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Henry Schein Reports Record Fourth Quarter Results

02/11/14
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EPS up 13.5% to $1.43

MELVILLE, N.Y., Feb. 11, 2014 /PRNewswire/ -- Henry Schein, Inc. (NASDAQ: HSIC), the world's largest provider of health care products and services to office-based dental, animal health and medical practitioners, today reported record financial results for the quarter ended December 28, 2013.

Net sales for the fourth quarter of 2013 were $2.5 billion, an increase of 4.9% compared with the fourth quarter of 2012.  This consisted of 4.4% growth in local currencies and 0.5% growth related to foreign currency exchange.  In local currencies, internally generated sales increased 3.7% and acquisition growth was 0.7% (see Exhibit A for details of sales growth).

Net income attributable to Henry Schein, Inc. for the fourth quarter of 2013 was $124.3 million or $1.43 per diluted share, an increase of 10.5% and 13.5%, respectively, compared with the fourth quarter of 2012. 

"We are pleased to complete a very successful 2013 with strong fourth quarter results," said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein. "Sales growth during the fourth quarter was solid and on plan.  Importantly, we believe we gained market share in each of our four global business units and exceeded the top of our original EPS guidance range for the year."

Global Dental sales of $1.4 billion increased 3.9%, consisting of 3.1% growth in local currencies and 0.8% growth related to foreign currency exchange.  In local currencies, internally generated sales increased 2.6% and acquisition growth was 0.5%.  The 2.6% internal growth in local currencies included 2.1% growth in North America and 3.5% growth in International.

"Gains in North America Dental sales included solid growth in consumable merchandise, while equipment sales and service revenue declined slightly following growth of nearly 22% in the prior-year quarter, making for a challenging comparison," commented Mr. Bergman.  "International Dental returned to growth during the quarter as consumable merchandise posted positive gains and equipment sales and service revenue growth accelerated from the previous quarter."

Global Animal Health sales of $651.7 million increased 6.6%; there was no material impact on sales growth from foreign currency exchange.  Internally generated sales increased 4.8% and acquisition growth was 1.8%.  The 4.8% internal growth in local currencies included 7.0% growth in North America and 2.9% growth in International.

"Once again our Global Animal Health business performed well during the quarter.  North America internal sales growth in the high single digits is consistent with our stated goals, and International Animal Health internal sales growth in local currencies accelerated slightly versus the prior quarter," commented Mr. Bergman.

Global Medical sales of $421.9 million increased 4.8%, including 4.6% growth in local currencies and 0.2% growth related to foreign currency exchange.  "Reported Global Medical growth benefitted from higher sales of seasonal influenza vaccines versus the prior year.  Excluding this impact, our Global Medical sales growth accelerated slightly compared to the third quarter. We believe patient traffic to U.S. physician offices was largely consistent with the prior quarter," remarked Mr. Bergman.  "We are confident that our focus on large group practices will allow us to continue to gain market share."

Global Technology and Value-Added Services sales of $88.4 million increased 8.6%, including 8.9% growth in local currencies and a 0.3% decline related to foreign currency exchange.  In local currencies, internally generated sales increased 8.6% and acquisition growth was 0.3%.

"Technology and Value-Added Services growth was driven by electronic services recurring revenue, software sales and value-added services," commented Mr. Bergman.  "Sales in International markets were particularly strong."

Stock Repurchase Plan

The Company announced that it repurchased approximately 664,000 shares of its common stock during the fourth quarter at an average price of $111.04 per share, or approximately $73.8 million.  The impact of the repurchase of shares on fourth quarter diluted EPS was immaterial.  For the full year 2013 the Company repurchased $300.3 million in stock, representing 3.1 million shares at an average price of $97.71 per share, which is in line with our stated goals.  At the close of the fourth quarter, Henry Schein had approximately $300 million authorized for future repurchases of its common stock.

Full-Year Results

For 2013, net sales of $9.6 billion increased 6.9% compared with 2012.  This consisted of 6.8% growth in local currencies and 0.1% growth related to foreign currency exchange.  In local currencies, internally generated sales increased 3.6% and acquisition growth was 3.2%.

