Henry Schein, Inc., the world’s largest provider of health care solutions to office-based dental and medical practitioners, reported financial results for the first quarter ended March 30, 2024.
- First-quarter 2024 sales growth of 3.7%, GAAP diluted EPS of $0.72 and non-GAAP diluted EPS of $1.10
- Tightens total sales growth guidance range to 8% to 10%, reflecting continued recovery from last year’s cyber incident and a strong pipeline of new specialty products and software innovation
- Affirms 2024 non-GAAP diluted EPS guidance of $5.00 to $5.16 and 2024 Adjusted EBITDA growth of more than 15%
MELVILLE, N.Y.--(BUSINESS WIRE)-- Henry Schein, Inc. (Nasdaq: HSIC), the world’s largest provider of health care solutions to office-based dental and medical practitioners, today reported financial results for the first quarter ended March 30, 2024.
“Our first-quarter financial results reflect solid earnings driven by gross margin expansion and a strong recovery from last quarter’s cyber incident,” said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein. “We continue to make good progress on executing our BOLD+1 Strategic Plan and are pleased with the contribution from our recent acquisitions.”
“We are affirming our expectations for 2024 non-GAAP diluted EPS and 2024 Adjusted EBITDA growth and tightening our expectations for 2024 total sales growth. Our projected sales growth reflects continued recovery from last year’s cyber incident and a strong pipeline of new specialty products and software innovation,” Mr. Bergman added.
First-Quarter 2024 Financial Results
- Total net sales for the quarter were $3.2 billion, an increase of 3.7% compared with the first quarter of 2023. Internal sales decreased 1.8%1 which includes:
- an approximate 300 to 400 basis points decrease in sales from the residual impact of last year’s cyber incident, and
- a 60 basis point decrease in sales due to lower personal protective equipment (PPE) sales, primarily due to lower glove pricing.
- First-quarter sales and internal sales growth are summarized below and detailed in Exhibit A1.
| Sales | Total | Internal | |
| Global Dental | $1.9 | 0.8% | (2.9%) |
| Merchandise | $1.5 | 0.8% | (3.7%) |
| Equipment | $0.4 | 0.8% | 0.2% |
| Global Medical | $1.0 | 7.3% | (0.7%) |
| Global Technology and Value-Added Services | $0.2 | 13.8% | 3.2% |
| TOTAL SALES | $3.2 | 3.7% | (1.8%) |
| Note: items may not sum due to rounding | |||
- GAAP net income2 for the quarter was $93 million, or $0.72 per diluted share4, and compares with first-quarter 2023 GAAP net income of $121 million, or $0.91 per diluted share.
- Non-GAAP net income2 for the quarter was $143 million, or $1.10 per diluted share4, and compares with first-quarter 2023 non-GAAP net income of $161 million, or $1.21 per diluted share.
- Adjusted EBITDA3 for the quarter was $255 million, consistent with the first-quarter 2023 Adjusted EBITDA of $256 million.
Capital Deployment
During the first quarter of 2024, the Company repurchased approximately 1 million shares of its common stock at an average price of $75.10 per share, for a total of approximately $75 million. The impact of the share repurchases on first-quarter diluted EPS was immaterial.
At quarter-end, Henry Schein had approximately $190 million authorized and available for future stock repurchases.
2024 Financial Guidance
Guidance is for current continuing operations as well as acquisitions that have closed and does not include the impact of future share repurchases, potential future acquisitions, restructuring and integration expenses, amortization expense of acquired intangible assets, contingent consideration revaluation adjustments, certain expenses directly associated with the cybersecurity incident or any potential insurance claim recovery. This guidance also assumes that foreign currency exchange rates remain generally consistent with current levels and that end markets remain consistent with current market conditions:
- 2024 non-GAAP diluted EPS attributable to Henry Schein, Inc. is expected to be $5.00 to $5.16, unchanged from prior guidance, reflecting growth of 11% to 15% compared with 2023 non-GAAP diluted EPS of $4.50.
