Henry Schein Inc. Files 10-Q for Period Ending March 30, 2024

TL;DR

<b>Henry Schein Inc. filed its Q1 2024 10-Q report, detailing financial positions and upcoming corporate dates.</b>

AI Summary

HENRY SCHEIN INC (HSIC) filed a Quarterly Report (10-Q) with the SEC on May 7, 2024. Henry Schein Inc. filed a 10-Q report for the period ending March 30, 2024. The filing covers the first quarter of fiscal year 2024. The company's fiscal year ends on December 28. The filing includes data related to various credit facilities and loans payable. Key dates for SEC filings and corporate events are listed, extending to 2033.

Why It Matters

For investors and stakeholders tracking HENRY SCHEIN INC, this filing contains several important signals. This 10-Q filing provides investors with the latest quarterly financial performance and position of Henry Schein Inc. The detailed listing of credit facilities and loan obligations offers insight into the company's capital structure and liquidity management.

Risk Assessment

Risk Level: low — HENRY SCHEIN INC shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain immediate, significant new risks or disclosures beyond routine financial reporting.

Analyst Insight

Review the detailed breakdown of credit facilities and loans payable to understand the company's current debt structure and borrowing capacity.

Key Numbers

• 2024-03-30 — Period of Report (Quarterly filing date)
• 2024-05-07 — Filed As Of Date (Date the report was filed)
• 12-28 — Fiscal Year End (Annual fiscal year end date)
• 000-27078 — SEC File Number (SEC registration number for Henry Schein Inc.)

Key Players & Entities

• HENRY SCHEIN INC (company) — Filer name
• 0001000228-24-000025 (other) — Accession Number
• 20240330 (date) — Period of Report
• 20240507 (date) — Filed as of date
• 135 DURYEA RD (address) — Business Street 1
• MELVILLE (address) — Business City
• NY (address) — Business State
• 11747 (address) — Business Zip

FAQ

Industry Context

Henry Schein Inc. operates in the wholesale distribution of medical, dental, and veterinary products and services.

Regulatory Implications

The filing is a standard 10-Q, adhering to SEC regulations for quarterly financial reporting under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze the company's debt structure by examining the details of its various credit facilities and loans payable.
2. Note the upcoming key dates for future filings and corporate events to anticipate further disclosures.
3. Cross-reference this filing with previous reports to identify trends in financial health and operational status.

Key Dates

• 2024-03-30: Quarter End — End of the reporting period for the 10-Q filing.
• 2024-05-07: Filing Date — Date the 10-Q report was officially submitted to the SEC.

Year-Over-Year Comparison

This is the first 10-Q filing for the fiscal year 2024, following the 2023 annual report (10-K).

Key Financial Figures

• $0.01 — ted Common Stock Additional Other Total $0.01 Par Value Paid-in Retained Comprehensiv

Filing Documents

• hsic-20240330.htm (10-Q) — 1313KB
• ex101.htm (EX-10.1) — 56KB
• ex102.htm (EX-10.2) — 62KB
• ex103.htm (EX-10.3) — 68KB
• ex104.htm (EX-10.4) — 31KB
• ex311.htm (EX-31.1) — 11KB
• ex312.htm (EX-31.2) — 11KB
• ex321.htm (EX-32.1) — 6KB
• 0001000228-24-000025.txt (&nbsp;) — 8517KB
• hsic-20240330.xsd (EX-101.SCH) — 72KB
• hsic-20240330_cal.xml (EX-101.CAL) — 88KB
• hsic-20240330_def.xml (EX-101.DEF) — 364KB
• hsic-20240330_lab.xml (EX-101.LAB) — 890KB
• hsic-20240330_pre.xml (EX-101.PRE) — 563KB
• hsic-20240330_htm.xml (XML) — 1108KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Page ITEM 1. Condensed Consolidated Financial Statements: Condensed Consolidated Balance Sheets as of March 30, 2024 and December 30, 2023 3 Condensed Consolidated Statements of Income for the three months ended March 30, 2024 and April 1, 2023 4 Condensed Consolidated Statements of Comprehensive Income for the three months ended March 30, 2024 and April 1, 2023 5 Condensed Consolidated Statement of Changes in Stockholders' Equity for the three months ended March 30, 2024 and April 1, 2023 6 Condensed Consolidated Statements of Cash Flows for the three months ended March 30, 2024 and April 1, 2023 7 Notes to Condensed Consolidated Financial Statements 8 Note 1 – Basis of Presentation 8 Note 2 – Significant Accounting Policies and Recently Issued Accounting Standards 9 Note 3 – Cyber Incident 10 Note 4 – Net Sales from Contracts with Customers 11 Note 5 – Segment Data 12 Note 6 – Business Acquisitions 13 Note 7 – Fair Value Measurements 16 Note 8 – Debt 18 Note 9 – Income Taxes 21 Note 10 – Plan of Restructuring 22 Note 11 – Legal Proceedings 23 Note 12 – Stock-Based Compensation 25 Note 13 – Redeemable Noncontrolling Interests 27 Note 14 – Comprehensive Income 27 Note 15 – Earnings Per Share 29 Note 16 – Supplemental Cash Flow Information 29 Note 17 – Related Party Transactions 30 ITEM 2.