Net income attributable to Henry Schein, Inc. for 2013 was $431.6 million or $4.93 per diluted share.  Excluding certain one-time items, adjusted net income attributable to Henry Schein, Inc. for 2013 was $433.4 million or $4.95 per diluted share, an increase of 8.7% and 11.5%, respectively, compared with adjusted net income for 2012 (see Exhibit B for reconciliation of GAAP net income and EPS to non-GAAP adjusted net income and EPS).

2014 EPS Guidance

Henry Schein today affirmed 2014 financial guidance, as follows:

  • For 2014 the Company expects diluted EPS attributable to Henry Schein, Inc. to be $5.29 to $5.39, which represents growth of 7% to 9% compared with 2013 results excluding certain one-time items.
  • The Company expects that growth in diluted EPS for 2014 will accelerate over the course of the year, due to a number of timing factors including the impact of recent acquisitions.
  • Guidance for 2014 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.

Fourth Quarter Conference Call Webcast

The Company will hold a conference call to discuss fourth quarter financial results today, beginning at 10:00 a.m. Eastern time.  Individual investors are invited to listen to the conference call over the Internet through Henry Schein's website at www.henryschein.com.  In addition, a replay will be available beginning shortly after the call has ended.

About Henry Schein, Inc.

Henry Schein, Inc. is the world's largest provider of health care products and services to office-based dental, animal health and medical practitioners.  The Company also serves dental laboratories, government and institutional health care clinics, and other alternate care sites.  A Fortune 500® Company and a member of the NASDAQ 100® Index, Henry Schein employs more than 16,000 Team Schein Members and serves more than 800,000 customers.

The Company offers a comprehensive selection of products and services, including value-added solutions for operating efficient practices and delivering high-quality care.  Henry Schein operates through a centralized and automated distribution network, with a selection of more than 96,000 branded products and Henry Schein private-brand products in stock, as well as more than 110,000 additional products available as special-order items. The Company also offers its customers exclusive, innovative technology solutions, including practice management software and e-commerce solutions, as well as a broad range of financial services.

Headquartered in Melville, N.Y., Henry Schein has operations or affiliates in 25 countries.  The Company's sales reached a record $9.6 billion in 2013, and have grown at a compound annual rate of nearly 17% since Henry Schein became a public company in 1995.  For more information, visit the Henry Schein website at www.henryschein.com.

Cautionary Note Regarding Forward-Looking Statements

In accordance with the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995, we provide the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied herein.  All forward-looking statements made by us are subject to risks and uncertainties and are not guarantees of future performance.  These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  These statements are identified by the use of such terms as "may," "could," "expect," "intend," "believe," "plan," "estimate," "forecast," "project," "anticipate" or other comparable terms.  A full discussion of our operations and financial condition, including factors that may affect our business and future prospects, is contained in documents we have filed with the SEC and will be contained in all subsequent periodic filings we make with the SEC. These documents identify in detail important risk factors that could cause our actual performance to differ materially from current expectations.

Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: effects of a highly competitive market; our dependence on third parties for the manufacture and supply of our products; our dependence upon sales personnel, customers, suppliers and manufacturers; our dependence on our senior management; fluctuations in quarterly earnings; risks from expansion of customer purchasing power and multi-tiered costing structures; possible increases in the cost of shipping our products or other service issues with our third-party shippers; general global macro-economic conditions; disruptions in financial markets; possible volatility of the market price of our common stock; changes in the health care industry; implementation of health care laws; failure to comply with regulatory requirements and data privacy laws; risks associated with our global operations; transitional challenges associated with acquisitions and joint ventures, including the failure to achieve anticipated synergies; financial risks associated with acquisitions and joint ventures; litigation risks; the dependence on our continued product development, technical support and successful marketing in the technology segment; risks from challenges associated with the emergence of potential increased competition by third-party online commerce sites; risks from disruption to our information systems; certain provisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation. The order in which these factors appear should not be construed to indicate their relative importance or priority. 

We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control or predict.  Accordingly, any forward-looking statements contained herein should not be relied upon as a prediction of actual results.  We undertake no duty and have no obligation to update forward-looking statements. 