- 2024 total sales growth is now expected to be approximately 8% to 10% over 2023, compared with prior guidance of 8% to 12% growth. This reflects continued recovery from last year’s cyber incident and a strong pipeline of new specialty products and software innovation.
- 2024 Adjusted EBITDA3 is expected to increase by more than 15% compared with 2023, unchanged from prior guidance.
Adjustments to 2024 GAAP Net Income and Diluted EPS
The Company is providing guidance for 2024 diluted EPS on a non-GAAP basis and for 2024 Adjusted EBITDA, as noted above. The Company is not providing a reconciliation of its 2024 non-GAAP guidance to its projected 2024 diluted EPS prepared on a GAAP basis, or its projected 2024 Adjusted EBITDA to net income prepared on a GAAP basis. This is because the Company is unable to provide without unreasonable effort an estimate of integration and restructuring costs related to an ongoing initiative to drive operating efficiencies, including the corresponding tax effect, that will be included in the Company’s 2024 diluted EPS and net income prepared on a GAAP basis. The inability to provide this reconciliation is due to the uncertainty and inherent difficulty of predicting the occurrence, magnitude, financial impact and 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.
1 See Exhibit A for details of sales growth. Internal sales growth is calculated from total net sales using constant foreign exchange rates and excludes sales from acquisitions.
2 See Exhibit B for a reconciliation of GAAP net income and diluted EPS to non-GAAP net income and diluted EPS.
3 See Exhibit C for a reconciliation of GAAP net income to Adjusted EBITDA.
4 References to diluted EPS refer to diluted EPS attributable to Henry Schein, Inc.
First-Quarter 2024 Conference Call Webcast
The Company will hold a conference call to discuss first-quarter 2024 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 by visiting www.henryschein.com/IRwebcasts. In addition, a replay will be available beginning shortly after the call has ended for a period of one week.
The Company will be posting slides that provide a summary of its first-quarter 2024 financial results on its website at https://www.henryschein.com/us-en/Corporate/investor-presentations.aspx.
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 25,000 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 help 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 300,000 branded products and Henry Schein corporate brand products in our main distribution centers.
A FORTUNE 500 Company and a member of the S&P 500® index, Henry Schein is headquartered in Melville, N.Y., and has operations or affiliates in 33 countries and territories. The Company’s sales reached $12.3 billion in 2023, and have grown at a compound annual rate of approximately 11.5 percent since Henry Schein became a public company in 1995.
For more information, visit Henry Schein at www.henryschein.com, Facebook.com/HenrySchein, Instagram.com/HenrySchein, and @HenrySchein on X.
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 and Adjusted EBITDA 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 United States Securities and Exchange Commission, or SEC, including our Annual Report on Form 10-K, 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: 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, as well as significant demands on our operations, information systems, legal, regulatory, compliance, , financial and human resources functions in connection with acquisitions, dispositions and joint ventures; certain provisions in our governing documents that may discourage third-party acquisitions of us; adverse changes in supplier rebates or other purchasing incentives; risks related to the sale of corporate brand products; security risks associated with our information systems and technology products and services, such as cyberattacks or other privacy or data security breaches (including the October 2023 incident); effects of a highly competitive (including, without limitation, competition from third-party online commerce sites) and consolidating market; 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 and domestic macro-economic and political conditions, including inflation, deflation, recession, ongoing wars, fluctuations in energy pricing and the value of the U.S. dollar as compared to foreign currencies, and changes to other economic indicators, international trade agreements, potential trade barriers and terrorism; geopolitical wars; 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 collection, storage and processing of sensitive personal information or standards in electronic health records or transmissions; changes in tax legislation; risks related to product liability, intellectual property and other claims; risks associated with customs policies or legislative import restrictions; risks associated with disease outbreaks, epidemics, pandemics (such as the COVID-19 pandemic), or similar wide-spread public health concerns and other natural or man-made disasters; risks associated with our global operations; litigation risks; new or unanticipated litigation developments and the status of litigation matters; our dependence on our senior management, employee hiring and retention, and our relationships with customers, suppliers and manufacturers; 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 except as required by law.
