Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 28, 2019 | Oct. 28, 2019 | |
Cover [Abstract] | ||
Entity Central Index Key | 0001000228 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-28 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 28, 2019 | |
Document Transition Report | false | |
Entity Registrant Name | HENRY SCHEIN, INC. | |
Entity File Number | 0-27078 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 11-3136595 | |
Entity Address, Address Line One | 135 Duryea Road | |
Entity Address, City or Town | Melville | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11747 | |
City Area Code | 631 | |
Local Phone Number | 843-5500 | |
Title of 12(b) Security | Common Stock, par value $.01 per share | |
Trading Symbol | HSIC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 146,740,149 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 75,256 | $ 56,885 |
Accounts receivable, net of reserves of $55,116 and $53,121 | 1,278,939 | 1,168,776 |
Inventories, net | 1,356,897 | 1,415,512 |
Prepaid expenses and other | 404,650 | 451,033 |
Assets of discontinued operations | 0 | 1,083,014 |
Total current assets | 3,115,742 | 4,175,220 |
Property and equipment, net | 311,123 | 314,221 |
Operating lease right-of-use assets | 240,126 | 0 |
Goodwill | 2,441,175 | 2,081,029 |
Other intangibles, net | 603,172 | 376,031 |
Investments and other | 385,744 | 420,367 |
Assets of discontinued operations | 0 | 1,133,659 |
Total assets | 7,097,082 | 8,500,527 |
Current liabilities: | ||
Accounts payable | 854,658 | 785,756 |
Bank credit lines | 107,841 | 951,458 |
Current maturities of long-term debt | 109,188 | 8,280 |
Operating lease liabilities | 67,374 | 0 |
Liabilities of discontinued operations | 0 | 577,607 |
Accrued expenses: | ||
Payroll and related | 230,239 | 242,876 |
Taxes | 111,051 | 154,613 |
Other | 428,341 | 498,237 |
Total current liabilities | 1,908,692 | 3,218,827 |
Long-term debt | 872,229 | 980,344 |
Deferred income taxes | 68,643 | 27,218 |
Operating lease liabilities | 182,505 | 0 |
Other liabilities | 322,378 | 357,741 |
Liabilities of discontinued operations | 0 | 62,453 |
Total liabilities | 3,354,447 | 4,646,583 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Redeemable noncontrolling interests | 283,325 | 219,724 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value, 1,000,000 shares authorized, none outstanding | 0 | 0 |
Common stock, $.01 par value, 480,000,000 shares authorized, 146,254,864 outstanding on September 28, 2019 and 151,401,668 outstanding on December 29, 2018 | 1,463 | 1,514 |
Additional paid-in capital | 65,641 | 0 |
Retained earnings | 2,957,850 | 3,208,589 |
Accumulated other comprehensive income (loss) | (195,426) | (248,771) |
Total Henry Schein, Inc. stockholders' equity | 2,829,528 | 2,961,332 |
Noncontrolling interests | 629,782 | 580,456 |
Total stockholders' equity | 3,459,310 | 3,541,788 |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | 7,097,082 | 8,500,527 |
Henry Schein Animal Health Business [Member] | ||
Current assets: | ||
Assets of discontinued operations | 1,083,014 | |
Operating lease right-of-use assets | 0 | |
Investments and other | 118,003 | |
Assets of discontinued operations | 1,133,659 | |
Current liabilities: | ||
Current maturities of long-term debt | 675 | |
Operating lease liabilities | 0 | |
Liabilities of discontinued operations | 577,607 | |
Accrued expenses: | ||
Long-term debt | 23,529 | |
Operating lease liabilities | 0 | |
Liabilities of discontinued operations | 62,453 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Redeemable noncontrolling interests | $ 0 | $ 92,432 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Current assets: | ||
Accounts receivable, reserves (in dollars) | $ 55,116 | $ 53,121 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 480,000,000 | 480,000,000 |
Common stock, shares outstanding (in shares) | 146,254,864 | 151,401,668 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
CONSOLIDATED STATEMENTS OF INCOME | ||||
Net sales | $ 2,508,767 | $ 2,355,565 | $ 7,316,862 | $ 6,945,047 |
Cost of sales | 1,747,600 | 1,633,206 | 5,036,574 | 4,785,231 |
Gross profit | 761,167 | 722,359 | 2,280,288 | 2,159,816 |
Operating expenses: | ||||
Selling, general and administrative | 574,771 | 552,051 | 1,742,597 | 1,658,988 |
Litigation settlements | 0 | 38,488 | 0 | 38,488 |
Restructuring costs (credits) | (802) | 8,551 | 15,764 | 19,723 |
Operating income | 187,198 | 123,269 | 521,927 | 442,617 |
Other income (expense): | ||||
Interest income | 3,943 | 3,928 | 12,368 | 11,105 |
Interest expense | (12,373) | (20,430) | (41,459) | (54,569) |
Other, net | (177) | (586) | (2,012) | (1,773) |
Income from continuing operations before taxes and equity in earnings of affiliates and noncontrolling interest | 178,591 | 106,181 | 490,824 | 397,380 |
Income taxes | (41,964) | (16,633) | (117,326) | (86,654) |
Equity in earnings of affiliates | 6,585 | 6,699 | 14,771 | 14,829 |
Income from continuing operations | 143,212 | 96,247 | 388,269 | 325,555 |
Income (loss) from discontinued operations | 5,641 | 30,729 | (5,576) | 97,561 |
Net income | 148,853 | 126,976 | 382,693 | 423,116 |
Less: Net income attributable to noncontrolling interests | (8,296) | (5,477) | (18,187) | (12,615) |
Less: Net (income) loss attributable to noncontrolling interests from discontinued operations | 0 | (21) | 366 | (7,593) |
Net income attributable to Henry Schein, Inc. | 140,557 | 121,478 | 364,872 | 402,908 |
Continuing operations | 134,916 | 90,770 | 370,082 | 312,940 |
Discontinued operations | 5,641 | 30,708 | (5,210) | 89,968 |
Net income attributable to Henry Schein, Inc. | $ 140,557 | $ 121,478 | $ 364,872 | $ 402,908 |
Earnings per share from continuing operations attributable to Henry Schein, Inc.: | ||||
Basic (in dollars per share) | $ 0.92 | $ 0.60 | $ 2.49 | $ 2.05 |
Diluted (in dollars per share) | 0.91 | 0.59 | 2.47 | 2.03 |
Earnings (loss) per share from discontinued operations attributable to Henry Schein, Inc.: | ||||
Basic (in dollars per share) | 0.04 | 0.20 | (0.04) | 0.59 |
Diluted (in dollars per share) | 0.04 | 0.20 | (0.04) | 0.58 |
Earnings per share attributable to Henry Schein, Inc.: | ||||
Basic (in dollars per share) | 0.96 | 0.80 | 2.46 | 2.63 |
Diluted (in dollars per share) | $ 0.95 | $ 0.79 | $ 2.43 | $ 2.62 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 147,136 | 152,533 | 148,603 | 152,970 |
Diluted (in shares) | 148,575 | 153,614 | 149,920 | 153,982 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 148,853 | $ 126,976 | $ 382,693 | $ 423,116 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation loss | (60,635) | (10,582) | (43,926) | (106,154) |
Unrealized gain (loss) from foreign currency hedging activities | (1,263) | (379) | (1,586) | 674 |
Unrealized investment gain (loss) | 2 | (1) | 8 | (2) |
Pension adjustment gain | 400 | 116 | 832 | 1,056 |
Other Comprehensive Income, net of tax | (61,496) | (10,846) | (44,672) | (104,426) |
Comprehensive income | 87,357 | 116,130 | 338,021 | 318,690 |
Comprehensive income attributable to noncontrolling interests: | ||||
Net income | (8,296) | (5,498) | (17,821) | (20,208) |
Foreign currency translation loss | 6,014 | 2,589 | 4,609 | 14,844 |
Comprehensive income attributable to noncontrolling interests | (2,282) | (2,909) | (13,212) | (5,364) |
Comprehensive income attributable to Henry Schein, Inc. | $ 85,075 | $ 113,221 | $ 324,809 | $ 313,326 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Noncontrolling Interests [Member] |
Cumulative impact of adopting new accounting standards | $ 2,594 | $ 0 | $ 0 | $ 2,594 | $ 0 | $ 0 |
Beginning Balance at Dec. 30, 2017 | 2,824,410 | $ 1,537 | 0 | 2,940,029 | (130,067) | 12,911 |
Beginning Balance, shares (in shares) at Dec. 30, 2017 | 153,690,146 | |||||
Net income (excluding attributable to Redeemable noncontrolling interests from continuing and discontinued operations) | 406,097 | $ 0 | 0 | 402,908 | 0 | 3,189 |
Foreign currency translation loss (excluding loss attributable to Redeemable noncontrolling interests and discontinued operations) | (92,402) | 0 | 0 | 0 | (91,310) | (1,092) |
Unrealized gain (loss) from foreign currency hedging activities, net of tax impact | 674 | 0 | 0 | 0 | 674 | 0 |
Unrealized investment gain (loss), net of tax impact | (2) | 0 | 0 | 0 | (2) | 0 |
Pension adjustment gain (loss), net of tax impact | 1,056 | 0 | 0 | 0 | 1,056 | 0 |
Dividends paid | (396) | 0 | 0 | 0 | 0 | (396) |
Other adjustments | 701 | 0 | (11) | 0 | 0 | 712 |
Purchase of noncontrolling interests | (207) | 0 | 0 | 0 | 0 | (207) |
Change in fair value of redeemable securities | (119,695) | 0 | (119,695) | 0 | 0 | 0 |
Initial noncontrolling interests and adjustments related to business acquisitions | 428,464 | 0 | 0 | 0 | 0 | 428,464 |
Repurchase and retirement of common stock - Value | (114,106) | $ (15) | (20,865) | (93,226) | 0 | 0 |
Repurchase and retirement of common stock - Shares | (1,521,208) | |||||
Stock issued upon exercise of stock options | 3,076 | $ 1 | 3,075 | 0 | 0 | 0 |
Stock issued upon exercise of stock options, shares | 153,516 | |||||
Stock-based compensation expense - Value | (34,235) | $ (4) | (34,231) | 0 | 0 | 0 |
Stock-based compensation expense - Shares | 379,428 | |||||
Shares withheld for payroll taxes - Value | (18,110) | $ (3) | (18,107) | 0 | 0 | 0 |
Shares withheld for payroll taxes - Shares | (267,573) | |||||
Settlement of stock-based compensation awards | (642) | $ 0 | (642) | 0 | 0 | 0 |
Settlement of stock-based compensation awards, shares | 3,371 | |||||
Deferred tax benefit arising from acquisition of noncontrolling interest in partnership | 60,969 | $ 0 | 60,969 | 0 | 0 | 0 |
Transfer of charges in excess of capital | 0 | 0 | 61,045 | (61,045) | 0 | 0 |
Ending Balance at Sep. 29, 2018 | 3,416,716 | $ 1,524 | 0 | 3,191,260 | (219,649) | 443,581 |
Ending Balance, shares (in shares) at Sep. 29, 2018 | 152,437,680 | |||||
Beginning Balance at Jun. 30, 2018 | 2,922,909 | $ 1,532 | 0 | 3,123,398 | (211,392) | 9,371 |
Beginning Balance, shares (in shares) at Jun. 30, 2018 | 153,231,669 | |||||
Net income (excluding attributable to Redeemable noncontrolling interests from continuing and discontinued operations) | 124,328 | $ 0 | 0 | 121,478 | 0 | 2,850 |
Foreign currency translation loss (excluding loss attributable to Redeemable noncontrolling interests and discontinued operations) | (8,365) | 0 | 0 | 0 | (7,993) | (372) |
Unrealized gain (loss) from foreign currency hedging activities, net of tax impact | (379) | 0 | 0 | 0 | (379) | 0 |
Unrealized investment gain (loss), net of tax impact | (1) | 0 | 0 | 0 | (1) | 0 |
Pension adjustment gain (loss), net of tax impact | 116 | 0 | 0 | 0 | 116 | 0 |
Dividends paid | (72) | 0 | 0 | 0 | 0 | (72) |
Other adjustments | (16) | 0 | 12 | 0 | 0 | (28) |
Purchase of noncontrolling interests | 8 | 0 | 0 | 0 | 0 | 8 |
Change in fair value of redeemable securities | (2,988) | 0 | (2,988) | 0 | 0 | 0 |
Initial noncontrolling interests and adjustments related to business acquisitions | 431,824 | 0 | 0 | 0 | 0 | 431,824 |
Repurchase and retirement of common stock - Value | (60,751) | $ (7) | (10,625) | (50,119) | 0 | 0 |
Repurchase and retirement of common stock - Shares | (751,928) | |||||
Stock issued upon exercise of stock options | 54 | $ 1 | 55 | 0 | 0 | 0 |
Stock issued upon exercise of stock options, shares | 2,000 | |||||
Stock-based compensation expense - Value | (10,890) | $ 0 | (10,890) | 0 | 0 | 0 |
Stock-based compensation expense - Shares | (40,017) | |||||
Shares withheld for payroll taxes - Value | (421) | $ 0 | (421) | 0 | 0 | 0 |
Shares withheld for payroll taxes - Shares | (4,044) | |||||
Settlement of stock-based compensation awards | (420) | $ 0 | (420) | 0 | 0 | 0 |
Settlement of stock-based compensation awards, shares | 0 | |||||
Transfer of charges in excess of capital | 0 | $ 0 | 3,497 | (3,497) | 0 | 0 |
Ending Balance at Sep. 29, 2018 | 3,416,716 | $ 1,524 | 0 | 3,191,260 | (219,649) | 443,581 |
Ending Balance, shares (in shares) at Sep. 29, 2018 | 152,437,680 | |||||
Cumulative impact of adopting new accounting standards | (274) | $ 0 | 0 | (274) | 0 | 0 |
Beginning Balance at Dec. 29, 2018 | $ 3,541,788 | $ 1,514 | 0 | 3,208,589 | (248,771) | 580,456 |
Beginning Balance, shares (in shares) at Dec. 29, 2018 | 151,401,668 | 151,401,668 | ||||
Net income (excluding attributable to Redeemable noncontrolling interests from continuing and discontinued operations) | $ 372,441 | $ 0 | 0 | 364,872 | 0 | 7,569 |
Foreign currency translation loss (excluding loss attributable to Redeemable noncontrolling interests and discontinued operations) | (39,606) | 0 | 0 | 0 | (39,317) | (289) |
Unrealized gain (loss) from foreign currency hedging activities, net of tax impact | (1,586) | 0 | 0 | 0 | (1,586) | 0 |
Unrealized investment gain (loss), net of tax impact | 8 | 0 | 0 | 0 | 8 | 0 |
Pension adjustment gain (loss), net of tax impact | 832 | 0 | 0 | 0 | 832 | 0 |
Dividends paid | (299) | 0 | 0 | 0 | 0 | (299) |
Other adjustments | (3) | 0 | (3) | 0 | 0 | 0 |
Change in fair value of redeemable securities | 5,867 | 0 | 5,867 | 0 | 0 | 0 |
Initial noncontrolling interests and adjustments related to business acquisitions | 42,345 | 0 | 0 | 0 | 0 | 42,345 |
Repurchase and retirement of common stock - Value | (325,000) | $ (52) | (51,312) | (273,636) | 0 | 0 |
Repurchase and retirement of common stock - Shares | (5,277,256) | |||||
Adjustment for Animal Health Spin-off, Value | 1 | $ 1 | 0 | 0 | 0 | 0 |
Adjustment for Animal Health Spin-off, Shares | 87,629 | |||||
Stock issued upon exercise of stock options | 34 | $ 0 | 34 | 0 | 0 | 0 |
Stock issued upon exercise of stock options, shares | 2,526 | |||||
Stock-based compensation expense - Value | (33,435) | $ (2) | (33,433) | 0 | 0 | 0 |
Stock-based compensation expense - Shares | 218,563 | |||||
Shares withheld for payroll taxes - Value | (10,767) | $ (2) | (10,765) | 0 | 0 | 0 |
Shares withheld for payroll taxes - Shares | (178,266) | |||||
Settlement of stock-based compensation awards | 303 | $ 0 | 303 | 0 | 0 | 0 |
Settlement of stock-based compensation awards, shares | 0 | |||||
Share Sale related to Animal Health business | 361,090 | $ 0 | 361,090 | 0 | 0 | 0 |
Separation of Animal Health business | (521,299) | 0 | (71,549) | (543,158) | 93,408 | 0 |
Transfer of charges in excess of capital | 0 | 0 | (201,457) | 201,457 | 0 | 0 |
Ending Balance at Sep. 28, 2019 | $ 3,459,310 | $ 1,463 | 65,641 | 2,957,850 | (195,426) | 629,782 |
Ending Balance, shares (in shares) at Sep. 28, 2019 | 146,254,864 | 146,254,864 | ||||
Beginning Balance at Jun. 29, 2019 | $ 3,446,214 | $ 1,478 | 65,356 | 2,900,387 | (139,944) | 618,937 |
Beginning Balance, shares (in shares) at Jun. 29, 2019 | 147,823,846 | |||||
Net income (excluding attributable to Redeemable noncontrolling interests from continuing and discontinued operations) | 144,748 | $ 0 | 0 | 140,557 | 0 | 4,191 |
Foreign currency translation loss (excluding loss attributable to Redeemable noncontrolling interests and discontinued operations) | (54,887) | 0 | 0 | 0 | (54,621) | (266) |
Unrealized gain (loss) from foreign currency hedging activities, net of tax impact | (1,263) | 0 | 0 | 0 | (1,263) | 0 |
Unrealized investment gain (loss), net of tax impact | 2 | 0 | 0 | 0 | 2 | 0 |
Pension adjustment gain (loss), net of tax impact | 400 | 0 | 0 | 0 | 400 | 0 |
Dividends paid | (84) | 0 | 0 | 0 | 0 | (84) |
Other adjustments | 1 | 0 | 1 | 0 | 0 | 0 |
Change in fair value of redeemable securities | 1,667 | 0 | 1,667 | 0 | 0 | 0 |
Initial noncontrolling interests and adjustments related to business acquisitions | 7,004 | 0 | 0 | 0 | 0 | 7,004 |
Repurchase and retirement of common stock - Value | (98,218) | $ (15) | (15,109) | (83,094) | 0 | 0 |
Repurchase and retirement of common stock - Shares | (1,571,909) | |||||
Stock-based compensation expense - Value | (13,338) | $ 0 | (13,338) | 0 | 0 | 0 |
Stock-based compensation expense - Shares | 6,028 | |||||
Shares withheld for payroll taxes - Value | (199) | $ 0 | (199) | 0 | 0 | 0 |
Shares withheld for payroll taxes - Shares | (3,101) | |||||
Settlement of stock-based compensation awards | (85) | $ 0 | (85) | 0 | 0 | 0 |
Separation of Animal Health business | 672 | 0 | 672 | 0 | 0 | 0 |
Ending Balance at Sep. 28, 2019 | $ 3,459,310 | $ 1,463 | $ 65,641 | $ 2,957,850 | $ (195,426) | $ 629,782 |
Ending Balance, shares (in shares) at Sep. 28, 2019 | 146,254,864 | 146,254,864 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019 | Sep. 28, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Unrealized loss from foreign currency hedging activities, tax benefit | $ 422 | $ 451 |
Unrealized investment gain, (tax benefit) tax | 1 | 2 |
Pension adjustment gain, tax benefit (tax) | 185 | 314 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net income attributable to Redeemable noncontrolling interests | 10,618 | |
Foreign currency translation gain (loss) attributable to Redeemable noncontrolling interests | (5,748) | (4,912) |
Continuing Operations [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net income attributable to Redeemable noncontrolling interests | $ 4,105 | 10,618 |
Foreign currency translation gain (loss) attributable to Redeemable noncontrolling interests | (4,912) | |
Discontinued Operations [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net income attributable to Redeemable noncontrolling interests | 366 | |
Foreign currency translation gain (loss) attributable to Redeemable noncontrolling interests | $ 592 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 382,693 | $ 423,116 |
Income (loss) from discontinued operations | (5,576) | 97,561 |
Income from continuing operations | 388,269 | 325,555 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 136,210 | 106,930 |
Stock-based compensation expense | 33,110 | 30,570 |
Provision for losses on trade and other accounts receivable | 7,576 | 7,400 |
Provision for deferred income taxes | (3,468) | (3,768) |
Equity in earnings of affiliates | (14,771) | (14,829) |
Distributions from equity affiliates | 67,913 | 14,585 |
Changes in unrecognized tax benefits | 3,535 | 2,853 |
Other | (2,122) | 503 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (115,384) | (141,017) |
Inventories | 75,093 | (59,794) |
Other current assets | (70,348) | (58,856) |
Accounts payable and accrued expenses | 19,567 | 59,263 |
Net cash provided by operating activities from continuing operations | 525,180 | 269,395 |
Net cash provided by operating activities from continuing operations | 525,180 | 269,395 |
Net cash provided by (used in) operating activities from discontinued operations | (163,653) | 121,359 |
Net cash provided by operating activities | 361,527 | 390,754 |
Cash flows from investing activities: | ||
Purchases of fixed assets | (48,956) | (49,319) |
Payments for equity investments and business acquisitions, net of cash acquired | (657,093) | (38,996) |
Proceeds from sale of equity investment | 10,500 | 0 |
Proceeds/(payments) for loan to affiliate | 16,448 | (24,200) |
Other | (12,248) | (11,557) |
Net cash used in investing activities from continuing operations | (691,349) | (124,072) |
Net cash used in investing activities from continuing operations | (691,349) | (124,072) |
Net cash used in investing activities from discontinued operations | (2,064) | (22,285) |
Net cash used in investing activities | (693,413) | (146,357) |
Cash flows from financing activities: | ||
Proceeds from (repayments of) bank borrowings | (843,846) | 404,098 |
Proceeds from issuance of debt | 741 | 115,000 |
Principal payments for long-term debt | (10,252) | (24,483) |
Debt issuance costs | (391) | (395) |
Proceeds from issuance of stock upon exercise of stock options | 34 | 3,076 |
Payments for repurchases of common stock | (325,000) | (114,106) |
Payments for taxes related to shares withheld for employee taxes | (10,751) | (17,903) |
Distribution received related to Animal Health Spin-off | 1,120,000 | 0 |
Proceeds related to Animal Health Share Sale | 361,090 | 0 |
Proceeds from (distributions to) noncontrolling stockholders | 53,429 | (6,142) |
Acquisitions of noncontrolling interests in subsidiaries | (2,358) | (286,233) |
Payments to Henry Schein Animal Health Business | (166,557) | (292,806) |
Net cash provided by financing activities from continuing operations | 176,139 | (219,894) |
Net cash provided by (used in) financing activities from continuing operations | 176,139 | (219,894) |
Net cash provided by (used in) financing activities from discontinued operations | 144,633 | (98,622) |
Net cash provided by (used in) financing activities | 320,772 | (318,516) |
Effect of exchange rate changes on cash and cash equivalents-continuing operations | 8,401 | 14,505 |
Effect of exchange rate changes on cash and cash equivalents-discontinued operations | (2,240) | 4,696 |
Net change in cash and cash equivalents from continuing operations | 18,371 | (60,066) |
Net change in cash and cash equivalents from discontinued operations | (23,324) | 5,148 |
Net change in cash and cash equivalents | (4,953) | (54,918) |
Cash and cash equivalents, beginning of period | 56,885 | 158,002 |