 

(TABLES TO FOLLOW)

 

                               

HENRY SCHEIN, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)
                               
           

Three Months Ended

    

Years Ended
         

December 28,

  

December 29,

  

December 28,

  

December 29,
         

2013

  

2012

  

2013

  

2012
         

(unaudited)

  

(unaudited)

            
                               

Net sales

 

$

2,526,370

  

$

2,408,438

  

$

9,560,647

  

$

8,939,967

Cost of sales

   

1,826,850

    

1,744,943

    

6,904,633

    

6,432,454
   

Gross profit

   

699,520

    

663,495

    

2,656,014

    

2,507,513

Operating expenses:

                        
 

Selling, general and administrative

   

512,637

    

482,153

    

1,978,960

    

1,873,360
 

Restructuring costs

   

-

    

-

    

-

    

15,192
   

Operating income

   

186,883

    

181,342

    

677,054

    

618,961

Other income (expense):

                        
 

Interest income

   

3,109

    

3,172

    

12,853

    

13,394
 

Interest expense

   

(4,870)

    

(8,243)

    

(27,538)

    

(30,902)
 

Other, net

   

1,466

    

392

    

2,325

    

2,735
   

Income before taxes and equity in earnings (losses)

                        
     

of affiliates

   

186,588

    

176,663

    

664,694

    

604,188

Income taxes

   

(55,604)

    

(54,108)

    

(190,891)

    

(187,858)

Equity in earnings (losses) of affiliates

   

3,985

    

(840)

    

10,194

    

7,058

Loss on sale of equity investment

    

-

    

-

    

(12,535)

    

-

Net income

   

134,969

    

121,715

    

471,462

    

423,388
 

Less: Net income attributable to noncontrolling interests

   

(10,701)

    

(9,248)

    

(39,908)

    

(35,312)

Net income attributable to Henry Schein, Inc.

 

$

124,268

  

$

112,467

  

$

431,554

  

$

388,076
                               

Earnings per share attributable to Henry Schein, Inc.:

                        
                               
 

Basic

 

$

1.46

  

$

1.29

  

$

5.02

  

$

4.44
 

Diluted

 

$

1.43

  

$

1.26

  

$

4.93

  

$

4.32
                               

Weighted-average common shares outstanding:

                        
 

Basic

   

85,072

    

87,002

    

85,926

    

87,499
 

Diluted

   

86,816

    

89,284

    

87,622

    

89,823

 

 

                   
                   
                   

HENRY SCHEIN, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)
                   
         

December 28,

  

December 29,
         

2013

  

2012
                   

ASSETS

            

Current assets:

            
 

Cash and cash equivalents

 

$

188,616

  

$

122,080
 

Accounts receivable, net of reserves of $78,298 and $75,240

   

1,055,216

    

1,015,194
 

Inventories, net

   

1,250,403

    

1,203,507
 

Deferred income taxes

   

63,865

    

64,049
 

Prepaid expenses and other

   

276,565

    

299,547
     

Total current assets

   

2,834,665

    

2,704,377

Property and equipment, net

   

275,888

    

273,458

Goodwill

   

1,635,005

    

1,601,046

Other intangibles, net

   

417,133

    

462,182

Investments and other

   

461,945

    

292,934
     

Total assets

 

$

5,624,636

  

$

5,333,997
                   

LIABILITIES AND STOCKHOLDERS' EQUITY

            

Current liabilities:

            
 

Accounts payable

 

$

824,495

  

$

787,658
 

Bank credit lines

   

29,508

    

27,166
 

Current maturities of long-term debt

   

5,441

    

17,992
 

Accrued expenses:

            
   

Payroll and related

   

216,629

    

207,381
   

Taxes

   

145,161

    

132,774
   

Other

   

329,429

    

299,738
     

Total current liabilities

   

1,550,663

    

1,472,709

Long-term debt

   

450,233

    

488,121

Deferred income taxes

   

198,674

    

196,814

Other liabilities

   

139,526

    

125,314
     

Total liabilities

   

2,339,096

    

2,282,958
                   

Redeemable noncontrolling interests

   

497,539

    

435,175

Commitments and contingencies

           
                   

Stockholders' equity:

            
 

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

           
   

none outstanding

   

-

    

-
 

Common stock, $.01 par value, 240,000,000 shares authorized,

            
   

85,622,452 outstanding on December 28, 2013 and

            
   

87,850,671 outstanding on December 29, 2012

   

856

    

879
 

Additional paid-in capital

   

318,225

    

375,946
 

Retained earnings

   

2,398,267

    

2,183,905
 

Accumulated other comprehensive income

   

67,849

    

