Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 29, 2018 | Oct. 29, 2018 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 29, 2018 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 | |
Current Fiscal Year End Date | --12-29 | |
Entity Central Index Key | 1,000,228 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | HSIC | |
Entity Registrant Name | HENRY SCHEIN INC | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 152,437,680 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 119,740 | $ 174,658 |
Accounts receivable, net of reserves of $55,289 and $53,832 | 1,627,640 | 1,522,807 |
Inventories, net | 1,932,855 | 1,933,803 |
Prepaid expenses and other | 513,717 | 454,752 |
Total current assets | 4,193,952 | 4,086,020 |
Property and equipment, net | 374,051 | 375,001 |
Goodwill | 2,685,681 | 2,301,331 |
Other intangibles, net | 618,201 | 669,641 |
Investments and other | 518,425 | 432,002 |
Total assets | 8,390,310 | 7,863,995 |
Current liabilities: | ||
Accounts payable | 1,136,120 | 1,153,012 |
Bank credit lines | 1,144,881 | 741,653 |
Current maturities of long-term debt | 12,482 | 16,659 |
Accrued expenses: | ||
Payroll and related | 259,180 | 272,998 |
Taxes | 180,163 | 188,873 |
Other | 496,959 | 455,780 |
Total current liabilities | 3,229,785 | 2,828,975 |
Long-term debt | 1,000,315 | 907,756 |
Deferred income taxes | 45,947 | 50,431 |
Other liabilities | 415,045 | 420,285 |
Total liabilities | 4,691,092 | 4,207,447 |
Redeemable noncontrolling interests | 282,502 | 832,138 |
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, 152,437,680 outstanding on September 29, 2018 and 240,000,000 shares authorized, 153,690,146 outstanding on December 30, 2017 | 1,524 | 1,537 |
Retained earnings | 3,191,260 | 2,940,029 |
Accumulated other comprehensive loss | (219,649) | (130,067) |
Total Henry Schein, Inc. stockholders' equity | 2,973,135 | 2,811,499 |
Noncontrolling interests | 443,581 | 12,911 |
Total stockholders' equity | 3,416,716 | 2,824,410 |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | $ 8,390,310 | $ 7,863,995 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 30, 2017 |
Current assets: | ||
Accounts receivable, reserves (in dollars) | $ 55,289 | $ 53,832 |
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 | 240,000,000 |
Common stock, shares outstanding (in shares) | 152,437,680 | 153,690,146 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 3,279,678 | $ 3,161,083 | $ 9,826,793 | $ 9,143,489 |
Cost of sales | 2,391,118 | 2,325,029 | 7,141,569 | 6,645,342 |
Gross profit | 888,560 | 836,054 | 2,685,224 | 2,498,147 |
Operating expenses: | ||||
Selling, general and administrative | 668,011 | 622,506 | 2,027,138 | 1,874,644 |
Litigation settlements | 38,488 | 0 | 38,488 | 5,325 |
Transaction costs related to Animal Health spin-off | 7,282 | 0 | 18,670 | 0 |
Restructuring costs | 8,853 | 0 | 27,511 | 0 |
Operating income | 165,926 | 213,548 | 573,417 | 618,178 |
Other income (expense): | ||||
Interest income | 5,163 | 4,793 | 15,429 | 13,204 |
Interest expense | (21,045) | (13,428) | (56,466) | (37,056) |
Other, net | (346) | (194) | (802) | 489 |
Income before taxes and equity in earnings of affiliates | 149,698 | 204,719 | 531,578 | 594,815 |
Income taxes | (29,401) | (59,340) | (124,084) | (156,276) |
Equity in earnings of affiliates | 6,679 | 5,569 | 15,622 | 12,244 |
Net income | 126,976 | 150,948 | 423,116 | 450,783 |
Less: Net income attributable to noncontrolling interests | (5,498) | (12,917) | (20,208) | (35,949) |
Net income attributable to Henry Schein, Inc. | $ 121,478 | $ 138,031 | $ 402,908 | $ 414,834 |
Earnings per share attributable to Henry Schein, Inc.: | ||||
Basic (in dollars per share) | $ 0.8 | $ 0.88 | $ 2.63 | $ 2.64 |
Diluted (in dollars per share) | $ 0.79 | $ 0.87 | $ 2.62 | $ 2.61 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 152,533 | 156,914 | 152,970 | 157,386 |
Diluted (in shares) | 153,614 | 158,271 | 153,982 | 158,866 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 126,976 | $ 150,948 | $ 423,116 | $ 450,783 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation gain (loss) | (10,582) | 58,916 | (106,154) | 173,166 |
Unrealized gain (loss) from foreign currency hedging activities | (379) | (34) | 674 | (1,274) |
Unrealized investment gain (loss) | (1) | (2) | (2) | (2) |
Pension adjustment gain (loss) | 116 | (353) | 1,056 | (1,063) |
Other comprehensive income (loss), net of tax | (10,846) | 58,527 | (104,426) | 170,827 |
Comprehensive income | 116,130 | 209,475 | 318,690 | 621,610 |
Comprehensive income attributable to noncontrolling interests: | ||||
Net income | (5,498) | (12,917) | (20,208) | (35,949) |
Foreign currency translation (gain) loss | 2,589 | (3,473) | 14,844 | (8,258) |
Comprehensive income attributable to noncontrolling interests | (2,909) | (16,390) | (5,364) | (44,207) |
Comprehensive income attributable to Henry Schein, Inc. | $ 113,221 | $ 193,085 | $ 313,326 | $ 577,403 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 9 months ended Sep. 29, 2018 - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Noncontrolling Interests [Member] |
Beginning Balance at Dec. 30, 2017 | $ 2,824,410,000 | $ 1,537,000 | $ 0 | $ 2,940,029,000 | $ (130,067,000) | $ 12,911,000 |
Beginning Balance, shares (in shares) at Dec. 30, 2017 | 153,690,146 | 153,690,146 | ||||
Net income (excluding $17,019 attributable to Redeemable noncontrolling interests) | $ 406,097,000 | $ 0 | 0 | 402,908,000 | 0 | 3,189,000 |
Foreign currency translation loss (excluding loss of $13,752 attributable to Redeemable noncontrolling interests) | (92,402,000) | 0 | 0 | 0 | (91,310,000) | (1,092,000) |
Unrealized gain (loss) from foreign currency hedging activities, net of tax benefit of $405 | 674,000 | 0 | 0 | 0 | 674,000 | 0 |
Unrealized investment gain (loss), net of tax of $0 | (2,000) | 0 | 0 | 0 | (2,000) | 0 |
Pension adjustment gain (loss), including tax of $393 | 1,056,000 | 0 | 0 | 0 | 1,056,000 | 0 |
Dividends paid | (396,000) | 0 | 0 | 0 | 0 | (396,000) |
Other adjustments | 701,000 | 0 | (11,000) | 0 | 0 | 712,000 |
Purchase of noncontrolling interests | (207,000) | 0 | 0 | 0 | 0 | (207,000) |
Change in fair value of redeemable securities | (119,695,000) | 0 | (119,695,000) | 0 | 0 | 0 |
Initial noncontrolling interests and adjustments related to business acquisitions | 428,464,000 | 0 | 0 | 0 | 0 | 428,464,000 |
Repurchase and retirement of common stock - Value | (114,106,000) | $ (15,000) | (20,865,000) | (93,226,000) | 0 | 0 |
Repurchase and retirement of common stock - Shares | (1,521,208) | |||||
Stock issued upon exercise of stock options - value | 3,076,000 | $ 1,000 | 3,075,000 | 0 | 0 | 0 |
Stock issued upon exercise of stock options - shares | 153,516 | |||||
Stock-based compensation expense - Value | 34,235,000 | $ 4,000 | 34,231,000 | 0 | 0 | 0 |
Stock-based compensation expense - Shares | 379,428 | |||||
Shares withheld for payroll taxes - Value | (18,110,000) | $ (3,000) | (18,107,000) | 0 | 0 | 0 |
Shares withheld for payroll taxes - Shares | (267,573) | |||||
Settlement of stock-based compensation awards | (642,000) | $ 0 | (642,000) | 0 | 0 | 0 |
Settlement of stock-based compensation awards, shares | 3,371 | |||||
Deferred tax benefit arising from acquisition of noncontrolling interest in partnership | 60,969,000 | $ 0 | 60,969,000 | 0 | 0 | 0 |
Transfer of charges in excess of capital | 0 | 0 | 61,045,000 | (61,045,000) | 0 | 0 |
Ending Balance at Sep. 29, 2018 | $ 3,416,716,000 | $ 1,524,000 | $ 0 | $ 3,191,260,000 | $ (219,649,000) | $ 443,581,000 |
Ending Balance, shares (in shares) at Sep. 29, 2018 | 152,437,680 | 152,437,680 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 30, 2017 | |
Statement of Stockholders' Equity [Abstract] | |||||
Net income attributable to redeemable noncontrolling interests | $ 17,019 | $ 52,203 | |||
Foreign currency translation gain (loss) attributable to Redeemable noncontrolling interests | 13,752 | $ (7,461) | |||
Unrealized gain (loss) from foreign currency hedging activities, (tax benefit) tax | $ (27) | $ 60 | 405 | $ (4) | |
Unrealized investment gain (loss), (tax benefit) tax | 0 | (1) | 0 | (1) | |
Pension adjustment gain (loss), tax benefit (tax) | $ (23) | $ 176 | $ (393) | $ 508 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 29, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 423,116 | $ 450,783 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 155,089 | 141,278 |
Stock-based compensation expense | 34,235 | 31,987 |
Provision for losses on trade and other accounts receivable | 7,870 | 6,981 |
Provision for (benefit from) deferred income taxes | (6,282) | 8,600 |
Equity in earnings of affiliates | (15,622) | (12,244) |
Distributions from equity affiliates | 15,534 | 16,826 |
Changes in unrecognized tax benefits | 2,853 | (6,653) |
Other | 590 | 6,031 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (155,579) | (226,577) |
Inventories | (35,300) | 27,336 |
Other current assets | (81,774) | (70,833) |
Accounts payable and accrued expenses | 46,024 | (66,014) |
Net cash provided by (used in) operating activities | 390,754 | 307,501 |
Cash flows from investing activities: | ||
Purchases of fixed assets | (61,826) | (55,315) |
Payments for equity investments and business acquisitions, net of cash acquired | (47,325) | (258,786) |
Other | (37,206) | (6,694) |
Net cash provided by (used in) investing activities | (146,357) | (320,795) |
Cash flows from financing activities: | ||
Proceeds from bank borrowings | 404,098 | 193,550 |
Proceeds from issuance of long-term debt | 115,000 | 200,440 |
Principal payments for long-term debt | (27,621) | (59,531) |
Debt issuance costs | (395) | (1,771) |
Proceeds from issuance of stock upon exercise of stock options | 3,076 | 4,941 |
Payments for repurchases of common stock | (114,106) | (225,005) |
Payments for taxes related to shares withheld for employee taxes | (17,903) | (44,721) |
Distributions to noncontrolling stockholders | (15,767) | (23,921) |
Acquisitions of noncontrolling interests in subsidiaries | (664,898) | (27,914) |
Net cash provided by (used in) financing activities | (318,516) | 16,068 |
Effect of exchange rate changes on cash and cash equivalents | 19,201 | 14,724 |
Net change in cash and cash equivalents | (54,918) | 17,498 |
Cash and cash equivalents, beginning of period | 174,658 | 62,381 |
Cash and cash equivalents, end of period | $ 119,740 | $ 79,879 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 29, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation O ur 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 For m 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. The consolidated financial statements reflect all adjustments considered n ecessary 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 b e 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 30, 2017 . The preparation of financial statements in confo rmity 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 29, 2018 are not necessarily indicative of the results to be expected for any other interim period or for the year ending December 29, 2018 . On August 16, 2017, we announced that our Board of Directors approved a 2-for-1 split of our common stock. Each Henry Schein, Inc. stockholder of record at the close of business on September 1, 2 017 received a dividend of one additional share for every share held. Trading began on a split-adjusted basis on September 15, 2017 and has been retroactively reflected for all periods presented in this Form 10- Q . As a result of the stock split, we incre ased our authorized common shares from 240,000,000 to 480,000,000 , effective May 31, 2018. |
Accounting Pronouncements Adopt
Accounting Pronouncements Adopted and Critical Accounting Policies and Estimates | 9 Months Ended |
Sep. 29, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Pronouncements Adopted and Critical Accounting Policies and Estimates | Note 2 – Accounting Pronouncements Adopted and Critical Accounting Policies and Estimates Accounting Pronouncements Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers”, Accounting Standards Codification (“ASC”) 606 (“Topic 606”). We adopted the provisions of this standard as of December 31, 2017, on a modified retrospective basis. We applied the requirements of the new standard on ly to contracts that were not completed as of the adoption date. We recorded an immaterial adjustment to the opening balance of retained earnings for the adoption of Topic 606. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The impact of the new standard on our consolidated statements of income, which we expect to be immaterial on an ongoing basis, is primarily related to software sales and sales commissions and is described as follows: Software Sales For software licenses sold together with post contract support (PCS), we previously deferred software revenue if it did not have vendor-specific evidence of fair value of the PCS. Under Topic 606, the concept of ven dor-specific objective evidence is eliminated and there are no cases where revenue is deferred due to a lack of standalone selling price. In addition, we previously recognized revenue from term licenses ratably over the contract term. Under Topic 606, su ch licenses represent a right to use intellectual property and therefore require upfront recognition. Furthermore, certain upfront fees related to service arrangements were previously deferred and recognized over the estimated customer life. Under Topic 606, the period over which we will recognize these fees is reduced, as the upfront fee represents additional contract price which will be allocated to the performance obligations in the contract and recognized as those performance obligations are satisfied , rather than being amortized over the estimated customer life. Based on the aforementioned changes, such software revenue will be recognized sooner than under the previous revenue recognition standard. Sales Commissions We previously recognized sales commissions as an expense when incurred. Under Topic 606, we defer such sales commissions as costs to obtain a contract when the costs are incremental and expected to be recovered. Deferred sales commissions are amortized over the estimated customer rela tionship period. We apply the practical expedient to expense, as incurred, commissions with an expected amortization period of one year or less. The impact of adoption on our consolidated balance sheet and income statement was as follows: As of September 29, 2018 Balances Effect of As Without Adoption Change Balance Sheet Reported of Topic 606 Increase/(Decrease) Assets: Prepaid expenses and other $ 513,717 $ 514,043 $ (326) Investments and other 518,425 516,409 2,016 Liabilities: Accrued expenses -Taxes $ 180,163 $ 179,748 $ 415 Accrued expenses - Other 496,959 499,603 (2,644) Deferred income taxes 45,947 45,340 607 Other liabilities (long-term) 415,045 415,594 (549) Stockholders' equity: Retained earnings $ 3,191,260 $ 3,187,304 $ 3,956 Accumulated other comprehensive loss $ (219,649) $ (219,554) $ (95) Three Months Ended Nine Months Ended September 29, 2018 September 29, 2018 Balances Balances Without Adoption Effect of Change Without Adoption Effect of Change Statement of Income As Reported of Topic 606 Increase/ (Decrease) As Reported of Topic 606 Increase/ (Decrease) Net sales: Dental $ 1,514,538 $ 1,514,538 $ - $ 4,675,212 $ 4,675,212 $ - Animal Health 899,295 899,295 - 2,805,031 2,805,031 - Medical 721,942 721,942 - 1,976,367 1,976,367 - Total healthcare distribution $ 3,135,775 $ 3,135,775 $ - $ 9,456,610 $ 9,456,610 $ - Technology and value-added services 143,903 143,420 483 370,183 369,459 724 Total $ 3,279,678 $ 3,279,195 $ 483 $ 9,826,793 $ 9,826,069 $ 724 Costs and expenses: Cost of sales 2,391,118 2,391,118 - 7,141,569 7,141,569 - Selling, general and administrative 722,634 722,842 (208) 2,111,807 2,112,058 (251) Income taxes (29,401) (29,265) 136 (124,084) (123,861) 223 Net income $ 126,976 $ 126,421 $ 555 $ 423,116 $ 422,364 $ 752 Additional information related to Topic 606 can be found below in “Critical Accounting Policies and Estimates” as well as in Note 3. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes, Intra-Entity Transfers of Assets Other Than Inventory” (“Topic 740”). Topic 740 requires companies to recognize the income tax effects of intercompany sales and transfers of assets other than inventory in the period which the transfer occurs. Previously, companies were required to defer the income tax effec ts on intercompany transfer of assets until the asset has been sold to an outside party. On December 31, 2017, we adopted the guidance, which is effective for annual periods and related interim periods beginning after December 15, 2017 on a modified retros pective basis. As a result of the adoption of Topic 740, we have recorded an immaterial adjustment to the opening balance of retained earnings and a reduction to prepaid assets. In May 2017, the FASB issued ASU No. 2017-09, “Compensation-Stock Compensat ion (Topic 718), Scope of Modification Accounting”. ASU No. 2017-09 provides guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting. ASU 2017-09 requires modificat ion accounting if the fair value, vesting conditions, or equity or liability classification of the award is not the same immediately before and after a change to the terms and conditions of the award. ASU 2017-09 was adopted on a prospective basis as of D ecember 31, 2017 and did not have a material impact on the consolidated financial statements or disclosures as of September 29 , 2018. The cumulative effect of the changes made to our consolidated balance sheet as of December 31, 2017 related to Topic 606 and T opic 740 were as follows: Balance at December 30, Adjustments Adjustments Balance at 2017 Due To Due To December 31, (As Reported) Topic 606 Topic 740 2017 Assets: Prepaid expenses and other $ 454,752 $ 119 $ (610) $ 454,261 Investments and other 432,002 1,133 - 433,135 Liabilities: Accrued expenses - Taxes $ 188,873 $ 437 $ - $ 189,310 Accrued expenses - Other 455,780 (2,614) - 453,166 Deferred income taxes 50,431 471 - 50,902 Other liabilities (long-term) 420,285 (246) - 420,039 Stockholders' equity: Retained earnings $ 2,940,029 $ 3,204 $ (610) $ 2,942,623 Critical Accounting Policies and Estimates There have been no material changes in our critical accounting policies and estimates from those disclosed in Item 7 of our Annual Report on Form 10-K for the year ended December 30, 2017 (the “2017 Form 10-K”) , except as follows: Revenue Recognition On December 31, 2017, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of the adoption date. Results for reporting periods beginning after Decembe r 30, 2017 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for those periods. Our revenue recognition accounting policies applied prior to adoption of Topic 606 are outlined in the financial statements in the 2017 Form 10-K. The disclosures included herein reflect our accounting policies under Topic 606. We generate revenue from the sale of dental, animal health and medical consumable products, as well as equipm ent, software products and services and other sources. Provisions for discounts, rebates to customers, customer returns and other contra revenue adjustments are included in the transaction price at contract inception by estimating the most likely amount ba sed upon historical data and estimates and are provided for in the period in which the related sales are recognized. Revenue derived from the sale of consumable products is recognized at a point in time when control transfers to the customer. Such sales typically entail high-volume, low-dollar orders shipped using third-party common carriers. We believe that the shipment date is the most appropriate point in time indicating control has transferred to the customer because we have no post-shipment obligations and this is when legal title and risks and rewards of ownership transfer to the customer and the point at which we have an enforceable right to payment. Revenue derived from the sale of equipment is recognized when control transfers to the customer. This occurs when the equipment is delivered. Such sales typically entail scheduled deliveries of large equipment primarily by equipment service technicians. Some equipment sales require minimal installation, which is ty pically completed at the time of delivery. Our product generally carries standard warranty terms provided by the manufacturer, however, in instances where we provide warranty labor services, the warranty costs are accrued in accordance with ASC 460 “Guaran tees”. Revenue derived from the sale of software products is recognized when products are shipped to customers or made available electronically. Such software is generally installed by customers and does not require extensive training due to the nature of its design. Revenue derived from post-contract customer support for software, including annual support and/or training, is generally recognized over time using time elapsed as the input method that best depicts the transfer of control to the customer. Revenue derived from other sources, including freight charges, equipment repairs and financial services, is recognized when the related product revenue is recognized or when the services are provided. We apply the practical expedient to treat shipping a nd handling activities performed after the customer obtains control as fulfillment activities, rather than a separate performance obligation in the contract . Sales, value- add and other taxes we collect concurrent with revenue-producing activities are excl uded from revenue. Certain of our revenue is derived from bundled arrangements that include multiple distinct performance obligations which are accounted for separately. When we sell software products together with related services (i.e., training and technical support), we allocate revenue to soft ware using the residual method, using an estimate of the standalone selling price to estimate the fair value of the undelivered elements. There are no cases where revenue is deferred due to a lack of a standalone selling price. Bundled arrangements that i nclude elements that are not considered software consist primarily of equipment and the related installation service. We allocate revenue for such arrangements based on the relative selling prices of the goods or services. If an observable selling price i s not available (i.e., we do not sell the goods or services separately), we use one of the following techniques to estimate the standalone selling price: adjusted market approach; cost-plus approach; or the residual method. There is no specific hierarchy for the use of these methods, but the estimated selling price reflects our best estimate of what the selling prices of each deliverable would be if it were sold regularly on a standalone basis taking into consideration the cost structure of our business, technical skill required, customer location and other market conditions. Accounts Receivable The carrying amount of accounts receivable is reduced by a valuation allowance that reflects our best estimate of the amounts that will not be collected. In addition to reviewing delinquent accounts receivable, we consider many factors in estimating our reserve, including historical data, experience, customer types, credit worthiness and economic trends. From time to time, we adjust our assumptions for anticip ated changes in any of these or other factors expected to affect collectability. Contract Assets Contract assets include amounts related to any conditional right to consideration for work completed but not billed as of the reporting date and generally re present amounts owed to us by customers, but not yet billed. Contract assets are transferred to accounts receivable when the right becomes unconditional. Current contract assets are included in Prepaid expenses and other and the non-current contract asset s are included in Investments and other within our consolidated balance sheet. Contract Liabilities Contract liabilities are comprised of advance payments and deferred revenue amounts. Contract liabilities are transferred to revenue once the performance obligation has been satisfied. Current contract liabilities are included in Accrued expenses: Other and the non-current contract liabilities are included in Other liabilities within our consolidated balance sheet. Deferred Commissions Sales commissions earned by our sales force that relate to long term arrangements are capitalized as costs to obtain a contract when the costs incurred are incremental and are expected to be recovered. Deferred sales commissions are amortized over the estimated customer rel ationship period. We apply the practical expedient related to the capitalization of incremental costs of obtaining a contract, and recognize such costs as an expense when incurred if the amortization period of the assets that we would have recognized is o ne year or less. Sales Returns Sales returns are recognized as a reduction of revenue by the amount of expected returns and are recorded as refund liability within current liabilities. We estimate the amount of revenue expected to be reversed to calculat e the sales return liability based on historical data for specific products, adjusted as necessary for new products. The allowance for returns is presented gross as a refund liability and we record an inventory asset (and a corresponding adjustment to cos t of sales) for any goods or services that we expect to be returned. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 29, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Note 3 – Revenue from Contracts with Customers Revenue (Net sales) is recognized in accordance with the policies discussed in Note 2 - Accounting Pronouncements Adopted and Critical Accounting Policies and Estimates. Disaggregation of Net sales The following table disaggregates our Net sales by reportable segment and geographic area: Three Months Ended Nine Months Ended September 29, 2018 September 29, 2018 North America International Global North America International Global Net sales: Health care distribution Dental $ 951,412 $ 563,126 $ 1,514,538 $ 2,831,062 $ 1,844,150 $ 4,675,212 Animal health 460,838 438,457 899,295 1,425,273 1,379,758 2,805,031 Medical 702,758 19,184 721,942 1,915,944 60,423 1,976,367 Total health care distribution 2,115,008 1,020,767 3,135,775 6,172,279 3,284,331 9,456,610 Technology and value-added services 123,823 20,080 143,903 307,826 62,357 370,183 Total $ 2,238,831 $ 1,040,847 $ 3,279,678 $ 6,480,105 $ 3,346,688 $ 9,826,793 Contract Balances Contract balances represent amounts presented in our consolidated balance sheet when either we have transferred goods or services to the customer or the customer has paid consideration to us under the contract. These contract balances include accounts receivable, contract assets and contract liabilities. The contract assets primarily relate to our rights to consideration for work completed but not billed at the reporting date on contracts. The contract assets are transferred to receiva bles when the rights become unconditional. The contract assets primarily relate to our bundled arrangements for the sale of equipment and consumables and sales of term software licenses. Current and non-current contract asset balances as of September 29, 2 018 and December 31, 2017 were not material. The contract liabilities primarily relate to advance payments from customers and upfront payments for service arrangements provided over time. At December 31, 2017, the current portion of contract liabilities o f $ 85.7 million was reported in Accrued expenses: Other, and $ 5.2 million related to non-current contract liabilities were reported in Other liabilities. During the nine months ended September 29, 2018, we recognized $ 69.7 million of the amount previously deferred at December 31, 2017. At September 29, 2018, the current and non-current portion of contract liabilities were $ 73.7 million and $ 5.5 million, respectively. |
Segment Data
Segment Data | 9 Months Ended |
Sep. 29, 2018 | |
Segment Reporting [Abstract] | |
Segment Data | Note 4 – 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, animal health and medical operating segments. This segment distributes consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and ge neric 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 animal health group serves animal health practices and clinics. Our global medical group serves office-based medical practitioners, ambulatory surgery centers, other alternate-care settings and other institutions. Our global dental, animal health and medical groups s erve practitioners in 34 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 practic e management software systems for dental and medical practitioners and animal health clinics. Our value-added practice solutions include financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting an d other services. The following tables present information about our reportable and operating segments: Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Net Sales: Health care distribution (1): Dental $ 1,514,538 $ 1,478,730 $ 4,675,212 $ 4,372,055 Animal health 899,295 882,580 2,805,031 2,586,850 Medical 721,942 690,761 1,976,367 1,861,074 Total health care distribution 3,135,775 3,052,071 9,456,610 8,819,979 Technology and value-added services (2) 143,903 109,012 370,183 323,510 Total $ 3,279,678 $ 3,161,083 $ 9,826,793 $ 9,143,489 (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. Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Operating Income: Health care distribution $ 127,990 $ 181,612 $ 471,543 $ 521,278 Technology and value-added services 37,936 31,936 101,874 96,900 Total $ 165,926 $ 213,548 $ 573,417 $ 618,178 |
Debt
Debt | 9 Months Ended |
