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

HENRY SCHEIN, INC.

NOT APPLICABLE

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 (see General Instruction A.2. below):

[  ]  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.  □

Securities registered pursuant to section 12(b) of the Act:

Item 2.02.  Results of Operations and Financial Condition.

On May 7, 2019, Henry Schein, Inc. issued a press release reporting the financial results for the three months ended March 30, 2019.  The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Item 2.02 and the press release attached as Exhibit 99.1 are considered furnished to the Securities and Exchange Commission and are not deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 9.01.  Financial Statements and Exhibits

(a)  Not applicable.

(b)  Not applicable.

(c)  Not applicable.

(d)  Exhibit 99.1 – Press Release dated May 7, 2019.

EXHIBIT INDEX

SIGNATURE

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 hereunto duly authorized.

May 7, 2019

FOR IMMEDIATE RELEASE

HENRY SCHEIN REPORTS RECORD FIRST QUARTER 2019 FINANCIAL RESULTS

FROM CONTINUING OPERATIONS

·          Q1 GAAP net income per diluted share from continuing operations of $0.78 versus prior-year GAAP net income per diluted share from continuing operations of $0.72

·          Q1 non-GAAP diluted EPS from continuing operations of $0.80 versus prior-year non-GAAP diluted EPS from continuing operations of $0.74

·          Raises top end of guidance range for 2019 non-GAAP diluted EPS from continuing operations

MELVILLE, N.Y., May 7, 2019 – Henry Schein, Inc. (Nasdaq: HSIC), the world’s largest provider of health care solutions to office-based dental and medical practitioners, today reported record first quarter financial results from continuing operations. Note that results from continuing operations exclude contributions from Henry Schein’s former Animal Health business, which was spun off in February 2019 to form a new publicly traded company, Covetrus.

Net sales from continuing operations for the quarter ended March 30, 2019, were $2.4 billion, an increase of 3.8% compared with the first quarter of 2018. The 3.8% increase consisted of 6.6% growth in local currencies and a 2.8% decline related to foreign currency exchange. In local currencies, internally generated sales increased 4.3% and acquisition growth was 2.3%. Excluding approximately $15.0 million in corporate revenues from product sales to Covetrus under the transition services agreement entered into in connection with the Animal Health spin-off, normalized internal sales growth in local currencies was 3.7% (see Exhibit A for details of sales growth and a reconciliation of this non-GAAP measure to GAAP sales).

Net income attributable to Henry Schein, Inc. from continuing operations for the first quarter of 2019 was $118.4 million, or $0.78 per diluted share, compared with prior-year net income from continuing operations of $111.5 million, or $0.72 per diluted share. Non-GAAP net income from continuing operations for the first quarter of 2019 was $120.6 million, or $0.80 per diluted share, compared with non-GAAP net income from continuing operations of $113.6 million, or $0.74 per diluted share, for the first quarter of 2018. Non-GAAP results for the first quarter of 2019 and 2018 exclude certain items noted in Exhibit B, which provides a reconciliation of GAAP net income from continuing operations and diluted EPS from continuing operations to non-GAAP net income and diluted EPS from continuing operations.

“We are pleased with our performance to date as we execute on our 2018 to 2020 strategic plan. We have completed the first quarter of what we have characterized as a transition year as we continue to separate operations of our former Animal Health business. Throughout this transition, we believe we gained market share in both of our global Dental and Medical businesses, and are confident that Henry Schein is well-positioned for operational success over the long-term,” said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein.

“We will continue to focus on supporting our customers around the world with the broadest array of products and services, along with innovative technology that expands our value-added solutions offering while pursuing new investment opportunities,” Mr. Bergman continued.

Dental sales of $1.5 billion decreased 0.1%, consisting of 3.8% growth in local currencies and a 3.9% decline related to foreign currency exchange. In local currencies, internally generated sales increased 3.2% and acquisition growth was 0.6%. The 3.2% internal growth in local currencies included 2.7% growth in North America and 4.0% growth internationally.

“First quarter dental consumables internal sales growth in North America was 2.5%, reflecting modest market-share gains in a stable end market. Dental equipment internal sales growth of 3.3% in local currencies improved sequentially, driven by double-digit growth in CAD/CAM equipment sales,” commented Mr. Bergman. “Internationally, dental consumables internal sales in local currencies had robust growth of 5.5%. Dental equipment internal sales in local currencies declined by 1.2%, due largely to the timing of the International Dental Show (IDS) in Cologne, Germany, in March, which customarily results in lower international equipment sales in the first quarter that typically accelerate in the second quarter.”

Medical sales of $683.7 million increased 6.8%, consisting of 7.0% growth in local currencies and a 0.2% decline related to foreign currency exchange. In local currencies, internally generated sales increased 5.1% and acquisition growth was 1.9%.