52,855
   

Total Henry Schein, Inc. stockholders' equity

   

2,785,197

    

2,613,585
 

Noncontrolling interests

   

2,804

    

2,279
     

Total stockholders' equity

   

2,788,001

    

2,615,864
   

Total liabilities, redeemable noncontrolling interests and stockholders' equity

 

$

5,624,636

  

$

5,333,997

 

 

HENRY SCHEIN, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)
           

Three Months Ended

  

Years Ended
           

December 28,

  

December 29,

  

December 28,

  

December 29,
           

2013

  

2012

  

2013

  

2012
           

(unaudited)

  

(unaudited)

            
                                 

Cash flows from operating activities:

                        
 

Net income

 

$

134,969

  

$

121,715

  

$

471,462

  

$

423,388
 

Adjustments to reconcile net income to net cash

                        
   

provided by operating activities:

                        
     

Depreciation and amortization

   

31,954

    

33,333

    

128,035

    

125,322
     

Accelerated amortization of deferred financing costs

    

-

    

-

    

6,203

    

-
     

Loss on sale of equity investment

    

-

    

-

    

12,535

    

-
     

Stock-based compensation expense

   

10,832

    

5,446

    

35,527

    

37,313
     

Provision for losses on trade and other

                        
       

accounts receivable

   

1,712

    

1,069

    

5,189

    

4,407
     

Provision for (benefit from) deferred income taxes

   

1,285

    

18,550

    

(11,514)

    

10,072
     

Equity in (earnings) losses of affiliates

   

(3,985)

    

840

    

(10,194)

    

(7,058)
     

Distributions from equity affiliates

   

7,243

    

5,202

    

16,529

    

14,499
     

Other

   

6,634

    

3,705

    

20,790

    

14,193
     

Changes in operating assets and liabilities,

                        
     

  net of acquisitions:

                        
       

Accounts receivable

   

48,341

    

32,036

    

(45,110)

    

(73,925)
       

Inventories

   

(124,964)

    

(108,558)

    

(48,087)

    

(193,585)
       

Other current assets

   

4,624

    

(35,602)

    

15,747

    

(62,390)
       

Accounts payable and accrued expenses

   

155,983

    

121,925

    

67,063

    

115,863

Net cash provided by operating activities

   

274,628

    

199,661

    

664,175

    

408,099
                                 

Cash flows from investing activities:

                        
 

Purchases of fixed assets

   

(21,482)

    

(18,303)

    

(60,215)

    

(51,237)
 

Payments related to equity investments and business

                        
   

acquisitions, net of cash acquired

   

(147,849)

    

(13,977)

    

(182,363)

    

(220,238)
 

Payments related to sale of equity investment

    

-

    

-

    

(13,364)

    

-
 

Proceeds from sales of available-for-sale securities

   

-

    

3,200

    

-

    

9,225
 

Other

   

(3,516)

    

(3,224)

    

(10,663)

    

(7,354)

Net cash used in investing activities

   

(172,847)

    

(32,304)

    

(266,605)

    

(269,604)
                                 

Cash flows from financing activities:

                        
 

Proceeds from (repayments of) bank borrowings

   

13,725

    

(130,246)

    

2,175

    

(32,185)
 

Proceeds from issuance of long-term debt

   

-

    

50,000

    

678,781

    

155,132
 

Debt issuance costs

   

(45)

    

(78)

    

(1,372)

    

(1,482)
 

Principal borrowings (payments) for long-term debt

   

63,886

    

(2,505)

    

(729,977)

    

(40,722)
 

Proceeds from issuance of stock upon exercise

                        
   

of stock options

    

12,917

    

28,712

    

35,553

    

72,485
 

Payments for repurchases of common stock

   

(73,773)

    

(84,194)

    

(300,251)

    

(299,883)
 

Excess tax benefits related to stock-based

                        
   

compensation

    

1,645

    

7,176

    

8,141

    

17,819
 

Distributions to noncontrolling shareholders

   

(1,175)

    

(9,703)

    

(19,224)

    

(21,284)
 

Acquisitions of noncontrolling interests in

                        
   

subsidiaries

    

(3,914)

    

(468)

    

(9,800)

    

(20,481)

Net cash provided by (used in) financing activities

   

13,266

    

(141,306)

    

(335,974)

    

(170,601)
                                 

Effect of exchange rate changes on cash and

                        
 

cash equivalents

    

3,654

    

6,693

    

4,940

    

6,902

Net change in cash and cash equivalents

   

118,701

    

32,744

    

66,536

    

(25,204)

Cash and cash equivalents, beginning of period

   

69,915

    

89,336

    

122,080

    

147,284

Cash and cash equivalents, end of period

 

$

188,616

  

$

122,080

  

$

188,616

  

$

122,080
                         

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

 

 

Exhibit A1 - QTD Sales

              
               

Henry Schein, Inc.