Sep. 29, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Note 5 – Debt Bank Credit Line s O n April 18, 2017 , we entered into a new $ 750 million revolving credit agreement (the “Credit Agreement”) . This facility, which matures in April 2022 , replaced our $ 500 million revolving credit facility, which was scheduled to mature in September 2019 . The interest rate is based on the USD LIBOR plus a spread based on our leverage ratio at the end of each financial reporting quarter. On June 29, 2018, we amended the Cr edit A greement to, among other things, (i) permit the consummation of the spin-o ff of our Animal Health business (the “Spin-off”) (S ee Note 9), (ii) provide for swing - line commitments in the amount of $ 75 million , and (iii) provide for the designation of s ubsidiary borrowers under the facility. The Credit Agreement provides, among other things, that we are required to maintain maximum leverage ratios, and contains customary representations, warranties and affirmative covenants. The Credit Agreement also c ontains customary negative covenants, subject to negotiated exceptions on liens, indebtedness, significant corporate changes (including mergers), dispositions and certain restrictive agreements. As of September 29, 2018 and December 30, 2017 , the bor rowings under this revolving credit facility were $ 350.0 million and $ 320.0 million, respectively. As of September 29, 2018 and December 30, 2017 , there were $ 11.2 m illion and $ 11.3 million of letters of credit , respectively, provided to third parties under the credit facility . As of September 29, 2018 and December 30, 2017 , we had various other short-term bank credit lines available, of which $ 394.9 m ill ion and $ 421.7 million, respectively, were outstanding. At September 29, 2018 and December 30, 2017 , borrowings under all of our credit lines had a weighted average interest rate of 3.06 % and 2.27 %, respectively. 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 expirati on 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 to 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. On June 29, 2018, we amended and restated the above p rivate placement facilities to, among other things, (i) permit the consummation of the Spin-off and (ii) provide for the issuance of notes in Euros, British Pounds and Australian Dollars, in addition to U.S. Dollars. The agreements provide, among other th ings, 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 29, 2018 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 (1) 28,571 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 (439) $ 628,132 (1) Annual repayments of approximately $7.1 million for this borrowing commenced on January 20, 2016. Committed Loan Associated with Animal Health Spin-off On May 21, 2018 , we obtained a $ 400 million committed loan which matures on the earlier of (i) March 31, 2019 and (i i) the consummation of the 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 September 29, 2018 , the balance outstanding on this loa n was $ 400 million and is included within the “Bank credit lines” caption within our consolidated balance sheet. At September 29, 2018 , the interest rate on this loan was 3.125 %. U.S. Trade Accounts Receivab le 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. On June 1, 2016, we extended the expiration date of this facility agreement to April 29, 2019 and increased the purchase limit under the facility from $ 300 million to $ 350 million . On July 6, 2017, we extended the expiration date of this facility agreement to April 29, 2020 . The borrowings outstanding under this securitization facility were $ 350 million and $ 350 million as of September 29, 2018 and December 30, 2017 , respectively . At September 29, 2018 , the interest rate on borrowings under this facility was based on the asset-backed commercial paper rate of 2.31 % plus 0.75 % , for a combined rate of 3.06 %. At December 30, 2017 , the interest rate on borrowings under this facility was based on the asset-b acked commercial paper rate of 1.53 % plus 0.75 %, for a combined rate of 2.28 %. 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. Long-term debt Long-term debt consisted of the following: September 29, December 30, 2018 2017 Private placement facilities $ 628,132 $ 535,295 U.S. trade accounts receivable securitization 350,000 350,000 Various collateralized and uncollateralized loans payable with interest in varying installments through 2022 at interest rates ranging from 2.61% to 4.73% at September 29, 2018 and ranging from 2.56% to 12.90% at December 30, 2017 29,719 34,027 Capital lease obligations payable through 2029 with interest rates ranging from 0.07% to 19.79% at September 29, 2018 and ranging from 0.84% to 19.79% at December 30, 2017 4,946 5,093 Total 1,012,797 924,415 Less current maturities (12,482) (16,659) Total long-term debt $ 1,000,315 $ 907,756 |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 9 Months Ended |
Sep. 29, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Noncontrolling Interests | Note 6 – Redeemable Noncontrolling Interests Some minority s tockholders 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 29, 2018 and the year ended December 30, 2017 are presented in the following table: September 29, December 30, 2018 2017 Balance, beginning of period $ 832,138 $ 607,636 Decrease in redeemable noncontrolling interests due to redemptions (666,363) (48,669) Increase in redeemable noncontrolling interests due to business acquisitions 10,058 78,939 Net income attributable to redeemable noncontrolling interests 17,019 52,203 Dividends declared (16,293) (28,161) Effect of foreign currency translation gain (loss) attributable to redeemable noncontrolling interests (13,752) 7,461 Change in fair value of redeemable securities 119,695 162,729 Balance, end of period $ 282,502 $ 832,138 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 no t impact the calculation of earnings per share. |
Comprehensive Income
Comprehensive Income | 9 Months Ended |
Sep. 29, 2018 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |
Comprehensive Income | Note 7 – 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. Our comprehensive income is primarily comprised of net income, foreign currency translation gain (loss), unrealized gain (loss) on foreign currency hedging activities, unrealized investment loss and pension adjustment gain (loss). The following table summarizes our Accumu lated other comprehensive loss , net of applicable taxes as of: September 29, December 30, 2018 2017 Attributable to Redeemable noncontrolling interests: Foreign currency translation adjustment $ (19,316) $ (5,564) Attributable to noncontrolling interests: Foreign currency translation adjustment $ (553) $ 539 Attributable to Henry Schein, Inc.: Foreign currency translation loss $ (203,749) $ (112,439) Unrealized loss from foreign currency hedging activities (108) (782) Unrealized investment loss (5) (3) Pension adjustment loss (15,787) (16,843) Accumulated other comprehensive loss $ (219,649) $ (130,067) Total Accumulated other comprehensive loss $ (239,518) $ (135,092) The following table summarizes the components of comprehensive income , net of applicable taxes as follows : Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Net income $ 126,976 $ 150,948 $ 423,116 $ 450,783 Foreign currency translation gain (loss) (10,582) 58,916 (106,154) 173,166 Tax effect - - - - Foreign currency translation gain (loss) (10,582) 58,916 (106,154) 173,166 Unrealized gain (loss) from foreign currency hedging activities (406) 26 1,079 (1,278) Tax effect 27 (60) (405) 4 Unrealized gain (loss) from foreign currency hedging activities (379) (34) 674 (1,274) Unrealized investment loss (1) (3) (2) (3) Tax effect - 1 - 1 Unrealized investment loss (1) (2) (2) (2) Pension adjustment gain (loss) 139 (529) 1,449 (1,571) Tax effect (23) 176 (393) 508 Pension adjustment gain (loss) 116 (353) 1,056 (1,063) Comprehensive income $ 116,130 $ 209,475 $ 318,690 $ 621,610 During the three months ended September 29, 2018 and September 30, 2017 , we recognized , as a component of our comprehensive income , a foreign currency translation gain (loss) of $ ( 10.6 ) million and $ 58.9 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 29, 2018 and September 30, 2017 , we recognized , as a component of our comprehensive i ncome , a foreign currency translation gain (loss) of $ (106.2) million and $ 173.2 million, respectively, due to changes in foreign exchange rates from the beginning of the period to the end of the period. Our financial sta tements 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. The foreign currency translation gain (loss) during the three a nd nine months ended September 29, 2018 and September 30, 2017 was impacted by changes in foreign currency exchange rates as follows: Foreign Currency Foreign Currency Translation Translation Gain (Loss) Gain for the Three for the Three Months Ended FX Rate into USD Months Ended FX Rate into USD September 29, September 29, June 30, September 30, September 30, July 1, Currency 2018 2018 2018 2017 2017 2017 Euro $ (144) 1.16 1.16 $ 30,373 1.18 1.14 British Pound (1,804) 1.31 1.31 9,168 1.34 1.30 Australian Dollar (5,507) 0.72 0.74 3,767 0.78 0.77 Canadian Dollar 1,488 0.77 0.76 5,640 0.80 0.77 Polish Zloty 1,253 0.27 0.27 940 0.27 0.27 Swiss Franc 266 1.02 1.00 407 1.03 1.04 Brazilian Real (6,001) 0.25 0.26 6,400 0.32 0.30 All other currencies (133) 2,221 Total $ (10,582) $ 58,916 Foreign Currency Foreign Currency Translation Translation Loss Gain for the Nine for the Nine Months Ended FX Rate into USD Months Ended FX Rate into USD September 29, September 29, December 30, September 30, September 30, December 26, Currency 2018 2018 2017 2017 2017 2016 Euro $ (27,896) 1.16 1.20 $ 95,715 1.18 1.05 British Pound (11,886) 1.31 1.35 24,712 1.34 1.23 Australian Dollar (21,227) 0.72 0.78 16,220 0.78 0.72 Canadian Dollar (4,366) 0.77 0.80 9,820 0.80 0.74 Polish Zloty (3,907) 0.27 0.29 7,891 0.27 0.24 Swiss Franc (1,741) 1.02 1.03 5,305 1.03 0.98 Brazilian Real (32,701) 0.25 0.30 4,136 0.32 0.31 All other currencies (2,430) 9,367 Total $ (106,154) $ 173,166 The following table summarizes our total comprehensive income, net of applicable taxes , as follows: Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Comprehensive income attributable to Henry Schein, Inc. $ 113,221 $ 193,085 $ 313,326 $ 577,403 Comprehensive income attributable to noncontrolling interests 2,478 372 2,097 848 Comprehensive income attributable to Redeemable noncontrolling interests 431 16,018 3,267 43,359 Comprehensive income $ 116,130 $ 209,475 $ 318,690 $ 621,610 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 29, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 8 – 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 assumption s 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). T he 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 29, 2018 and December 30, 2017 was estimated at $ 2,157.7 million and $ 1,666.1 million, respectively. Factors that we considered when estimating the fair value of our debt include market conditions, prepayment and make-whole provisions, liquidity levels in the private placement market, variability in pricing from multiple lenders and term of debt. Derivative contracts Derivative contracts are valued using quoted market prices and signifi cant 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 intercom pany 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 marke t 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 s tockholder s 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 impacte d. 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 “flo or” 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 impac t 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 6. 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 29, 2018 and December 30, 2017 : September 29, 2018 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 18,135 $ - $ 18,135 Total assets $ - $ 18,135 $ - $ 18,135 Liabilities: Derivative contracts $ - $ 2,824 $ - $ 2,824 Total liabilities $ - $ 2,824 $ - $ 2,824 Redeemable noncontrolling interests $ - $ - $ 282,502 $ 282,502 *CS *CE December 30, 2017 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 11,799 $ - $ 11,799 Total assets $ - $ 11,799 $ - $ 11,799 Liabilities: Derivative contracts $ - $ 2,089 $ - $ 2,089 Total liabilities $ - $ 2,089 $ - $ 2,089 Redeemable noncontrolling interests $ - $ - $ 832,138 $ 832,138 |
Business Acquisitions and Plann
Business Acquisitions and Planned Divestiture | 9 Months Ended |
Sep. 29, 2018 | |
Business Combinations [Abstract] | |
Business Acquisitions | N ote 9 – Business Acquisitions and Planned Divestiture Acquisitions The operating results of all acquisitions are reflected in our financial statements from their respective acquisition dates. On July 1, 2018, we closed on a joint venture with Internet Brands, a provider of web presence and online marketing software, to create a newly formed entity, Henry Schein One, LLC. The joint venture includes Henry Schein Practice Solutions products and services, as well as Henry Schein’s international de ntal practice management systems and the dental businesses of Internet Brands. We own 74 % of the joint venture and Internet Brands owns the remaining 26 % minority interest. Beginning with the second anniversary of the effective date of the formation of t he joint venture, Henry Schein One will issue a fixed number of additional interests to Internet Brands through the fifth anniversary of the effective date, thereby increasing Internet Brands’ ownership by approximately 7.6 %. Internet Brands will also be entitled to receive a fixed number of additional interests, in the aggregate up to approximately 1.6 % of the joint venture’s ownership, if certain operating targets are met by the joint venture in its fourth, fifth and sixth operating years. Senior manage ment from Henry Schein and Internet Brands serve on the board of Henry Schein One. The combined entity, which serves markets globally, had pro-forma 2017 sales of approximately $ 400 million, of which approximately $ 100 million originated at Internet Brand s. As a result of this acquisition, $ 412.8 million of initial goodwill resulted which reflects the excess of our purchase price over the fair value of the net assets acquired. The initial goodwill recorded as part of the acquisition primarily reflects th e value of future synergies. We allocated all of the goodwill to our Technology and value-added services reporting segment. None of the goodwill recognized is deductible for income tax purposes, and as such, no deferred taxes have been recorded related t o goodwill. Concurrent with the formation of Henry Schein One, LLC, we entered into a separate agreement with Internet Brands whereby (1) beginning July 1, 2023, Internet Brands wi ll have the right to require Henry Schein to purchase all or a portion of I nternet Brands ownership interests in Henry Schein On e, LLC for fair market value , and (2) beginning July 1, 2028, or earlier if certain events occur, Henry Schein wi ll have the right to require Internet Brands to sell all or a portion of its ownership in terests in Henry Schein One, LLC t o Henry Schein for fair market value. We did not complete any other material acquisitions during the nine months ended September 29, 2018 . 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 accrua l amounts are recorded in our consolidated statements of income. For the nine months ended September 29, 2018 and September 30, 2017 , there were no material adjustments recorded in our consolidated statement of income relating to changes in estimated contingent purchase price liabilities. Planned Divestiture On April 23, 2018, we announced that we entered into a definitive agreement with HS Spinco , Inc., a direct, wholly owned subsidiary of Henry Schein (“ Spinco ”), and Direct Vet Marketing, Inc. (d/b/a Vets First Choice) (“DVM”) to create a newly formed company, Vets First Corp. The transaction is intended to be tax-free to Henry Schein stockholders for U.S. tax purposes. As part of this transaction, subject to the terms and conditions set forth in certain definitive agreements, we will contribute the assets and entities comprising our animal health business to Spinco . In exchange for the contribution to Spinco of our animal health business, Spinco will issue to Henry Schein shares of common stock, par value $ 0.01 per share, of Spinco (the “ Spinco Common Stock”). We will subsequently distribute to our stockholders all of the shares of Spinco Common Stock held by us (the “Dist ribution”). Immediately after the Distribution, HS Merger Sub, Inc., a wholly owned subsidiary of Spinco , will merge with and into DVM, with DVM surviving the merger as a wholly owned subsidiary of Spinco (with such subsidiary to be renamed Vets First Cor p.). Upon consummation of these transactions, on a fully-diluted basis, the stockholders of Henry Schein and, if applicable, certain third parties and minority holders of our animal health subsidiaries that are contributed to Spinco in exchange for their interests in these subsidiaries, are expected to own approximately 63 % of the outstanding shares of Spinco Common Stock, and the then former stockholders of DVM are expected to own approximately 37 % of the outstanding shares of Spinco Common Stock, subjec t to certain adjustments. Henry Schein will nominate six individuals to the Vets First Corp. Board of Directors and DVM will nominate five individuals to the Vets First Corp. Board of Directors. Additionally, we expect to receive a cash dividend between $ 1.0 billion and $ 1.25 billion on a tax-free basis as part of the transaction. We plan to use the proceeds for general corporate purposes, including share repurchases and repayment of indebtedness. The transaction has been unanimously approved by our Boa rd of Directors and the Board of Directors of DVM. We are working toward closing the transaction by the end of 2018 or early 2019. The transaction is subject to customary closing conditions, including customary regulatory approvals, the receipt of tax op inions from counsel with respect to the transaction and the effectiveness of a registration statement on Form S-1/S-4 to be filed with the Securities and Exchange Commission (the “SEC”) in connection with th e transaction. |