“We were pleased with Medical internal sales growth of 5.1% in local currencies during the first quarter, despite a fairly light influenza season that adversely impacted patient office visits,” remarked Mr. Bergman. “We are well-positioned in our partnerships with large group practices, independent physician offices, and alternate sites of care, which are driving our continued market-share gains.” 

Technology and Value-Added Services sales from continuing operations of $115.5 million increased 35.1%, consisting of 36.8% growth in local currencies and a 1.7% decline related to foreign currency exchange. In local currencies, internally generated sales increased 2.1% and acquisition growth was 34.7%.

“Technology and Value-Added Services growth in the first quarter was primarily driven by the formation of Henry Schein One. North America internal sales growth in local currencies was 0.9%. Internal sales increased by 7.0% in local currencies in our international business. With a single connected platform in Henry Schein One, we are helping our customers leverage technology solutions to automate tasks, share data, and better communicate with their patients.  We expect these solutions will drive long-term growth in our technology, as well as our distribution businesses,” said Mr. Bergman.

Stock Repurchase Plan

The Company repurchased approximately 2.5 million shares of its common stock during the first quarter at an average price of $59.45 per share, or a total of approximately $150 million. The impact of the repurchase of shares on first quarter 2019 diluted EPS was immaterial. At the end of the first quarter of 2019, Henry Schein had approximately $250 million authorized and available for future stock repurchases.

Restructuring Program

Henry Schein previously disclosed a comprehensive restructuring initiative designed to increase profitability by improving business efficiencies, reducing redundancies and maximizing the Company's infrastructure.  The Company recorded a pretax restructuring charge in the first quarter of 2019 of $4.6 million, or $0.02 per diluted share. These charges primarily include severance pay, facility closing costs, and outside professional and consulting fees directly related to the restructuring.

2019 EPS Guidance

Henry Schein today raises 2019 non-GAAP financial guidance. At this time the Company is not providing GAAP guidance as it is unable to provide an accurate estimate of costs related to its restructuring initiative on full-year 2019 financial results. Guidance is as follows:

·          2019 non-GAAP diluted EPS from continuing operations attributable to Henry Schein, Inc. is expected to be $3.38 to $3.50, reflecting growth of 7% to 10% compared with 2018 non-GAAP diluted EPS from continuing operations of $3.17. This compares to prior guidance of $3.38 to $3.46, reflecting growth of 7% to 9%. The Company’s Animal Health business was spun off to shareholders as of February 7, 2019, and that business is classified as a discontinued operation for all current and prior periods presented.

·          Guidance for 2019 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. Guidance also assumes foreign exchange rates that are generally consistent with current levels.

The Company has provided guidance for 2019 diluted EPS on a non-GAAP basis as noted above. A reconciliation to the Company’s projected 2019 diluted EPS prepared on a GAAP basis is not provided because the Company is unable to provide such reconciliation for an estimate of restructuring costs without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact, and the periods in which the non-GAAP adjustments may be recognized.

The Company’s 2019 diluted EPS prepared on a GAAP basis will include the impact of such items as restructuring charges and any litigation settlement expenses and the tax effect of all such items. 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 2019 Conference Call Webcast

The Company will hold a conference call to discuss first quarter 2019 financial results today, beginning at 10:00 a.m. Eastern time. Individual investors are invited to listen to the conference call 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. (Nasdaq: HSIC) is a solutions company for health care professionals powered by a network of people and technology. With more than 19,000 Team Schein Members worldwide, the Company's network of trusted advisors provides more than 1 million customers globally with more than 300 valued solutions that improve operational success and clinical outcomes. Our Business, Clinical, Technology, and Supply Chain solutions help office-based dental and medical practitioners work more efficiently so they can provide quality care more effectively. These solutions also support dental laboratories, government and institutional health care clinics, as well as other alternate care sites.

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® and the Nasdaq 100® indexes, Henry Schein is headquartered in Melville, N.Y., and has operations or affiliates in 31 countries. The Company's sales from continuing operations reached $9.4 billion in 2018, and have grown at a compound annual rate of approximately 13 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 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 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 United States Securities and Exchange Commission, or 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 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, dispositions and joint ventures, including the failure to achieve anticipated synergies/benefits; financial and tax risks associated with acquisitions, dispositions 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; 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.

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.

CONTACTS:   Investors 

Steven Paladino

Executive Vice President and Chief Financial Officer

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

(TABLES TO FOLLOW)

(1)      Corporate TSA revenues represents sales of certain animal health products to Covetrus under the transition services agreement entered into in connection with the Animal Health spin-off, which we expect to continue through 2020.

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

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 Q1 2019 restructuring costs of $4,641, net of $1,160 tax benefit, resulting in an after-tax effect of $3,481and Q1 2018 restructuring costs of $2,675, net of $642 tax benefit, resulting in an after-tax effect of $2,033.

(2)      Represents a change in estimate of $1,333 to income tax expense related to a one-time tax expense recorded in Q4 2018 as a result of a reorganization of legal entities completed in preparation for the Animal Health spin-off, which was completed on February 7^th, 2019.