2013 Fourth Quarter

Sales Summary

(in thousands)

(unaudited)
               

Q4 2013 over Q4 2012
               

Global

Q4 2013

  

Q4 2012

  

Total Sales
Growth
               

   Dental

$

1,364,395

  

$

1,313,467

  

3.9%
               

   Animal Health

  

651,733

    

611,179

  

6.6%
               

   Medical

  

421,885

    

402,435

  

4.8%
               

Total Health Care Distribution

  

2,438,013

    

2,327,081

  

4.8%
               

Technology and value-added services

  

88,357

    

81,357

  

8.6%
               

Total Global

$

2,526,370

  

$

2,408,438

  

4.9%
               

North America

Q4 2013

  

Q4 2012

  

Total Sales
Growth
               

   Dental

$

819,884

  

$

807,597

  

1.5%
               

   Animal Health

  

301,258

    

281,592

  

7.0%
               

   Medical

  

400,776

    

380,850

  

5.2%
               

Total Health Care Distribution

  

1,521,918

    

1,470,039

  

3.5%
               

Technology and value-added services

  

76,217

    

71,323

  

6.9%
               

Total North America

$

1,598,135

  

$

1,541,362

  

3.7%
               

International

Q4 2013

  

Q4 2012

  

Total Sales
Growth
               

   Dental

$

544,511

  

$

505,870

  

7.6%
               

   Animal Health

  

350,475

    

329,587

  

6.3%
               

   Medical

  

21,109

    

21,585

  

-2.2%
               

Total Health Care Distribution

  

916,095

    

857,042

  

6.9%
               

Technology and value-added services

  

12,140

    

10,034

  

21.0%
               

Total International

$

928,235

  

$

867,076

  

7.1%

 

 

Exhibit A1 - YTD Sales

              
               

Henry Schein, Inc.

Full Year 2013

Sales Summary

(in thousands)

(unaudited)
               

Full Year 2013 over Full Year 2012
               

Global

Full Year 2013

  

Full Year 2012

  

Total Sales
Growth
               

   Dental

$

4,997,972

  

$

4,774,482

  

4.7%
               

   Animal Health

  

2,599,461

    

2,321,151

  

12.0%
               

   Medical

  

1,643,167

    

1,560,921

  

5.3%
               

Total Health Care Distribution

  

9,240,600

    

8,656,554

  

6.7%
               

Technology and value-added services

  

320,047

    

283,413

  

12.9%
               

Total Global

$

9,560,647

  

$

8,939,967

  

6.9%
               

North America

Full Year 2013

  

Full Year 2012

  

Total Sales
Growth
               

   Dental

$

3,047,504

  

$

2,960,129

  

3.0%
               

   Animal Health

  

1,239,013

    

1,122,273

  

10.4%
               

   Medical

  

1,562,031

    

1,479,775

  

5.6%
               

Total Health Care Distribution

  

5,848,548

    

5,562,177

  

5.1%
               

Technology and value-added services

  

274,689

    

245,385

  

11.9%
               

Total North America

$

6,123,237

  

$

5,807,562

  

5.4%
               

International

Full Year 2013

  

Full Year 2012

  

Total Sales
Growth
               

   Dental

$

1,950,468

  

$

1,814,353

  

7.5%
               

   Animal Health

  

1,360,448

    

1,198,878

  

13.5%
               

   Medical

  

81,136

    

81,146

  

0.0%
               

Total Health Care Distribution

  

3,392,052

    

3,094,377

  

9.6%
               

Technology and value-added services

  

45,358

    

38,028

  

19.3%
               

Total International

$

3,437,410

  

$

3,132,405

  

9.7%

 

 

Exhibit A2 - QTD Sales Growth

              
                     

Henry Schein, Inc.