Cash and cash equivalents, end of period | $ 75,256 | $ 97,936 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 28, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation Our consolidated financial statements include our accounts, as well as those of our wholly-owned and majority-owned subsidiaries. Certain prior period amounts have been reclassified to conform to the current period presentation. Our accompanying unaudited 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. We consolidate a Variable Interest Entity (“VIE”) where we hold a variable interest and are the primary beneficiary. The VIE is a trade accounts receivable securitization. We are the primary beneficiary because we have the power to direct activities that most significantly affect the economic performance and have the obligation to absorb the majority of the losses or benefits. The results of operations and financial position of this VIE are included in our consolidated financial statements. For the consolidated VIE, the trade accounts receivable transferred to the VIE are pledged as collateral to the related debt. The creditors have recourse to us for losses on these trade accounts receivable. At September 28, 2019 and December 29, 2018, trade accounts receivable that can only be used to settle obligations of this VIE were $ 419 million and $ 422 million, respectively, and the liabilities of the VIE where the creditors have recourse to us were $ 350 million and $ 350 million, respectively. The 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. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 29, 2018. On February 7, 2019 (the “Distribution Date”), we completed the separation (the “Separation”) and subsequent merger of our animal health business (the “Henry Schein Animal Health Business”) with Direct Vet Marketing, Inc. (d/b/a Vets First Choice, “Vets First Choice”) (the “Merger”). All financial information within this Form 10-Q presents the Henry Schein Animal Health Business as a discontinued operation. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the nine months ended September 28, 2019 are not necessarily indicative of the results to be expected for any other interim period or for the year ending December 28, 2019. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 28, 2019 | |
Discontinued Operations | |
Discontinued Operations | Note 2 – Discontinued Operations Animal Health Spin-off On the Distribution Date, we completed the Separation and subsequent Merger of the Henry Schein Animal Health Business with Vets First Choice. This was accomplished by a series of transactions among us, Vets First Choice, Covetrus, Inc. (f/k/a HS Spinco, Inc. “Covetrus”), a wholly owned subsidiary of ours prior to the Distribution Date, and HS Merger Sub, Inc., a wholly owned subsidiary of Covetrus (“Merger Sub”). In connection with the Separation, we contributed, assigned and transferred to Covetrus certain applicable assets, liabilities and capital stock or other ownership interests relating to the Henry Schein Animal Health Business. On the Distribution Date, we received a tax-free distribution of $ 1,120 million from Covetrus pursuant to certain debt financing incurred by Covetrus. On the Distribution Date and prior to the Animal Health Spin-off, Covetrus issued shares of Covetrus common stock to certain institutional accredited investors (the “Share Sale Investors”) for $ 361.1 million (the “Share Sale”). The proceeds of the Share Sale were paid to Covetrus and distributed to us. Subsequent to the Share Sale, we distributed, on a pro rata basis, all of the shares of the common stock of Covetrus held by us to our stockholders of record as of the close of business on January 17, 2019 (the “Animal Health Spin-off”). After the Share Sale and Animal Health Spin-off, Merger Sub consummated the Merger whereby it merged with and into Vets First Choice, with Vets First Choice surviving the Merger as a wholly owned subsidiary of Covetrus. Immediately following the consummation of the Merger, on a fully diluted basis, (i) approximately 63% of the shares of Covetrus common stock were (a) owned by our stockholders and the Share Sale Investors, and (b) held by certain employees of the Henry Schein Animal Health Business (in the form of certain equity awards), and (ii) approximately 37% of the shares of Covetrus common stock were (a) owned by stockholders of Vets First Choice immediately prior to the Merger, and (b) held by certain employees of Vets First Choice (in the form of certain equity awards). After the Separation and the Merger, we no longer beneficially owned any shares of Covetrus common stock and, following the Distribution Date, will not consolidate the financial results of Covetrus for the purpose of our financial reporting. Following the Separation and the Merger, Covetrus was an independent, publicly traded company on the Nasdaq Global Select Market. In connection with the completion of the Animal Health Spin-off, we entered into a transition services agreement with Covetrus under which we have agreed to provide certain transition services for up to twenty-four months in areas such as information technology, finance and accounting, human resources, supply chain, and real estate and facility services. As a result of the Separation, the financial position and results of operations of the Henry Schein Animal Health Business are presented as discontinued operations and have been excluded from continuing operations and segment results for all periods presented. The accompanying Notes to the Consolidated Financial Statements have been revised to reflect the effect of the Separation and all prior year balances have been revised accordingly to reflect continuing operations only. The historical statements of Comprehensive Income (Loss) and Shareholders' Equity have not been revised to reflect the Separation and instead reflect the Separation as an adjustment to the balances at September 28, 2019. Summarized financial information for our discontinued operations is as follows: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Net sales $ - $ 924,114 $ 319,522 $ 2,881,747 Gross profit - 166,201 59,425 525,408 Operating income (loss) ( 1,063) 42,657 ( 8,588) 130,800 Income tax expense (benefit) ( 6,704) 12,767 ( 2,023) 37,430 Income (loss) from discontinued operations 5,641 30,729 ( 5,576) 97,561 Net (income) loss attributable to noncontrolling interests - ( 21) 366 ( 7,593) Net income (loss) from discontinued operations attributable to Henry Schein, Inc. 5,641 30,708 ( 5,210) 89,968 The financial information above represents activity of the discontinued operations during the quarter through the Distribution Date. The operating income (loss) from discontinued operations for the three and nine months ended September 28, 2019 was primarily attributable to the inclusion of approximately $ 0.3 million and $ 23.4 million, respectively, of transaction costs directly related to the Animal Health Spin-off. The income from discontinued operations for the three months ended September 28, 2019 was primarily attributable a change in estimate of the tax deductibility of transaction costs incurred that were directly related to the Animal Health Spin-off. The loss from discontinued operations for the nine months ended September 28, 2019 was primarily attributable to the inclusion of the transaction costs directly related to the Animal Health Spin-off. The following are the amounts of assets and liabilities that were transferred to Covetrus as of February 7, 2019 and December 29, 2018. February 7, December 29, 2019 2018 (unaudited) (unaudited) Cash and cash equivalents $ 6,815 $ 23,324 Accounts receivable, net 432,812 434,935 Inventories, net 536,637 555,230 Prepaid expenses and other 120,546 69,525 Total current assets of discontinued operations 1,096,810 1,083,014 Property and equipment, net 69,790 68,177 Operating lease right-of-use asset, net 57,012 - Goodwill 742,931 739,266 Other intangibles, net 205,793 208,213 Investments and other 120,518 118,003 Total long-term assets of discontinued operations 1,196,044 1,133,659 Total assets of discontinued operations $ 2,292,854 $ 2,216,673 Accounts payable $ 316,162 $ 441,453 Current maturities of long-term debt 657 675 Operating lease liabilities 18,951 - Accrued expenses: Payroll and related 36,847 36,888 Taxes 24,060 17,552 Other 80,400 81,039 Total current liabilities of discontinued operations 477,077 577,607 Long-term debt 1,176,105 23,529 Deferred income taxes 17,019 4,352 Operating lease liabilities 38,668 - Other liabilities 29,209 34,572 Total long-term liabilities of discontinued operations 1,261,001 62,453 Total liabilities of discontinued operations $ 1,738,078 $ 640,060 Redeemable noncontrolling interests $ 28,270 $ 92,432 |
Critical Accounting Policies an
Critical Accounting Policies and Estimates and Accounting Pronouncements Adopted | 9 Months Ended |
Sep. 28, 2019 | |
Critical Accounting Policies and Estimates and Accounting Pronouncements Adopted | |
Critical Accounting Policies and Estimates and Accounting Pronouncements Adopted | Note 3 – Critical Accounting Policies and Accounting Pronouncements Adopted Critical Accounting Policies Except for the accounting policy for leases appearing below, implemented as a result of adopting Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), there have been no material changes in our critical accounting policies during the nine months ended September 28, 2019, as compared to the critical accounting policies described in Item 7 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 29, 2018. Leases We determine if an arrangement contains a lease at inception. An arrangement contains a lease if it implicitly or explicitly identifies an asset to be used and conveys the right to control the use of the identified asset in exchange for consideration. As a lessee, we include operating leases in Operating lease right-of-use (“ROU”) assets, Operating lease liabilities, and Non-current operating lease liabilities in our consolidated balance sheet. Finance leases are included in Property and equipment Current maturities of long-term debt Long-term debt ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized upon commencement of the lease based on the present value of the lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. When readily determinable, we use the implicit rate. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with a lease term of 12 months or less are not capitalized. We have lease agreements with lease and non-lease components, which are generally accounted for as a single lease component, except non-lease components for leases of vehicles which are accounted for separately. When a vehicle lease contains both lease and non-lease components, we allocate the transaction price based on the relative standalone selling price. Accounting Pronouncements Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02 “Leases (Topic 842)” related to leases requiring the recognition of ROU assets and lease liabilities on the balance sheet. Most significant among the changes in the standard is the recognition of ROU assets and lease liabilities by lessors for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. We adopted the standard on December 30, 2018 using a modified retrospective without adjusting historical financial statements. We elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward the historical lease classification. Information related to leases as of September 28, 2019 is presented under Topic 842, while prior period amounts are not adjusted and continue to be reported under legacy guidance in Topic 840. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. Adoption of the new standard resulted in the recording of additional net operating lease assets of $ 259.9 million and operating lease liabilities of $ 267.3 million, and a decrease of $ 1.1 million and $ 8.5 million in prepaid rent and deferred rent liabilities, respectively. The standard did not materially impact our consolidated net income and had no impact on cash flows. In February 2018, the FASB issued ASU No. 2018-02, "Treatment of Stranded Tax Effects in Accumulated Other Comprehensive Income Resulting From the Tax Cuts and Jobs Act of 2017," which allows the reclassification from accumulated comprehensive income to retained earnings the income tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). This ASU is effective for interim and annual reporting periods beginning after December 15, 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging” (Topic 815), which simplified the requirements for hedge accounting, more closely aligns hedge accounting risk with risk management activities and increases transparency of the scope and results of hedging activities. This ASU amends the presentation and disclosure requirements and changes how we can assess the effectiveness of our hedging relationships. This ASU will make more financial and nonfinancial hedging strategies eligible for hedge accounting. This ASU is effective for interim and annual reporting periods beginning after December 15, 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 28, 2019 | |
Revenue from Contracts with Customers | |
Revenue from Contracts with Customers | Note 4 – Revenue from Contracts with Customers Revenue is recognized in accordance with policies disclosed in Item 7 of our Annual Report on form 10-K for the year ended December 29, 2018. Disaggregation of Revenue The following table disaggregates our revenue by segment and geography: Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 North America International Global North America International Global Revenues: Health care distribution Dental $ 951,796 $ 594,188 $ 1,545,984 $ 2,850,762 $ 1,843,041 $ 4,693,803 Medical 784,349 19,360 803,709 2,125,002 59,925 2,184,927 Total health care distribution 1,736,145 613,548 2,349,693 4,975,764 1,902,966 6,878,730 Technology and value-added services 120,197 17,134 137,331 327,618 50,273 377,891 Total excluding Corporate TSA revenues (1) 1,856,342 630,682 2,487,024 5,303,382 1,953,239 7,256,621 Corporate TSA revenues (1) 1,077 20,666 21,743 4,098 56,143 60,241 Total revenues $ 1,857,419 $ 651,348 $ 2,508,767 $ 5,307,480 $ 2,009,382 $ 7,316,862 Three Months Ended Nine Months Ended September 29, 2018 September 29, 2018 North America International Global North America International Global Revenues: Health care distribution Dental $ 951,199 $ 563,126 $ 1,514,325 $ 2,830,384 $ 1,844,150 $ 4,674,534 Medical 702,758 19,184 721,942 1,915,944 60,423 1,976,367 Total health care distribution 1,653,957 582,310 2,236,267 4,746,328 1,904,573 6,650,901 Technology and value-added services 103,955 15,343 119,298 245,761 48,385 294,146 Total excluding Corporate TSA revenues (1) 1,757,912 597,653 2,355,565 4,992,089 1,952,958 6,945,047 Corporate TSA revenues (1) - - - - - - Total revenues $ 1,757,912 $ 597,653 $ 2,355,565 $ 4,992,089 $ 1,952,958 $ 6,945,047 (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 August 2020. At December 29, 2018, the current portion of contract liabilities of $ 65.3 million was reported in Accrued expenses: Other, and $ 5.0 million related to non-current contract liabilities was reported in Other liabilities. During the nine months ended September 28, 2019, we recognized in revenue $ 55.0 million of the amounts previously deferred at December 29, 2018. At September 28, 2019, the current and non-current portion of contract liabilities were $ 58.2 million and $ 4.9 million, respectively. |
Segment Data
Segment Data | 9 Months Ended |
Sep. 28, 2019 | |
Segment Data | |
Segment Data | 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. The health care distribution reportable segment aggregates our global dental and medical operating segments. This segment distributes consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. Our global dental group serves office-based dental practitioners, dental laboratories, schools and other institutions. Our global medical group serves office-based medical practitioners, ambulatory surgery centers, other alternate-care settings and other institutions. Our global dental and medical groups serve practitioners in 32 countries worldwide. Our global technology and value-added services group provides software, technology and other value-added services to health care practitioners. Our technology group offerings include practice management software systems for dental and medical practitioners. Our value-added practice solutions include financial services on a non-recourse basis, e-services, practice technology, network and hardware services, as well as continuing education services for practitioners. The following tables present information about our reportable and operating segments: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Net Sales: Health care distribution (1): Dental $ 1,545,984 $ 1,514,325 $ 4,693,803 $ 4,674,534 Medical 803,709 721,942 2,184,927 1,976,367 Total health care distribution 2,349,693 2,236,267 6,878,730 6,650,901 Technology and value-added services (2) 137,331 119,298 377,891 294,146 Total excluding Corporate TSA revenue 2,487,024 2,355,565 7,256,621 6,945,047 Corporate TSA revenues (3) 21,743 - 60,241 - Total $ 2,508,767 $ 2,355,565 $ 7,316,862 $ 6,945,047 (1) Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. (2) Consists of practice management software and other value-added products, which are distributed primarily to health care providers, and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. (3) Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which we expect to continue through August 2020. Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Operating Income: Health care distribution $ 149,497 $ 91,306 $ 429,026 $ 358,978 Technology and value-added services 37,701 31,963 92,901 83,639 Total $ 187,198 $ 123,269 $ 521,927 $ 442,617 |
Debt
Debt | 9 Months Ended |
Sep. 28, 2019 | |
Debt | |
Debt | Note 6 – Debt Bank Credit Lines Bank credit lines consisted of the following: September 28, December 29, 2019 2018 Revolving credit agreement $ 75,000 $ 175,000 Other short-term bank credit lines 32,841 376,458 Committed loan associated with Animal Health Spin-off - 400,000 Total $ 107,841 $ 951,458 Revolving Credit Agreement On April 18, 2017, we entered into a $ 750 million revolving credit agreement (the “Credit Agreement”). This facility, which matures in April 2022 500 million revolving credit facility, which was scheduled to mature in September 2019 75.0 million and $ 175.0 million, respectively. As of September 28, 2019 and December 29, 2018, there were $ 9.6 million and $ 11.2 million of letters of credit, respectively, provided to third parties under the credit facility. Other Short-Term Credit Lines As of September 28, 2019 and December 29, 2018, we had various other short-term bank credit lines available, of which $ 32.8 million and $ 376.5 million, respectively, were outstanding. At September 28, 2019 and December 29, 2018, borrowings under all of our credit lines had a weighted average interest rate of 2.94% and 3.30%, respectively. Committed Loan Associated with Animal Health Spin-off On May 21, 2018, we obtained a $ 400 million committed loan which matured on the earlier of (i) March 31, 2019 and (ii) the consummation of the Animal Health Spin-off. The proceeds of this loan were used, among other things, to fund our purchase of all of the equity interests in Butler Animal Health Holding Company, LLC (“BAHHC”) directly or indirectly owned by Darby Group Companies, Inc. (“Darby”) and certain other sellers pursuant to the terms of that certain Amendment to Put Rights Agreements, dated as of April 20, 2018, by and among us, Darby, BAHHC and the individual sellers party thereto for an aggregate purchase price of $ 365 million. As of December 29, 2018, the balance outstanding on this loan was $ 400 million and is included within the “Bank credit lines” caption within our consolidated balance sheet. At December 29, 2018, the interest rate on this loan was 3.38%. Concurrent with the completion of the Animal Health Spin-off on February 7, 2019, we re-paid the balance of this loan. Long-term debt Long-term debt consisted of the following: September 28, December 29, 2019 2018 Private placement facilities $ 621,217 $ 628,189 U.S. trade accounts receivable securitization 350,000 350,000 Various collateralized and uncollateralized loans payable with interest in varying installments through 2024 at interest rates ranging from 2.56% to 10.5% at September 28,2019 and ranging from 2.61% to 4.17% at December 29, 2018 5,995 6,491 Finance lease obligations payable through 2029 with interest rates ranging from 1.64% to 19.13% at September 28,2019 and ranging from 1.45% to 6.00% at December 29, 2018 4,205 3,944 Total 981,417 988,624 Less current maturities ( 109,188) ( 8,280) Total long-term debt $ 872,229 $ 980,344 Private Placement Facilities On September 15, 2017, we increased our available private placement facilities with three insurance companies to a total facility amount of $ 1 billion, and extended the expiration date to September 15, 2020. These facilities are available on an uncommitted basis at fixed rate economic terms to be agreed upon at the time of issuance, from time to time through September 15, 2020. The facilities allow us to issue senior promissory notes to the lenders at a fixed rate based on an agreed upon spread over applicable treasury notes at the time of issuance. The term of each possible issuance will be selected by us and can range from five 15 years (with an average life no longer than 12 years). The proceeds of any issuances under the facilities will be used for general corporate purposes, including working capital and capital expenditures, to refinance existing indebtedness and/or to fund potential acquisitions. The agreements provide, among other things, that we maintain certain maximum leverage ratios, and contain restrictions relating to subsidiary indebtedness, liens, affiliate transactions, disposal of assets and certain changes in ownership. These facilities contain make-whole provisions in the event that we pay off the facilities prior to the applicable due dates. The components of our private placement facility borrowings as of September 28, 2019 are presented in the following table (in thousands): Amount of Borrowing Borrowing Date of Borrowing Outstanding Rate Due Date September 2, 2010 $ 100,000 3.79 % September 2, 2020 January 20, 2012 50,000 3.45 January 20, 2024 January 20, 2012 21,429 3.09 January 20, 2022 December 24, 2012 50,000 3.00 December 24, 2024 June 2, 2014 100,000 3.19 June 2, 2021 June 16, 2017 100,000 3.42 June 16, 2027 September 15, 2017 100,000 3.52 September 15, 2029 January 2, 2018 100,000 3.32 January 2, 2028 Less: Deferred debt issuance costs ( 212) $ 621,217 (1) Annual repayments of approximately $ 7.1 million for this borrowing commenced on January 20, 2016. U.S. Trade Accounts Receivable Securitization We have a facility agreement with a bank, as agent, based on the securitization of our U.S. trade accounts receivable that is structured as an asset-backed securitization program with pricing committed for up to three years. Our current facility, which has a purchase limit of $ 350 million, and was previously scheduled to expire on April 29, 2020, has been extended to April 29, 2022. The borrowings outstanding under this securitization facility were $ 350 million as of both September 28, 2019 and December 29, 2018, respectively. At September 28, 2019, the interest rate on borrowings under this facility was based on the asset-backed commercial paper rate of 2.21 % plus 0.75%, for a combined rate of 2.96%. At December 29, 2018, the interest rate on borrowings under this facility was based on the asset-backed commercial paper rate of 2.66% plus 0.75%, for a combined rate of 3.41%. We are required to pay a commitment fee of 30 basis points on the daily balance of the unused portion of the facility if our usage is greater than or equal to 50% of the facility limit or a commitment fee of 35 basis points on the daily balance of the unused portion of the facility if our usage is less than 50% of the facility limit. Borrowings under this facility are presented as a component of Long-term debt within our consolidated balance sheet. |