Management's Discussion and Analysis of

Management's Discussion and Analysis of Financial Condition and Results of Operations 31 ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 44 ITEM 4.

Controls and Procedures

Controls and Procedures 44

OTHER INFORMATION

PART II. OTHER INFORMATION ITEM 1.

Legal Proceedings

Legal Proceedings 45 ITEM 1A.

Risk Factors

Risk Factors 45 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 45 ITEM 5. Other Information 46 ITEM 6. Exhibits 46 Signature 47 Table of Contents See accompanying notes. 3 PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED

ITEM 1. CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS HENRY SCHEIN, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, except share data) 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) 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 (1) 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 (nil) (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, 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 (1) Amounts presented include balances held by our consolidated vari

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (in millions, except share and per share data) (unaudited ) 8 Note 1 – Basis of Presentation Our condensed consolidated financial statements include the accounts of Henry Schein, Inc., and all of our controlled subsidiaries ("we", "us" and "our"). All intercompany accounts and transactions are eliminated in consolidation. Investments in unconsolidated affiliates for which we have the ability to influence the operating or financial decisions are accounted for under the equity method. Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by U.S. GAAP for complete

financial statements

financial statements. The unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to the consolidated financial on Form 10-K for the year ended December 30, 2023 and with the information contained in our other publicly- available filings with the Securities and Exchange Commission. The condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation of the consolidated results of operations and financial position for the interim periods presented. All such adjustments are of a normal recurring nature. The preparation of financial statements in conformity with accounting principles generally accepted in the United assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the three months ended March 30, 2024 are not necessarily indicative of the results to be expected for any other interim period or for the year ending December 28, 2024. Our condensed consolidated financial statements reflect estimates and assumptions made by us that affect, among other things, our goodwill, long-lived asset and definite-lived intangible asset valuation; inventory valuation; equity investment valuation; assessment of the annual effective tax rate; valuation of deferred income taxes and income tax contingencies; the allowance for doubtful accounts; hedging activity; supplier rebates; measurement of compensation cost for certain share-based performance awards and cash bonus plans; and pension plan assumptions. We consolidate the results of operations and financial posi

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (in millions, except share and per share data) (unaudited ) 9 Note 2 – Significant Accounting Policies and Recently Issued Accounting Standards Significant Accounting Policies There have been no material changes in our significant accounting policies during the three months ended March 30, 2024, as compared to the significant accounting policies described in Item 8 of our Annual Report on Form 10- K for the year ended December 30, 2023. Recently Issued Accounting Standards In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, " Income Taxes (Topic 740): Improvements to Income Tax Disclosures ," which requires public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state and foreign income taxes. It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold. In addition to new disclosures associated with the rate reconciliation, the ASU requires information pertaining to taxes paid (net of refunds received) to be disaggregated for federal, state and foreign taxes and further disaggregated for specific jurisdictions to the extent the related amounts exceed a quantitative threshold. The ASU also describes items that need to be disaggregated based on their nature, which is determined by reference to the item's fundamental or essential characteristics, such as the transaction or event that triggered the establishment of the reconciling item and the activity with which the reconciling item is associated. The ASU eliminates the historic requirement that entities disclose information concerning unrecognized tax benefits having a reasonable possibility of significantly increasing or decreasing in the 12 months following the rep

financial statements that have not yet been issued or made available

financial statements that have not yet been issued or made available for issuance. This ASU should be applied on a prospective basis; however, retrospective application is permitted. We are currently evaluating the impact that ASU 2023 – 09 will have on our consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, " Segment Reporting (Topic 280): Improvements to Reportable Segments ," which aims to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. Currently, Topic 280 requires that a public entity disclose certain information about its reportable segments. For example, a public entity is required to report a measure of segment profit or loss that the chief operating decision maker uses to assess segment performance and make decisions about allocating resources. Topic 280 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances. The amendments in this ASU do not change or remove those disclosure requirements and do not change how a public entity identifies its operating segments, aggregates those operating segments or applies the quantitative thresholds to determine its reportable segments. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We do not expect that the requirements of ASU 2023 – 07 will have a material impact on our consolidated financial In March 2024, the FASB issued ASU 2024-01, " Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, " which clarifies how to determine whether a profit interest and similar awards should be accounted for as a