2013 Fourth Quarter

Sales Growth Rate Summary

(unaudited)
                     

Q4 2013 over Q4 2012

Global

  

Consolidated

  

Dental

  

Animal Health

  

Medical

  

Technology /  
VAS
                     

Local Internal Sales Growth

  

3.7%

  

2.6%

  

4.8%

  

4.6%

  

8.6%
                     

Acquisitions

  

0.7%

  

0.5%

  

1.8%

  

0.0%

  

0.3%
                     

Local Currency Sales Growth

  

4.4%

  

3.1%

  

6.6%

  

4.6%

  

8.9%
                     

Foreign Currency Exchange

  

0.5%

  

0.8%

  

0.0%

  

0.2%

  

-0.3%
                     

     Total Sales Growth

  

4.9%

  

3.9%

  

6.6%

  

4.8%

  

8.6%
                     

Total sales growth excluding

                   

influenza vaccine sales

  

4.6%

          

2.8%

    
                     

Local currency internal sales growth

                

excluding influenza vaccine sales

3.4%

          

2.6%

    
                     

North America

  

Consolidated

  

Dental

  

Animal Health

  

Medical

  

Technology /  
VAS
                     

Local Internal Sales Growth

  

4.0%

  

2.1%

  

7.0%

  

5.2%

  

6.7%
                     

Acquisitions

  

0.0%

  

0.0%

  

0.0%

  

0.0%

  

0.4%
                     

Local Currency Sales Growth

  

4.0%

  

2.1%

  

7.0%

  

5.2%

  

7.1%
                     

Foreign Currency Exchange

  

-0.3%

  

-0.6%

  

0.0%

  

0.0%

  

-0.2%
                     

     Total Sales Growth

  

3.7%

  

1.5%

  

7.0%

  

5.2%

  

6.9%
                     

Total sales growth excluding

                   

influenza vaccine sales

  

3.2%

          

3.1%

    
                     

Local currency internal sales growth

                

excluding influenza vaccine sales

3.5%

          

3.1%

    
                     

International

  

Consolidated

  

Dental

  

 Animal Health

  

Medical

  

Technology /  
VAS
                     

Local Internal Sales Growth

  

3.2%

  

3.5%

  

2.9%

  

-6.5%

  

21.5%
                     

Acquisitions

  

2.1%

  

1.3%

  

3.3%

  

0.0%

  

0.0%
                     

Local Currency Sales Growth

  

5.3%

  

4.8%

  

6.2%

  

-6.5%

  

21.5%
                     

Foreign Currency Exchange

  

1.8%

  

2.8%

  

0.1%

  

4.3%

  

-0.5%
                     

     Total Sales Growth

  

7.1%

  

7.6%

  

6.3%

  

-2.2%

  

21.0%

 

 

Exhibit A2 - FY Sales Growth

              
                     

Henry Schein, Inc.

2013 Full Year

Sales Growth Rate Summary

(unaudited)
                     

FY 2013 over FY 2012

Global

  

Consolidated

  

Dental

  

Animal Health

  

Medical

  

Technology /  
VAS
                     

Local Internal Sales Growth

  

3.6%

  

2.1%

  

5.5%

  

4.6%

  

9.5%
                     

Acquisitions

  

3.2%

  

2.2%

  

6.8%

  

0.5%

  

3.8%
                     

Local Currency Sales Growth

  

6.8%

  

4.3%

  

12.3%

  

5.1%

  

13.3%
                     

Foreign Currency Exchange

  

0.1%

  

0.4%

  

-0.3%

  

0.2%

  

-0.4%
                     

     Total Sales Growth

  

6.9%

  

4.7%

  

12.0%

  

5.3%

  

12.9%
                     

Total sales growth excluding

                   

influenza vaccine sales

  

6.9%

          

5.1%

    
                     

Local currency internal sales growth

                

excluding influenza vaccine sales

3.6%

          

4.4%

    
                     

North America

  

Consolidated

  

Dental

  

Animal Health

  

Medical

  

Technology /  
VAS
                     

Local Internal Sales Growth

  

5.1%

  

2.9%

  

10.4%

  

5.0%

  

8.2%
                     

Acquisitions

  

0.5%

  

0.4%

  

0.0%

  

0.6%

  

3.9%
                     

Local Currency Sales Growth

  

5.6%

  

3.3%

  

10.4%

  