Leases
Leases | 9 Months Ended |
Sep. 28, 2019 | |
Leases | |
Leases | Note 7 – Leases Leases We have operating and finance leases for corporate offices, office space, distribution and other facilities, vehicles and certain equipment. Our leases have remaining terms of less than one year to 16 years, some of which may include options to extend the leases for up to 10 years. The components of lease expense were as follows (in thousands): Three Months Ended Nine Months Ended September 28, September 28, 2019 2019 Operating lease cost: (1) $ 21,840 $ 68,273 Finance lease cost: Amortization of right-of-use assets 290 798 Interest on lease liabilities 31 88 Total finance lease cost $ 321 $ 886 (1) Includes variable lease expenses. Supplemental balance sheet information related to leases is as follows: September 28, 2019 Operating Leases: Operating lease right-of-use assets $ 240,126 Current operating lease liabilities 67,374 Non-current operating lease liabilities 182,505 Total operating lease liabilities $ 249,879 Finance Leases: Property and equipment, at cost $ 10,826 Accumulated depreciation ( 6,115) Property and equipment, net of accumulated depreciation $ 4,711 Current maturities of long-term debt $ 1,092 Long-term debt 3,113 Total finance lease liabilities $ 4,205 Weighted Average Remaining Lease Term in Years: Operating leases 5.5 Finance leases 6.1 Weighted Average Discount Rate: Operating leases 3.4 % Finance leases 2.2 % Supplemental cash flow information related to leases is as follows: September 28, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 60,275 Operating cash flows for finance leases 67 Financing cash flows for finance leases 862 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ 281,373 Finance leases 1,149 (1) Includes leases that commenced during the nine months ended September 28, 2019, as well as balances related to leases in existence as of the date of the adoption of Topic 842. Maturities of lease liabilities are as follows: September 28, 2019 Operating Finance Leases Leases 2019 (excluding the nine months ended September 28, 2019) $ 21,149 $ 453 2020 69,052 1,135 2021 54,082 846 2022 37,886 434 2023 26,051 295 Thereafter 67,075 1,372 Total future lease payments 275,295 4,535 Less imputed interest ( 25,416) ( 330) Total $ 249,879 $ 4,205 As of September 28, 2019 we have additional operating leases with total lease payments of $ 6.8 million for buildings and vehicles that have not yet commenced. These operating leases will commence during 2019 with lease terms of two 10 years. As previously disclosed in our December 29, 2018 Form 10-K and under the previous lease accounting standard, future minimum lease payments under non-cancelable operating leases and capital leases as of December 29, 2018 were as follows (in thousands): Operating Finance Leases Leases 2019 $ 62,535 $ 976 2020 47,686 801 2021 34,633 501 2022 25,626 305 2023 19,560 283 Thereafter 62,918 1,430 Total minimum lease payments $ 252,958 4,296 Less imputed interest (Capital leases only) ( 352) Total present value of minimum lease payments $ 3,944 |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 9 Months Ended |
Sep. 28, 2019 | |
Redeemable Noncontrolling Interests | |
Redeemable Noncontrolling Interests | Note 8 – Redeemable Noncontrolling Interests Some minority stockholders in certain of our subsidiaries have the right, at certain times, to require us to acquire their ownership interest in those entities at fair value. ASC Topic 480-10 is applicable for noncontrolling interests where we are or may be required to purchase all or a portion of the outstanding interest in a consolidated subsidiary from the noncontrolling interest holder under the terms of a put option contained in contractual agreements. The components of the change in the redeemable noncontrolling interests for the nine months ended September 28, 2019 and the year ended December 29, 2018 are presented in the following table: September 28, December 29, 2019 2018 Balance, beginning of period $ 219,724 $ 465,585 Decrease in redeemable noncontrolling interests due to redemptions ( 2,270) ( 287,767) Increase in redeemable noncontrolling interests due to business acquisitions 73,975 4,655 Net income attributable to redeemable noncontrolling interests 10,618 15,327 Dividends declared ( 7,943) ( 8,206) Effect of foreign currency translation loss attributable to redeemable noncontrolling interests ( 4,912) ( 11,330) Change in fair value of redeemable securities ( 5,867) 41,460 Balance, end of period $ 283,325 $ 219,724 Changes in the estimated redemption amounts of the noncontrolling interests subject to put options are adjusted at each reporting period with a corresponding adjustment to Additional paid-in capital. Future reductions in the carrying amounts are subject to a floor amount that is equal to the fair value of the redeemable noncontrolling interests at the time they were originally recorded. The recorded value of the redeemable noncontrolling interests cannot go below the floor level. These adjustments do not impact the calculation of earnings per share. |
Comprehensive Income
Comprehensive Income | 9 Months Ended |
Sep. 28, 2019 | |
Comprehensive Income | |
Comprehensive Income | Note 9 – Comprehensive Income Comprehensive income includes certain gains and losses that, under U.S. GAAP, are excluded from net income as such amounts are recorded directly as an adjustment to stockholders’ equity. The following table summarizes our Accumulated other comprehensive loss, net of applicable taxes as of: September 28, December 29, 2019 2018 Attributable to Redeemable noncontrolling interests: Foreign currency translation adjustment $ ( 22,915) $ ( 18,595) Attributable to noncontrolling interests: Foreign currency translation adjustment $ ( 715) $ ( 426) Attributable to Henry Schein, Inc.: Foreign currency translation loss $ ( 180,267) $ ( 234,799) Unrealized loss from foreign currency hedging activities ( 1,742) ( 156) Unrealized investment gain (loss) 2 ( 6) Pension adjustment loss ( 13,419) ( 13,810) Accumulated other comprehensive loss $ ( 195,426) $ ( 248,771) Total Accumulated other comprehensive loss $ ( 219,056) $ ( 267,792) The following table summarizes the components of comprehensive income, net of applicable taxes as follows: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Net income $ 148,853 $ 126,976 $ 382,693 $ 423,116 Foreign currency translation loss ( 60,635) ( 10,582) ( 43,926) ( 106,154) Tax effect - - - - Foreign currency translation loss ( 60,635) ( 10,582) ( 43,926) ( 106,154) Unrealized gain (loss) from foreign currency hedging activities ( 1,685) ( 406) ( 2,037) 1,079 Tax effect 422 27 451 ( 405) Unrealized gain (loss) from foreign currency hedging activities ( 1,263) ( 379) ( 1,586) 674 Unrealized investment gain (loss) 3 ( 1) 10 ( 2) Tax effect ( 1) - ( 2) - Unrealized investment gain (loss) 2 ( 1) 8 ( 2) Pension adjustment gain 585 139 1,146 1,449 Tax effect ( 185) ( 23) ( 314) ( 393) Pension adjustment gain 400 116 832 1,056 Comprehensive income $ 87,357 $ 116,130 $ 338,021 $ 318,690 During the three months ended September 28, 2019 and September 29, 2018, we recognized, as a component of our comprehensive income, a foreign currency translation loss of $ 60.6 million and $ 10.6 million, respectively, due to changes in foreign exchange rates from the beginning of the period to the end of the period. During the nine months ended September 28, 2019 and September 29, 2018, we recognized, as a component of our comprehensive income, a foreign currency translation loss of $ 43.9 million and $ 106.2 million, respectively, due to changes in foreign exchange rates from the beginning of the period to the end of the period. Our financial statements are denominated in the U.S. Dollar currency. Fluctuations in the value of foreign currencies as compared to the U.S. Dollar may have a significant impact on our comprehensive income (loss). The foreign currency translation gain (loss) during the three and nine months ended September 28, 2019 and September 29, 2018 was primarily impacted by changes in foreign currency exchange rates of the Euro, Brazilian Real, British Pound and Australian Dollar. The following table summarizes our total comprehensive income, net of applicable taxes, as follows: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Comprehensive income attributable to Henry Schein, Inc. $ 85,075 $ 113,221 $ 324,809 $ 313,326 Comprehensive income attributable to noncontrolling interests 3,924 2,478 7,280 2,097 Comprehensive income (loss) attributable to Redeemable noncontrolling interests ( 1,642) 431 5,932 3,267 Comprehensive income $ 87,357 $ 116,130 $ 338,021 $ 318,690 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10 – Fair Value Measurements ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC Topic 820”) provides a framework for measuring fair value in generally accepted accounting principles. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC Topic 820 are described as follows: • Level 1— Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. • Level 2— Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3— Inputs that are unobservable for the asset or liability. The following section describes the valuation methodologies that we used to measure different financial instruments at fair value. Investments and notes receivable There are no quoted market prices available for investments in unconsolidated affiliates and notes receivable; however, we believe the carrying amounts are a reasonable estimate of fair value. Debt The fair value of our debt, including bank credit lines, as of September 28, 2019 and December 29, 2018 was estimated at $ 1,089.3 million and $ 1,940.1 million, respectively. Factors that we considered when estimating the fair value of our debt include market conditions, such as interest rates and credit spreads. Derivative contracts Derivative contracts are valued using quoted market prices and significant other observable and unobservable inputs. We use derivative instruments to minimize our exposure to fluctuations in foreign currency exchange rates. Our derivative instruments primarily include foreign currency forward agreements related to intercompany loans and certain forecasted inventory purchase commitments with suppliers. The fair values for the majority of our foreign currency derivative contracts are obtained by comparing our contract rate to a published forward price of the underlying market rates, which is based on market rates for comparable transactions and are classified within Level 2 of the fair value hierarchy. Redeemable noncontrolling interests Some minority stockholders in certain of our subsidiaries have the right, at certain times, to require us to acquire their ownership interest in those entities at fair value based on third-party valuations. The primary factor affecting the future value of redeemable noncontrolling interests is expected earnings and, if such earnings are not achieved, the value of the redeemable noncontrolling interests might be impacted. The noncontrolling interests subject to put options are adjusted to their estimated redemption amounts each reporting period with a corresponding adjustment to Additional paid-in capital. Future reductions in the carrying amounts are subject to a “floor” amount that is equal to the fair value of the redeemable noncontrolling interests at the time they were originally recorded. The recorded value of the redeemable noncontrolling interests cannot go below the floor level. These adjustments do not impact the calculation of earnings per share. The values for Redeemable noncontrolling interests are classified within Level 3 of the fair value hierarchy. The details of the changes in Redeemable noncontrolling interests are presented in Note 8. The following table presents our assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of September 28, 2019 and December 29, 2018: September 28, 2019 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 5,620 $ - $ 5,620 Total assets $ - $ 5,620 $ - $ 5,620 Liabilities: Derivative contracts $ - $ 3,629 $ - $ 3,629 Total liabilities $ - $ 3,629 $ - $ 3,629 Redeemable noncontrolling interests $ - $ - $ 283,325 $ 283,325 December 29, 2018 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 12,533 $ - $ 12,533 Total assets $ - $ 12,533 $ - $ 12,533 Liabilities: Derivative contracts $ - $ 1,708 $ - $ 1,708 Total liabilities $ - $ 1,708 $ - $ 1,708 Redeemable noncontrolling interests $ - $ - $ 219,724 $ 219,724 |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Sep. 28, 2019 | |
Business Acquisitions | |
Business Acquisitions | Note 11 – Business Acquisitions Acquisitions The operating results of all acquisitions are reflected in our financial statements from their respective acquisition dates. During the nine months ended September 28, 2019 we completed the following acquisitions: On March 4, 2019, we announced that we acquired North American Rescue (“NAR”), a leading provider of survivability and casualty-care medical products to the defense and public-safety markets. NAR has annual sales of approximately $ 184 million. As of September 28, 2019, we have recorded $ 168.9 million of goodwill related to this acquisition. On March 18, 2019, we announced that our Henry Schein One subsidiary acquired Lighthouse 360, a provider of easy-to-use dental practice management and patient communication software. Lighthouse 360 has annual sales of approximately $ 50 million. As of September 28, 2019, we have recorded $ 143.4 million of goodwill related to this acquisition. We completed certain other acquisitions during the nine months ended September 28, 2019 which were immaterial to our financial statements individually and in the aggregate. Some prior owners of acquired subsidiaries are eligible to receive additional purchase price cash consideration if certain financial targets are met. We have accrued liabilities for the estimated fair value of additional purchase price consideration at the time of the acquisition. Any adjustments to these accrual amounts are recorded in our consolidated statements of income. For the nine months ended September 28, 2019 and September 29, 2018, there were no material adjustments recorded in our consolidated statement of income relating to changes in estimated contingent purchase price liabilities. |
Plans of Restructuring
Plans of Restructuring | 9 Months Ended |
Sep. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Plans of Restructuring | Note 12 – Plans of Restructuring On July 9, 2018, we committed to an initiative to rationalize our operations and provide expense efficiencies. These actions have allowed us to execute on our plan to reduce our cost structure and fund new initiatives that are expected to drive future growth under our 2018 to 2020 strategic plan. This initiative has resulted in the elimination of approximately 4% of our workforce and the closing of certain facilities. During the three and nine months ended September 28, 2019, we recorded restructuring (credits) costs of $( 0.8) million and $ 15.8 million, respectively. The restructuring credits in the three months ended September 28, 2019 were attributable to a reduction in previously recorded estimated restructuring costs as of June 29, 2019. The total 2018 costs associated with the actions to complete this restructuring were $ 54.4 million from continuing operations, consisting primarily of severance costs. As of June 29, 2019, the restructuring activities under this initiative are complete and we do not expect to incur any additional restructuring charges for the remainder of 2019. The costs associated with this restructuring are included in a separate line item, “Restructuring costs” within our consolidated statements of income. The following table shows the net amounts expensed and paid for restructuring costs that were incurred during the nine months ended September 28, 2019 and during our 2018 fiscal year and the remaining accrued balance of restructuring costs as of September 28, 2019, which is included in Accrued expenses: Other within our consolidated balance sheet: Facility Severance Closing Costs Costs Other Total Balance, December 30, 2017 $ 3,087 $ 1,315 $ 24 $ 4,426 Provision 50,197 3,153 1,017 54,367 Payments and other adjustments ( 23,320) ( 2,865) ( 883) ( 27,068) Balance, December 29, 2018 $ 29,964 $ 1,603 $ 158 $ 31,725 Provision 14,733 945 86 15,764 Payments ( 26,313) ( 1,575) ( 110) ( 27,998) Balance, September 28, 2019 $ 18,384 $ 973 $ 134 $ 19,491 The following table shows, by reportable segment, the net amounts expensed and paid for restructuring costs that were incurred during the nine months ended September 28, 2019 and during our 2018 fiscal year and the remaining accrued balance of restructuring costs as of September 28, 2019: Technology and Health Care Value-Added Distribution Services Total Balance, December 30, 2017 $ 4,426 $ - $ 4,426 Provision 50,824 3,543 54,367 Payments and other adjustments ( 24,959) ( 2,109) ( 27,068) Balance, December 29, 2018 $ 30,291 $ 1,434 $ 31,725 Provision 14,966 798 15,764 Payments ( 26,349) ( 1,649) ( 27,998) Balance, September 28, 2019 $ 18,908 $ 583 $ 19,491 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 13 – Earnings Per Share Basic earnings per share is computed by dividing net income attributable to Henry Schein, Inc. by the weighted-average number of common shares outstanding for the period. Our diluted earnings per share is computed similarly to basic earnings per share, except that it reflects the effect of common shares issuable for presently unvested restricted stock and restricted stock units and upon exercise of stock options, using the treasury stock method in periods in which they have a dilutive effect. A reconciliation of shares used in calculating earnings per basic and diluted share follows: Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Basic 147,136 152,533 148,603 152,970 Effect of dilutive securities: Stock options, restricted stock and restricted stock units 1,439 1,081 1,317 1,012 Diluted 148,575 153,614 149,920 153,982 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14 – Income Taxes For the nine months ended September 28, 2019, our effective tax rate was 23.9 % compared to 21.8 % for the prior year period. The difference between our effective tax rates and the federal statutory tax rate for the nine months ended September 28, 2019 primarily relates to state and foreign income taxes and interest expense. The difference between our effective tax rates and the federal statutory tax rate for the nine months ended September 29, 2018 primarily relates to a provisional transition tax benefit of $ 10 million related to the Tax Act, as well as state and foreign income taxes and interest expense. On December 22, 2017, the U.S. government passed the Tax Act. The Tax Act is comprehensive tax legislation that implemented complex changes to the U.S. tax code including, but not limited to, the reduction of the corporate tax rate from 35% to 21%, modification of accelerated depreciation, the repeal of the domestic manufacturing deduction and changes to the limitations of the deductibility of interest. Additionally, the Tax Act moved from a global tax regime to a modified territorial regime, which requires U.S. companies to pay a mandatory one-time transition tax on historical offshore earnings that have not been repatriated to the U.S. The transition tax is payable over eight years. The Tax Act also included provisions to tax global intangible low-taxed income (“GILTI”), a beneficial tax rate for eign Derived Intangible Income (“FDII”), a base erosion and anti-abuse tax (“BEAT”) that imposes tax on certain foreign related-party payments, and IRC Section 163(j) interest limitation (Interest Limitation). We became subject to the GILTI, FDII, BEAT and Interest Limitation provisions effective January 1, 2018. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. We elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. For the BEAT, FDII and Interest Limitation computations, we have not recorded an estimate in our effective tax rate for the nine months ended September 28, 2019 because we have concluded that these provisions of the Tax Act will not apply to us in 2019. The total amount of unrecognized tax benefits, which are included in “Other liabilities” within our consolidated balance sheets, as of September 28, 2019 was approximately $ 107.6 million, of which $ 86.5 million would affect the effective tax rate if recognized. It is possible that the amount of unrecognized tax benefits will change in the next 12 months, which may result in a material impact on our consolidated statement of income. The total amounts of interest and penalties, which are classified as a component of the provision for income taxes and included in “Other liabilities”, were approximately $ 18.3 million and $ 0, respectively , as of September 28, 2019 . The tax years subject to examination by major tax jurisdictions include the years 2012 and forward by the U.S. Internal Revenue Service (“IRS”), as well as the years 2008 and forward for certain states and certain foreign jurisdictions. During the quarter ended December 31, 2016 we filed a Mutual Agreement Procedure request with the IRS for assistance from the U.S. Competent Authority for an open Transfer Pricing issue which resulted in a partial settlement during the quarter ended December 30, 2017. We received a 30 Day Letter from the IRS during the quarter ended April 1, 2017 for the remaining open audit issues for the years 2012 and 2013. We filed a Protest with the Appellate Division regarding these issues during the second quarter of 2017. We had an initial Appeals Conference during the third quarter of 2018, of which we are awaiting a final settlement. During the quarter ended December 29, 2018, we submitted the first draft of our proposed Advanced Pricing Agreement covering tax years 2014-2024 to the IRS in which Henry Schein, Inc. and the IRS would agree on an appropriate transfer pricing methodology. We have provided all necessary documentation to the Appellate Division and the Advance Pricing and Mutual Agreement Program to date and are waiting for responses. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Note 15 – Derivatives and Hedging Activities We are exposed to market risks as well as changes in foreign currency exchange rates as measured against the U.S. dollar and each other, and changes to the credit risk of the derivative counterparties. We attempt to minimize these risks by primarily using foreign currency forward contracts and by maintaining counter-party credit limits. These hedging activities provide only limited protection against currency exchange and credit risks. Factors that could influence the effectiveness of our hedging programs include currency markets and availability of hedging instruments and liquidity of the credit markets. All foreign currency forward contracts that we enter into are components of hedging programs and are entered into for the sole purpose of hedging an existing or anticipated currency exposure. We do not enter into such contracts for speculative purposes and we manage our credit risks by diversifying our counterparties, maintaining a strong balance sheet and having multiple sources of capital. Fluctuations in the value of certain foreign currencies as compared to the U.S. dollar may positively or negatively affect our revenues, gross margins, operating expenses and retained earnings, all of which are expressed in U.S. dollars. Where we deem it prudent, we engage in hedging programs using primarily foreign currency forward contracts aimed at limiting the impact of foreign currency exchange rate fluctuations on earnings. We purchase short-term (i.e., 18 months or less) foreign currency forward contracts to protect against currency exchange risks associated with intercompany loans due from our international subsidiaries and the payment of merchandise purchases to our foreign suppliers. We do not hedge the translation of foreign currency profits into U.S. dollars, as we regard this as an accounting exposure, not an economic exposure. Our hedging activities have historically not had a material impact on our consolidated financial statements. Accordingly, additional disclosures related to derivatives and hedging activities required by ASC Topic 815 have been omitted. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 28, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | N ote 16 – Stock-Based Compensation Our accompanying consolidated statements of income reflect pre-tax share-based compensation expense of $ 13.3 million ($ 10.2 million after-tax) and $ 33.1 million ($ 25.2 million after-tax) for the three and nine months ended September 28, 2019, respectively, and $ 9.5 million ($ 7.6 million after-tax) and $ 30.6 million ($ 23.4 million after-tax) for the three and nine months ended September 29, 2018, respectively. Stock-based compensation represents the cost related to stock-based awards granted to employees and non-employee directors. We measure stock-based compensation at the grant date, based on the estimated fair value of the award, and recognize the cost (net of estimated forfeitures) as compensation expense on a straight-line basis over the requisite service period. Our stock-based compensation expense is reflected in selling, general and administrative expenses in our consolidated statements of income. Stock-based awards are provided to certain employees and non-employee directors under the terms of our 2013 Stock Incentive Plan, as amended, and our 2015 Non-Employee Director Stock Incentive Plan (together, the “Plans”). The Plans are administered by the Compensation Committee of the Board of Directors. Prior to March 2009, awards under the Plans principally included a combination of at-the-money stock options and restricted stock/units. Since March 2009, equity-based awards have been granted solely in the form of restricted stock/units, with the exception of providing stock options to employees pursuant to certain pre-existing contractual obligations. Grants of restricted stock/units are stock-based awards granted to recipients with specified vesting provisions. In the case of restricted stock, common stock is delivered on the date of grant, subject to vesting conditions. In the case of restricted stock units, common stock is generally delivered on or following satisfaction of vesting conditions. We issue restricted stock/units that vest solely based on the recipient’s continued service over time (primarily four-year 12-month cliff vesting) and restricted stock/units that vest based on our achieving specified performance measurements and the recipient’s continued service over time (primarily three With respect to time-based restricted stock/units, we estimate the fair value on the date of grant based on our closing stock price. With respect to performance-based restricted stock/units, the number of shares that ultimately vest and are received by the recipient is based upon our performance as measured against specified targets over a specified period, as determined by the Compensation Committee of the Board of Directors. Although there is no guarantee that performance targets will be achieved, we estimate the fair value of performance-based restricted stock/units based on our closing stock price at time of grant. The Plans provide for adjustments to the performance-based restricted stock/units targets for significant events, including, without limitation, acquisitions, divestitures, new business ventures, certain capital transactions (including share repurchases), restructuring costs, if any, certain litigation settlements or payments, if any, changes in accounting principles or in applicable laws or regulations and foreign exchange fluctuations. Over the performance period As a result of the Separation, the number of our unvested equity-based awards from previous grants to our remaining employees under our Long-term Incentive Program was increased in accordance with the provisions in the Plans. This was based on a factor of approximately 1.2633 Total unrecognized compensation cost related to unvested awards as of September 28, 2019 was $ 97.5 million, which is expected to be recognized over a weighted-average period of approximately 2.2 years. The following table summarizes stock option activity under the Plans during the nine months ended September 28, 2019: Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Life in Intrinsic Shares Price Years Value Outstanding at beginning of period 3 $ 13.63 Granted - - Exercised ( 3) 13.63 Forfeited - - Outstanding at end of period - $ - - $ - Options exercisable at end of period - $ - - $ - The following tables summarize the activity of our unvested restricted stock/units for the nine months ended September 28, 2019: Time-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,513 $ 57.94 Granted 449 59.47 Vested ( 338) 55.57 Forfeited ( 204) 60.39 Outstanding at end of period 1,420 $ 58.66 $ 62.58 Performance-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,163 $ 40.26 Granted 656 60.04 Vested ( 185) 66.52 Forfeited ( 155) 61.37 Outstanding at end of period 1,479 $ 61.41 $ 62.58 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 28, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Note 17 – Supplemental Cash Flow Information Cash paid for interest and income taxes was: Nine Months Ended September 28, September 29, 2019 2018 Interest $ 45,543 $ 49,959 Income taxes 138,068 197,943 During the nine months ended September 28, 2019 and September 29, 2018, we had a $ 2.0 million non-cash net unrealized loss related to foreign currency hedging activities and a $ 1.1 million non-cash net unrealized gain related to foreign currency hedging activities, respectively. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Note 18 – Legal Proceedings Beginning in January 2016, purported class action complaints were filed against Patterson Companies, Inc. (“Patterson”), Benco Dental Supply Co. (“Benco”) and Henry Schein, Inc. Although there were factual and legal variations among these complaints, each of these complaints alleges, among other things, that defendants conspired to fix prices, allocate customers and foreclose competitors by boycotting manufacturers, state dental associations and others that deal with defendants’ competitors. On February 9, 2016, the U.S. District Court for the Eastern District of New York ordered all of these actions, and all other actions filed thereafter asserting substantially similar claims against defendants, consolidated for pre-trial purposes. On February 26, 2016, a consolidated class action complaint was filed by Arnell Prato, D.D.S., P.L.L.C., d/b/a Down to Earth Dental, Evolution Dental Sciences, LLC, Howard M. May, DDS, P.C., Casey Nelson, D.D.S., Jim Peck, D.D.S., Bernard W. Kurek, D.M.D., Larchmont Dental Associates, P.C., and Keith Schwartz, D.M.D., P.A. (collectively, “putative class representatives”) in the U.S. District Court for the Eastern District of New York, entitled In re Dental Supplies Antitrust Litigation, Civil Action No. 1:16-CV-00696-BMC-GRB. In the consolidated class action complaint, putative class representatives allege a nationwide agreement among Henry Schein, Benco, Patterson and non-party Burkhart Dental Supply Company, Inc. (“Burkhart”) not to compete on price. The consolidated class action complaint asserts a single count under Section 1 of the Sherman Act, and seeks equitable relief, compensatory and treble damages, jointly and severally, and reasonable costs and expenses, including attorneys’ fees and expert fees. On September 28, 2018, the parties executed a settlement agreement that proposes, subject to court approval, a full and final settlement of the lawsuit on a classwide basis. Subject to certain exceptions, the settlement class consists of all persons or entities that purchased dental products directly from Henry Schein, Patterson, Benco, Burkhart, or any combination thereof, during the period August 31, 2008 through and including March 31, 2016. As a result, in our third quarter of fiscal 2018, we recorded a charge of $38.5 million, which was paid into a settlement fund in January 2019. On June 25, 2019, the district court granted final approval to the settlement, and entered final judgment dismissing the case. On July 16, 2019, Dr. William Roe, an unnamed class member that had objected to the settlement, filed a notice of appeal appealing the district court’s Final Judgment and Order Granting Motion for Final Approval of Class Settlement. On October 8, 2019, the class plaintiffs and the objector filed notice indicating that they had reached a settlement concerning the objection, which, once approved by the court, would resolve the objection. On October 24, 2019 the court approved the agreement between the objector and the plaintiffs. On August 31, 2012, Archer and White Sales, Inc. (“Archer”) filed a complaint against Henry Schein, Inc. as well as Danaher Corporation and its subsidiaries Instrumentarium Dental, Inc., Dental Equipment, LLC, Kavo Dental Technologies, LLC and Dental Imaging Technologies Corporation (collectively, the “Danaher Defendants”) in the U.S. District Court for the Eastern District of Texas, Civil Action No. 2:12-CV-00572-JRG, styled as an antitrust action under Section 1 of the Sherman Act, and the Texas Free Enterprise Antitrust Act. Archer alleges aconspiracy between Henry Schein, an unnamed company and the Danaher Defendants to terminate or limit Archer’s distribution rights. On August 1, 2017, Archer filed an amended complaint, adding Patterson and Benco as defendants, and alleging that Henry Schein, Patterson, Benco and Burkhart conspired to fix prices and refused to compete with each other for sales of dental equipment to dental professionals and agreed to enlist their common suppliers, the Danaher Defendants, to join a price-fixing conspiracy and boycott by reducing the distribution territory of, and eventually terminating, their price-cutting competing distributor Archer. Archer seeks damages in an amount to be proved at trial, to be trebled with interest and costs, including attorneys’ fees, jointly and severally, as well as injunctive relief. On October 30, 2017, Archer filed a second amended complaint, to add additional allegations that it believes support its claims. The named parties and causes of action are the same as the August 1, 2017 amended complaint. On October 1, 2012, we filed a motion for an order: (i) compelling Archer to arbitrate its claims against us; (2) staying all proceedings pending arbitration; and (3) joining the Danaher Defendants’ motion to arbitrate and stay. On May 28, 2013, the Magistrate Judge granted the motions to arbitrate and stayed proceedings pending arbitration. On June 10, 2013, Archer moved for reconsideration before the District Court judge. On December 7, 2016, the District Court Judge granted Archer’s motion for reconsideration and lifted the stay. Defendants appealed the District Court’s order. On December 21, 2017, the U.S. Court of Appeals for the Fifth Circuit affirmed the District Court’s order denying the motions to compel arbitration. On June 25, 2018, the Supreme Court of the United States granted defendants’ petition for writ of certiorari. On October 29, 2018, the Supreme Court heard oral arguments. On January 8, 2019, the Supreme Court issued its published decision vacating the judgment of the Fifth Circuit and remanding the case to the Fifth Circuit for further proceedings consistent with the Supreme Court’s opinion. On April 2, 2019, the District Court stayed the proceeding in the trial court pending resolution by the Fifth Circuit. The Fifth Circuit heard oral argument on May 1, 2019 on whether the case should be arbitrated. The Fifth Circuit issued its opinion on August 14, 2019 affirming the District Court’s order denying defendants’ motions to compel arbitration. Defendants filed a petition for rehearing en banc before the Fifth Circuit. The Fifth Circuit has not ruled on that petition. On October 1, 2019, the District Court set the case for trial on February 3, 2020. We intend to defend ourselves vigorously against this action. On August 17, 2017, IQ Dental Supply, Inc. (“IQ Dental”) filed a complaint in the U.S. District Court for the Eastern District of New York, entitled IQ Dental Supply, Inc. v. Henry Schein, Inc., Patterson Companies, Inc. and Benco Dental Supply Company, Case No. 2:17-cv-4834. Plaintiff alleges that it is a distributor of dental supplies and equipment, and sells dental products through an online dental distribution platform operated by SourceOne Dental (“SourceOne”). SourceOne had previously brought an antitrust lawsuit against Henry Schein, Patterson and Benco, which Henry Schein settled in the second quarter of 2017 and which is described in our prior filings with the SEC. IQ Dental alleges, among other things, that defendants conspired to suppress competition from IQ Dental and SourceOne for the marketing, distribution and sale of dental supplies and equipment in the United States, and that defendants unlawfully agreed with one another to boycott dentists, manufacturers and state dental associations that deal with, or considered dealing with, plaintiff and SourceOne. Plaintiff claims that this alleged conduct constitutes unreasonable restraint of trade in violation of Section 1 of the Sherman Act, New York’s Donnelly Act and the New Jersey Antitrust Act, and also makes pendant state law claims for tortious interference with prospective business relations, civil conspiracy and aiding and abetting. Plaintiff seeks injunctive relief, compensatory, treble and punitive damages, jointly and severally, and reasonable costs and expenses, including attorneys’ fees and expert fees. On December 21, 2017, the District Court granted the defendants’ motion to dismiss. On January 19, 2018, IQ Dental appealed the District Court’s order. On May 10, 2019, the U.S. Court of Appeals for the Second Circuit affirmed in part and reversed in part the District Court’s dismissal of the Complaint, holding that IQ Dental lacks antitrust standing to challenge the alleged boycott of SourceOne and state dental associations, but that it has standing to challenge injury related to the alleged direct boycott of its business. On June 29, 2019, the Second Circuit denied IQ Dental’s petition for rehearing or rehearing en banc. Proceedings in the District Court are ongoing. We intend to defend ourselves vigorously against this action. On February 12, 2018, the United States Federal Trade Commission (“FTC”) filed a complaint against Benco Dental Supply Co., Henry Schein, Inc. and Patterson Companies, Inc. The FTC alleges, among other things, that defendants violated U.S. antitrust laws by conspiring, and entering into an agreement, to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners. The FTC alleges that defendants conspired in violation of Section 5 of the FTC Act. The complaint seeks equitable relief only and does not seek monetary damages. We deny the allegation that we conspired to refuse to provide discounts to or otherwise serve dental buying groups and intend to defend ourselves vigorously against this action. A hearing before an administrative law judge began on October 16, 2018 and the hearing record was closed on February 21, 2019. On October 7, 2019, the administrative law judge issued his Initial Decision, finding in relevant part that the “evidence fails to prove a conspiracy involving Schein,” and dismissing the Complaint as to Schein. The Initial Decision will become the decision of the Commission on or about November 7, 2019 unless the Commission places the case on its own docket for review or stays the effective date of the decision. We believe this matter will not have a material adverse effect on our consolidated financial position, liquidity or results of operations. On March 7, 2018, Joseph Salkowitz, individually and on behalf of all others similarly situated, filed a putative class action complaint for violation of the federal securities laws against Henry Schein, Inc., Stanley M. Bergman and Steven Paladino in the U.S. District Court for the Eastern District of New York, Case No. 1:18-cv-01428. The complaint sought to certify a class consisting of all persons and entities who, subject to certain exclusions, purchased Henry Schein securities from March 7, 2013 through February 12, 2018 (the “Class Period”). The complaint alleged, among other things, that the defendants had made materially false and misleading statements about Henry Schein’s business, operations and prospects during the Class Period, including matters relating to the issues in the antitrust class action and the FTC action described above, thereby causing the plaintiff and members of the purported class to pay artificially inflated prices for Henry Schein securities. The complaint sought unspecified monetary damages and a jury trial. Pursuant to the provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), the court appointed lead plaintiff and lead counsel on June 22, 2018 and recaptioned the putative class action as In re Henry Schein, Inc. Securities Litigation, under the same case number. Lead plaintiff filed a consolidated class action complaint on September 14, 2018. The consolidated class action complaint asserts similar claims against the same defendants (plus Timothy Sullivan) on behalf of the same putative class of purchasers during the Class Period. It alleges that Henry Schein’s stock price was inflated during that period because Henry Schein had misleadingly portrayed its dental-distribution business “as successfully producing excellent profits while operating in a highly competitive environment” even though, “in reality, [Henry Schein] had engaged for years in collusive and anticompetitive practices in order to maintain Schein’s margins, profits, and market share.” The complaint alleges that the stock price started to fall from August 8, 2017, when the company announced below-expected financial performance that allegedly “revealed that Schein’s poor results were a product of abandoning prior attempts to inflate sales volume and margins through anticompetitive collusion,” through February 13, 2018, after the FTC filed a complaint against Benco, Henry Schein and Patterson alleging that they violated U.S. antitrust laws. The complaint alleges violations of Section 10(b) of the Exchange Act and Rule 10b-5 