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 the 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. The impact of certain items that are excluded include integration and restructuring costs, and amortization of acquisition-related assets, because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions we consummate and occur on an unpredictable basis. 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)
| HENRY SCHEIN, INC. | ||||||
| Three Months Ended | ||||||
| March 30, | April 1, | |||||
| 2024 | 2023 | |||||
| Net sales | $ | 3,172 | $ | 3,060 | ||
| Cost of sales | 2,160 | 2,094 | ||||
| Gross profit | 1,012 | 966 | ||||
| Operating expenses: | ||||||
| Selling, general and administrative | 791 | 717 | ||||
| Depreciation and amortization | 61 | 44 | ||||
| Restructuring costs | 10 | 30 | ||||
| Operating income | 150 | 175 | ||||
| Other income (expense): | ||||||
| Interest income | 5 | 3 | ||||
| Interest expense | (30) | (14) | ||||
| Other, net | 2 | (1) | ||||
| Income before taxes, equity in earnings of affiliates and noncontrolling interests | 127 | 163 | ||||
| Income taxes | (32) | (39) | ||||
| Equity in earnings of affiliates, net of tax | 3 | 4 | ||||
| Net income | 98 | 128 | ||||
| Less: Net income attributable to noncontrolling interests | (5) | (7) | ||||
| Net income attributable to Henry Schein, Inc. | $ | 93 | $ | 121 | ||
| Earnings per share attributable to Henry Schein, Inc.: | ||||||
| Basic | $ | 0.72 | $ | 0.92 | ||
| Diluted | $ | 0.72 | $ | 0.91 | ||
| Weighted-average common shares outstanding: | ||||||
| Basic | 128,720,661 | 131,365,789 | ||||
| Diluted | 129,769,580 | 133,039,886 | ||||
| HENRY SCHEIN, INC. | ||||||
| March 30, | December 30, | |||||
| 2024 | 2023 | |||||
| (unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 159 | $ | 171 | ||
| Accounts receivable, net of allowance for credit losses of $84 and $83 | 1,644 | 1,863 | ||||
| Inventories, net of reserves of $188 and $192 | 1,686 | 1,815 | ||||
| Prepaid expenses and other | 589 | 639 | ||||
| Total current assets | 4,078 | 4,488 | ||||
| Property and equipment, net | 500 | 498 | ||||
| Operating lease right-of-use assets | 314 | 325 | ||||
| Goodwill | 3,835 | 3,875 | ||||
| Other intangibles, net | 915 | 916 | ||||
| Investments and other | 503 | 471 | ||||
| Total assets | $ | 10,145 | $ | 10,573 | ||
| LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 879 | $ | 1,020 | ||
| Bank credit lines | 264 | 264 | ||||
| Current maturities of long-term debt | 103 | 150 | ||||
| Operating lease liabilities | 75 | 80 | ||||
| Accrued expenses: | ||||||
| Payroll and related | 245 | 332 | ||||
| Taxes | 143 | 137 | ||||
| Other | 625 | 700 | ||||
| Total current liabilities | 2,334 | 2,683 | ||||
| Long-term debt | 2,010 | 1,937 | ||||
| Deferred income taxes | 77 | 54 | ||||
| Operating lease liabilities | 266 | 310 | ||||
| Other liabilities | 423 | 436 | ||||
| Total liabilities | 5,110 | 5,420 | ||||
| Redeemable noncontrolling interests | 798 | 864 | ||||
| Commitments and contingencies | ||||||
| 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, 128,480,909 outstanding on March 30, 2024 and 129,247,765 outstanding on December 30, 2023 | 1 | 1 | ||||
| Additional paid-in capital | - | - | ||||
| Retained earnings | 3,838 | 3,860 | ||||