5.6%

  

12.1%
                     

Foreign Currency Exchange

  

-0.2%

  

-0.3%

  

0.0%

  

0.0%

  

-0.2%
                     

     Total Sales Growth

  

5.4%

  

3.0%

  

10.4%

  

5.6%

  

11.9%
                     

Total sales growth excluding

                   

influenza vaccine sales

  

5.4%

          

5.4%

    
                     

Local currency internal sales growth

                

excluding influenza vaccine sales

5.1%

          

4.8%

    
                     

International

  

Consolidated

  

Dental

  

 Animal Health

  

Medical

  

Technology /  
VAS
                     

Local Internal Sales Growth

  

1.0%

  

0.9%

  

0.8%

  

-2.6%

  

17.8%
                     

Acquisitions

  

8.0%

  

5.0%

  

13.2%

  

0.0%

  

3.2%
                     

Local Currency Sales Growth

  

9.0%

  

5.9%

  

14.0%

  

-2.6%

  

21.0%
                     

Foreign Currency Exchange

  

0.7%

  

1.6%

  

-0.5%

  

2.6%

  

-1.7%
                     

     Total Sales Growth

  

9.7%

  

7.5%

  

13.5%

  

0.0%

  

19.3%

 

 

                                   

Exhibit B

                                  
                                   

Henry Schein, Inc.

2013 Fourth Quarter and Full Year 2013

Reconciliation of reported GAAP net income and diluted EPS attributable to Henry Schein, Inc. to

non-GAAP net income and diluted EPS attributable to Henry Schein, Inc.

(in thousands, except per share data)

(unaudited)
                                   
                                   
   

Fourth Quarter

      

Full Year

  
             

%

                

%

  
   

2013

    

2012

  

Growth

      

2013

    

2012

  

Growth

  

Net Income attributable to Henry Schein, Inc.

$

124,268

  

$

112,467

  

10.5

%

  

$

431,554

  

$

388,076

  

11.2

%

Diluted EPS attributable to Henry Schein, Inc.

$

1.43

  

$

1.26

  

13.5

%

  

$

4.93

  

$

4.32

  

14.1

%
                                   

Non-GAAP Adjustments (after-tax)

                                  

Foreign tax benefit (1)

$

-

  

$

-

        

$

(13,398)

  

$

-

      

Loss on sale of equity investment (2)

  

-

    

-

          

12,535

    

-

      

Accelerated amortization of deferred financing costs (3)

  

-

    

-

          

2,679

    

-

      

Restructuring costs (4)

  

-

    

-

          

-

    

10,537

      

Total non-GAAP adjustments to Net Income

                                  

attributable to Henry Schein, Inc.

$

-

  

$

-

        

$

1,816

  

$

10,537

      

Total non-GAAP adjustments to diluted EPS

                                  

attributable to Henry Schein, Inc.

$

-

  

$

-

        

$

0.02

  

$

0.12

      
                                   

Non-GAAP Net Income attributable to

                                  

Henry Schein, Inc.

$

124,268

  

$

112,467

  

10.5

%

  

$

433,370

  

$

398,613

  

8.7

%

Non-GAAP diluted EPS attributable to

                                  

Henry Schein, Inc.

$

1.43

  

$

1.26

  

13.5

%

  

$

4.95

  

$

4.44

  

11.5

%

 

This non-GAAP comparison is being presented in order to provide a more comparable basis for analysis. Earnings per share numbers may not sum due to rounding.
   
   

(1)

Represents tax benefit related to expected utilization of tax loss carryforwards outside the U.S.
   

(2)

Represents loss on divestiture of a noncontrolling interest in a dental wholesale distributor in the Middle East.  There was no tax benefit related to this loss.
   

(3)

Represents non-cash, one-time expenses related to the debt refinancing of Henry Schein Animal Health.
   

(4)

Represents restructuring costs recorded in the first and second quarters of 2012.

 

SOURCE Henry Schein, Inc.

Investors, Steven Paladino, Executive Vice President and Chief Financial Officer, steven.paladino@henryschein.com, (631) 843-5500, or Carolynne Borders, Vice President, Investor Relations, carolynne.borders@henryschein.com, (631) 390-8105; or Media, Susan Vassallo, Vice President, Corporate Communications, susan.vassallo@henryschein.com, (631) 843-5562