Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 30, 2018

 

 

HENRY SCHEIN, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   0-27078   11-3136595

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

135 Duryea Road Melville, New York   11747
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (631) 843-5500

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02

Results of Operations and Financial Condition

Henry Schein, Inc. (the “Company”) is furnishing this report under Item 2.02 disclosure solely with respect to the statement in the press release (described in Item 7.01 below) regarding the charge of $38.5 million pre-tax or $0.19 per share the Company expects to record when it reports its third-quarter 2018 results.

 

Item 7.01

Regulation FD Disclosure

On August 30, 2018, the Company issued a press release regarding an anticipated settlement, subject to court approval, of the proposed class-action litigation In Re Dental Supplies Antitrust Litigation, No. 1:16-CV-00696-BMC-GRB, in the United States District Court for the Eastern District of New York (the “Settlement”). The Company is also providing the attached Questions & Answers concerning the Settlement (the “Q&A”). The press release and Q&A are attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K, and are incorporated herein by reference. The anticipated settlement is subject to reaching a definitive agreement among the parties, as well as to subsequent approval by the court.

The information in this Current Report on Form 8-K (including the exhibits attached hereto) shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section or incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing.

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 statements that address ongoing litigation matters, events or developments that we expect or anticipate will occur in the future with respect to litigation matters, including statements relating to pending litigation settlements are forward-looking statements. No assurances can be made that the prospective settlement will be finalized, as a definitive agreement has not been executed, that the court will approve the settlement, or that other cases will be settled on satisfactory terms, or will not have a material adverse impact on our financial condition or results of operations. For questions relating to the status of litigation matters other than the matter addressed in this filing, please refer to the Company’s litigation disclosure in its most recently-filed quarterly report on Form 10-Q.

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.

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 and consolidating 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; increases in shipping costs for our products or other service issues with our third-party shippers; general global macro-economic conditions; risks associated with currency fluctuations; risks associated with political and economic uncertainty; disruptions in financial markets; 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; new or unanticipated litigation developments; the dependence on our continued product development, technical support and successful marketing in the technology segment; our dependence on third parties for certain technologically advanced components; increased competition by third party online commerce sites; risks from disruption to our information systems; cyberattacks or other privacy or data security breaches; certain provisions in our governing documents that may discourage third-party acquisitions of us; changes in tax legislation; and risks associated with the ability to consummate the spin-off and merger of our animal health business with Direct Vet Marketing, Inc. (d/b/a Vets First Choice) and the timing of the closing of the transaction, as well as the ability to realize anticipated benefits and synergies of the transaction. 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.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit
Number

  

Description

99.1

   Press Release dated August 30, 2018

99.2

   Q&A on settlement


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

HENRY SCHEIN, INC.
By:   /s/ Walter Siegel
Name:   Walter Siegel
Title:   Senior Vice President and General Counsel

Date: August 30, 2018

EX-99.1

Exhibit 99.1

HENRY SCHEIN ANTICIPATES SETTLING PROPOSED CLASS-ACTION LITIGATION

Company Expects to Record a Charge of $38.5 Million Pre-Tax or $0.19 Per Share in Third Quarter of 2018; Company Denies Any Wrongdoing

MELVILLE, N.Y., August 30, 2018 – Henry Schein, Inc. (Nasdaq:HSIC) announced today that it anticipates settling the proposed class-action litigation, In Re Dental Supplies Antitrust Litigation, No. 1:16-CV-00696-BMC-GRB, in the United States District Court for the Eastern District of New York. As a result, Henry Schein expects to record a charge of $38.5 million pre-tax or $0.19 per share when the Company reports its third-quarter 2018 results. The anticipated settlement is subject to reaching a definitive agreement among the parties, as well as to subsequent approval by the court.

“We categorically and emphatically deny any wrongdoing, and we have made a business decision in the best interests of the Company to engage in settlement discussions to avoid long, distracting litigation and the additional use of resources,” said Stanley M. Bergman, Chairman of the Board and CEO of Henry Schein. “We have a long history of serving customers with integrity and honesty, and we have earned our reputation for doing business ethically in a competitive business environment.”

The company’s co-defendants, Patterson Companies, Inc., and Benco Dental Supply Company, also anticipate settling this matter.

About Henry Schein, Inc.