| Accumulated other comprehensive loss | (239) | (206) | ||||
| Total Henry Schein, Inc. stockholders’ equity | 3,600 | 3,655 | ||||
| Noncontrolling interests | 637 | 634 | ||||
| Total stockholders’ equity | 4,237 | 4,289 | ||||
| Total liabilities, redeemable noncontrolling interests and stockholders’ equity | $ | 10,145 | $ | 10,573 | ||
| HENRY SCHEIN, INC. | ||||||
| Three Months Ended | ||||||
| March 30, | April 1, | |||||
| 2024 | 2023 | |||||
| Cash flows from operating activities: | ||||||
| Net income | $ | 98 | $ | 128 | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 73 | 52 | ||||
| Non-cash restructuring charges | 1 | 7 | ||||
| Stock-based compensation expense | 8 | 10 | ||||
| Provision for losses on trade and other accounts receivable | 5 | 1 | ||||
| Provision for deferred income taxes | 2 | 2 | ||||
| Equity in earnings of affiliates | (3) | (4) | ||||
| Distributions from equity affiliates | 2 | 2 | ||||
| Changes in unrecognized tax benefits | 2 | 1 | ||||
| Other | (6) | (1) | ||||
| Changes in operating assets and liabilities, net of acquisitions: | ||||||
| Accounts receivable | 190 | (20) | ||||
| Inventories | 74 | 63 | ||||
| Other current assets | 41 | 29 | ||||
| Accounts payable and accrued expenses | (290) | (243) | ||||
| Net cash provided by operating activities | 197 | 27 | ||||
| Cash flows from investing activities: | ||||||
| Purchases of property and equipment | (41) | (31) | ||||
| Payments related to equity investments and business acquisitions, net of cash acquired | (20) | (1) | ||||
| Proceeds from loan to affiliate | 1 | 2 | ||||
| Capitalized software costs | (9) | (9) | ||||
| Other | (3) | - | ||||
| Net cash used in investing activities | (72) | (39) | ||||
| Cash flows from financing activities: | ||||||
| Net change in bank credit lines | - | 132 | ||||
| Proceeds from issuance of long-term debt | 90 | 31 | ||||
| Principal payments for long-term debt | (60) | (1) | ||||
| Proceeds from issuance of stock upon exercise of stock options | 1 | 1 | ||||
| Payments for repurchases and retirement of common stock | (75) | (100) | ||||
| Payments for taxes related to shares withheld for employee taxes | (7) | (30) | ||||
| Distributions to noncontrolling shareholders | (6) | (4) | ||||
| Acquisitions of noncontrolling interests in subsidiaries | (94) | (8) | ||||
| Net cash provided by (used in) financing activities | (151) | 21 | ||||
| Effect of exchange rate changes on cash and cash equivalents | 14 | - | ||||
| Net change in cash and cash equivalents | (12) | 9 | ||||
| Cash and cash equivalents, beginning of period | 171 | 117 | ||||
| Cash and cash equivalents, end of period | $ | 159 | $ | 126 | ||
| Exhibit A - First Quarter Sales | |||||||||||||||
| Henry Schein, Inc. | |||||||||||||||
| 2024 First Quarter | |||||||||||||||
| Sales Summary | |||||||||||||||
| (in millions) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Q1 2024 over Q1 2023 | |||||||||||||||
| Local Currency Growth | |||||||||||||||
| Global | Q1 2024 | Q1 2023 | Local Internal Growth | Acquisition Growth | Total Local Currency Growth | Foreign Exchange Impact | Total Sales Growth | ||||||||
| Dental Merchandise | $ | 1,499 | $ | 1,487 | -3.7% | 3.8% | 0.1% | 0.7% | 0.8% | ||||||
| Dental Equipment | 415 | 411 | 0.2% | 0.0% | 0.2% | 0.6% | 0.8% | ||||||||
