
|
0.0% |
|
-11.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
3,514,670 |
|
|
2,894,137 |
|
21.4% |
|
0.0% |
|
21.4% |
|
0.9% |
|
20.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care Distribution |
|
6,986,191 |
|
|
6,805,883 |
|
2.6% |
|
-0.1% |
|
2.7% |
|
0.4% |
|
2.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
446,830 |
|
|
445,317 |
|
0.3% |
|
-0.1% |
|
0.4% |
|
2.6% |
|
-2.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
7,433,021 |
|
|
7,251,200 |
|
2.5% |
|
0.0% |
|
2.5% |
|
0.5% |
|
2.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
- |
|
|
4,098 |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,433,021 |
|
$ |
7,255,298 |
|
2.4% |
|
-0.1% |
|
2.5% |
|
0.5% |
|
2.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
Full Year 2020 |
|
Full Year 2019 |
|
Total Sales |
|
Foreign |
|
Local |
|
Acquisition |
|
Local |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dental |
$ |
2,441,072 |
|
$ |
2,504,119 |
|
-2.5% |
|
-0.5% |
|
-2.0% |
|
0.8% |
|
-2.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical |
|
102,347 |
|
|
79,449 |
|
28.8% |
|
2.6% |
|
26.2% |
|
0.0% |
|
26.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Health Care Distribution |
|
2,543,419 |
|
|
2,583,568 |
|
-1.6% |
|
-0.4% |
|
-1.2% |
|
0.7% |
|
-1.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology and value-added services |
|
67,428 |
|
|
69,768 |
|
-3.4% |
|
0.9% |
|
-4.3% |
|
5.8% |
|
-10.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total excluding Corporate TSA Revenue |
|
2,610,847 |
|
|
2,653,336 |
|
-1.6% |
|
-0.4% |
|
-1.2% |
|
0.9% |
|
-2.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
75,273 |
|
|
77,169 |
|
-2.5% |
|
0.0% |
|
-2.5% |
|
0.0% |
|
-2.5% |
|
|
|
$ |
2,686,120 |
|
$ |
2,730,505 |
|
-1.6% |
|
-0.3% |
|
-1.3% |
|
0.8% |
|
-2.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Corporate TSA revenues represents sales of certain products to |
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||
|
Exhibit B |
|
|
|
|
|
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|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|||||||||||||||||
|
2020 Fourth Quarter and Full Year |
|
|||||||||||||||||
|
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) |
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
Fourth Quarter |
|
|
|
Full Year |
|
|||||||||||
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
% |
|
|
|
|
|
2020 |
|
|
2019 |
|
Growth |
|
|
|
2020 |
|
|
2019 |
|
Growth |
|
|
|
Net Income from continuing operations attributable to |
$ |
141,921 |
|
$ |
330,609 |
|
(57.1) |
% |
|
$ |
402,808 |
|
$ |
700,691 |
(42.5) |
% |
||
|
Diluted EPS from continuing operations attributable to |
$ |
0.99 |
|
$ |
2.25 |
|
(56.0) |
% |
|
$ |
2.81 |
|
$ |
4.69 |
(40.1) |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Non-GAAP Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Restructuring costs (credits) - Pre-tax (1) |
$ |
4,380 |
|
$ |
(1,059) |
|
|
|
|
$ |
32,093 |
|
$ |
14,705 |
|
|
||
|
Income tax expense (benefit) for restructuring costs (credits) (1) |
|
(1,095) |
|
|
265 |
|
|
|
|
|
(8,023) |
|
|
(3,676) |
|
|
||
|
Net gain on sale of equity investments (2) |
|
(1,572) |
|
|
(186,769) |
|
|
|
|
|
(1,572) |
|
|
(186,769) |
|
|
||
|
Tax credit related to |
|
- |
|
|
- |
|
|
|
|
|
- |
|
|
(1,333) |
|
|
||
|
Total non-GAAP adjustments to Net Income from continuing operations |
$ |
1,713 |
|
$ |
(187,563) |
|
|
|
|
$ |
22,498 |
|
$ |
(177,073) |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Non-GAAP adjustments to diluted EPS from continuing operations |
$ |
0.01 |
|
$ |
(1.28) |
|
|
|
|
$ |
0.16 |
|
$ |
(1.19) |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Non-GAAP Net Income from continuing operations attributable to |
$ |
143,634 |
|
$ |
143,046 |
|
0.4 |
% |
|
$ |
425,306 |
|
$ |
523,618 |
(18.8) |
% |
||
|
Non-GAAP diluted EPS from continuing operations attributable to |
$ |
1.00 |
|
$ |
0.97 |
|
3.1 |
% |
|
$ |
2.97 |
|
$ |
3.51 |
(15.4) |
% |
||
|
Management believes that non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures. Earnings per share numbers may not sum due to rounding. |
| (1) |
Represents Q4 2020 restructuring costs of |
| (2) |
Represents a net after-tax gain on a sale of equity investments during Q4 2020 and Q4 2019. |
| (3) |
Represents a change in estimate of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210217005411/en/
Investors
Executive Vice President and Chief Financial Officer
steven.paladino@henryschein.com
(631) 843-5500
Vice President, Investor Relations
carolynne.borders@henryschein.com
(631) 390-8105
Media
Vice President, Corporate Media Relations
annmarie.gothard@henryschein.com
(631) 390-8169
Source: