hsic-20220326

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☒

QUARTERLY

REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the

quarterly

period ended

March 26, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT

OF 1934

For the transition period from ____________ to ____________

Commission File Number:

0-27078

HENRY SCHEIN, INC.

(Exact name of registrant as specified in its charter)

Delaware

11-3136595

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

135 Duryea Road

Melville

New York

(Address of principal executive offices)

11747

(Zip Code)

(

631

)

843-5500

(Registrant’s telephone number, including area code)

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.01 per share

HSIC

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required

to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such

shorter period that the registrant was required to file such

reports), and (2) has been subject to such filing requirements for the

past 90 days.

Yes

☒

☐

Indicate by

check mark

whether the registrant

has submitted

electronically every Interactive

Data File

required to

be submitted

pursuant

Rule

405

Regulation

S-T

during

the

preceding

months

(or

for

such

shorter

period

that

the

registrant

was

required to submit such files).

Yes

☒

☐

Indicate by

check mark

whether the

registrant is

a large

accelerated filer,

an accelerated

filer,

a non-accelerated

filer,

a smaller

reporting

company,

emerging

growth

company.

See

the

definitions

“large

accelerated

filer,”

“accelerated

filer,”

“smaller reporting company,” and “emerging growth company”

in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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.

☐

Indicate by check mark whether the registrant is a shell company (as defined

in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

As of April 25, 2022,

there were

138,050,781

shares of the registrant’s common stock outstanding.

HENRY SCHEIN, INC.

INDEX

PART I. FINANCIAL INFORMATION

Page

ITEM 1.

Condensed Consolidated Financial Statements:

Condensed Balance Sheets as of March 26, 2022 and December 25, 2021

Condensed Statements of Income for the three months ended

March 26, 2022 and March 27, 2021

Condensed Statements of Comprehensive Income for the three months ended

March 26, 2022 and March 27, 2021

Condensed Statement of Changes in Stockholders' Equity for the three months ended

March 26, 2022 and March 27, 2021

Condensed Statements of Cash Flows for the three months ended

March 26, 2022 and March 27, 2021

Notes to Consolidated Financial Statements

Note 1 – Basis of Presentation

Note 2 – Critical Accounting Policies, Accounting Pronouncements Adopted

and Recently Issued Accounting Standards

Note 3 – Revenue from Contracts with Customers

Note 4 – Segment Data

Note 5 – Business Acquisitions

Note 6 – Fair Value Measurements

Note 7 – Debt

Note 8 – Income Taxes

Note 9 – Legal Proceedings

Note 10 – Stock-Based Compensation

Note 11 – Redeemable Noncontrolling Interests

Note 12 – Comprehensive Income

Note 13 – Plans of Restructuring

Note 14 – Earnings Per Share

Note 15 – Supplemental Cash Flow Information

Note 16 – Related Party Transactions

ITEM 2.

Management's Discussion and Analysis of

Financial Condition and Results of Operations

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

ITEM 4.

Controls and Procedures

PART II. OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

See accompanying notes.

PART

I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions,

except share data)

March 26,

December 25,

2022

2021

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

126

118

Accounts receivable, net of reserves of $

and $

1,444

1,452

Inventories, net

1,871

1,861

Prepaid expenses and other

389

413

Total current assets

3,830

3,844

Property and equipment, net

358

366

Operating lease right-of-use assets

331

325

Goodwill

2,857

2,854

Other intangibles, net

644

668

Investments and other

427

424

Total assets

8,447

8,481

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

914

1,054

Bank credit lines

Current maturities of long-term debt

Operating lease liabilities

Accrued expenses:

Payroll and related

326

385

Taxes

174

137

Other

561

593

Total current liabilities

2,144

2,307

Long-term debt

773

811

Deferred income taxes

Operating lease liabilities

277

268

Other liabilities

376

377

Total liabilities

3,610

3,805

Redeemable noncontrolling interests

613

Commitments and contingencies

(nil)

Stockholders' equity:

Preferred stock, $

0.01

par value,

1,000,000

shares authorized,

none

outstanding

Common stock, $

0.01

par value,

480,000,000

shares authorized,

137,708,809

outstanding on March 26, 2022 and

137,145,558

outstanding on December 25, 2021

Additional paid-in capital

Retained earnings

3,759

3,595

Accumulated other comprehensive loss

(168)

(171)

Total Henry Schein, Inc. stockholders' equity

3,592

3,425

Noncontrolling interests

632

638

Total stockholders' equity

4,224

4,063

Total liabilities, redeemable noncontrolling

interests and stockholders' equity

8,447

8,481

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF INCOME

(unaudited, in millions, except share and per share data)

Three Months Ended

March 26,

March 27,

2022

2021

Net sales

3,179

2,925

Cost of sales

2,206

2,034

Gross profit

973

891

Operating expenses:

Selling, general and administrative

682

614

Depreciation and amortization

Restructuring costs

Operating income

244

230

Other income (expense):

Interest income

Interest expense

(7)

(6)

Income before taxes, equity in earnings of affiliates and noncontrolling interests

239

226

Income taxes

(57)

Equity in earnings of affiliates

Net income

186

175

Less: Net income attributable to noncontrolling interests

(5)

(9)

Net income attributable to Henry Schein, Inc.

181

166

Earnings per share attributable to Henry Schein, Inc.:

Basic

1.31

1.17

Diluted

1.30

1.16

Weighted-average common

shares outstanding:

Basic

137,296,581

142,298,387

Diluted

139,237,472

143,397,724

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

(unaudited, in millions)

Three Months Ended

March 26,

March 27,

2022

2021

Net income

186

175

Other comprehensive income (loss), net of tax:

Foreign currency translation gain (loss)

(38)

Unrealized gain from foreign currency hedging activities

Pension adjustment gain

Other comprehensive income (loss), net of tax

(34)

Comprehensive income

190

141

Comprehensive income attributable to noncontrolling interests:

Net income

(5)

(9)

Foreign currency translation (gain) loss

(1)

Comprehensive income attributable to noncontrolling interests

(6)

(3)

Comprehensive income attributable to Henry Schein, Inc.

184

138

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENT

OF CHANGES IN

STOCKHOLDERS’ EQUITY

(unaudited, in millions, except share data)

Accumulated

Common Stock

Additional

Other

Total

$0.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, December 25, 2021

137,145,558

3,595

(171)

638

4,063

Net income (excluding $

attributable to Redeemable

noncontrolling interests)

181

SEC Form 10-Q filed by Henry Schein Inc.