| Total Dental | 1,914 | 1,898 | -2.9% | 3.0% | 0.1% | 0.7% | 0.8% | ||||||||
| Medical | 1,041 | 971 | -0.7% | 8.0% | 7.3% | 0.0% | 7.3% | ||||||||
| Total Health Care Distribution | 2,955 | 2,869 | -2.1% | 4.6% | 2.5% | 0.5% | 3.0% | ||||||||
| Technology and Value-Added Services | 217 | 191 | 3.2% | 10.2% | 13.4% | 0.4% | 13.8% | ||||||||
| Total Global | $ | 3,172 | $ | 3,060 | -1.8% | 5.0% | 3.2% | 0.5% | 3.7% | ||||||
| Local Currency Growth | |||||||||||||||
| North America | Q1 2024 | Q1 2023 | Local Internal Growth | Acquisition Growth | Total Local Currency Growth | Foreign Exchange Impact | Total Sales Growth | ||||||||
| Dental Merchandise | $ | 848 | $ | 896 | -5.5% | 0.1% | -5.4% | 0.0% | -5.4% | ||||||
| Dental Equipment | 255 | 248 | 2.9% | 0.0% | 2.9% | 0.1% | 3.0% | ||||||||
| Total Dental | 1,103 | 1,144 | -3.7% | 0.1% | -3.6% | 0.0% | -3.6% | ||||||||
| Medical | 1,014 | 951 | -0.5% | 7.1% | 6.6% | 0.0% | 6.6% | ||||||||
| Total Health Care Distribution | 2,117 | 2,095 | -2.2% | 3.2% | 1.0% | 0.1% | 1.1% | ||||||||
| Technology and Value-Added Services | 189 | 166 | 2.3% | 11.6% | 13.9% | 0.0% | 13.9% | ||||||||
| Total North America | $ | 2,306 | $ | 2,261 | -1.9% | 3.9% | 2.0% | 0.0% | 2.0% | ||||||
| Local Currency Growth | |||||||||||||||
| International | Q1 2024 | Q1 2023 | Local Internal Growth | Acquisition Growth | Total Local Currency Growth | Foreign Exchange Impact | Total Sales Growth | ||||||||
| Dental Merchandise | $ | 651 | $ | 591 | -1.0% | 9.4% | 8.4% | 1.8% | 10.2% | ||||||
| Dental Equipment | 160 | 163 | -3.8% | 0.0% | -3.8% | 1.3% | -2.5% | ||||||||
| Total Dental | 811 | 754 | -1.6% | 7.4% | 5.8% | 1.6% | 7.4% | ||||||||
| Medical | 27 | 20 | -10.4% | 50.8% | 40.4% | 0.0% | 40.4% | ||||||||
| Total Health Care Distribution | 838 | 774 | -1.8% | 8.5% | 6.7% | 1.6% | 8.3% | ||||||||
| Technology and Value-Added Services | 28 | 25 | 8.9% | 0.6% | 9.5% | 3.2% | 12.7% | ||||||||
| Total International | $ | 866 | $ | 799 | -1.5% | 8.2% | 6.7% | 1.7% | 8.4% | ||||||
| Exhibit B | ||||||||
| Henry Schein, Inc. | ||||||||
| 2024 First Quarter | ||||||||
| 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 millions, except per share data) | ||||||||
| (unaudited) | ||||||||
| First Quarter | ||||||||
| % | ||||||||
| 2024 | 2023 | Growth | ||||||
| Net income attributable to Henry Schein, Inc. | $ | 93 | $ | 121 | (23.2) | % | ||
| Diluted EPS attributable to Henry Schein, Inc. | $ | 0.72 | $ | 0.91 | (20.9) | % | ||
| Non-GAAP Adjustments, net of tax and attribution to noncontrolling interests | ||||||||
| Restructuring costs (1) | $ | 7 | $ | 21 | ||||
| Acquisition intangible amortization (2) | 28 | 19 | ||||||
| Cyber incident-third-party advisory expenses (3) | 4 | - | ||||||
| Change in contingent consideration (4) | 11 | - | ||||||
| Non-GAAP adjustments to net income | $ | 50 | $ | 40 | ||||
| Non-GAAP adjustments to diluted EPS | $ | 0.38 | $ | 0.30 | ||||
| Non-GAAP net income attributable to Henry Schein, Inc. | $ | 143 | $ | 161 | (11.3) | % | ||
| Non-GAAP diluted EPS attributable to Henry Schein, Inc. | $ | 1.10 | $ | 1.21 | (9.1) | % | ||
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. Net income growth rates are based on actual values and may not recalculate due to rounding. Amounts may not sum due to rounding.