and Section 20(a) of the Exchange Act. On September 27, 2019, the court issued a decision partially granting and partially denying defendants’ motion to dismiss the securities action. The court dismissed all claims against Messrs. Bergman and Paladino as well as the Section 10(b) claim against Henry Schein to the extent that that claim relied on the Company’s financial results and margins to allege a material misstatement or omission, and on the Company’s August 8, 2017 disclosure to allege loss causation. The court otherwise denied the motion as to Henry Schein and Mr. Sullivan. We intend to defend ourselves vigorously against this action. Henry Schein has also received a request under 8 Del. C. § 220 to inspect corporate books and records relating to the issues raised in the securities class action and the antitrust matters discussed above. On May 3, 2018, a purported class action complaint, Marion Diagnostic Center, LLC, et al. v. Becton, Dickinson, and Co., et al., Case No. 3:18-cv-010509, was filed in the U.S. District Court for the Southern District of Illinois against Becton, Dickinson, and Co. (“Becton”); Premier, Inc. (“Premier”), Vizient, Inc. (“Vizient”), Cardinal Health, Inc. (“Cardinal”), Owens & Minor Inc. (“O&M”), Henry Schein, Inc., and Unnamed Becton DistributorCo-Conspirators. The complaint alleges that the defendants entered into a vertical conspiracy to force health care providers into long-term exclusionary contracts that restrain trade in the nationwide markets for conventional and safety syringes and safety IV catheters and inflate the prices of certain Becton products to above-competitive levels. The named plaintiffs seek to represent three separate classes consisting of all health care providers that purchased (i) Becton’s conventional syringes, (ii) Becton’s safety syringes, or (iii) Becton’s safety catheters directly from Becton, Premier, Vizient, Cardinal, O&M or Henry Schein on or after May 3, 2014. The complaint asserts a single count under Section 1 of the Sherman Act, and seeks equitable relief, treble damages, reasonable attorneys’ fees and costs and expenses, and pre-judgment and post-judgment interest. On June 15, 2018, an amended complaint was filed asserting the same allegations against the same parties and adding McKesson Medical-Surgical, Inc. as a defendant. On November 30, 2018, the District Court granted defendants’ motion to dismiss and entered a final judgment, dismissing plaintiffs’ complaint with prejudice. On December 27, 2018, plaintiffs appealed the District Court’s decision to the Seventh Circuit Court of Appeals. The parties argued the appeal on September 27, 2019 and are currently awaiting the Seventh Circuit’s ruling. On May 29, 2018, an amended complaint was filed in the MultiDistrict Litigation (“MDL”) proceeding In Re National Prescription Opiate Litigation (MDL No. 2804; Case No. 17-md-2804) in an action entitled The County of Summit, Ohio et al. v. Purdue Pharma, L.P., et al., Civil Action No. 1:18-op-45090-DAP (“County of Summit Action”), in the U.S. District Court for the Northern District of Ohio, adding Henry Schein, Inc., Henry Schein Medical Systems, Inc. and others as defendants. Summit County alleges that manufacturers of prescription opioid drugs engaged in a false advertising campaign to expand the market for such drugs and their own market share and that the entities in the supply chain (including Henry Schein, Inc. and Henry Schein Medical Systems, Inc.) reaped financial rewards by refusing or otherwise failing to monitor appropriately and restrict the improper distribution of those drugs. On October 29, 2019, the Company was dismissed with prejudice from this lawsuit. Henry Schein, working with Summit County, will establish and donate $ 1 million to a Pain Management Education Foundation dedicated to making grants to programs within Summit County focused on (I) supporting and aggregating research around best practices for pain management, including the prescription of opioids and alternatives: (II) educating dentists and physicians, clinical associates, patients and patient networks on those best practices along with the risks of opioid addiction and alternative pain management treatment options for key indications; and (III) offering grants to develop and offer training to dentists and physicians or other qualified professionals to qualify a practitioner for a waiver to prescribe or dispense buprenorphine medications. Henry Schein will pay $ 250,000 of Summit County’s expenses. In addition to the County of Summit Action, Henry Schein and/or one or more of its affiliated companies have currently been named as a defendant in multiple lawsuits (currently less than one-hundred ( 100)), which allege claims similar to those alleged in the County of Summit Action. None of these other cases have been set for trial. These actions consist of some that have been consolidated within the MDL and are currently abated for discovery purposes, and others which remain pending in state courts and are proceeding independently and outside of the MDL. Of Henry Schein’s 2018 revenue of $ 9.4 billion from continuing operations, sales of opioids represented less than one-tenth of 1 percent On October 9, 2018, a purported class action complaint entitled Kramer v. Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and Unnamed Co-Conspirators, was filed in the U.S. District Court for the Northern District of California. The complaint alleges that members of the proposed class, comprised of purchasers of dental services from dental practices in California, suffered antitrust injury due to an unlawful boycott, price-fixing or otherwise anticompetitive conspiracy among Henry Schein, Patterson and Benco. The complaint alleges that the alleged conspiracy overcharged California dental practices, orthodontic practices and dental laboratories on their purchase of dental supplies, which in turn passed on some or all of such overcharges to members of the California class purchasing dental services. Subject to certain exclusions, the complaint defines the class as “all persons residing in California purchasing and/or reimbursing for dental services from California dental practices on or after August 31, 2012.” The complaint alleges violations of California antitrust laws, including the Cartwright Act (Cal. Bus. and Prof. Code § 16720) and the Unfair Competition Act (Cal. Bus. and Prof. Code § 17200), and seeks a permanent injunction, actual damages to be determined at trial, trebled, reasonable attorneys’ fees and costs, and pre- and post-judgment interest. On December 7, 2018, an amended complaint was filed asserting the same claims against the same parties. On June 28, 2019, the court granted Defendants’ motions to dismiss with leave to amend. The parties subsequently stipulated to dismissal of the action with prejudice, pursuant to a settlement in which Henry Schein agreed to pay the plaintiff a de minimis amount. The court entered the stipulation of dismissal with prejudice and terminated the case on August 2, 2019. On January 29, 2019, a purported class action complaint was filed by R. Lawrence Hatchett, M.D. against Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and unnamed co-conspirators in the U.S. District Court for the Southern District of Illinois. The complaint alleges that members of the proposed class suffered antitrust injury due to an unlawful boycott, price-fixing or otherwise anticompetitive conspiracy among Henry Schein, Patterson and Benco. The complaint alleges that the alleged conspiracy overcharged Illinois dental practices, orthodontic practices and dental laboratories on their purchase of dental supplies, which in turn passed on some or all of such overcharges to members of the class. Subject to certain exclusions, the complaint defines the class as “all persons residing in Illinois purchasing and/or reimbursing for dental care provided by independent Illinois dental practices purchasing dental supplies from the defendants, or purchasing from buying groups purchasing these supplies from the defendants, on or after January 29, 2015.” The complaint alleges violations of the Illinois Antitrust Act, 740 Ill. Comp. Stat. §§ 10/3(2), 10/7(2), and seeks a permanent injunction, actual damages to be determined at trial, trebled, reasonable attorneys’ fees and costs, and pre- and post-judgment interest. We intend to defend ourselves vigorously against this action. On September 30, 2019, City of Hollywood Police Officers Retirement System, individually and on behalf of all others similarly situated, filed a putative class action complaint for violation of the federal securities laws against Henry Schein, Inc., Covetrus, Inc., and Benjamin Shaw and Christine Komola (Covetrus’s then Chief Executive Officer and Chief Financial Officer, respectively) in the U.S. District Court for the Eastern District of New York, Case No. 2:19-cv-05530-FB-RLM. The complaint seeks to certify a class consisting of all persons and entities who, subject to certain exclusions, purchased or otherwise acquired Covetrus common stock from February 8, 2019 through August 12, 2019. The case relates to the Animal Health Spin-off and Merger of the Henry Schein Animal Health Business with Vets First Choice in February 2019. The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 and asserts that defendants’ statements in the offering documents and after the transaction were materially false and misleading because they purportedly overstated Covetrus’s capabilities as to inventory management and supply-chain services, understated the costs of integrating the Henry Schein Animal Health Business and Vets First Choice, understated Covetrus’s separation costs from Henry Schein, and understated the impact on earnings from online competition and alternative distribution channels and from the loss of an allegedly large customer in North America just before the Separation and Merger. The complaint seeks unspecified monetary damages and a jury trial. We intend to defend ourselves vigorously against this action. From time to time, we may become a party to other legal proceedings, including, without limitation, product liability claims, employment matters, commercial disputes, governmental inquiries and investigations (which may in some cases involve our entering into settlement arrangements or consent decrees), and other matters arising out of the ordinary course of our business. While the results of any legal proceeding cannot be predicted with certainty, in our opinion none of these other pending matters are currently anticipated to have a material adverse effect on our consolidated financial position, liquidity or results of operations. As of September 28, 2019, we had accrued our best estimate of potential losses relating to claims that were probable to result in liability and for which we were able to reasonably estimate a loss. This accrued amount, as well as related expenses, was not material to our financial position, results of operations or cash flows. Our method for determining estimated losses considers currently available facts, presently enacted laws and regulations and other factors, including probable recoveries from third parties. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 28, 2019 | |
Subsequent Events | |
Subsequent Events | Note 19 – Subsequent Events On October 1, 2019, the Company sold an equity investment in Hu-Friedy Mfg. Co., LLC, a manufacturer of dental instruments and infection prevention solutions. Our investment was non-controlling, we were not involved in running the business and had no representation on the board of directors. We estimate that in the fourth quarter of 2019 we will record a pretax gain from this sale in the range of $ 225 million to $ 275 million. Our final calculation of the gain will take into account the accounting treatment of contingent consideration associated with the transaction and the appropriate income tax treatment. |
Critical Accounting Policies _2
Critical Accounting Policies and Accounting Pronouncements Adopted (Policies) | 9 Months Ended |
Sep. 28, 2019 | |
Critical Accounting Policies and Estimates and Accounting Pronouncements Adopted | |
Leases | Leases We determine if an arrangement contains a lease at inception. An arrangement contains a lease if it implicitly or explicitly identifies an asset to be used and conveys the right to control the use of the identified asset in exchange for consideration. As a lessee, we include operating leases in Operating lease right-of-use (“ROU”) assets, Operating lease liabilities, and Non-current operating lease liabilities in our consolidated balance sheet. Finance leases are included in Property and equipment Current maturities of long-term debt Long-term debt ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized upon commencement of the lease based on the present value of the lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. When readily determinable, we use the implicit rate. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with a lease term of 12 months or less are not capitalized. We have lease agreements with lease and non-lease components, which are generally accounted for as a single lease component, except non-lease components for leases of vehicles which are accounted for separately. When a vehicle lease contains both lease and non-lease components, we allocate the transaction price based on the relative standalone selling price. |
Short-term Leases | Leases with a lease term of 12 months or less are not capitalized. |
Separation of Lease and Nonlease Components | We have lease agreements with lease and non-lease components, which are generally accounted for as a single lease component, except non-lease components for leases of vehicles which are accounted for separately. When a vehicle lease contains both lease and non-lease components, we allocate the transaction price based on the relative standalone selling price. |
Accounting Pronouncements Adopted | Accounting Pronouncements Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02 “Leases (Topic 842)” related to leases requiring the recognition of ROU assets and lease liabilities on the balance sheet. Most significant among the changes in the standard is the recognition of ROU assets and lease liabilities by lessors for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. We adopted the standard on December 30, 2018 using a modified retrospective without adjusting historical financial statements. We elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward the historical lease classification. Information related to leases as of September 28, 2019 is presented under Topic 842, while prior period amounts are not adjusted and continue to be reported under legacy guidance in Topic 840. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. Adoption of the new standard resulted in the recording of additional net operating lease assets of $ 259.9 million and operating lease liabilities of $ 267.3 million, and a decrease of $ 1.1 million and $ 8.5 million in prepaid rent and deferred rent liabilities, respectively. The standard did not materially impact our consolidated net income and had no impact on cash flows. In February 2018, the FASB issued ASU No. 2018-02, "Treatment of Stranded Tax Effects in Accumulated Other Comprehensive Income Resulting From the Tax Cuts and Jobs Act of 2017," which allows the reclassification from accumulated comprehensive income to retained earnings the income tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). This ASU is effective for interim and annual reporting periods beginning after December 15, 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging” (Topic 815), which simplified the requirements for hedge accounting, more closely aligns hedge accounting risk with risk management activities and increases transparency of the scope and results of hedging activities. This ASU amends the presentation and disclosure requirements and changes how we can assess the effectiveness of our hedging relationships. This ASU will make more financial and nonfinancial hedging strategies eligible for hedge accounting. This ASU is effective for interim and annual reporting periods beginning after December 15, 2018. The adoption of this ASU did not have a material impact on our consolidated financial statements. |
Income Taxes | On December 22, 2017, the U.S. government passed the Tax Act. The Tax Act is comprehensive tax legislation that implemented complex changes to the U.S. tax code including, but not limited to, the reduction of the corporate tax rate from 35% to 21%, modification of accelerated depreciation, the repeal of the domestic manufacturing deduction and changes to the limitations of the deductibility of interest. Additionally, the Tax Act moved from a global tax regime to a modified territorial regime, which requires U.S. companies to pay a mandatory one-time transition tax on historical offshore earnings that have not been repatriated to the U.S. The transition tax is payable over eight years. The Tax Act also included provisions to tax global intangible low-taxed income (“GILTI”), a beneficial tax rate for eign Derived Intangible Income (“FDII”), a base erosion and anti-abuse tax (“BEAT”) that imposes tax on certain foreign related-party payments, and IRC Section 163(j) interest limitation (Interest Limitation). We became subject to the GILTI, FDII, BEAT and Interest Limitation provisions effective January 1, 2018. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. We elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. For the BEAT, FDII and Interest Limitation computations, we have not recorded an estimate in our effective tax rate for the nine months ended September 28, 2019 because we have concluded that these provisions of the Tax Act will not apply to us in 2019. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Discontinued Operations | |
Summarized financial information for discontinued operations | Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Net sales $ - $ 924,114 $ 319,522 $ 2,881,747 Gross profit - 166,201 59,425 525,408 Operating income (loss) ( 1,063) 42,657 ( 8,588) 130,800 Income tax expense (benefit) ( 6,704) 12,767 ( 2,023) 37,430 Income (loss) from discontinued operations 5,641 30,729 ( 5,576) 97,561 Net (income) loss attributable to noncontrolling interests - ( 21) 366 ( 7,593) Net income (loss) from discontinued operations attributable to Henry Schein, Inc. 5,641 30,708 ( 5,210) 89,968 February 7, December 29, 2019 2018 (unaudited) (unaudited) Cash and cash equivalents $ 6,815 $ 23,324 Accounts receivable, net 432,812 434,935 Inventories, net 536,637 555,230 Prepaid expenses and other 120,546 69,525 Total current assets of discontinued operations 1,096,810 1,083,014 Property and equipment, net 69,790 68,177 Operating lease right-of-use asset, net 57,012 - Goodwill 742,931 739,266 Other intangibles, net 205,793 208,213 Investments and other 120,518 118,003 Total long-term assets of discontinued operations 1,196,044 1,133,659 Total assets of discontinued operations $ 2,292,854 $ 2,216,673 Accounts payable $ 316,162 $ 441,453 Current maturities of long-term debt 657 675 Operating lease liabilities 18,951 - Accrued expenses: Payroll and related 36,847 36,888 Taxes 24,060 17,552 Other 80,400 81,039 Total current liabilities of discontinued operations 477,077 577,607 Long-term debt 1,176,105 23,529 Deferred income taxes 17,019 4,352 Operating lease liabilities 38,668 - Other liabilities 29,209 34,572 Total long-term liabilities of discontinued operations 1,261,001 62,453 Total liabilities of discontinued operations $ 1,738,078 $ 640,060 Redeemable noncontrolling interests $ 28,270 $ 92,432 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Revenue from Contracts with Customers | |
Disaggregation of Revenue | Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 North America International Global North America International Global Revenues: Health care distribution Dental $ 951,796 $ 594,188 $ 1,545,984 $ 2,850,762 $ 1,843,041 $ 4,693,803 Medical 784,349 19,360 803,709 2,125,002 59,925 2,184,927 Total health care distribution 1,736,145 613,548 2,349,693 4,975,764 1,902,966 6,878,730 Technology and value-added services 120,197 17,134 137,331 327,618 50,273 377,891 Total excluding Corporate TSA revenues (1) 1,856,342 630,682 2,487,024 5,303,382 1,953,239 7,256,621 Corporate TSA revenues (1) 1,077 20,666 21,743 4,098 56,143 60,241 Total revenues $ 1,857,419 $ 651,348 $ 2,508,767 $ 5,307,480 $ 2,009,382 $ 7,316,862 Three Months Ended Nine Months Ended September 29, 2018 September 29, 2018 North America International Global North America International Global Revenues: Health care distribution Dental $ 951,199 $ 563,126 $ 1,514,325 $ 2,830,384 $ 1,844,150 $ 4,674,534 Medical 702,758 19,184 721,942 1,915,944 60,423 1,976,367 Total health care distribution 1,653,957 582,310 2,236,267 4,746,328 1,904,573 6,650,901 Technology and value-added services 103,955 15,343 119,298 245,761 48,385 294,146 Total excluding Corporate TSA revenues (1) 1,757,912 597,653 2,355,565 4,992,089 1,952,958 6,945,047 Corporate TSA revenues (1) - - - - - - Total revenues $ 1,757,912 $ 597,653 $ 2,355,565 $ 4,992,089 $ 1,952,958 $ 6,945,047 (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 August 2020. |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Segment Data | |