financial statements or prospectively to profits interest awards granted

financial statements or prospectively to profits interest awards granted or modified on or after the date of adoption. If prospective application is elected, an entity must disclose the nature of and reason for the change in accounting principle that resulted from the adoption of the ASU. This ASU is effective for fiscal years beginning after Table of Contents HENRY SCHEIN, INC. NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (in millions, except share and per share data) (unaudited ) 10 December 15, 2024, including interim periods within those fiscal years. We do not expect that the requirements of ASU 2024 – 01 will have a material impact on our consolidated financial Note 3 – Cyber Incident In October 2023 Henry Schein experienced a cyber incident that primarily affected the operations of our North American and European dental and medical distribution businesses. Henry Schein One, our practice management software, revenue cycle management and patient relationship management solutions business, was not affected, and our manufacturing businesses were mostly unaffected. On November 22, 2023, we experienced a disruption of our ecommerce platform and related applications, which has since been remediated. During the three months ended March 30, 2024, we continued to experience a residual impact of the cyber events noted above relating primarily to decreased sales to episodic customers (customers that had generally registered a less continuous level of demand pre-incident). During the three months ended March 30, 2024, we incurred $ 5 million of expenses directly related to the cyber incident, mostly consisting of professional fees. We maintain cyber insurance, subject to certain retentions and policy limitations. With respect to the October 2023 cyber incident, we have a $ 60 million insurance policy, following a $ 5 million retention. Table of Contents HENRY SCHEIN, INC. NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (in millions, except share and per share data) (unaudited ) 11 Note 4 – Net Sales from Contracts with Customers Net sales are recognized in accordance with policies disclosed in Item 8 of our Annual Report on Form 10-K for the year ended December 30, 2023. Disaggregation of Net Sales The following table disaggregates our net sales by reportable and operating segment and geographic area: Three Months Ended March 30, 2024 North America International Global Net sales: Health care distribution Dental $ 1,103 $ 811 $ 1,914 Medical 1,014 27 1,041 Total health care distribution 2,117 838 2,955 Technology and value-added services 189 28 217 Total net sales $ 2,306 $ 866 $ 3,172 Three Months Ended April 1, 2023 North America International Global Net sales: Health care distribution Dental $ 1,144 $ 754 $ 1,898 Medical 951 20 971 Total health care distribution 2,095 774 2,869 Technology and value-added services 166 25 191 Total net sales $ 2,261 $ 799 $ 3,060 Contract Liabilities At March 30, 2024, December 30, 2023, and December 31, 2022, the current and non-current contract liabilities were $ 84 million and $ 8 million; $ 89 million and $ 9 million; and $ 86 million and $ 8 million, respectively. During the three months ended March 30, 2024, we recognized, in net sales, $ 36 million of the amount that was previously deferred at December 30, 2023. During the three months ended April 1, 2023, we recognized in net sales $ 35 million of the amounts that were previously deferred at December 31, 2022. Current contract liabilities are included in accrued expenses: other and the non-current contract liabilities are included in other liabilities within our consolidated balance sheets. Table of Contents HENRY SCHEIN, INC. NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (in millions, except share and per share data) (unaudited ) 12 Note 5 – Segment Data We conduct our business through two reportable segments: (i) health care distribution and (ii) technology and value-added services. These segments offer different products and services to the same customer base. Our global dental businesses serve office-based dental practitioners, dental laboratories, schools, government and other institutions. Our medical businesses serve physician offices, urgent care centers, ambulatory care sites, emergency medical technicians, dialysis centers, home health, federal and state governments and large enterprises, such as group practices, and integrated delivery networks, among other providers across a wide range of specialties. Our dental and medical groups serve practitioners in 33 countries worldwide. The health care distribution reportable segment aggregates our global dental and medical operating segments. This segment distributes consumable products, dental specialty products (including implant, orthodontic and endodontic products), small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products, personal protective equipment ("PPE") products, vitamins, and orthopedic implants. Our global technology and value-added services reportable segment provides software, technology and other value- added services to health care practitioners. Our technology offerings include practice management software systems for dental and medical practitioners. Our value-added practice solutions include practice consultancy, education, revenue cycle management and financial services on a non-recourse basis, e-services, continuing education services for practitioners, practice technology, network and hardware services, and other services. The following tables present i

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (in millions, except share and per share data) (unaudited ) 13 Note 6 – Business Acquisitions Our acquisition strategy is focused on investments in companies that add new customers and sales teams, increase our geographic footprint (whether entering a new country, such as emerging markets, or building scale where we have already invested in businesses), and finally, those that enable us to access new products and technologies. 2024 Acquisitions During the quarter ended March 30, 2024, we made acquisitions within the technology and value-added services segment. Our acquired ownership interest in these companies was 100 %. Total consideration for

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