Plans of Restructuring
Plans of Restructuring | 9 Months Ended |
Sep. 29, 2018 | |
Restructuring and Related Activities [Abstract] | |
Plans of Restructuring | N ote 10 – Plans of Restructuring On July 9, 2018, we committed to an initiative to rationalize our operations and provide expense efficiencies. These actions will allow us to execute on our plan to reduce our cost structure and fund new initiatives that will drive future growth under our 2018 to 2020 strategic plan. This initiative is expected to include the elimination of approximately 2 % to 3 % of our workforce and the closing of certain facilities. The total 2018 costs associated with the actions to complete this restructuring are expected to be in the range of $ 45 million to $ 55 million pre-tax, or $ 0.22 to $ 0.27 per diluted share, consisting of $ 40 million to $ 45 million in employee severance pay and benefits and $ 5 million to $ 1 0 million in fa cility costs, representing primarily lease termination and other facility closure related costs. During the three and nine months ended September 29, 2018 , we recorded restructuring costs of $ 8.9 millio n and $ 27.5 million, respectively, primarily for certain redundancies. The costs associated with these restructuring activities are included in a separate line item, “Restructuring costs” within our consolidated statements of income . The following table shows the amounts expensed and paid for restructuring costs that were incurred during the nine months ended September 29, 2018 and during our 2017 fiscal year and the remaining accrued balance of restructuring costs a s of September 29, 2018 , which is included in Accrued expenses: Other and Other liabilities within our consolidated balance sheet : Facility Severance Closing Costs Costs Other Total Balance, December 31, 2016 $ 22,354 $ 2,454 $ 895 $ 25,703 Payments and other adjustments (19,136) (1,139) (871) (21,146) Balance, December 30, 2017 $ 3,218 $ 1,315 $ 24 $ 4,557 Provision 26,474 757 280 27,511 Payments and other adjustments (16,908) (1,441) (206) (18,555) Balance, September 29, 2018 $ 12,784 $ 631 $ 98 $ 13,513 The following table shows, by reportable segment, the amounts expensed and paid for restructuring costs that were incurred during the nine months ended September 29, 2018 and the 2017 fiscal year and the remaining accrued balance of restructuring costs as of September 29, 2018 : Technology and Health Care Value-Added Distribution Services Total Balance, December 31, 2016 $ 25,238 $ 465 $ 25,703 Payments and other adjustments (20,681) (465) (21,146) Balance, December 30, 2017 $ 4,557 $ - $ 4,557 Provision 25,625 1,886 27,511 Payments and other adjustments (18,065) (490) (18,555) Balance, September 29, 2018 $ 12,117 $ 1,396 $ 13,513 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 29, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 11 – 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 t hey 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 29, September 30, September 29, September 30, 2018 2017 2018 2017 Basic 152,533 156,914 152,970 157,386 Effect of dilutive securities: Stock options, restricted stock and restricted stock units 1,081 1,357 1,012 1,480 Diluted 153,614 158,271 153,982 158,866 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12 – Income Taxes Our effective tax rate was 23.3 % for the nine months ended September 29, 2018 and 26.3 % for the nine months ended September 30, 2017 . The difference between our effective tax rate and the federal statutory tax rate for the nine months ended September 29, 2018 primarily relates to the Tax Cuts and Jobs Act (“the Tax Act”), as well as state and foreign income taxes and interest expense. The difference between our effective t ax rate and the federal statutory tax rate for the nine months ended September 30, 2017 primarily relates to the adoption of ASU No. 2016-09, “Stock Compensation” (Topic 718) (“ASU 2016-09”) in the first quarter of 2017, as well as state and foreign income taxes and interest expense. Under ASU 2016-09, all excess tax benefits and tax deficiencies resulting from the difference between the deduction for tax purposes and the stock-based compensation cost recognized for financial reporting purposes are includ ed as a component of income tax expense beginning January 1, 2017. Prior to the implementation of ASU 2016-09, excess tax benefits were recorded as a component of Additional paid in capital and tax deficiencies were recognized either as an offset to accum ulated excess tax benefits or in the income statement if there were no accumulated excess tax benefits. For the nine months ended September 29, 2018 and September 30, 2017, the application of ASU No. 2016-09 reduced income tax expense by approximately $ 1. 0 million and $ 19.5 million, respectively. On December 22, 2017, the U.S. government passed the Tax Act . The Tax Act is comprehensive tax legislation effective January 1, 2018 that implements complex changes to the U.S . tax code including, but not limite d 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. The Tax Act also includes provisio ns to tax global intangible low-taxed income (“GILTI”), a beneficial tax rate for Foreign 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) inte rest limitation (Interest Limitation). We are 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 c an 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 have elected to recognize th e tax on GILTI as a period expense in the period the tax is incurred. Under Topic 740, we have reasonably estimated the impact of each provision of the Tax Act on our effective tax rate. We have recorded an estimate for the GILTI provision in our effecti ve tax rate for the nine months ended September 29, 2018. 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 29, 2018 because we currently estimate that t hese provisions of the Tax Act will not apply to us or will have an immaterial impact in 2018. Due to the complexity of the new GILTI tax rules and uncertainty of the application of the foreign tax credit rules in relation to GILTI, we have calculated GIL TI based upon the law as we currently interpret it, and subsequent changes in law could cause us to revise our calculations in a later period. Due to the complexities of the Tax Act, the Staff of the SEC issued Staff Accounting Bulletin No. 118 (“SAB 1 18”) that requires us to record a provisional amount for any income tax effects of the Tax Act in accordance with Topic 740, to the extent that a reasonable estimate can be made. SAB 118 allows for a measurement period of up to one year after the enactmen t date of the Tax Act to finalize the recording of the related tax impacts. In the fourth quarter of 2017, we recorded provisional amounts for income tax effects of the Tax Act that we could reasonably estimate. This included the one-time transition tax that we estimated to be $ 140.0 million and a net deferred tax expense of $ 3.0 million attributable to the revaluation of deferred tax assets and liabilities due to the lower enacted federal income tax rate of 21%. For the nine months ended September 29, 2 018, we recorded a provisional benefit of $ 10 million related to transition tax adjustments and a net deferred tax benefit of $ 1.5 million attributable to the revaluation of deferred tax assets and liabilities. We will continue to refine provisional amount s for the impacts of the Tax Act as anticipated guidance, clarifying certain aspects of the Tax Act, becomes available. We will record any adjustments in the fourth quarter of 2018 when our analysis is complete, although we do not expect any material adju stments. The total amount of unrecognized tax benefits as of September 29, 2018 was approximately $ 104.6 million, of which $ 83.0 million would affect the effective tax rate if recognized. It is expected that the amount of unrecognized tax benefits will change in the next 12 months; however, we do not expect the change to have a material impact on our consolidated financial statements. The total amounts of interest and penalties, which are classified as a component of Other liabilities within our consol idated balance sheets, were approximately $ 15.3 million and $ 0.0 , respectively, as of September 29, 2018. In 2016, we reached a settlement on a portion of the IRS audit of tax years 2012 and 2013, and 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. During the quarter ended June 30, 2017, we filed a protest with the Appellate Division regarding the remaining open audit issues for the years 2012 and 2013. We had an initial Appeals Conference during the third quarter of 2018. In addition, we are working on finalizing our submission for an A dvanced Pricing Agreement pursuant to which Henry Schein, Inc. and the IRS w ould agree on an appropriate transfer pricing methodology for future tax years. We do not expect this to have a material effect on our consolidated financial position, liquidity or results of operations. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 29, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Note 13 – 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 . 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 effectivenes s 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. 29, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | N ote 14 – Stock-Based Compensation Our accompanying consolidated statements of income reflect pre-tax share-based compensation expense of $ 10.9 million ($ 8.7 million after-tax) and $ 34.2 million ($ 26.2 million after-tax) for the three and nine months ended September 29, 2018 , respectively, and $ 12.6 million ($ 9.0 million after-tax) and $ 32.0 million ($ 23.6 million af ter-tax) for the three and nine months ended September 30, 2017 , respectively. Stock-based compensation represents the cost related to stock-based awards granted to employees and non-employee directors. We measure stock-based compensation a t 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 i n 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-Employe e 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 r estricted 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, c ommon 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 cliff vesting, except for grants made under t he 2015 Non-Employee Director Stock Incentive Plan, which are primarily 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- year cliff vesting). 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 w ill 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, in cluding, 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 excha nge fluctuations. Over the performance period, the number of shares of common stock that will ultimately vest and be issued and the related compensation expense is adjusted upward or downward based upon our estimation of achieving such performance targets . The ultimate number of shares delivered to recipients and the related compensation cost recognized as an expense will be based on our actual performance metrics as defined under the Plans. Total unrecognized compensation cost related to non-vested awards as of September 29, 2018 was $ 91.4 million, which is expected to be recognized over a weighted-average period of approximately 2.2 y ears. The following table summarizes stock option activity under the Plans during the nine months ended September 29, 2018 : Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Life in Intrinsic Shares Price Years Value Outstanding at beginning of period 155 $ 29.65 Granted - - Exercised (154) 29.81 Forfeited - - Outstanding at end of period 1 $ 17.22 0.4 $ 136 Options exercisable at end of period 1 $ 17.22 0.4 $ 136 The following tables summarize the activity of our non-vested restricted stock/units for the nine months ended September 29, 2018 : Time-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,233 $ 70.28 Granted 363 65.88 Vested (311) 62.96 Forfeited (78) 77.96 Outstanding at end of period 1,207 $ 70.34 $ 85.03 Performance-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,226 $ 60.81 Granted 397 68.76 Vested (426) 71.33 Forfeited (72) 77.39 Outstanding at end of period 1,125 $ 55.75 $ 85.03 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 29, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Note 15 – Supplemental Cash Flow Information Cash paid for interest and income taxes was : Nine Months Ended September 29, September 30, 2018 2017 Interest $ 52,108 $ 33,640 Income taxes 207,474 179,445 During the nine months ended September 29, 2018 and September 30, 2017 , we had $ 1.1 million and $( 1.3 ) million of non-cash net unrealized gains (losses) related to foreign currency hedging activities, respectively. During the first quarter of 2018, as part of a business acquisition, we increased our ownership in a subsidiary through a non-cash transaction of $ 1.3 million. During the third quarter of 2018, we closed on a joint venture with Internet Brands to create a newly formed entity, Henry Schein One, LLC, through a non-cash transaction resulting in an initial estimate of approximately $ 337 million of noncontrolling interest representing Internet Brands’ current 26 % minority interest and an initi al estimate of $ 95 million of deferred additional ownership interests of Internet Brands in Henry Schein One, representing up to an additional 9.2 % ownership interests,a portion of which is contingent upon the achievement of certain operating targets (See Note 9). |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 29, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Note 16 – 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, Ci vil 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 comp ete 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’ fee s and expert fees. On February 22, 2018, plaintiffs moved to certify a class that, subject to certain exclusions, includes all private dental practices and laboratories that purchased dental supplies directly from Henry Schein, Patterson, Benco , Burkhart or any combination thereof, during the period beginning January 1, 2009 until March 31, 2016. On September 28, 2018, the parties executed a settlement agreement that proposes a full and final settl ement of the lawsuit on a class wide basis, subject to cour t approval. As a result, we recorded a charge of $38.5 million in our third quarter 2018 results. On August 31, 2012, Archer and White Sales, Inc. (“Archer”) filed a complaint against Henry Schein, Inc. as well as Danaher Corporation and its subsidiar ies 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 a conspiracy between Henry Schein, an unnamed company and the Danaher Defendants to terminate or limit Archer’s dis tribution 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 den tal 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 di stributor 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 Decembe r 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 February 12, 2018, defendants filed an Application for Stay of Proceedings in the District Court in the Supreme C ourt of the United States, seeking to stay proceedings in the District Court pending a decision on defendants’ forthcoming petition for writ of certiorari. On March 2, 2018, the Supreme Court of the United States granted a stay of proceedings. On June 25, 2018, the Supreme Court of the United States granted defendants’ petition for writ of certiorari, pursuant to which it will review the lower court’s decision affirming the District Court’s decision denying our motion to compel arbitration. On October 29, 2 018 , the Supreme Court heard oral argument. The Supreme Court’s decision is pending. 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 se lls 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 quarte r 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 equip ment 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 cond uct 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, c ivil 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. The U.S. Court of Appeals for the Second Circuit heard oral argument on the appeal on September 13, 2018. The court’s decision is pendi ng. 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 allege s, 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 conspi red 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 d efend ourselves vigorously against this action. A hearing before an administrative law judge began on October 16, 2018 and is ongoing. We believe this matter will not have a material adverse effect on our consolidated financial position, liquidity or resu lts 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 Ste ven 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 Peri od, including matters relating to the issue s 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 defen dants (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 bu siness “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, profit s, 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 at tempts 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 viol ations of Section 10(b) of the Exchange Act and Rule 10b-5 and Section 20(a) of the Exchange Act. 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 r ecords relating to the issues raised in the securities class action and the antitrust matters discussed above. On May 3, 2018, a class action complaint, Marion Diagnostic Center, LLC, et al. v. Becton, Dickinson, and Co., et al., Case No. 3:18-cv-010509 (S .D. Ill), 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 Distributor Co-Conspirators. The complaint alleges that the defendants entered into a vertical conspiracy to force healthcare providers into long-term exclusionary contracts that restrain trade in the nationwide markets fo r 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 healthcare 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 part ies and adding McKesson Medical-Surgical, Inc. as an additional defendant. We intend to defend ourselves vigorously against this action. On May 29, 2018, an amended complaint was filed in the MultiDistrict Litigation (MDL) proceeding In Re National Presc ription 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, in the U.S. District Court for the Northern District of Ohio, adding H enry Schein, Inc., Henry Schein Medical Systems, Inc. and others as defendants. Plaint iffs allege 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 th at 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. Plaintiffs assert the following claims for relief against Henry Schein, Inc. and Henry Schein Medical Systems, Inc.: statutory public nuisance; common law absolute public nuisance; negligence; injury through criminal acts (R.C. 2307.60); unjust enrichment; and civil conspiracy. This case has been designated “Track 1” and is currently set for trial on September 3 , 2019. We intend to defend ourselves vigorously against this action. On July 3, 2018, the City of Barberton, Ohio (and related entities) filed a complain t in the same MDL proceeding (MDL No. 2804; Case No. 17-md-2804) in an action entitled City of Barberton, et al. v. Purdue Pharma, L.P., et al., Civil Action No. 1:18-op-45767-DAP, in the Northern District of Ohio, against Henry Schein, Inc., Henry Schein Medical Systems, Inc. and others, that is similar to The County of Summit complaint. This case has been designated “Track 2” and is currently stayed. On September 20, 2018, Southeast Alaska Regional Health Consortium filed a complaint entitled Southeast Alaska Regional Health Consortium v. Purdue Pharma L.P., et al., Case No. 3:18-cv-00217-TMB, in the U.S. District Court for the District of Alaska, against Henry Schein, Inc., Henry Schein Medical Systems, Inc. and others. That case was transferred to the MDL proceeding referenced above (MDL Civil Action No. 1:17-md-02804; Case No. 1:18-op-46149), designated a “Track 2” case and is currently stayed. On September 20, 2018, Tucson Medical Center filed a complaint entitled Tucson Medical Center v. Purdue Pha rma L.P., et al., Case No. C20184213, in the Superior Court of Arizona, County of Pima, against Henry Schein, Inc. and others. On September 27, 2018, Defendants removed that case to the U.S. District Court for the District of Arizona (Case No. 4:18-cv-004 81-RCC). On October 8, 2018, Tucson Medical Center voluntarily dismissed the lawsuit pending in the District of Arizona without prejudice. On October 9, 2018, Tucson Medical Center refiled the lawsuit in the Superior Court of Arizona, County of Pima (Cas e No. C20184991). On October 29, 2018, defendants removed the case to the U.S. District Court for the District of Arizona (Case. No . CV-18-00532 ). Sales of opioids in North America last year were less than 1% of all North American sales. We intend to def end ourselves vigorously against the s e action s . 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 f or 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 otherwi se anticompetitive conspiracy among Henry Schein, Patterson and Benco . The complaint alleges that the alleged conspiracy overcharged California dental p ractices, 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 se rvices 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. We intend to defend ourselves vigorously against this action. From time to time, we ma y 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 arrangeme nts 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 ha ve a material adverse effect on our consolidated financial position, liquidity or results of operations. As of September 29, 2018, 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 p arties. |
Adoption of New Accounting Stan
Adoption of New Accounting Standards & Accounting Policy Updates (Policies) | 9 Months Ended |
Sep. 29, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Pronouncements Adopted | Accounting Pronouncements Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers”, Accounting Standards Codification (“ASC”) 606 (“Topic 606”). We adopted the provisions of this standard as of December 31, 2017, on a modified retrospective basis. We applied the requirements of the new standard on ly to contracts that were not completed as of the adoption date. We recorded an immaterial adjustment to the opening balance of retained earnings for the adoption of Topic 606. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The impact of the new standard on our consolidated statements of income, which we expect to be immaterial on an ongoing basis, is primarily related to software sales and sales commissions and is described as follows: Software Sales For software licenses sold together with post contract support (PCS), we previously deferred software revenue if it did not have vendor-specific evidence of fair value of the PCS. Under Topic 606, the concept of ven dor-specific objective evidence is eliminated and there are no cases where revenue is deferred due to a lack of standalone selling price. In addition, we previously recognized revenue from term licenses ratably over the contract term. Under Topic 606, su ch licenses represent a right to use intellectual property and therefore require upfront recognition. Furthermore, certain upfront fees related to service arrangements were previously deferred and recognized over the estimated customer life. Under Topic 606, the period over which we will recognize these fees is reduced, as the upfront fee represents additional contract price which will be allocated to the performance obligations in the contract and recognized as those performance obligations are satisfied , rather than being amortized over the estimated customer life. Based on the aforementioned changes, such software revenue will be recognized sooner than under the previous revenue recognition standard. Sales Commissions We previously recognized sales commissions as an expense when incurred. Under Topic 606, we defer such sales commissions as costs to obtain a contract when the costs are incremental and expected to be recovered. Deferred sales commissions are amortized over the estimated customer rela tionship period. We apply the practical expedient to expense, as incurred, commissions with an expected amortization period of one year or less. The impact of adoption on our consolidated balance sheet and income statement was as follows: As of September 29, 2018 Balances Effect of As Without Adoption Change Balance Sheet Reported of Topic 606 Increase/(Decrease) Assets: Prepaid expenses and other $ 513,717 $ 514,043 $ (326) Investments and other 518,425 516,409 2,016 Liabilities: Accrued expenses -Taxes $ 180,163 $ 179,748 $ 415 Accrued expenses - Other 496,959 499,603 (2,644) Deferred income taxes 45,947 45,340 607 Other liabilities (long-term) 415,045 415,594 (549) Stockholders' equity: Retained earnings $ 3,191,260 $ 3,187,304 $ 3,956 Accumulated other comprehensive loss $ (219,649) $ (219,554) $ (95) Three Months Ended Nine Months Ended September 29, 2018 September 29, 2018 Balances Balances Without Adoption Effect of Change Without Adoption Effect of Change Statement of Income As Reported of Topic 606 Increase/ (Decrease) As Reported of Topic 606 Increase/ (Decrease) Net sales: Dental $ 1,514,538 $ 1,514,538 $ - $ 4,675,212 $ 4,675,212 $ - Animal Health 899,295 899,295 - 2,805,031 2,805,031 - Medical 721,942 721,942 - 1,976,367 1,976,367 - Total healthcare distribution $ 3,135,775 $ 3,135,775 $ - $ 9,456,610 $ 9,456,610 $ - Technology and value-added services 143,903 143,420 483 370,183 369,459 724 Total $ 3,279,678 $ 3,279,195 $ 483 $ 9,826,793 $ 9,826,069 $ 724 Costs and expenses: Cost of sales 2,391,118 2,391,118 - 7,141,569 7,141,569 - Selling, general and administrative 722,634 722,842 (208) 2,111,807 2,112,058 (251) Income taxes (29,401) (29,265) 136 (124,084) (123,861) 223 Net income $ 126,976 $ 126,421 $ 555 $ 423,116 $ 422,364 $ 752 Additional information related to Topic 606 can be found below in “Critical Accounting Policies and Estimates” as well as in Note 3. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes, Intra-Entity Transfers of Assets Other Than Inventory” (“Topic 740”). Topic 740 requires companies to recognize the income tax effects of intercompany sales and transfers of assets other than inventory in the period which the transfer occurs. Previously, companies were required to defer the income tax effec ts on intercompany transfer of assets until the asset has been sold to an outside party. On December 31, 2017, we adopted the guidance, which is effective for annual periods and related interim periods beginning after December 15, 2017 on a modified retros pective basis. As a result of the adoption of Topic 740, we have recorded an immaterial adjustment to the opening balance of retained earnings and a reduction to prepaid assets. In May 2017, the FASB issued ASU No. 2017-09, “Compensation-Stock Compensat ion (Topic 718), Scope of Modification Accounting”. ASU No. 2017-09 provides guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting. ASU 2017-09 requires modificat ion accounting if the fair value, vesting conditions, or equity or liability classification of the award is not the same immediately before and after a change to the terms and conditions of the award. ASU 2017-09 was adopted on a prospective basis as of D ecember 31, 2017 and did not have a material impact on the consolidated financial statements or disclosures as of September 29 , 2018. The cumulative effect of the changes made to our consolidated balance sheet as of December 31, 2017 related to Topic 606 and T opic 740 were as follows: Balance at December 30, Adjustments Adjustments Balance at 2017 Due To Due To December 31, (As Reported) Topic 606 Topic 740 2017 Assets: Prepaid expenses and other $ 454,752 $ 119 $ (610) $ 454,261 Investments and other 432,002 1,133 - 433,135 Liabilities: Accrued expenses - Taxes $ 188,873 $ 437 $ - $ 189,310 Accrued expenses - Other 455,780 (2,614) - 453,166 Deferred income taxes 50,431 471 - 50,902 Other liabilities (long-term) 420,285 (246) - 420,039 Stockholders' equity: Retained earnings $ 2,940,029 $ 3,204 $ (610) $ 2,942,623 |
Revenue Recognition | Revenue Recognition On December 31, 2017, we adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of the adoption date. Results for reporting periods beginning after Decembe r 30, 2017 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for those periods. Our revenue recognition accounting policies applied prior to adoption of Topic 606 are outlined in the financial statements in the 2017 Form 10-K. The disclosures included herein reflect our accounting policies under Topic 606. We generate revenue from the sale of dental, animal health and medical consumable products, as well as equipm ent, software products and services and other sources. Provisions for discounts, rebates to customers, customer returns and other contra revenue adjustments are included in the transaction price at contract inception by estimating the most likely amount ba sed upon historical data and estimates and are provided for in the period in which the related sales are recognized. Revenue derived from the sale of consumable products is recognized at a point in time when control transfers to the customer. Such sales typically entail high-volume, low-dollar orders shipped using third-party common carriers. We believe that the shipment date is the most appropriate point in time indicating control has transferred to the customer because we have no post-shipment obligations and this is when legal title and risks and rewards of ownership transfer to the customer and the point at which we have an enforceable right to payment. Revenue derived from the sale of equipment is recognized when control transfers to the customer. This occurs when the equipment is delivered. Such sales typically entail scheduled deliveries of large equipment primarily by equipment service technicians. Some equipment sales require minimal installation, which is ty pically completed at the time of delivery. Our product generally carries standard warranty terms provided by the manufacturer, however, in instances where we provide warranty labor services, the warranty costs are accrued in accordance with ASC 460 “Guaran tees”. Revenue derived from the sale of software products is recognized when products are shipped to customers or made available electronically. Such software is generally installed by customers and does not require extensive training due to the nature of its design. Revenue derived from post-contract customer support for software, including annual support and/or training, is generally recognized over time using time elapsed as the input method that best depicts the transfer of control to the customer. Revenue derived from other sources, including freight charges, equipment repairs and financial services, is recognized when the related product revenue is recognized or when the services are provided. We apply the practical expedient to treat shipping a nd handling activities performed after the customer obtains control as fulfillment activities, rather than a separate performance obligation in the contract . Sales, value- add and other taxes we collect concurrent with revenue-producing activities are excl uded from revenue. Certain of our revenue is derived from bundled arrangements that include multiple distinct performance obligations which are accounted for separately. When we sell software products together with related services (i.e., training and technical support), we allocate revenue to soft ware using the residual method, using an estimate of the standalone selling price to estimate the fair value of the undelivered elements. There are no cases where revenue is deferred due to a lack of a standalone selling price. Bundled arrangements that i nclude elements that are not considered software consist primarily of equipment and the related installation service. We allocate revenue for such arrangements based on the relative selling prices of the goods or services. If an observable selling price i s not available (i.e., we do not sell the goods or services separately), we use one of the following techniques to estimate the standalone selling price: adjusted market approach; cost-plus approach; or the residual method. There is no specific hierarchy for the use of these methods, but the estimated selling price reflects our best estimate of what the selling prices of each deliverable would be if it were sold regularly on a standalone basis taking into consideration the cost structure of our business, technical skill required, customer location and other market conditions. Accounts Receivable The carrying amount of accounts receivable is reduced by a valuation allowance that reflects our best estimate of the amounts that will not be collected. In addition to reviewing delinquent accounts receivable, we consider many factors in estimating our reserve, including historical data, experience, customer types, credit worthiness and economic trends. From time to time, we adjust our assumptions for anticip ated changes in any of these or other factors expected to affect collectability. Contract Assets Contract assets include amounts related to any conditional right to consideration for work completed but not billed as of the reporting date and generally re present amounts owed to us by customers, but not yet billed. Contract assets are transferred to accounts receivable when the right becomes unconditional. Current contract assets are included in Prepaid expenses and other and the non-current contract asset s are included in Investments and other within our consolidated balance sheet. Contract Liabilities Contract liabilities are comprised of advance payments and deferred revenue amounts. Contract liabilities are transferred to revenue once the performance obligation has been satisfied. Current contract liabilities are included in Accrued expenses: Other and the non-current contract liabilities are included in Other liabilities within our consolidated balance sheet. Deferred Commissions Sales commissions earned by our sales force that relate to long term arrangements are capitalized as costs to obtain a contract when the costs incurred are incremental and are expected to be recovered. Deferred sales commissions are amortized over the estimated customer rel ationship period. We apply the practical expedient related to the capitalization of incremental costs of obtaining a contract, and recognize such costs as an expense when incurred if the amortization period of the assets that we would have recognized is o ne year or less. Sales Returns Sales returns are recognized as a reduction of revenue by the amount of expected returns and are recorded as refund liability within current liabilities. We estimate the amount of revenue expected to be reversed to calculat e the sales return liability based on historical data for specific products, adjusted as necessary for new products. The allowance for returns is presented gross as a refund liability and we record an inventory asset (and a corresponding adjustment to cos t of sales) for any goods or services that we expect to be returned. |
Income Taxes | Under ASU 2016-09, all excess tax benefits and tax deficiencies resulting from the difference between the deduction for tax purposes and the stock-based compensation cost recognized for financial reporting purposes are includ ed as a component of income tax expense beginning January 1, 2017. Prior to the implementation of ASU 2016-09, excess tax benefits were recorded as a component of Additional paid in capital and tax deficiencies were recognized either as an offset to accum ulated excess tax benefits or in the income statement if there were no accumulated excess tax benefits. For the nine months ended September 29, 2018 and September 30, 2017, the application of ASU No. 2016-09 reduced income tax expense by approximately $ 1. 0 million and $ 19.5 million, respectively. On December 22, 2017, the U.S. government passed the Tax Act . The Tax Act is comprehensive tax legislation effective January 1, 2018 that implements complex changes to the U.S . tax code including, but not limite d 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. The Tax Act also includes provisio ns to tax global intangible low-taxed income (“GILTI”), a beneficial tax rate for Foreign 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) inte rest limitation (Interest Limitation). We are 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 c an 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 have elected to recognize th e tax on GILTI as a period expense in the period the tax is incurred. Under Topic 740, we have reasonably estimated the impact of each provision of the Tax Act on our effective tax rate. We have recorded an estimate for the GILTI provision in our effecti ve tax rate for the nine months ended September 29, 2018. 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 29, 2018 because we currently estimate that t hese provisions of the Tax Act will not apply to us or will have an immaterial impact in 2018. Due to the complexity of the new GILTI tax rules and uncertainty of the application of the foreign tax credit rules in relation to GILTI, we have calculated GIL TI based upon the law as we currently interpret it, and subsequent changes in law could cause us to revise our calculations in a later period. Due to the complexities of the Tax Act, the Staff of the SEC issued Staff Accounting Bulletin No. 118 (“SAB 1 18”) that requires us to record a provisional amount for any income tax effects of the Tax Act in accordance with Topic 740, to the extent that a reasonable estimate can be made. SAB 118 allows for a measurement period of up to one year after the enactmen t date of the Tax Act to finalize the recording of the related tax impacts. |
Adoption of New Accounting St_2
Adoption of New Accounting Standards & Accounting Policy Updates (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
The impact of adoption on our consolidated income statement and balance sheet and the cumulative effect of the changes made to our consolidated balance sheet | As of September 29, 2018 Balances Effect of As Without Adoption Change Balance Sheet Reported of Topic 606 Increase/(Decrease) Assets: Prepaid expenses and other $ 513,717 $ 514,043 $ (326) Investments and other 518,425 516,409 2,016 Liabilities: Accrued expenses -Taxes $ 180,163 $ 179,748 $ 415 Accrued expenses - Other 496,959 499,603 (2,644) Deferred income taxes 45,947 45,340 607 Other liabilities (long-term) 415,045 415,594 (549) Stockholders' equity: Retained earnings $ 3,191,260 $ 3,187,304 $ 3,956 Accumulated other comprehensive loss $ (219,649) $ (219,554) $ (95) Three Months Ended Nine Months Ended September 29, 2018 September 29, 2018 Balances Balances Without Adoption Effect of Change Without Adoption Effect of Change Statement of Income As Reported of Topic 606 Increase/ (Decrease) As Reported of Topic 606 Increase/ (Decrease) Net sales: Dental $ 1,514,538 $ 1,514,538 $ - $ 4,675,212 $ 4,675,212 $ - Animal Health 899,295 899,295 - 2,805,031 2,805,031 - Medical 721,942 721,942 - 1,976,367 1,976,367 - Total healthcare distribution $ 3,135,775 $ 3,135,775 $ - $ 9,456,610 $ 9,456,610 $ - Technology and value-added services 143,903 143,420 483 370,183 369,459 724 Total $ 3,279,678 $ 3,279,195 $ 483 $ 9,826,793 $ 9,826,069 $ 724 Costs and expenses: Cost of sales 2,391,118 2,391,118 - 7,141,569 7,141,569 - Selling, general and administrative 722,634 722,842 (208) 2,111,807 2,112,058 (251) Income taxes (29,401) (29,265) 136 (124,084) (123,861) 223 Net income $ 126,976 $ 126,421 $ 555 $ 423,116 $ 422,364 $ 752 Balance at December 30, Adjustments Adjustments Balance at 2017 Due To Due To December 31, (As Reported) Topic 606 Topic 740 2017 Assets: Prepaid expenses and other $ 454,752 $ 119 $ (610) $ 454,261 Investments and other 432,002 1,133 - 433,135 Liabilities: Accrued expenses - Taxes $ 188,873 $ 437 $ - $ 189,310 Accrued expenses - Other 455,780 (2,614) - 453,166 Deferred income taxes 50,431 471 - 50,902 Other liabilities (long-term) 420,285 (246) - 420,039 Stockholders' equity: Retained earnings $ 2,940,029 $ 3,204 $ (610) $ 2,942,623 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Three Months Ended Nine Months Ended September 29, 2018 September 29, 2018 North America International Global North America International Global Net sales: Health care distribution Dental $ 951,412 $ 563,126 $ 1,514,538 $ 2,831,062 $ 1,844,150 $ 4,675,212 Animal health 460,838 438,457 899,295 1,425,273 1,379,758 2,805,031 Medical 702,758 19,184 721,942 1,915,944 60,423 1,976,367 Total health care distribution 2,115,008 1,020,767 3,135,775 6,172,279 3,284,331 9,456,610 Technology and value-added services 123,823 20,080 143,903 307,826 62,357 370,183 Total $ 2,238,831 $ 1,040,847 $ 3,279,678 $ 6,480,105 $ 3,346,688 $ 9,826,793 |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Segment Reporting [Abstract] | |
Business segment information | Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Net Sales: Health care distribution (1): Dental $ 1,514,538 $ 1,478,730 $ 4,675,212 $ 4,372,055 Animal health 899,295 882,580 2,805,031 2,586,850 Medical 721,942 690,761 1,976,367 1,861,074 Total health care distribution 3,135,775 3,052,071 9,456,610 8,819,979 Technology and value-added services (2) 143,903 109,012 370,183 323,510 Total $ 3,279,678 $ 3,161,083 $ 9,826,793 $ 9,143,489 (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. Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Operating Income: Health care distribution $ 127,990 $ 181,612 $ 471,543 $ 521,278 Technology and value-added services 37,936 31,936 101,874 96,900 Total $ 165,926 $ 213,548 $ 573,417 $ 618,178 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Debt Disclosure [Abstract] | |
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 (1) 28,571 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 (439) $ 628,132 (1) Annual repayments of approximately $7.1 million for this borrowing commenced on January 20, 2016. |
Schedule of long-term debt | September 29, December 30, 2018 2017 Private placement facilities $ 628,132 $ 535,295 U.S. trade accounts receivable securitization 350,000 350,000 Various collateralized and uncollateralized loans payable with interest in varying installments through 2022 at interest rates ranging from 2.61% to 4.73% at September 29, 2018 and ranging from 2.56% to 12.90% at December 30, 2017 29,719 34,027 Capital lease obligations payable through 2029 with interest rates ranging from 0.07% to 19.79% at September 29, 2018 and ranging from 0.84% to 19.79% at December 30, 2017 4,946 5,093 Total 1,012,797 924,415 Less current maturities (12,482) (16,659) Total long-term debt $ 1,000,315 $ 907,756 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Change in fair value of redeemable noncontrolling interests | September 29, December 30, 2018 2017 Balance, beginning of period $ 832,138 $ 607,636 Decrease in redeemable noncontrolling interests due to redemptions (666,363) (48,669) Increase in redeemable noncontrolling interests due to business acquisitions 10,058 78,939 Net income attributable to redeemable noncontrolling interests 17,019 52,203 Dividends declared (16,293) (28,161) Effect of foreign currency translation gain (loss) attributable to redeemable noncontrolling interests (13,752) 7,461 Change in fair value of redeemable securities 119,695 162,729 Balance, end of period $ 282,502 $ 832,138 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |
Accumulated other comprehensive income, net of applicable taxes | September 29, December 30, 2018 2017 Attributable to Redeemable noncontrolling interests: Foreign currency translation adjustment $ (19,316) $ (5,564) Attributable to noncontrolling interests: Foreign currency translation adjustment $ (553) $ 539 Attributable to Henry Schein, Inc.: Foreign currency translation loss $ (203,749) $ (112,439) Unrealized loss from foreign currency hedging activities (108) (782) Unrealized investment loss (5) (3) Pension adjustment loss (15,787) (16,843) Accumulated other comprehensive loss $ (219,649) $ (130,067) Total Accumulated other comprehensive loss $ (239,518) $ (135,092) |
Components of comprehensive income, net of applicable taxes | Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Net income $ 126,976 $ 150,948 $ 423,116 $ 450,783 Foreign currency translation gain (loss) (10,582) 58,916 (106,154) 173,166 Tax effect - - - - Foreign currency translation gain (loss) (10,582) 58,916 (106,154) 173,166 Unrealized gain (loss) from foreign currency hedging activities (406) 26 1,079 (1,278) Tax effect 27 (60) (405) 4 Unrealized gain (loss) from foreign currency hedging activities (379) (34) 674 (1,274) Unrealized investment loss (1) (3) (2) (3) Tax effect - 1 - 1 Unrealized investment loss (1) (2) (2) (2) Pension adjustment gain (loss) 139 (529) 1,449 (1,571) Tax effect (23) 176 (393) 508 Pension adjustment gain (loss) 116 (353) 1,056 (1,063) Comprehensive income $ 116,130 $ 209,475 $ 318,690 $ 621,610 |
Components of foreign currency translation gain (loss) by foreign currency | Foreign Currency Foreign Currency Translation Translation Gain (Loss) Gain for the Three for the Three Months Ended FX Rate into USD Months Ended FX Rate into USD September 29, September 29, June 30, September 30, September 30, July 1, Currency 2018 2018 2018 2017 2017 2017 Euro $ (144) 1.16 1.16 $ 30,373 1.18 1.14 British Pound (1,804) 1.31 1.31 9,168 1.34 1.30 Australian Dollar (5,507) 0.72 0.74 3,767 0.78 0.77 Canadian Dollar 1,488 0.77 0.76 5,640 0.80 0.77 Polish Zloty 1,253 0.27 0.27 940 0.27 0.27 Swiss Franc 266 1.02 1.00 407 1.03 1.04 Brazilian Real (6,001) 0.25 0.26 6,400 0.32 0.30 All other currencies (133) 2,221 Total $ (10,582) $ 58,916 Foreign Currency Foreign Currency Translation Translation Loss Gain for the Nine for the Nine Months Ended FX Rate into USD Months Ended FX Rate into USD September 29, September 29, December 30, September 30, September 30, December 26, Currency 2018 2018 2017 2017 2017 2016 Euro $ (27,896) 1.16 1.20 $ 95,715 1.18 1.05 British Pound (11,886) 1.31 1.35 24,712 1.34 1.23 Australian Dollar (21,227) 0.72 0.78 16,220 0.78 0.72 Canadian Dollar (4,366) 0.77 0.80 9,820 0.80 0.74 Polish Zloty (3,907) 0.27 0.29 7,891 0.27 0.24 Swiss Franc (1,741) 1.02 1.03 5,305 1.03 0.98 Brazilian Real (32,701) 0.25 0.30 4,136 0.32 0.31 All other currencies (2,430) 9,367 Total $ (106,154) $ 173,166 |
Total comprehensive income, net of applicable taxes | Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Comprehensive income attributable to Henry Schein, Inc. $ 113,221 $ 193,085 $ 313,326 $ 577,403 Comprehensive income attributable to noncontrolling interests 2,478 372 2,097 848 Comprehensive income attributable to Redeemable noncontrolling interests 431 16,018 3,267 43,359 Comprehensive income $ 116,130 $ 209,475 $ 318,690 $ 621,610 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value - assets and liabilities measured and recognized on a recurring basis | September 29, 2018 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 18,135 $ - $ 18,135 Total assets $ - $ 18,135 $ - $ 18,135 Liabilities: Derivative contracts $ - $ 2,824 $ - $ 2,824 Total liabilities $ - $ 2,824 $ - $ 2,824 Redeemable noncontrolling interests $ - $ - $ 282,502 $ 282,502 *CS *CE December 30, 2017 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 11,799 $ - $ 11,799 Total assets $ - $ 11,799 $ - $ 11,799 Liabilities: Derivative contracts $ - $ 2,089 $ - $ 2,089 Total liabilities $ - $ 2,089 $ - $ 2,089 Redeemable noncontrolling interests $ - $ - $ 832,138 $ 832,138 |
Plans of Restructuring (Tables)
Plans of Restructuring (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve by type of cost | Facility Severance Closing Costs Costs Other Total Balance, December 31, 2016 $ 22,354 $ 2,454 $ 895 $ 25,703 Payments and other adjustments (19,136) (1,139) (871) (21,146) Balance, December 30, 2017 $ 3,218 $ 1,315 $ 24 $ 4,557 Provision 26,474 757 280 27,511 Payments and other adjustments (16,908) (1,441) (206) (18,555) Balance, September 29, 2018 $ 12,784 $ 631 $ 98 $ 13,513 |
Schedule of restructuring reserve by segment | Technology and Health Care Value-Added Distribution Services Total Balance, December 31, 2016 $ 25,238 $ 465 $ 25,703 Payments and other adjustments (20,681) (465) (21,146) Balance, December 30, 2017 $ 4,557 $ - $ 4,557 Provision 25,625 1,886 27,511 Payments and other adjustments (18,065) (490) (18,555) Balance, September 29, 2018 $ 12,117 $ 1,396 $ 13,513 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted shares used to calculate earnings per share | Three Months Ended Nine Months Ended September 29, September 30, September 29, September 30, 2018 2017 2018 2017 Basic 152,533 156,914 152,970 157,386 Effect of dilutive securities: Stock options, restricted stock and restricted stock units 1,081 1,357 1,012 1,480 Diluted 153,614 158,271 153,982 158,866 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
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 155 $ 29.65 Granted - - Exercised (154) 29.81 Forfeited - - Outstanding at end of period 1 $ 17.22 0.4 $ 136 Options exercisable at end of period 1 $ 17.22 0.4 $ 136 |
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 1,233 $ 70.28 Granted 363 65.88 Vested (311) 62.96 Forfeited (78) 77.96 Outstanding at end of period 1,207 $ 70.34 $ 85.03 Performance-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,226 $ 60.81 Granted 397 68.76 Vested (426) 71.33 Forfeited (72) 77.39 Outstanding at end of period 1,125 $ 55.75 $ 85.03 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 29, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash paid for interest and income taxes | Nine Months Ended September 29, September 30, 2018 2017 Interest $ 52,108 $ 33,640 Income taxes 207,474 179,445 |
Basis of Presentation (Details)
Basis of Presentation (Details) | Aug. 16, 2017 | Sep. 29, 2018shares | May 31, 2018shares | Dec. 30, 2017shares |
Common Stock, Shares Authorized | 480,000,000 | 480,000,000 | 240,000,000 | |
Common Stock [Member] | ||||
Stock split, conversion ratio | 2 | |||
Stock split, description | On August 16, 2017, we announced that our Board of Directors approved a 2-for-1 split of our common stock. Each Henry Schein, Inc. stockholder of record at the close of business on September 1, 2017 received a dividend of one additional share for every share held. Trading began on a split-adjusted basis on September 15, 2017 and has been retroactively reflected for all periods presented in this Form 10-Q. As a result of the stock split, we increased our authorized common shares from 240,000,000 to 480,000,000, effective May 31, 2018. |
Accounting Pronouncements Ado_2
Accounting Pronouncements Adopted and Critical Accounting Policies and Estimates - Topic 606, the disclosure of the impact of adoption on our consolidated balance sheet and income statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 30, 2017 | ||
Assets | |||||||
Prepaid expenses and other | $ 513,717 | $ 513,717 | $ 454,261 | $ 454,752 | |||
Investments and other | 518,425 | 518,425 | 433,135 | 432,002 | |||
Liabilities | |||||||
Accrued Expenses - Taxes | 180,163 | 180,163 | 189,310 | 188,873 | |||
Accrued Expenses - Other | 496,959 | 496,959 | 453,166 | 455,780 | |||
Deferred income taxes | 45,947 | 45,947 | 50,902 | 50,431 | |||
Other Liabilities (Long term) | 415,045 | 415,045 | 420,039 | 420,285 | |||
Stockholders' equity | |||||||
Retained earnings | 3,191,260 | 3,191,260 | 2,942,623 | 2,940,029 | |||
Accumulated other comprehensive loss | (219,649) | (219,649) | $ (130,067) | ||||
Income Statement | |||||||
Revenues | 3,279,678 | $ 3,161,083 | 9,826,793 | $ 9,143,489 | |||
Cost and expenses | |||||||
Cost of sales | 2,391,118 | 2,325,029 | 7,141,569 | 6,645,342 | |||
Selling, general and administrative | 722,634 | 2,111,807 | |||||
Income taxes | (29,401) | (59,340) | (124,084) | (156,276) | |||
Net income | 126,976 | 150,948 | 423,116 | 450,783 | |||
Accounting Standards Update 2014-09 [Member] | |||||||
Assets | |||||||
Prepaid expenses and other | 119 | ||||||
Investments and other | 1,133 | ||||||
Liabilities | |||||||
Accrued Expenses - Taxes | 437 | ||||||
Accrued Expenses - Other | (2,614) | ||||||
Deferred income taxes | 471 | ||||||
Other Liabilities (Long term) | (246) | ||||||
Stockholders' equity | |||||||
Retained earnings | $ 3,204 | ||||||
Healthcare Distribution [Member] | |||||||
Income Statement | |||||||
Revenues | [1] | 3,135,775 | 3,052,071 | 9,456,610 | 8,819,979 | ||
Healthcare Distribution [Member] | Dental [Member] | |||||||
Income Statement | |||||||
Revenues | 1,514,538 | 1,478,730 | 4,675,212 | 4,372,055 | |||
Healthcare Distribution [Member] | Animal Health [Member] | |||||||
Income Statement | |||||||
Revenues | 899,295 | 882,580 | 2,805,031 | 2,586,850 | |||
Healthcare Distribution [Member] | Medical [Member] | |||||||
Income Statement | |||||||
Revenues | 721,942 | 690,761 | 1,976,367 | 1,861,074 | |||
Technology and Value-Added Services [Member] | |||||||
Income Statement | |||||||
Revenues | [2] | 143,903 | $ 109,012 | 370,183 | $ 323,510 | ||
Balances Without Adoption of Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Assets | |||||||
Prepaid expenses and other | 514,043 | 514,043 | |||||
Investments and other | 516,409 | 516,409 | |||||
Liabilities | |||||||
Accrued Expenses - Taxes | 179,748 | 179,748 | |||||
Accrued Expenses - Other | 499,603 | 499,603 | |||||
Deferred income taxes | 45,340 | 45,340 | |||||
Other Liabilities (Long term) | 415,594 | 415,594 | |||||
Stockholders' equity | |||||||
Retained earnings | 3,187,304 | 3,187,304 | |||||
Accumulated other comprehensive loss | (219,554) | (219,554) | |||||
Income Statement | |||||||
Revenues | 3,279,195 | 9,826,069 | |||||
Cost and expenses | |||||||
Cost of sales | 2,391,118 | 7,141,569 | |||||
Selling, general and administrative | 722,842 | 2,112,058 | |||||
Income taxes | (29,265) | (123,861) | |||||
Net income | 126,421 | 422,364 | |||||
Balances Without Adoption of Topic 606 [Member] | Healthcare Distribution [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Income Statement | |||||||
Revenues | 3,135,775 | 9,456,610 | |||||
Balances Without Adoption of Topic 606 [Member] | Healthcare Distribution [Member] | Dental [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Income Statement | |||||||
Revenues | 1,514,538 | 4,675,212 | |||||
Balances Without Adoption of Topic 606 [Member] | Healthcare Distribution [Member] | Animal Health [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Income Statement | |||||||
Revenues | 899,295 | 2,805,031 | |||||
Balances Without Adoption of Topic 606 [Member] | Healthcare Distribution [Member] | Medical [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Income Statement | |||||||
Revenues | 721,942 | 1,976,367 | |||||
Balances Without Adoption of Topic 606 [Member] | Technology and Value-Added Services [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Income Statement | |||||||
Revenues | 143,420 | 369,459 | |||||
Effect of Change Increase/(Decrease) [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Assets | |||||||
Prepaid expenses and other | (326) | (326) | |||||
Investments and other | 2,016 | 2,016 | |||||
Liabilities | |||||||
Accrued Expenses - Taxes | 415 | 415 | |||||
Accrued Expenses - Other | (2,644) | (2,644) | |||||
Deferred income taxes | 607 | 607 | |||||
Other Liabilities (Long term) | (549) | (549) | |||||
Stockholders' equity | |||||||
Retained earnings | 3,956 | 3,956 | |||||
Accumulated other comprehensive loss | (95) | (95) | |||||
Income Statement | |||||||
Revenues | 483 | 724 | |||||
Cost and expenses | |||||||
Cost of sales | 0 | 0 | |||||
Selling, general and administrative | (208) | (251) | |||||
Income taxes | 136 | 223 | |||||
Net income | 555 | 752 | |||||
Effect of Change Increase/(Decrease) [Member] | Healthcare Distribution [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Income Statement | |||||||
Revenues | 0 | 0 | |||||
Effect of Change Increase/(Decrease) [Member] | Healthcare Distribution [Member] | Dental [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Income Statement | |||||||
Revenues | 0 | 0 | |||||
Effect of Change Increase/(Decrease) [Member] | Healthcare Distribution [Member] | Animal Health [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Income Statement | |||||||
Revenues | 0 | 0 | |||||
Effect of Change Increase/(Decrease) [Member] | Healthcare Distribution [Member] | Medical [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Income Statement | |||||||
Revenues | 0 | 0 | |||||
Effect of Change Increase/(Decrease) [Member] | Technology and Value-Added Services [Member] | Accounting Standards Update 2014-09 [Member] | |||||||
Income Statement | |||||||
Revenues | $ 483 | $ 724 | |||||
[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. |
Accounting Pronouncements Ado_3
Accounting Pronouncements Adopted and Critical Accounting Policies and Estimates - The cumulative effect of the changes made to our consolidated balance sheet (Details) - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 31, 2017 | Dec. 30, 2017 |
Assets [Abstract] | |||
Prepaid expenses and other | $ 513,717 | $ 454,261 | $ 454,752 |
Investments and other | 518,425 | 433,135 | 432,002 |
Liabilities [Abstract] | |||
Accrued Expenses - Taxes | 180,163 | 189,310 | 188,873 |
Accrued Expenses - Other | 496,959 | 453,166 | 455,780 |
Deferred income taxes | 45,947 | 50,902 | 50,431 |
Other Liabilities (Long term) | 415,045 | 420,039 | 420,285 |
Stockholders' Equity Attributable to Parent [Abstract] | |||
Retained earnings | $ 3,191,260 | 2,942,623 | $ 2,940,029 |
Adjustments Due To Topic 606 [Member] | |||
Assets [Abstract] | |||
Prepaid expenses and other | 119 | ||
Investments and other | 1,133 | ||
Liabilities [Abstract] | |||
Accrued Expenses - Taxes | 437 | ||
Accrued Expenses - Other | (2,614) | ||
Deferred income taxes | 471 | ||
Other Liabilities (Long term) | (246) | ||
Stockholders' Equity Attributable to Parent [Abstract] | |||
Retained earnings | 3,204 | ||
Adjustments Due To Topic 740 [Member] | |||
Assets [Abstract] | |||
Prepaid expenses and other | (610) | ||
Investments and other | 0 | ||
Liabilities [Abstract] | |||
Accrued Expenses - Taxes | 0 | ||
Accrued Expenses - Other | 0 | ||
Deferred income taxes | 0 | ||
Other Liabilities (Long term) | 0 | ||
Stockholders' Equity Attributable to Parent [Abstract] | |||
Retained earnings | $ (610) |
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. 29, 2018 | Sep. 29, 2018 | |
Disaggregation of Revenue [Abstract] | ||
Net sales | $ 3,279,678 | $ 9,826,793 |
North America [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 2,238,831 | 6,480,105 |
International [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 1,040,847 | 3,346,688 |
Healthcare Distribution [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 3,135,775 | 9,456,610 |
Healthcare Distribution [Member] | North America [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 2,115,008 | 6,172,279 |
Healthcare Distribution [Member] | International [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 1,020,767 | 3,284,331 |
Healthcare Distribution [Member] | Dental [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 1,514,538 | 4,675,212 |
Healthcare Distribution [Member] | Dental [Member] | North America [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 951,412 | 2,831,062 |
Healthcare Distribution [Member] | Dental [Member] | International [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 563,126 | 1,844,150 |
Healthcare Distribution [Member] | Animal Health [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 899,295 | 2,805,031 |
Healthcare Distribution [Member] | Animal Health [Member] | North America [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 460,838 | 1,425,273 |
Healthcare Distribution [Member] | Animal Health [Member] | International [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 438,457 | 1,379,758 |
Healthcare Distribution [Member] | Medical [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 721,942 | 1,976,367 |
Healthcare Distribution [Member] | Medical [Member] | North America [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 702,758 | 1,915,944 |
Healthcare Distribution [Member] | Medical [Member] | International [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 19,184 | 60,423 |
Technology and Value-Added Services [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 143,903 | 370,183 |
Technology and Value-Added Services [Member] | North America [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | 123,823 | 307,826 |
Technology and Value-Added Services [Member] | International [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Net sales | $ 20,080 | $ 62,357 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 29, 2018 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with Customer, Liability, Current | $ 73.7 | $ 85.7 |
Contract with Customer, Liability, Noncurrent | 5.5 | $ 5.2 |
Contract with Customer, Liability, Revenue Recognized | $ 69.7 |
Segment Data (Details)
Segment Data (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2018USD ($)number | Sep. 30, 2017USD ($) | Sep. 29, 2018USD ($)number | Sep. 30, 2017USD ($) | ||
Segment Reporting [Abstract] | |||||
Number of reportable segments | number | 2 | ||||
Number of countries served globally | number | 34 | 34 | |||
Segment Reporting Information [Line Items] | |||||
Net sales | $ 3,279,678 | $ 3,161,083 | $ 9,826,793 | $ 9,143,489 | |
Operating income | 165,926 | 213,548 | 573,417 | 618,178 | |
Healthcare Distribution [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [1] | 3,135,775 | 3,052,071 | 9,456,610 | 8,819,979 |
Operating income | 127,990 | 181,612 | 471,543 | 521,278 | |
Healthcare Distribution [Member] | Dental [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 1,514,538 | 1,478,730 | 4,675,212 | 4,372,055 | |
Healthcare Distribution [Member] | Animal Health [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 899,295 | 882,580 | 2,805,031 | 2,586,850 | |
Healthcare Distribution [Member] | Medical [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 721,942 | 690,761 | 1,976,367 | 1,861,074 | |
Technology and Value-Added Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | [2] | 143,903 | 109,012 | 370,183 | 323,510 |
Operating income | $ 37,936 | $ 31,936 | $ 101,874 | $ 96,900 | |
[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. |
Debt - Bank Credit Lines (Detai
Debt - Bank Credit Lines (Details) - USD ($) $ in Millions | 4 Months Ended | 9 Months Ended | ||
Apr. 18, 2017 | Sep. 29, 2018 | Jun. 29, 2018 | Dec. 30, 2017 | |
Line of Credit Facility [Line Items] | ||||
Weighted average interest rate on borrowings under credit lines at period end (in hundredths) | 3.06% | 2.27% | ||
Revolving credit facility maturing in April 2022 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Revolving credit facility borrowing capacity | $ 750 | |||
Revolving credit facility expiration date | Apr. 1, 2022 | |||
Line of credit facility, amount outstanding | $ 350 | $ 320 | ||
Outstanding letters of credit provided to third parties | 11.2 | 11.3 | ||
Swing-line commitments [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Revolving credit facility borrowing capacity | $ 75 | |||
Revolving Credit Facility maturing in September 2019 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Extinguishment Of Line of Credit | $ 500 | |||
Revolving credit facility expiration date | Sep. 1, 2019 | |||
Various other short-term bank credit lines [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, amount outstanding | $ 394.9 | $ 421.7 |
Debt - Private Placement Facili
Debt - Private Placement Facilities (Details) - Private placement facilities [Member] $ in Billions | 9 Months Ended |
Sep. 29, 2018USD ($) | |
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. 29, 2018 | Dec. 30, 2017 | |
Debt Instrument [Line Items] | ||||
Long-term debt and capital lease obligations including current maturities | $ 1,012,797 | $ 924,415 | ||
Private Placement Facilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Less: Deferred debt issuance costs | (439) | |||