Business segment information | Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Net Sales: Health care distribution (1): Dental $ 1,545,984 $ 1,514,325 $ 4,693,803 $ 4,674,534 Medical 803,709 721,942 2,184,927 1,976,367 Total health care distribution 2,349,693 2,236,267 6,878,730 6,650,901 Technology and value-added services (2) 137,331 119,298 377,891 294,146 Total excluding Corporate TSA revenue 2,487,024 2,355,565 7,256,621 6,945,047 Corporate TSA revenues (3) 21,743 - 60,241 - Total $ 2,508,767 $ 2,355,565 $ 7,316,862 $ 6,945,047 (1) Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. (2) Consists of practice management software and other value-added products, which are distributed primarily to health care providers, and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. (3) Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which we expect to continue through August 2020. Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Operating Income: Health care distribution $ 149,497 $ 91,306 $ 429,026 $ 358,978 Technology and value-added services 37,701 31,963 92,901 83,639 Total $ 187,198 $ 123,269 $ 521,927 $ 442,617 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Debt | |
Bank credit lines | September 28, December 29, 2019 2018 Revolving credit agreement $ 75,000 $ 175,000 Other short-term bank credit lines 32,841 376,458 Committed loan associated with Animal Health Spin-off - 400,000 Total $ 107,841 $ 951,458 |
Long-term debt | September 28, December 29, 2019 2018 Private placement facilities $ 621,217 $ 628,189 U.S. trade accounts receivable securitization 350,000 350,000 Various collateralized and uncollateralized loans payable with interest in varying installments through 2024 at interest rates ranging from 2.56% to 10.5% at September 28,2019 and ranging from 2.61% to 4.17% at December 29, 2018 5,995 6,491 Finance lease obligations payable through 2029 with interest rates ranging from 1.64% to 19.13% at September 28,2019 and ranging from 1.45% to 6.00% at December 29, 2018 4,205 3,944 Total 981,417 988,624 Less current maturities ( 109,188) ( 8,280) Total long-term debt $ 872,229 $ 980,344 |
Private placement facilities | Amount of Borrowing Borrowing Date of Borrowing Outstanding Rate Due Date September 2, 2010 $ 100,000 3.79 % September 2, 2020 January 20, 2012 50,000 3.45 January 20, 2024 January 20, 2012 21,429 3.09 January 20, 2022 December 24, 2012 50,000 3.00 December 24, 2024 June 2, 2014 100,000 3.19 June 2, 2021 June 16, 2017 100,000 3.42 June 16, 2027 September 15, 2017 100,000 3.52 September 15, 2029 January 2, 2018 100,000 3.32 January 2, 2028 Less: Deferred debt issuance costs ( 212) $ 621,217 (1) Annual repayments of approximately $ 7.1 million for this borrowing commenced on January 20, 2016. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Leases | |
Components of lease expense, supplemental cash flow, and supplemental balance sheet information | Three Months Ended Nine Months Ended September 28, September 28, 2019 2019 Operating lease cost: (1) $ 21,840 $ 68,273 Finance lease cost: Amortization of right-of-use assets 290 798 Interest on lease liabilities 31 88 Total finance lease cost $ 321 $ 886 (1) Includes variable lease expenses. Supplemental balance sheet information related to leases is as follows: September 28, 2019 Operating Leases: Operating lease right-of-use assets $ 240,126 Current operating lease liabilities 67,374 Non-current operating lease liabilities 182,505 Total operating lease liabilities $ 249,879 Finance Leases: Property and equipment, at cost $ 10,826 Accumulated depreciation ( 6,115) Property and equipment, net of accumulated depreciation $ 4,711 Current maturities of long-term debt $ 1,092 Long-term debt 3,113 Total finance lease liabilities $ 4,205 Weighted Average Remaining Lease Term in Years: Operating leases 5.5 Finance leases 6.1 Weighted Average Discount Rate: Operating leases 3.4 % Finance leases 2.2 % Supplemental cash flow information related to leases is as follows: September 28, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 60,275 Operating cash flows for finance leases 67 Financing cash flows for finance leases 862 Right-of-use assets obtained in exchange for lease obligations: Operating leases (1) $ 281,373 Finance leases 1,149 (1) Includes leases that commenced during the nine months ended September 28, 2019, as well as balances related to leases in existence as of the date of the adoption of Topic 842. |
Maturities of operating lease liabilities | Maturities of lease liabilities are as follows: September 28, 2019 Operating Finance Leases Leases 2019 (excluding the nine months ended September 28, 2019) $ 21,149 $ 453 2020 69,052 1,135 2021 54,082 846 2022 37,886 434 2023 26,051 295 Thereafter 67,075 1,372 Total future lease payments 275,295 4,535 Less imputed interest ( 25,416) ( 330) Total $ 249,879 $ 4,205 |
Maturities of finance lease liabilities | Maturities of lease liabilities are as follows: September 28, 2019 Operating Finance Leases Leases 2019 (excluding the nine months ended September 28, 2019) $ 21,149 $ 453 2020 69,052 1,135 2021 54,082 846 2022 37,886 434 2023 26,051 295 Thereafter 67,075 1,372 Total future lease payments 275,295 4,535 Less imputed interest ( 25,416) ( 330) Total $ 249,879 $ 4,205 |
Operating leases | Operating Finance Leases Leases 2019 $ 62,535 $ 976 2020 47,686 801 2021 34,633 501 2022 25,626 305 2023 19,560 283 Thereafter 62,918 1,430 Total minimum lease payments $ 252,958 4,296 Less imputed interest (Capital leases only) ( 352) Total present value of minimum lease payments $ 3,944 |
Finance leases | Operating Finance Leases Leases 2019 $ 62,535 $ 976 2020 47,686 801 2021 34,633 501 2022 25,626 305 2023 19,560 283 Thereafter 62,918 1,430 Total minimum lease payments $ 252,958 4,296 Less imputed interest (Capital leases only) ( 352) Total present value of minimum lease payments $ 3,944 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Redeemable Noncontrolling Interests | |
Change in fair value of redeemable noncontrolling interests | September 28, December 29, 2019 2018 Balance, beginning of period $ 219,724 $ 465,585 Decrease in redeemable noncontrolling interests due to redemptions ( 2,270) ( 287,767) Increase in redeemable noncontrolling interests due to business acquisitions 73,975 4,655 Net income attributable to redeemable noncontrolling interests 10,618 15,327 Dividends declared ( 7,943) ( 8,206) Effect of foreign currency translation loss attributable to redeemable noncontrolling interests ( 4,912) ( 11,330) Change in fair value of redeemable securities ( 5,867) 41,460 Balance, end of period $ 283,325 $ 219,724 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Comprehensive Income | |
Accumulated other comprehensive income, net of applicable taxes | September 28, December 29, 2019 2018 Attributable to Redeemable noncontrolling interests: Foreign currency translation adjustment $ ( 22,915) $ ( 18,595) Attributable to noncontrolling interests: Foreign currency translation adjustment $ ( 715) $ ( 426) Attributable to Henry Schein, Inc.: Foreign currency translation loss $ ( 180,267) $ ( 234,799) Unrealized loss from foreign currency hedging activities ( 1,742) ( 156) Unrealized investment gain (loss) 2 ( 6) Pension adjustment loss ( 13,419) ( 13,810) Accumulated other comprehensive loss $ ( 195,426) $ ( 248,771) Total Accumulated other comprehensive loss $ ( 219,056) $ ( 267,792) |
Components of comprehensive income, net of applicable taxes | Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Net income $ 148,853 $ 126,976 $ 382,693 $ 423,116 Foreign currency translation loss ( 60,635) ( 10,582) ( 43,926) ( 106,154) Tax effect - - - - Foreign currency translation loss ( 60,635) ( 10,582) ( 43,926) ( 106,154) Unrealized gain (loss) from foreign currency hedging activities ( 1,685) ( 406) ( 2,037) 1,079 Tax effect 422 27 451 ( 405) Unrealized gain (loss) from foreign currency hedging activities ( 1,263) ( 379) ( 1,586) 674 Unrealized investment gain (loss) 3 ( 1) 10 ( 2) Tax effect ( 1) - ( 2) - Unrealized investment gain (loss) 2 ( 1) 8 ( 2) Pension adjustment gain 585 139 1,146 1,449 Tax effect ( 185) ( 23) ( 314) ( 393) Pension adjustment gain 400 116 832 1,056 Comprehensive income $ 87,357 $ 116,130 $ 338,021 $ 318,690 |
Total comprehensive income, net of applicable taxes | Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Comprehensive income attributable to Henry Schein, Inc. $ 85,075 $ 113,221 $ 324,809 $ 313,326 Comprehensive income attributable to noncontrolling interests 3,924 2,478 7,280 2,097 Comprehensive income (loss) attributable to Redeemable noncontrolling interests ( 1,642) 431 5,932 3,267 Comprehensive income $ 87,357 $ 116,130 $ 338,021 $ 318,690 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value - assets and liabilities measured and recognized on a recurring basis | September 28, 2019 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 5,620 $ - $ 5,620 Total assets $ - $ 5,620 $ - $ 5,620 Liabilities: Derivative contracts $ - $ 3,629 $ - $ 3,629 Total liabilities $ - $ 3,629 $ - $ 3,629 Redeemable noncontrolling interests $ - $ - $ 283,325 $ 283,325 December 29, 2018 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 12,533 $ - $ 12,533 Total assets $ - $ 12,533 $ - $ 12,533 Liabilities: Derivative contracts $ - $ 1,708 $ - $ 1,708 Total liabilities $ - $ 1,708 $ - $ 1,708 Redeemable noncontrolling interests $ - $ - $ 219,724 $ 219,724 |
Plans of Restructuring (Tables)
Plans of Restructuring (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve by type of cost | Facility Severance Closing Costs Costs Other Total Balance, December 30, 2017 $ 3,087 $ 1,315 $ 24 $ 4,426 Provision 50,197 3,153 1,017 54,367 Payments and other adjustments ( 23,320) ( 2,865) ( 883) ( 27,068) Balance, December 29, 2018 $ 29,964 $ 1,603 $ 158 $ 31,725 Provision 14,733 945 86 15,764 Payments ( 26,313) ( 1,575) ( 110) ( 27,998) Balance, September 28, 2019 $ 18,384 $ 973 $ 134 $ 19,491 |
Schedule of restructuring reserve by segment | Technology and Health Care Value-Added Distribution Services Total Balance, December 30, 2017 $ 4,426 $ - $ 4,426 Provision 50,824 3,543 54,367 Payments and other adjustments ( 24,959) ( 2,109) ( 27,068) Balance, December 29, 2018 $ 30,291 $ 1,434 $ 31,725 Provision 14,966 798 15,764 Payments ( 26,349) ( 1,649) ( 27,998) Balance, September 28, 2019 $ 18,908 $ 583 $ 19,491 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted shares used to calculate earnings per share | Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, 2019 2018 2019 2018 Basic 147,136 152,533 148,603 152,970 Effect of dilutive securities: Stock options, restricted stock and restricted stock units 1,439 1,081 1,317 1,012 Diluted 148,575 153,614 149,920 153,982 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the stock option activity under the plans | Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Life in Intrinsic Shares Price Years Value Outstanding at beginning of period 3 $ 13.63 Granted - - Exercised ( 3) 13.63 Forfeited - - Outstanding at end of period - $ - - $ - Options exercisable at end of period - $ - - $ - |
Status of non-vested restricted shares/units | Time-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,513 $ 57.94 Granted 449 59.47 Vested ( 338) 55.57 Forfeited ( 204) 60.39 Outstanding at end of period 1,420 $ 58.66 $ 62.58 Performance-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,163 $ 40.26 Granted 656 60.04 Vested ( 185) 66.52 Forfeited ( 155) 61.37 Outstanding at end of period 1,479 $ 61.41 $ 62.58 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash paid for interest and income taxes | Nine Months Ended September 28, September 29, 2019 2018 Interest $ 45,543 $ 49,959 Income taxes 138,068 197,943 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 28, 2019 | Dec. 29, 2018 | |
Discontinued Operation, Name | Henry Schein Animal Health Business | |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Variable Interest Entity, Consolidated, Assets, Pledged | $ 419 | $ 422 |
Variable Interest Entity, Consolidated, Liabilities, Recourse | $ 350 | $ 350 |
Discontinued Operations Summari
Discontinued Operations Summarized financial information for our discontinued operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Feb. 07, 2019 | Dec. 29, 2018 | Dec. 30, 2017 | |
Summarized financial information for our discontinued operations | |||||||
Income (loss) from discontinued operations | $ 5,641 | $ 30,729 | $ (5,576) | $ 97,561 | |||
Net (income) loss attributable to noncontrolling interests | 0 | 21 | (366) | 7,593 | |||
Net income (loss) from discontinued operations atrributable to Henry Schein, Inc. | 5,641 | 30,708 | (5,210) | 89,968 | |||
Assets transferred | |||||||
Total current assets of discontinued operations | 0 | 0 | $ 1,083,014 | ||||
Operating lease right-of-use assets | 240,126 | 240,126 | 0 | ||||
Investments and other | 385,744 | 385,744 | 420,367 | ||||
Total long-term assets of discontinued operations | 0 | 0 | 1,133,659 | ||||
Liabilities transferred | |||||||
Current maturities of long-term debt | 109,188 | 109,188 | 8,280 | ||||
Operating lease liabilities | 67,374 | 67,374 | 0 | ||||
Accrued expenses: | |||||||
Total current liabilities of discontinued operations | 0 | 0 | 577,607 | ||||
Long-term debt | 872,229 | 872,229 | 980,344 | ||||
Operating lease liabilities | 182,505 | 182,505 | 0 | ||||
Total long-term liabilities of discontinued operations | 0 | 0 | 62,453 | ||||
Redeemable noncontrolling interests | 283,325 | 283,325 | 219,724 | $ 465,585 | |||
Henry Schein Animal Health Business [Member] | |||||||
Summarized financial information for our discontinued operations | |||||||
Net sales | 0 | 924,114 | 319,522 | 2,881,747 | |||
Gross profit | 0 | 166,201 | 59,425 | 525,408 | |||
Operating income (loss) | (1,063) | 42,657 | (8,588) | 130,800 | |||
Income tax expense (benefit) | (6,704) | 12,767 | (2,023) | 37,430 | |||
Income (loss) from discontinued operations | 5,641 | 30,729 | (5,576) | 97,561 | |||
Net (income) loss attributable to noncontrolling interests | 0 | (21) | 366 | (7,593) | |||
Net income (loss) from discontinued operations atrributable to Henry Schein, Inc. | 5,641 | $ 30,708 | (5,210) | $ 89,968 | |||
Assets transferred | |||||||
Cash and cash equivalents | $ 6,815 | 23,324 | |||||
Accounts receivable, net | 432,812 | 434,935 | |||||
Inventories, net | 536,637 | 555,230 | |||||
Prepaid expenses and other | 120,546 | 69,525 | |||||
Total current assets of discontinued operations | 1,096,810 | 1,083,014 | |||||
Property and equipment, net | 69,790 | 68,177 | |||||
Operating lease right-of-use assets | 57,012 | 0 | |||||
Goodwill | 742,931 | 739,266 | |||||
Other intangibles, net | 205,793 | 208,213 | |||||
Investments and other | 120,518 | 118,003 | |||||
Total long-term assets of discontinued operations | 1,196,044 | 1,133,659 | |||||
Total assets of discontinued operations | 2,292,854 | 2,216,673 | |||||
Liabilities transferred | |||||||
Accounts Payable | 316,162 | 441,453 | |||||
Current maturities of long-term debt | 657 | 675 | |||||
Operating lease liabilities | 18,951 | 0 | |||||
Accrued expenses: | |||||||
Payroll and related | 36,847 | 36,888 | |||||
Taxes | 24,060 | 17,552 | |||||
Other | 80,400 | 81,039 | |||||
Total current liabilities of discontinued operations | 477,077 | 577,607 | |||||
Long-term debt | 1,176,105 | 23,529 | |||||
Deferred income taxes | 17,019 | 4,352 | |||||
Operating lease liabilities | 38,668 | 0 | |||||
Other liabilities | 29,209 | 34,572 | |||||
Total long-term liabilities of discontinued operations | 1,261,001 | 62,453 | |||||
Total liabilities of discontinued operations | 1,738,078 | 640,060 | |||||
Redeemable noncontrolling interests | $ 0 | $ 0 | $ 28,270 | $ 92,432 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Thousands | Feb. 07, 2019 | Sep. 28, 2019 | Sep. 28, 2019 | Sep. 29, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Distribution received related to Animal Health Spin-off | $ 1,120,000 | $ 0 | ||
Proceeds related to Animal Health Share Sale | $ 361,090 | $ 0 | ||
Discontinued Operation, Name | Henry Schein Animal Health Business | |||
Henry Schein Animal Health Business [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Distribution received related to Animal Health Spin-off | $ 1,120,000 | |||
Proceeds related to Animal Health Share Sale | $ 361,100 | |||
Transaction costs related to Animal Health spin-off | $ 300 | $ 23,400 | ||
Deconsolidation, Nature of Continuing Involvement, Description | In connection with the completion of the Animal Health Spin-off, we entered into a transition services agreement with Covetrus under which we have agreed to provide certain transition services for up to twenty-four months in areas such as information technology, finance and accounting, human resources, supply chain, and real estate and facility services. | |||
Henry Schein Animal Health Business [Member] | Covetrus Inc [Member] | Henry Schein stockholders and the Share Sale Investors [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Noncontrolling Interest, Ownership Percentage by Parent | 63.00% | 63.00% | ||
Henry Schein Animal Health Business [Member] | Covetrus Inc [Member] | Vets First Corp [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Noncontrolling Interest, Ownership Percentage by Parent | 37.00% | 37.00% |
Critical Accounting Policies _3
Critical Accounting Policies and Estimates and Accounting Pronouncements Adopted - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Dec. 29, 2018 | |
Operating Leases | ||
Lessee, Operating Lease, Assumptions and Judgments, Discount Rate, Description | As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. When readily determinable, we use the implicit rate. | |
Lessee, Operating Lease, Assumptions and Judgments, Allocation of Lease and Nonlease Component | When a vehicle lease contains both lease and non-lease components, we allocate the transaction price based on the relative standalone selling price. | |
Lessee, Operating Lease, Assumptions and Judgments, Whether Contract is or Contains Lease | We determine if an arrangement contains a lease at inception. An arrangement contains a lease if it implicitly or explicitly identifies an asset to be used and conveys the right to control the use of the identified asset in exchange for consideration. | |
Lessee, Operating Lease, Option to Extend | Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. | |
Lessee, Operating Lease, Option to Terminate | Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. | |
Lessee, Finance Lease, Description [Abstract] | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations, Current | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets | $ 240,126 | $ 0 |
Operating lease liabilities | $ 249,879 | |
Accounting Standards Update 2016-02 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |
New Accounting Pronouncement or Change in Accounting Principle, Prior Period Not Restated [true false] | true | |
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected [Fixed List] | Modified Retrospective | |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Dec. 30, 2018 | |
Operating lease right-of-use assets | $ 259,900 | |
Operating lease liabilities | 267,300 | |
Decrease in prepaid rent | 1,100 | |
Decrease in deferred rent liabilities | $ (8,500) | |
Lease, Practical Expedients, Package [true false] | true | |
Accounting Standards Update 2018-02 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |
Accounting Standards Update 2017-12 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | ||
Disaggregation of Revenue [Abstract] | |||||
Net sales | $ 2,508,767 | $ 2,355,565 | $ 7,316,862 | $ 6,945,047 | |
Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 2,487,024 | 2,355,565 | 7,256,621 | 6,945,047 | |
Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [1] | 21,743 | 0 | 60,241 | 0 |
North America [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 1,857,419 | 1,757,912 | 5,307,480 | 4,992,089 | |
North America [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 1,856,342 | 1,757,912 | 5,303,382 | 4,992,089 | |
North America [Member] | Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 1,077 | 0 | 4,098 | 0 | |
International [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 651,348 | 597,653 | 2,009,382 | 1,952,958 | |
International [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 630,682 | 597,653 | 1,953,239 | 1,952,958 | |
International [Member] | Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 20,666 | 0 | 56,143 | 0 | |
Healthcare Distribution [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [2] | 2,349,693 | 2,236,267 | 6,878,730 | 6,650,901 |
Healthcare Distribution [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [2] | 2,349,693 | 2,236,267 | 6,878,730 | 6,650,901 |
Healthcare Distribution [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 1,736,145 | 1,653,957 | 4,975,764 | 4,746,328 | |
Healthcare Distribution [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 613,548 | 582,310 | 1,902,966 | 1,904,573 | |
Healthcare Distribution [Member] | Dental [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [2] | 1,545,984 | 1,514,325 | 4,693,803 | 4,674,534 |
Healthcare Distribution [Member] | Dental [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 951,796 | 951,199 | 2,850,762 | 2,830,384 | |
Healthcare Distribution [Member] | Dental [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 594,188 | 563,126 | 1,843,041 | 1,844,150 | |
Healthcare Distribution [Member] | Medical [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [2] | 803,709 | 721,942 | 2,184,927 | 1,976,367 |
Healthcare Distribution [Member] | Medical [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 784,349 | 702,758 | 2,125,002 | 1,915,944 | |
Healthcare Distribution [Member] | Medical [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 19,360 | 19,184 | 59,925 | 60,423 | |
Technology [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | [3] | 137,331 | 119,298 | 377,891 | 294,146 |
Technology [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | 120,197 | 103,955 | 327,618 | 245,761 | |
Technology [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Disaggregation of Revenue [Abstract] | |||||
Net sales | $ 17,134 | $ 15,343 | $ 50,273 | $ 48,385 | |
[1] | Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which we expect to continue through August 2020. | ||||
[2] | Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. | ||||
[3] | Consists of practice management software and other value-added products, which are distributed primarily to health care providers, and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 28, 2019 | Dec. 29, 2018 | |
Revenue from Contracts with Customers | ||
Contract with Customer, Liability, Current | $ 58.2 | $ 65.3 |
Contract with Customer, Liability, Noncurrent | 4.9 | $ 5 |
Contract with Customer, Liability, Revenue Recognized | $ 55 |
Segment Data (Details)
Segment Data (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2019USD ($)number | Sep. 29, 2018USD ($) | Sep. 28, 2019USD ($)numbersegments | Sep. 29, 2018USD ($) | ||
Segment Data | |||||
Number of reportable segments | segments | 2 | ||||
Number of countries served globally | number | 32 | 32 | |||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 2,508,767 | $ 2,355,565 | $ 7,316,862 | $ 6,945,047 | |
Operating income | 187,198 | 123,269 | 521,927 | 442,617 | |
Total excluding Corporate TSA revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 2,487,024 | 2,355,565 | 7,256,621 | 6,945,047 | |
Corporate TSA revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [1] | 21,743 | 0 | 60,241 | 0 |
Healthcare Distribution [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [2] | 2,349,693 | 2,236,267 | 6,878,730 | 6,650,901 |
Operating income | [2] | 149,497 | 91,306 | 429,026 | 358,978 |
Healthcare Distribution [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [2] | 2,349,693 | 2,236,267 | 6,878,730 | 6,650,901 |
Healthcare Distribution [Member] | Dental [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [2] | 1,545,984 | 1,514,325 | 4,693,803 | 4,674,534 |
Healthcare Distribution [Member] | Medical [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [2] | 803,709 | 721,942 | 2,184,927 | 1,976,367 |
Technology [Member] | Total excluding Corporate TSA revenues [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [3] | 137,331 | 119,298 | 377,891 | 294,146 |
Operating income | $ 37,701 | $ 31,963 | $ 92,901 | $ 83,639 | |
[1] | Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which we expect to continue through August 2020. | ||||
[2] | Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. | ||||
[3] | Consists of practice management software and other value-added products, which are distributed primarily to health care providers, and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. |
Debt - Bank credit lines (Detai
Debt - Bank credit lines (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Line of Credit Facility [Line Items] | ||
Bank Credit lines | $ 107,841 | $ 951,458 |
Revolving Credit Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Bank Credit lines | 75,000 | 175,000 |
Other short-term bank credit lines [Member] | ||
Line of Credit Facility [Line Items] | ||
Bank Credit lines | 32,841 | 376,458 |
Committed Loan Associated with Animal Health Spin-off [Member] | ||
Line of Credit Facility [Line Items] | ||
Bank Credit lines | $ 0 | $ 400,000 |
Debt - Revolving Credit Agreeme
Debt - Revolving Credit Agreement and Other Short-Term Credit Lines - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Dec. 29, 2018 | |
Line of Credit Facility [Line Items] | ||
Bank credit lines | $ 107,841 | $ 951,458 |
Weighted average interest rate on borrowings under credit lines at period end (in hundredths) | 2.94% | 3.30% |
Revolving Credit Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Bank credit lines | $ 75,000 | $ 175,000 |
Revolving credit facility maturing in April 2022 [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving credit facility borrowing capacity | $ 750,000 | |
Revolving credit facility expiration date | Apr. 30, 2022 | |
Bank credit lines | $ 75,000 | 175,000 |
Outstanding letters of credit provided to third parties | 9,600 | 11,200 |
Revolving Credit Facility maturing in September 2019 [Member] | ||
Line of Credit Facility [Line Items] | ||
Extinguishment Of Line of Credit | $ 500,000 | |
Revolving credit facility expiration date | Sep. 30, 2019 | |
Other short-term bank credit lines [Member] | ||
Line of Credit Facility [Line Items] | ||
Bank credit lines | $ 32,841 | $ 376,458 |
Debt - Committed Loan Associate
Debt - Committed Loan Associated with Animal Health Spin-off - Narrative (Details) - USD ($) $ in Thousands | Feb. 07, 2019 | Sep. 28, 2019 | Dec. 29, 2018 | Apr. 20, 2018 |
Line of Credit Facility [Line Items] | ||||
Bank Credit lines | $ 107,841 | $ 951,458 | ||
Line of Credit Facility, Interest Rate at Period End | 2.94% | 3.30% | ||
Committed Loan Associated with Animal Health Spin-off [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Bank Credit lines | $ 0 | $ 400,000 | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000 | |||
Equity Method Investment Aggregate Cost | $ 365,000 | |||
Line of Credit Facility, Interest Rate at Period End | 3.38% | |||
Repayments of Lines of Credit | $ 400,000 |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 981,417 | $ 988,624 |
Less current maturities | (109,188) | (8,280) |
Long-term debt | 872,229 | 980,344 |
Finance lease obligations payable through 2029 with interest rates ranging from 1.45% to 6% at March 30, 2019 and ranging from 1.45% to 6.0% at December 29, 2018 | $ 4,205 | $ 3,944 |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Finance lease obligations, interest rates | 1.64% | 1.45% |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Finance lease obligations, interest rates | 19.13% | 6.00% |
Private placement facilities [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 621,217 | $ 628,189 |
U.S. trade accounts receivable securitization [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 350,000 | 350,000 |
Various collateralized and uncollateralized loans payable with interest in varying installments through 2023 at interest rates ranging from 2.61% to 4.17% at March 30, 2019 and ranging from 2.61% to 4.17% at December 29, 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 5,995 | $ 6,491 |
Various collateralized and uncollateralized loans payable with interest in varying installments through 2023 at interest rates ranging from 2.61% to 4.17% at March 30, 2019 and ranging from 2.61% to 4.17% at December 29, 2018 [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.56% | 2.61% |
Various collateralized and uncollateralized loans payable with interest in varying installments through 2023 at interest rates ranging from 2.61% to 4.17% at March 30, 2019 and ranging from 2.61% to 4.17% at December 29, 2018 [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 10.50% | 4.17% |
Debt - Private Placement Facili
Debt - Private Placement Facilities - Narrative (Details) - Private placement facilities [Member] $ in Billions | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Debt Instrument [Line Items] | |
Debt instrument, maximum borrowing capacity | $ 1 |
Debt instrument, maturity date | Sep. 15, 2020 |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Term of issuances under private placement facilities | 5 years |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Term of issuances under private placement facilities | 15 years |
Average term of issuances under private placement facilities | 12 years |
Debt - Private Placement Borrow
Debt - Private Placement Borrowings (Details) - USD ($) $ in Thousands | Jan. 20, 2016 | Sep. 28, 2019 | Dec. 29, 2018 | |
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 981,417 | $ 988,624 | ||
Private placement facilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Less: Deferred debt issuance costs | (212) | |||
Total long-term debt | $ 621,217 | $ 628,189 | ||
Debt Instrument, Maturity Date | Sep. 15, 2020 | |||
Private placement facilities [Member] | Private placement facilities maturing in September 2020 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Sep. 2, 2010 | |||
Long-term Debt, Gross | $ 100,000 | |||
Borrowing Rate | 3.79% | |||
Debt Instrument, Maturity Date | Sep. 2, 2020 | |||
Private placement facilities [Member] | Private placement facilities maturing in January 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Jan. 20, 2012 | |||
Long-term Debt, Gross | $ 50,000 | |||
Borrowing Rate | 3.45% | |||
Debt Instrument, Maturity Date | Jan. 20, 2024 | |||
Private placement facilities [Member] | Private placement facilities maturing in January 2022 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | [1] | Jan. 20, 2012 | ||
Long-term Debt, Gross | [1] | $ 21,429 | ||
Borrowing Rate | [1] | 3.09% | ||
Debt Instrument, Maturity Date | [1] | Jan. 20, 2022 | ||
Private placement facility, frequency of periodic payment | Annual | |||
Private placement facility annual payment | $ 7,100 | |||
Debt Instrument, Date of First Required Payment | Jan. 20, 2016 | |||
Private placement facilities [Member] | Private placement facilities maturing in December 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Dec. 24, 2012 | |||
Long-term Debt, Gross | $ 50,000 | |||
Borrowing Rate | 3.00% | |||
Debt Instrument, Maturity Date | Dec. 24, 2024 | |||
Private placement facilities [Member] | Private placement facilities maturing in June 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Jun. 2, 2014 | |||
Long-term Debt, Gross | $ 100,000 | |||
Borrowing Rate | 3.19% | |||
Debt Instrument, Maturity Date | Jun. 2, 2021 | |||
Private placement facilities [Member] | Private Placement facilities maturing in June 2027 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Jun. 16, 2017 | |||
Long-term Debt, Gross | $ 100,000 | |||
Borrowing Rate | 3.42% | |||
Debt Instrument, Maturity Date | Jun. 16, 2027 | |||
Private placement facilities [Member] | Private Placement facilities maturing in September 2029 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Sep. 15, 2017 | |||
Long-term Debt, Gross | $ 100,000 | |||
Borrowing Rate | 3.52% | |||
Debt Instrument, Maturity Date | Sep. 15, 2029 | |||
Private placement facilities [Member] | Private Placement facilities maturing in January 2028 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Jan. 2, 2018 | |||
Long-term Debt, Gross | $ 100,000 | |||
Borrowing Rate | 3.32% | |||
Debt Instrument, Maturity Date | Jan. 2, 2028 | |||
[1] | (1) Annual repayments of approximately $ 7.1 million for this borrowing commenced on January 20, 2016. |
Debt - U.S. Trade Accounts Rece
Debt - U.S. Trade Accounts Receivable Securitization - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 28, 2019 | Dec. 29, 2018 | |
Debt Instrument [Line Items] | ||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 981,417 | $ 988,624 |
U.S. trade accounts receivable securitization [Member] | ||
Debt Instrument [Line Items] | ||
Pricing commitment period | 3 years | |
Debt Instrument, Maturity Date | Apr. 29, 2022 | |
Debt Instrument Maximum Borrowing Capacity | $ 350,000 | |
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 350,000 | $ 350,000 |
Commitment fee for facility usage - facility limit greater than or equal to fifty percent usage (as a percent) | 0.30% | |
Commitment fee for facility usage - facility limit less than fifty percent usage (as a percent) | 0.35% | |
Debt instrument borrowing percentage of facility used for calculating commitment fee (as a percent) | 50.00% | |
U.S. trade accounts receivable securitization [Member] | Average Asset Backed Commercial Paper Rate [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable rate basis at period end | 2.21% | 2.66% |
Debt instrument, basis spread on variable rate | 0.75% | 0.75% |
Debt instrument, interest rate at period end | 2.96% | 3.41% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Lessee, Operating Lease, Description | We have operating and finance leases for corporate offices, office space, distribution and other facilities, vehicles and certain equipment. |
Lessee, Operating Lease, Option to Extend | Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. |
Lessee, Operating Lease, Lease Not yet Commenced, Description | buildings and vehicles |
Operating lease assets, Lease not yet commenced | $ 6.8 |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee operating lease, remaining lease term | 1 year |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 2 years |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee operating lease, remaining lease term | 16 years |
Lessee, Operating Lease, Option to Extend | may include options to extend the leases for up to 10 years |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 10 years |
Leases - Components of lease ex
Leases - Components of lease expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 28, 2019 | Sep. 28, 2019 | ||
Leases | |||
Operating lease cost | [1] | $ 21,840 | $ 68,273 |
Finance lease cost: | |||
Amortization of right-of-use assets | 290 | 798 | |
Interest on lease liabilities | 31 | 88 | |
Finance lease cost | $ 321 | $ 886 | |
[1] | Includes variable lease expenses. |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019USD ($) | ||
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows for operating leases | $ 60,275 | |
Operating cash flows for finance leases | 67 | |
Financing cash flows for finance leases | 862 | |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 281,373 | [1] |
Finance leases | $ 1,149 | |
[1] | Includes leases that commenced during the nine months ended September 28, 2019, as well as balances related to leases in existence as of the date of the adoption of Topic 842. |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Operating Leases | ||
Operating lease right-of-use assets | $ 240,126 | $ 0 |
Current operating lease liabilities | 67,374 | 0 |
Operating lease liabilities | 182,505 | 0 |
Total operating lease liabilities | 249,879 | |
Lessee, Finance Lease, Description [Abstract] | ||
Property and equipment, at cost | 10,826 | |
Accumulated depreciation | (6,115) | |
Finance Leases | 4,711 | |
Finance Lease, Liability, Current | 1,092 | |
Finance Lease, Liability, Noncurrent | 3,113 | |
Total finance lease liabilities | $ 4,205 | $ 3,944 |
Operating Lease, Weighted Average Remaining Lease Term, in years | 5 years 6 months | |
Finance Lease, Weighted Average Remaining Lease Term, in years | 6 years 1 month 6 days | |
Operating Lease, Weighted Average Discount Rate, Percent | 3.40% | |
Finance Lease, Weighted Average Discount Rate, Percent | 2.20% |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Thousands | Sep. 28, 2019USD ($) |
Operating Leases | |
2019 (excluding the nine months ended September 28, 2019) | $ 21,149 |
2020 | 69,052 |
2021 | 54,082 |
2022 | 37,886 |
2023 | 26,051 |
Thereafter | 67,075 |
Total future lease payments | 275,295 |
Finance Leases | |
2019 (excluding the nine months ended September 28, 2019) | 453 |
2020 | 1,135 |
2021 | 846 |
2022 | 434 |
2023 | 295 |
Thereafter | 1,372 |
Total future lease payments | $ 4,535 |
Leases - Present value of lease
Leases - Present value of lease liabilities (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 |
Present value of lease liabilities - Operating Leases | ||
Total future lease payments | $ 275,295 | |
Less imputed interest | (25,416) | |
Total operating lease liabilities | 249,879 | |
Present value of lease liabilities - Finance Leases | ||
Total future lease payments | 4,535 | |
Less imputed interest | (330) | |
Total finance lease liabilities | $ 4,205 | $ 3,944 |
Leases - Future minimum lease p
Leases - Future minimum lease payments under non-cancelable operating leases and capital leases (Details) $ in Thousands | Dec. 29, 2018USD ($) |
Operating Leases, Future Minimum Payments Due [Abstract] | |
2019 | $ 62,535 |
2020 | 47,686 |
2021 | 34,633 |
2022 | 25,626 |
2023 | 19,560 |
Thereafter | 62,918 |
Total minimum lease payments | 252,958 |
Finance Leases, Future Minimum Payments Due [Abstract] | |
2019 | 976 |
2020 | 801 |
2021 | 501 |
2022 | 305 |
2023 | 283 |
Thereafter | 1,430 |
Total minimum lease payments | 4,296 |
Capital Leases, Future Minimum Payments, Interest Included in Payments | (352) |
Total present value of minimum lease payments | $ 3,944 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Dec. 29, 2018 | |
Components of the change in the redeemable noncontrolling interests [Abstract] | |||||
Balance, beginning of period | $ 219,724 | $ 465,585 | $ 465,585 | ||
Decrease in redeemable noncontrolling interests due to redemptions | (2,270) | (287,767) | |||
Increase in redeemable noncontrolling interests due to business acquisitions | 73,975 | 4,655 | |||
Net income attributable to Redeemable noncontrolling interests | $ 2,648 | 10,618 | 17,019 | 15,327 | |
Dividends declared | (7,943) | (8,206) | |||
Effect of foreign currency translation loss attributable to redeemable noncontrolling interests | $ (5,748) | $ (2,217) | (4,912) | $ (13,752) | (11,330) |
Change in fair value of redeemable securities | (5,867) | 41,460 | |||
Balance, end of period | $ 283,325 | $ 283,325 | $ 219,724 |
Comprehensive Income - Accumula
Comprehensive Income - Accumulated Other Comprehensive Income and Comprehensive Income Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Dec. 29, 2018 | |
Attributable to Redeemable noncontrolling interests: | |||||
Foreign currency translation adjustment | $ (22,915) | $ (22,915) | $ (18,595) | ||
Attributable to noncontrolling interests: | |||||
Foreign currency translation adjustment | (715) | (715) | (426) | ||
Attributable to Henry Schein, Inc.: | |||||
Foreign currency translation gain (loss) | (180,267) | (180,267) | (234,799) | ||
Unrealized gain (loss) from foreign currency hedging activities | (1,742) | (1,742) | (156) | ||
Unrealized investment gain (loss) | 2 | 2 | (6) | ||
Pension adjustment gain (loss) | (13,419) | (13,419) | (13,810) | ||
Accumulated other comprehensive income (loss) | (195,426) | (195,426) | (248,771) | ||
Total Accumulated other comprehensive income (loss) | (219,056) | (219,056) | $ (267,792) | ||
Components of comprehensive income [Abstract] | |||||
Net income | 148,853 | $ 126,976 | 382,693 | $ 423,116 | |
Foreign currency translation gain (loss) | (60,635) | (10,582) | (43,926) | (106,154) | |
Tax effect | 0 | 0 | 0 | 0 | |
Foreign currency translation gain (loss) | (60,635) | (10,582) | (43,926) | (106,154) | |
Unrealized gain (loss) from foreign currency hedging activities | (1,685) | (406) | (2,037) | 1,079 | |
Tax effect | 422 | 27 | 451 | (405) | |
Unrealized gain (loss) from foreign currency hedging activities | (1,263) | (379) | (1,586) | 674 | |
Unrealized investment gain (loss) | 3 | (1) | 10 | (2) | |
Tax effect | (1) | (2) | |||
Unrealized investment gain (loss) | 2 | (1) | 8 | (2) | |
Pension adjustment gain (loss) | 585 | 139 | 1,146 | 1,449 | |
Tax effect | (185) | (23) | (314) | (393) | |
Pension adjustment gain (loss) | 400 | 116 | 832 | 1,056 | |
Comprehensive income | $ 87,357 | $ 116,130 | $ 338,021 | $ 318,690 |
Comprehensive Income - Comprehe
Comprehensive Income - Comprehensive Income Components - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Comprehensive Income | ||||
Foreign currency translation loss | $ 60,635 | $ 10,582 | $ 43,926 | $ 106,154 |
Comprehensive Income - Total Co
Comprehensive Income - Total Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Comprehensive Income Net Of Applicable Taxes [Abstract] | ||||
Comprehensive income attributable to Henry Schein, Inc. | $ 85,075 | $ 113,221 | $ 324,809 | $ 313,326 |
Comprehensive income attributable to noncontrolling interests | 3,924 | 2,478 | 7,280 | 2,097 |
Comprehensive income (loss) attributable to Redeemable noncontrolling interests | (1,642) | 431 | 5,932 | 3,267 |
Comprehensive income (loss) | $ 87,357 | $ 116,130 | $ 338,021 | $ 318,690 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 28, 2019 | Dec. 29, 2018 | Dec. 30, 2017 |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | $ 283,325 | $ 219,724 | $ 465,585 |
Estimate of Fair Value Measurement [Member] | |||
Debt Instrument, Fair Value Disclosure [Abstract] | |||
Fair value of debt | 1,089,300 | 1,940,100 | |
Fair value, measurements, recurring [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 5,620 | 12,533 | |
Total assets | 5,620 | 12,533 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 3,629 | 1,708 | |
Total liabilities | 3,629 | 1,708 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | 283,325 | 219,724 | |
Fair value, measurements, recurring [Member] | Level 1 [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 0 | 0 | |
Total assets | 0 | 0 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 0 | 0 | |
Total liabilities | 0 | 0 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | 0 | 0 | |
Fair value, measurements, recurring [Member] | Level 2 [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 5,620 | 12,533 | |
Total assets | 5,620 | 12,533 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 3,629 | 1,708 | |
Total liabilities | 3,629 | 1,708 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | 0 | 0 | |
Fair value, measurements, recurring [Member] | Level 3 [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 0 | 0 | |
Total assets | 0 | 0 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 0 | 0 | |
Total liabilities | 0 | 0 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | $ 283,325 | $ 219,724 |
Business Acquisitions- Narrativ
Business Acquisitions- Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 28, 2019 | Dec. 29, 2018 | |
Business Acquisition [Line Items] | ||
Business acquisition allocated initial goodwill amount | $ 2,441,175 | $ 2,081,029 |
North American Rescue [Member] | ||
Business Acquisition [Line Items] | ||
Business Acquisition, Name of Acquired Entity | North American Rescue | |
Business acquisition, approximate annual sales of acquired entity | $ 184,000 | |
Business acquisition allocated initial goodwill amount | $ 168,900 | |
Lighthouse 360 [Member] | Henry Schein One, LLC. [Member] | ||
Business Acquisition [Line Items] | ||
Business Acquisition, Name of Acquired Entity | Lighthouse 360 | |
Business acquisition, approximate annual sales of acquired entity | $ 50,000 | |
Business acquisition allocated initial goodwill amount | $ 143,400 |