Henry Schein, Inc. (Nasdaq: HSIC) is a solutions company for health care professionals powered by a network of people and technology. With more than 22,000 Team Schein Members serving more than 1 million customers globally, the Company is the world’s largest provider of Business, Clinical, Technology, and Supply Chain solutions to enhance the efficiency of 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 S&P 500® and the Nasdaq 100® indexes, Henry Schein’s network of trusted advisors provides health care professionals with the valued solutions they need to improve operational success and clinical outcomes. The Company offers customers exclusive, innovative products and solutions, including practice management software, e-commerce solutions, specialty and surgical products, as well as a broad range of financial services. 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.


Headquartered in Melville, N.Y., Henry Schein has operations or affiliates in 34 countries. The Company’s sales reached a record $12.5 billion in 2017, and have grown at a compound annual rate of approximately 15 percent since Henry Schein became a public company in 1995.

For more information, visit Henry Schein at www.henryschein.com, Facebook.com/HenrySchein, and @HenrySchein on Twitter.

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 statements that address ongoing litigation matters, events or developments that we expect or anticipate will occur in the future with respect to litigation matters, including statements relating to pending litigation settlements are forward-looking statements. No assurances can be made that the prospective settlement will be finalized, as a definitive agreement has not been executed, that the court will approve the settlement, or that other cases will be settled on satisfactory terms, or will not have a material adverse impact on our financial condition or results of operations. For questions relating to the status of litigation matters other than the matter addressed in this press release, please refer to the Company’s litigation disclosure in its most recently-filed quarterly report on Form 10-Q.

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.

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 and consolidating 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; increases in shipping costs for our products or other service issues with our third-party shippers; general global macro-economic conditions; risks associated with currency fluctuations; risks associated with political and economic uncertainty; disruptions in financial markets; 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; new or unanticipated litigation developments; the dependence on our continued product development, technical support and successful marketing in the technology segment; our dependence on third parties for certain technologically advanced components; increased competition by third party online commerce sites; risks from disruption to our information systems; cyberattacks or other privacy or data security breaches; certain provisions in our governing documents that may discourage third-party acquisitions of us; changes in tax legislation; and risks associated with the ability to consummate the spin-off and merger of our animal health business with Direct Vet Marketing, Inc. (d/b/a Vets First Choice) and the timing of the closing of the transaction, as well as the ability to realize anticipated benefits and synergies of the transaction. 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.

###

Investors: Steven Paladino, Executive Vice President and CFO, steven.paladino@henryschein.com, (631) 843-5500; Carolynne Borders, Vice President, Investor Relations, carolynne.borders@henryschein.com, (631) 390-8105;

Media: Ann Marie Gothard, Vice President, Corporate Media Relations, annmarie.gothard@henryschein.com, (631) 390-8169

EX-99.2

Exhibit 99.2

1. Why are you engaged in discussions to settle? And why now?

We are engaged in discussions to reach a settlement, which is subject to finalization in a definitive agreement and court approval, to avoid further distraction and the associated use of resources resulting from this matter. We reiterate that we categorically and emphatically deny any wrongdoing related to this litigation.

2. Would this anticipated settlement resolve all outstanding class action antitrust litigation related to dental supplies against the company?

Yes.

3. Why are you engaged in settlement discussions as a group, and how did you arrive at the settlement amount for each company?

It is not uncommon for multiple parties to settle litigation of this kind. As for the settlement amounts, they took into account each company’s relative sales in the U.S. dental distribution market over the period of the class and among the defendants.

4. Will this proposed settlement change your business practices?

No. What’s more, we train our Team Schein Members on our Worldwide Business Standards, which are publicly available on our website, and we devote significant resources to reinforcing those standards and educating our team on compliance matters through a global training program.

5. How many dentists are involved in the proposed class?

We estimate there are approximately 140,000 dentists in the proposed class.

6. Is there any update to your 2018 EPS guidance?

As a matter of practice, we do not comment on guidance except upon the release of our financial results each quarter.

7. What do you expect the customer reaction to be in the wake of this anticipated settlement?

We believe our customers understand and appreciate our high-touch, full-service approach, which is why we are the market leader. We provide the value-added services our customers need to operate a better practice so they can focus on providing quality care. Henry Schein has a long history of serving customers with integrity and honesty, and we have earned our reputation for doing business ethically in a competitive business environment.

8. When do you anticipate the settlement will be finalized?

We anticipate that documentation will be completed within the next couple of weeks. After that, the settlement will be subject to court approval.