| (1) | Restructuring Costs | |||||
| The following table presents details of our restructuring costs: | ||||||
| First Quarter | ||||||
| 2024 | 2023 | |||||
| Restructuring costs - pre-tax, as reported | $ | 10 | $ | 30 | ||
| Income tax benefit | (3) | (8) | ||||
| Amount attributable to noncontrolling interests | - | (1) | ||||
| Restructuring costs, net | $ | 7 | $ | 21 | ||
Q1 2024 restructuring costs primarily consisted of employee severance and costs related to the exit of facilities.
| (2) | Acquisition Intangible Amortization | |||||
| The following table presents details of amortization of acquired intangible assets: | ||||||
| First Quarter | ||||||
| 2024 | 2023 | |||||
| Acquisition intangible amortization - pre-tax, as reported | $ | 46 | $ | 30 | ||
| Income tax benefit | (11) | (7) | ||||
| Amount attributable to noncontrolling interests | (7) | (4) | ||||
| Acquisition intangible amortization, net | $ | 28 | $ | 19 | ||
| (3) | Represents one time professional and other fees of $5 million ($4 million, net of taxes) related to remediation of our Q4 2023 cyber incident. |
| (4) | Represents a change in the fair value of contingent consideration of $15 million ($11 million, net of taxes) recorded during Q1 2024 related to a 2023 acquisition. |
| Exhibit C | ||||||
| Henry Schein, Inc. | ||||||
| 2024 First Quarter | ||||||
| Reconciliation of reported GAAP net income to Adjusted EBITDA | ||||||
| (in millions) | ||||||
| (unaudited) | ||||||
| First Quarter | ||||||
| 2024 | 2023 | |||||
| Net income attributable to Henry Schein, Inc. (GAAP) | $ | 93 | $ | 121 | ||
| Income attributable to noncontrolling interests | 5 | 7 | ||||
| Net income (GAAP) | 98 | 128 | ||||
| Definitional adjustments: | ||||||
| Interest income | (5) | (3) | ||||
| Interest expense | 30 | 14 | ||||
| Income taxes | 32 | 39 | ||||
| Depreciation and amortization | 73 | 52 | ||||
| Non-GAAP adjustments: | ||||||
| Restructuring costs | 10 | 30 | ||||
| Cyber incident-professional and other fees | 5 | - | ||||
| Change in contingent consideration | 15 | - | ||||
| Other adjustments: | ||||||
| Equity in earnings of affiliates, net of tax | (3) | (4) | ||||
| Adjusted EBITDA (non-GAAP) | $ | 255 | $ | 256 | ||
| Adjusted EBITDA is a non-GAAP measure that we calculate in the manner reflected on Exhibit C. We define Adjusted EBITDA as net income, excluding (i) net income attributable to noncontrolling interests, (ii) interest income and expense, (iii) income taxes, (iv) depreciation and amortization, (v) restructuring costs, (vi) cyber incident-professional and other fees, (vii) change in contingent consideration, and (viii) equity in earnings of affiliates. Amounts may not sum due to rounding. | ||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240505165642/en/
Contacts
Investors
Ronald N. South
Senior Vice President and Chief Financial Officer
ronald.south@henryschein.com
(631) 843-5500
Graham Stanley
Vice President, Investor Relations and Strategic Financial Project Officer
graham.stanley@henryschein.com
(631) 843-5500
Media
Ann Marie Gothard
Vice President, Global Corporate Media Relations
annmarie.gothard@henryschein.com
(631) 390-8169
Source: Henry Schein, Inc.
View this news release online at:
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