Plans of Restructuring - Narrat
Plans of Restructuring - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Dec. 29, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs (credits) | $ (802) | $ 8,551 | $ 15,764 | $ 19,723 | $ 54,367 |
Strategic Plan, 2018 to 2020 [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring costs (credits) | $ (800) | $ 15,800 | $ 54,400 | ||
Strategic Plan, 2018 to 2020 [Member] | Scenario, Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring And Related Cost Expected Percentage Of Workforce Eliminated | 4.00% | 4.00% |
Plans of Restructuring - Restru
Plans of Restructuring - Restructuring Reserve Roll Forward by Expense and Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Dec. 29, 2018 | |
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | $ 31,725 | $ 4,426 | $ 4,426 | ||
Provision | $ (802) | $ 8,551 | 15,764 | 19,723 | 54,367 |
Payments and other adjustments | (27,998) | (27,068) | |||
Restructuring Reserve, ending balance | 19,491 | 19,491 | 31,725 | ||
Healthcare Distribution [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 30,291 | 4,426 | 4,426 | ||
Provision | 14,966 | 50,824 | |||
Payments and other adjustments | (26,349) | (24,959) | |||
Restructuring Reserve, ending balance | 18,908 | 18,908 | 30,291 | ||
Technology [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 1,434 | 0 | 0 | ||
Provision | 798 | 3,543 | |||
Payments and other adjustments | (1,649) | (2,109) | |||
Restructuring Reserve, ending balance | 583 | 583 | 1,434 | ||
Employee Severance [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 29,964 | 3,087 | 3,087 | ||
Provision | 14,733 | 50,197 | |||
Payments and other adjustments | (26,313) | (23,320) | |||
Restructuring Reserve, ending balance | 18,384 | 18,384 | 29,964 | ||
Facility Closing [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 1,603 | 1,315 | 1,315 | ||
Provision | 945 | 3,153 | |||
Payments and other adjustments | (1,575) | (2,865) | |||
Restructuring Reserve, ending balance | 973 | 973 | 1,603 | ||
Other [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 158 | $ 24 | 24 | ||
Provision | 86 | 1,017 | |||
Payments and other adjustments | (110) | (883) | |||
Restructuring Reserve, ending balance | $ 134 | $ 134 | $ 158 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 147,136 | 152,533 | 148,603 | 152,970 |
Effect of dilutive securities: | ||||
Stock options, restricted stock and restricted stock units (in shares) | 1,439 | 1,081 | 1,317 | 1,012 |
Diluted (in shares) | 148,575 | 153,614 | 149,920 | 153,982 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate (in hundredths) | 23.90% | 21.80% |
Effect of Tax Cuts and Jobs Act [Abstract] | ||
Unrecognized tax benefits | $ 107.6 | |
Unrecognized tax benefits that would affect the effective tax rate if recognized | 86.5 | |
Provision for (benefit from) transitional tax | $ 10 | |
Total interest | 18.3 | |
Total penalties | $ 0 | |
Other Information Pertaining to Income Taxes | The tax years subject to examination by major tax jurisdictions include the years 2012 and forward by the U.S. Internal Revenue Service (“IRS”), as well as the years 2008 and forward for certain states and certain foreign jurisdictions. During the quarter ended December 31, 2016 we filed a Mutual Agreement Procedure request with the IRS for assistance from the U.S. Competent Authority for an open Transfer Pricing issue which resulted in a partial settlement during the quarter ended December 30, 2017. We received a 30 Day Letter from the IRS during the quarter ended April 1, 2017 for the remaining open audit issues for the years 2012 and 2013. We filed a Protest with the Appellate Division regarding these issues during the second quarter of 2017. We had an initial Appeals Conference during the third quarter of 2018, of which we are awaiting a final settlement. During the quarter ended December 29, 2018, we submitted the first draft of our proposed Advanced Pricing Agreement covering tax years 2014-2024 to the IRS in which Henry Schein, Inc. and the IRS would agree on an appropriate transfer pricing methodology. We have provided all necessary documentation to the Appellate Division and the Advance Pricing and Mutual Agreement Program to date and are waiting for responses. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Details) | 9 Months Ended |
Sep. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Maximum duration of foreign currency forward contracts | 18 months |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Pre-tax share-based compensation expense | $ 13.3 | $ 9.5 | $ 33.1 | $ 30.6 |
After-tax share-based compensation expense | 10.2 | $ 7.6 | 25.2 | $ 23.4 |
Total unrecognized compensation cost related to non-vested awards | $ 97.5 | $ 97.5 | ||
Weighted-average period of recognition for unrecognized compensation costs on nonvested awards (in years) | 2 years 2 months 12 days | |||
Restricted Stock And Restricted Stock Unit Awards [Member] | Long-term Incentive Program [Member] | Henry Schein Animal Health Business [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Period Increase (Decrease) | 1.2633 | |||
Decrease in price per share | $ 1.2633 | |||
Time Based Restricted Stock Restricted Units [Member] | 2013 Stock Incentive Plan, as amended [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||
Time Based Restricted Stock Restricted Units [Member] | 2015 Non-Employee Director Stock Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 12 months | |||
Performance Based Restricted Stock Restricted Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Period Over Which Earnings Per Share Performance Is Measured Against Specified Targets | 3 years | |||
Performance Based Restricted Stock Restricted Units [Member] | 2015 Non-Employee Director Stock Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - Employee and director stock options [Member] $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 28, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at beginning of period (in shares) | shares | 3,000 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (3,000) |
Forfeited (in shares) | shares | 0 |
Outstanding at end of period (in shares) | shares | 0 |
Ending balance, options exercisable (in shares) | shares | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 13.63 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 13.63 |
Forfeited (in dollars per share) | $ / shares | 0 |
Outstanding at end of period (in dollars per share) | $ / shares | 0 |
Ending balance, options exercisable (in dollars per share) | $ / shares | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Weighted average remaining contractual life, options outstanding (in years) | |
Weighted average remaining contractual life, options exercisable (in years) | |
Stock option outstanding aggregate intrinsic value as of period end | $ | $ 0 |
Stock option exercisable aggregate intrinsic value as of period end | $ | $ 0 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Resticted Stock Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 28, 2019$ / sharesshares | |
Time Based Restricted Stock Restricted Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance outstanding (in shares) | shares | 1,513 |
Granted (in shares) | shares | 449 |
Vested (in shares) | shares | (338) |
Forfeited (in shares) | shares | (204) |
Ending balance outstanding (in shares) | shares | 1,420 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning balance outstanding (in dollars per share) | $ 57.94 |
Granted (in dollars per share) | 59.47 |
Vested (in dollars per share) | 55.57 |
Forfeited (in dollars per share) | 60.39 |
Ending balance outstanding (in dollars per share) | 58.66 |
Intrinsic value (in dollars per share) | $ 62.58 |
Performance Based Restricted Stock Restricted Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance outstanding (in shares) | shares | 1,163 |
Granted (in shares) | shares | 656 |
Vested (in shares) | shares | (185) |
Forfeited (in shares) | shares | (155) |
Ending balance outstanding (in shares) | shares | 1,479 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning balance outstanding (in dollars per share) | $ 40.26 |
Granted (in dollars per share) | 60.04 |
Vested (in dollars per share) | 66.52 |
Forfeited (in dollars per share) | 61.37 |
Ending balance outstanding (in dollars per share) | 61.41 |
Intrinsic value (in dollars per share) | $ 62.58 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Supplemental Cash Flow Information [Abstract] | ||||
Interest | $ 45,543 | $ 49,959 | ||
Income taxes | 138,068 | 197,943 | ||
Unrealized gain (loss) from foreign currency hedging activities | $ (1,685) | $ (406) | (2,037) | 1,079 |
Unrealized gain (loss) from foreign currency hedging activities | $ 1,685 | $ 406 | $ 2,037 | $ (1,079) |
Legal Proceedings - Narrative (
Legal Proceedings - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 28, 2019USD ($)claims | Sep. 29, 2018USD ($) | Sep. 28, 2019USD ($)claims | Sep. 29, 2018USD ($) | Dec. 29, 2018USD ($) | |
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Litigation settlements | $ 0 | $ 38,488,000 | $ 0 | $ 38,488,000 | |
Revenues | $ 2,508,767,000 | $ 2,355,565,000 | $ 7,316,862,000 | $ 6,945,047,000 | |
Loss Contingency, Management's Assessment and Process | As of September 28, 2019, we had accrued our best estimate of potential losses relating to claims that were probable to result in liability and for which we were able to reasonably estimate a loss. This accrued amount, as well as related expenses, was not material to our financial position, results of operations or cash flows. Our method for determining estimated losses considers currently available facts, presently enacted laws and regulations and other factors, including probable recoveries from third parties. | ||||
Class Action Complaints Against Patterson Companies, Inc., Benco Dental Supply Co. and Henry Schein, Inc. [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | January 2016 | ||||
Loss Contingency, Name of Defendant | Patterson Companies, Inc. (“Patterson”), Benco Dental Supply Co. (“Benco”) and Henry Schein, Inc | ||||
Loss Contingency, Name of Plaintiff | class action complaints | ||||
Loss Contingency, Allegations | each of these complaints alleges, among other things, that defendants conspired to fix prices, allocate customers and foreclose competitors by boycotting manufacturers, state dental associations and others that deal with defendants’ competitors | ||||
Archer and White Sales, Inc. v. collectively, the Danaher Defendants [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | August 31, 2012 | ||||
Loss Contingency, Name of Defendant | Henry Schein, Inc. as well as Danaher Corporation and its subsidiaries Instrumentarium Dental, Inc., Dental Equipment, LLC, Kavo Dental Technologies, LLC and Dental Imaging Technologies Corporation (collectively, the “Danaher Defendants”) | ||||
Loss Contingency, Name of Plaintiff | Archer and White Sales, Inc. | ||||
Loss Contingency, Allegations | Archer alleges aconspiracy between Henry Schein, an unnamed company and the Danaher Defendants to terminate or limit Archer’s distribution rights. | ||||
Archer filed amended complaint adding Patterson and Benco as Defendants [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | August 1, 2017 | ||||
Loss Contingency, Name of Defendant | adding Patterson and Benco as defendants | ||||
Loss Contingency, Name of Plaintiff | Archer | ||||
Loss Contingency, Allegations | alleging that Henry Schein, Patterson, Benco and Burkhart conspired to fix prices and refused to compete with each other for sales of dental equipment to dental professionals and agreed to enlist their common suppliers, the Danaher Defendants, to join a price-fixing conspiracy and boycott by reducing the distribution territory of, and eventually terminating, their price-cutting competing distributor Archer. | ||||
Archer filed second amended complaint under seal [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | October 30, 2017 | ||||
Loss Contingency, Name of Defendant | The named parties and causes of action are the same as the August 1, 2017 amended complaint. | ||||
Loss Contingency, Name of Plaintiff | Archer | ||||
Loss Contingency, Allegations | add additional allegations that it believes support its claims | ||||
IQ Dental Supply, Inc V. Henry Schein, Inc. Patterson Companies, Inc. [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | August 17, 2017 | ||||
Loss Contingency, Name of Defendant | Henry Schein, Inc., Patterson Companies, Inc. and Benco Dental Supply Company | ||||
Loss Contingency, Name of Plaintiff | IQ Dental Supply, Inc. | ||||
Loss Contingency, Allegations | Plaintiff alleges that it is a distributor of dental supplies and equipment, and sells dental products through an online dental distribution platform operated by SourceOne Dental (“SourceOne”). | ||||
United States Federal Trade Commission [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | February 12, 2018 | ||||
Loss Contingency, Name of Defendant | Benco Dental Supply Co., Henry Schein, Inc. and Patterson Companies, Inc. | ||||
Loss Contingency, Name of Plaintiff | United States Federal Trade Commission | ||||
Loss Contingency, Allegations | The FTC alleges, among other things, that defendants violated U.S. antitrust laws by conspiring, and entering into an agreement, to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners. | ||||
Salkowitz v. Henry Schein, Inc. et al [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | March 7, 2018 | ||||
Loss Contingency, Name of Defendant | Joseph Salkowitz, individually and on behalf of all others similarly situated | ||||
Loss Contingency, Name of Plaintiff | Henry Schein, Inc., Stanley M. Bergman and Steven Paladino | ||||
Loss Contingency, Allegations | The complaint alleged, among other things, that the defendants had made materially false and misleading statements about Henry Schein’s business, operations and prospects during the Class Period, including matters relating to the issues in the antitrust class action and the FTC action described above, thereby causing the plaintiff and members of the purported class to pay artificially inflated prices for Henry Schein securities. | ||||
Marion Diagnostic Center, LLC v. Dickinson, and Co., 3:18-cv-01509 (S.D. Ill) [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | May 3, 2018 | ||||
Loss Contingency, Name of Defendant | Marion Diagnostic Center, LLC, et al. | ||||
Loss Contingency, Name of Plaintiff | Becton, Dickinson, and Co. (“Becton”); Premier, Inc. (“Premier”), Vizient, Inc. (“Vizient”), Cardinal Health, Inc. (“Cardinal”), Owens & Minor Inc. (“O&M”), Henry Schein, Inc., and Unnamed Becton DistributorCo-Conspirators. | ||||
Loss Contingency, Allegations | The complaint alleges that the defendants entered into a vertical conspiracy to force health care providers into long-term exclusionary contracts that restrain trade in the nationwide markets for conventional and safety syringes and safety IV catheters and inflate the prices of certain Becton products to above-competitive levels. | ||||
The County of Summit, Ohio et al. v. Purdue Pharma, L.P., et al [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | May 29, 2018 | ||||
Loss Contingency, Name of Defendant | Henry Schein, Inc., Henry Schein Medical Systems, Inc. and others as defendants. | ||||
Loss Contingency, Name of Plaintiff | The County of Summit, Ohio et al. | ||||
Loss Contingency, Allegations | Summit County alleges that manufacturers of prescription opioid drugs engaged in a false advertising campaign to expand the market for such drugs and their own market share and that the entities in the supply chain (including Henry Schein, Inc. and Henry Schein Medical Systems, Inc.) reaped financial rewards by refusing or otherwise failing to monitor appropriately and restrict the improper distribution of those drugs. | ||||
Loss Contingency, Settlement Agreement, Terms | On October 29, 2019, the Company was dismissed with prejudice from this lawsuit. Henry Schein, working with Summit County, will establish and donate $1 million to a Pain Management Education Foundation dedicated to making grants to programs within Summit County focused on (I) supporting and aggregating research around best practices for pain management, including the prescription of opioids and alternatives: (II) educating dentists and physicians, clinical associates, patients and patient networks on those best practices along with the risks of opioid addiction and alternative pain management treatment options for key indications; and (III) offering grants to develop and offer training to dentists and physicians or other qualified professionals to qualify a practitioner for a waiver to prescribe or dispense buprenorphine medications. Henry Schein will pay $250,000 of Summit County’s expenses. | ||||
Donation amount to Pain Management Education Foundation | $ 1,000,000 | ||||
Litigation Settlement, Amount Awarded to Other Party | $ 250,000 | ||||
Actions consolidated in the MultiDistrict Litigation [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Name of Defendant | Henry Schein and/or one or more of its affiliated companies | ||||
Loss Contingency, Allegations | allege claims similar to those alleged in the County of Summit Action | ||||
Actions consolidated in the MultiDistrict Litigation [Member] | Maximum [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Pending Claims, Number | claims | 100 | 100 | |||
Maximum sales of opioids in North America during the year, percentage | 10.00% | ||||
Actions consolidated in the MultiDistrict Litigation [Member] | Continuing Operations [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Revenues | $ 9,400,000,000 | ||||
Kramer v. Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and Unnamed Co-Conspirators [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | October 9, 2018 | ||||
Loss Contingency, Name of Defendant | Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and Unnamed Co-Conspirators | ||||
Loss Contingency, Name of Plaintiff | Kramer | ||||
Loss Contingency, Allegations | The complaint alleges that members of the proposed class, comprised of purchasers of dental services from dental practices in California, suffered antitrust injury due to an unlawful boycott, price-fixing or otherwise anticompetitive conspiracy among Henry Schein, Patterson and Benco. The complaint alleges that the alleged conspiracy overcharged California dental practices, orthodontic practices and dental laboratories on their purchase of dental supplies, which in turn passed on some or all of such overcharges to members of the California class purchasing dental services. | ||||
R. Lawrence Hatchett, M.D. against Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and unnamed co-conspirators [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | January 29, 2019 | ||||
Loss Contingency, Name of Defendant | Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and unnamed co-conspirators | ||||
Loss Contingency, Name of Plaintiff | R. Lawrence Hatchett, M.D. | ||||
Loss Contingency, Allegations | The complaint alleges that members of the proposed class suffered antitrust injury due to an unlawful boycott, price-fixing or otherwise anticompetitive conspiracy among Henry Schein, Patterson and Benco. The complaint alleges that the alleged conspiracy overcharged Illinois dental practices, orthodontic practices and dental laboratories on their purchase of dental supplies, which in turn passed on some or all of such overcharges to members of the class. | ||||
City of Hollywood Police Officers Retirement System V. Henry Schein, Inc., Covetrus, Inc., and Benjamin Shaw and Christine Komola [Member] | |||||
Loss Contingency, Information about Litigation Matters [Abstract] | |||||
Loss Contingency, Lawsuit Filing Date | September 30, 2019 | ||||
Loss Contingency, Name of Defendant | Henry Schein, Inc., Covetrus, Inc., and Benjamin Shaw and Christine Komola | ||||
Loss Contingency, Name of Plaintiff | City of Hollywood Police Officers Retirement System, individually and on behalf of all others similarly situated | ||||
Loss Contingency, Allegations | The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 and asserts that defendants’ statements in the offering documents and after the transaction were materially false and misleading because they purportedly overstated Covetrus’s capabilities as to inventory management and supply-chain services, understated the costs of integrating the Henry Schein Animal Health Business and Vets First Choice, understated Covetrus’s separation costs from Henry Schein, and understated the impact on earnings from online competition and alternative distribution channels and from the loss of an allegedly large customer in North America just before the Separation and Merger. |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - Subsequent Event [Member] | Oct. 01, 2019USD ($) |
Subsequent Event [Line Items] | |
Subsequent Event, Date | Oct. 1, 2019 |
Subsequent Event, Description | the Company sold an equity investment in Hu-Friedy Mfg. Co., LLC, a manufacturer of dental instruments and infection prevention solutions. Our investment was non-controlling, we were not involved in running the business and had no representation on the board of directors. We estimate that in the fourth quarter of 2019 we will record a pretax gain from this sale in the range of $225 million to $275 million. Our final calculation of the gain will take into account the accounting treatment of contingent consideration associated with the transaction and the appropriate income tax treatment. |
Minimum [Member] | Forecast [Member] | Hu-Friedy Mfg. Co., LLC [Member] | |
Subsequent Event [Line Items] | |
Equity Method Investment, Pretax gain on sale | $ 225,000,000 |
Maximum [Member] | Forecast [Member] | Hu-Friedy Mfg. Co., LLC [Member] | |
Subsequent Event [Line Items] | |
Equity Method Investment, Pretax gain on sale | $ 275,000,000 |