Long-term debt and capital lease obligations including current maturities | $ 628,132 | $ 535,295 | ||
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 | $ 28,571 | |||
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] | Annual repayments of approximately $7.1 million for this borrowing commenced on January 20, 2016. |
Debt - Committed Loan Associate
Debt - Committed Loan Associated with Animal Health Spin-off (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 29, 2018 | Apr. 20, 2018 | Dec. 30, 2017 | |
Debt Instrument [Line Items] | |||
Bank credit lines | $ 1,144,881 | $ 741,653 | |
Line of Credit Facility, Interest Rate at Period End | 3.06% | 2.27% | |
Committed Loan Associated with Animal Health Spin-off [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Initiation Date | May 21, 2018 | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000 | ||
Line of Credit Facility, Expiration Date | Mar. 31, 2019 | ||
Bank credit lines | $ 400,000 | ||
Equity Method Investment Aggregate Cost | $ 365,000 | ||
Line of Credit Facility, Interest Rate at Period End | 3.125% |
Debt - U.S. Trade Accounts Rece
Debt - U.S. Trade Accounts Receivable Securitization (Details) - USD ($) $ in Thousands | 5 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 01, 2016 | Jul. 06, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 30, 2017 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||||||
Repayments of Long-term Debt | $ 27,621 | $ 59,531 | ||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 1,012,797 | $ 924,415 | ||||
U.S. trade accounts receivable securitization [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Pricing commitment period | 3 years | |||||
Debt Instrument, Maturity Date | Apr. 29, 2019 | Apr. 29, 2020 | ||||
Debt Instrument Maximum Borrowing Capacity | $ 300,000 | $ 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] | ||||||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 350,000 | $ 350,000 | ||||
Debt instrument, variable rate basis at period end | 2.31% | 1.53% | ||||
Debt instrument, basis spread on variable rate | 0.75% | 0.75% | ||||
Debt instrument, interest rate at period end | 3.06% | 2.28% |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 30, 2017 |
Debt Instrument [Line Items] | ||
Long-term debt and capital lease obligations including current maturities | $ 1,012,797 | $ 924,415 |
Less current maturities | (12,482) | (16,659) |
Total long-term debt | 1,000,315 | 907,756 |
Private Placement Facilities [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt and capital lease obligations including current maturities | 628,132 | 535,295 |
U S Trade Accounts Receivable Securitization [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt and capital lease obligations including current maturities | 350,000 | 350,000 |
Various collateralized and uncollateralized long-term loans payable with interest, in varying installments [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt and capital lease obligations including current maturities | $ 29,719 | $ 34,027 |
Various collateralized and uncollateralized long-term loans payable with interest, in varying installments [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.61% | 2.56% |
Various collateralized and uncollateralized long-term loans payable with interest, in varying installments [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.73% | 12.90% |
Capital Lease Obligations [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt and capital lease obligations including current maturities | $ 4,946 | $ 5,093 |
Capital Lease Obligations [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 0.07% | 0.84% |
Capital Lease Obligations [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 19.79% | 19.79% |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 29, 2018 | Dec. 30, 2017 | |
Components of the change in the redeemable noncontrolling interests [Abstract] | ||
Balance, beginning of period | $ 832,138 | $ 607,636 |
Decrease in redeemable noncontrolling interests due to redemptions | (666,363) | (48,669) |
Increase in redeemable noncontrolling interests due to business acquisitions | 10,058 | 78,939 |
Net income attributable to redeemable noncontrolling interests | 17,019 | 52,203 |
Dividends declared | (16,293) | (28,161) |
Effect of foreign currency translation gain (loss) attributable to redeemable noncontrolling interests | (13,752) | 7,461 |
Change in fair value of redeemable securities | 119,695 | 162,729 |
Balance, end of period | $ 282,502 | $ 832,138 |
Comprehensive Income - Accumula
Comprehensive Income - Accumulated Other Comprehensive Income and Comprehensive Income Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 30, 2017 | |
Attributable to Redeemable noncontrolling interests: | |||||
Foreign currency translation adjustment | $ (19,316) | $ (19,316) | $ (5,564) | ||
Attributable to noncontrolling interests: | |||||
Foreign currency translation adjustment | (553) | (553) | 539 | ||
Attributable to Henry Schein, Inc.: | |||||
Foreign currency translation gain (loss) | (203,749) | (203,749) | (112,439) | ||
Unrealized gain (loss) from foreign currency hedging activities | (108) | (108) | (782) | ||
Unrealized investment gain (loss) | (5) | (5) | (3) | ||
Pension adjustment loss | (15,787) | (15,787) | (16,843) | ||
Accumulated other comprehensive loss | (219,649) | (219,649) | (130,067) | ||
Total Accumulated other comprehensive loss | (239,518) | (239,518) | $ (135,092) | ||
Components of comprehensive income [Abstract] | |||||
Net income | 126,976 | $ 150,948 | 423,116 | $ 450,783 | |
Foreign currency translation gain (loss) | (10,582) | 58,916 | (106,154) | 173,166 | |
Tax effect | 0 | 0 | 0 | 0 | |
Foreign currency translation gain (loss) | (10,582) | 58,916 | (106,154) | 173,166 | |
Unrealized gain (loss) from foreign currency hedging activities | (406) | 26 | 1,079 | (1,278) | |
Tax effect | 27 | (60) | (405) | 4 | |
Unrealized gain (loss) from foreign currency hedging activities | (379) | (34) | 674 | (1,274) | |
Unrealized investment gain (loss) | (1) | (3) | (2) | (3) | |
Tax effect | 0 | 1 | 0 | 1 | |
Unrealized investment gain (loss) | (1) | (2) | (2) | (2) | |
Pension adjustment gain (loss) | 139 | (529) | 1,449 | (1,571) | |
Tax effect | (23) | 176 | (393) | 508 | |
Pension adjustment gain (loss) | 116 | (353) | 1,056 | (1,063) | |
Comprehensive income | $ 116,130 | $ 209,475 | $ 318,690 | $ 621,610 |
Comprehensive Income - Foreign
Comprehensive Income - Foreign Currency Translation Gain (Loss) Components (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 29, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 29, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2018 | Dec. 30, 2017 | Jul. 01, 2017 | Dec. 26, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Foreign currency translation gain (loss) | $ (10,582) | $ 58,916 | $ (106,154) | $ 173,166 | ||||
Euro | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Foreign currency translation gain (loss) | $ (144) | $ 30,373 | $ (27,896) | $ 95,715 | ||||
FX rate into USD | 1.16 | 1.18 | 1.16 | 1.18 | 1.16 | 1.2 | 1.14 | 1.05 |
British Pound | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Foreign currency translation gain (loss) | $ (1,804) | $ 9,168 | $ (11,886) | $ 24,712 | ||||
FX rate into USD | 1.31 | 1.34 | 1.31 | 1.34 | 1.31 | 1.35 | 1.3 | 1.23 |
Australian Dollar | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Foreign currency translation gain (loss) | $ (5,507) | $ 3,767 | $ (21,227) | $ 16,220 | ||||
FX rate into USD | 0.72 | 0.78 | 0.72 | 0.78 | 0.74 | 0.78 | 0.77 | 0.72 |
Canadian Dollar | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Foreign currency translation gain (loss) | $ 1,488 | $ 5,640 | $ (4,366) | $ 9,820 | ||||
FX rate into USD | 0.77 | 0.8 | 0.77 | 0.8 | 0.76 | 0.8 | 0.77 | 0.74 |
Polish Zloty | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Foreign currency translation gain (loss) | $ 1,253 | $ 940 | $ (3,907) | $ 7,891 | ||||
FX rate into USD | 0.27 | 0.27 | 0.27 | 0.27 | 0.27 | 0.29 | 0.27 | 0.24 |
Swiss Franc | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Foreign currency translation gain (loss) | $ 266 | $ 407 | $ (1,741) | $ 5,305 | ||||
FX rate into USD | 1.02 | 1.03 | 1.02 | 1.03 | 1 | 1.03 | 1.04 | 0.98 |
Brazilian Real | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Foreign currency translation gain (loss) | $ (6,001) | $ 6,400 | $ (32,701) | $ 4,136 | ||||
FX rate into USD | 0.25 | 0.32 | 0.25 | 0.32 | 0.26 | 0.3 | 0.3 | 0.31 |
All other currencies | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
Foreign currency translation gain (loss) | $ (133) | $ 2,221 | $ (2,430) | $ 9,367 |
Comprehensive Income - Total Co
Comprehensive Income - Total Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Comprehensive Income Net Of Applicable Taxes [Abstract] | ||||
Comprehensive income attributable to Henry Schein, Inc. | $ 113,221 | $ 193,085 | $ 313,326 | $ 577,403 |
Comprehensive income (loss) attributable to noncontrolling interests | 2,478 | 372 | 2,097 | 848 |
Comprehensive income (loss) attributable to Redeemable noncontrolling interests | 431 | 16,018 | 3,267 | 43,359 |
Comprehensive income (loss) | $ 116,130 | $ 209,475 | $ 318,690 | $ 621,610 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | $ 282,502 | $ 832,138 | $ 607,636 |
Estimate of Fair Value Measurement [Member] | |||
Debt Instrument, Fair Value Disclosure [Abstract] | |||
Fair value of debt | 2,157,700 | 1,666,100 | |
Fair value, measurements, recurring [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 18,135 | 11,799 | |
Total assets | 18,135 | 11,799 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 2,824 | 2,089 | |
Total liabilities | 2,824 | 2,089 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | 282,502 | 832,138 | |
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 | 18,135 | 11,799 | |
Total assets | 18,135 | 11,799 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 2,824 | 2,089 | |
Total liabilities | 2,824 | 2,089 | |
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 | $ 282,502 | $ 832,138 |
Business Acquisitions and Pla_2
Business Acquisitions and Planned Divestiture (Narrative) (Details) $ / shares in Units, $ in Thousands | Jul. 01, 2018USD ($) | Apr. 23, 2018USD ($)Individuals$ / shares | Sep. 29, 2018USD ($)$ / shares | Sep. 30, 2017USD ($) | Sep. 29, 2018USD ($)$ / shares | Sep. 30, 2017USD ($) | Dec. 30, 2017USD ($)$ / shares | |
Business Acquisition [Line Items] | ||||||||
Revenues | $ 3,279,678 | $ 3,161,083 | $ 9,826,793 | $ 9,143,489 | ||||
Business acquisition allocated initial goodwill amount | $ 2,685,681 | $ 2,685,681 | $ 2,301,331 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Technology and Value-Added Services [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Revenues | [1] | $ 143,903 | $ 109,012 | $ 370,183 | $ 323,510 | |||
Henry Schein One [Member] | Technology and Value-Added Services [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition allocated initial goodwill amount | $ 412,800 | |||||||
Scenario, Plan [Member] | Vets First Corp [Member] | Minimum [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from dividends received | $ 1,000,000 | |||||||
Scenario, Plan [Member] | Vets First Corp [Member] | Maximum [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from dividends received | $ 1,250,000 | |||||||
Scenario, Plan [Member] | Henry Schein One [Member] | HS Spinco, Inc [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||
Pro Forma [Member] | Henry Schein One [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Revenues | $ 400,000 | |||||||
Pro Forma [Member] | Henry Schein One [Member] | Internet Brands Inc [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Revenues | $ 100,000 | |||||||
Henry Schein Inc, and certain minority holders, if applicable [Member] | Henry Schein One [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 74.00% | |||||||
Henry Schein Inc, and certain minority holders, if applicable [Member] | Henry Schein One [Member] | Internet Brands Inc [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 26.00% | |||||||
Henry Schein Inc, and certain minority holders, if applicable [Member] | Scenario, Plan [Member] | Vets First Corp [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of individuals nominated to board of directors | Individuals | 6 | |||||||
Henry Schein Inc, and certain minority holders, if applicable [Member] | Scenario, Plan [Member] | Henry Schein One [Member] | Internet Brands Inc [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Noncontrolling interest, ownership percentage increase, second through fifth anniversary | 7.60% | |||||||
Noncontrolling interest, ownership percentage maximum additional increase, contingency | 1.60% | |||||||
Direct Vet Marketing [Member] | Scenario, Plan [Member] | Vets First Corp [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 37.00% | |||||||
Number of individuals nominated to board of directors | Individuals | 5 | |||||||
HS Spinco, Inc [Member] | Scenario, Plan [Member] | Vets First Corp [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 63.00% | |||||||
[1] | 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. |
Plans of Restructuring - Narrat
Plans of Restructuring - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Jul. 09, 2018 | Sep. 29, 2018 | Sep. 30, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges, pre-tax | $ 8,853 | $ 0 | $ 27,511 | $ 0 | |
Earnings Per Share, Diluted | $ (0.79) | $ (0.87) | $ (2.62) | $ (2.61) | |
Employee severance pay and benefits [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges, pre-tax | $ 26,474 | ||||
Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges, pre-tax | 757 | ||||
November 2014 restructuring initiative [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring Charges, pre-tax | $ 27,511 | ||||
Strategic Plan, 2018 to 2020 [Member] | Minimum [Member] | Scenario, Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring And Related Cost Expected Percentage Of Workforce Eliminated | 2.00% | ||||
Restructuring and Related Cost, Expected Cost | $ 45,000 | ||||
Earnings Per Share, Diluted | $ 0.22 | ||||
Strategic Plan, 2018 to 2020 [Member] | Minimum [Member] | Scenario, Plan [Member] | Employee severance pay and benefits [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | $ 40,000 | ||||
Strategic Plan, 2018 to 2020 [Member] | Minimum [Member] | Scenario, Plan [Member] | Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | $ 5,000 | ||||
Strategic Plan, 2018 to 2020 [Member] | Maximum [Member] | Scenario, Plan [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring And Related Cost Expected Percentage Of Workforce Eliminated | 3.00% | ||||
Restructuring and Related Cost, Expected Cost | $ 55,000 | ||||
Earnings Per Share, Diluted | $ 0.27 | ||||
Strategic Plan, 2018 to 2020 [Member] | Maximum [Member] | Scenario, Plan [Member] | Employee severance pay and benefits [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | $ 45,000 | ||||
Strategic Plan, 2018 to 2020 [Member] | Maximum [Member] | Scenario, Plan [Member] | Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | $ 10,000 |
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. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 30, 2017 | |
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | $ 4,557 | $ 25,703 | $ 25,703 | ||
Provision | $ 8,853 | $ 0 | 27,511 | 0 | |
Payments and other adjustments | (18,555) | (21,146) | |||
Restructuring Reserve, ending balance | 13,513 | 13,513 | 4,557 | ||
Healthcare Distribution [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 4,557 | 25,238 | 25,238 | ||
Provision | 25,625 | ||||
Payments and other adjustments | (18,065) | (20,681) | |||
Restructuring Reserve, ending balance | 12,117 | 12,117 | 4,557 | ||
Technology [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 0 | 465 | 465 | ||
Provision | 1,886 | ||||
Payments and other adjustments | (490) | (465) | |||
Restructuring Reserve, ending balance | 1,396 | 1,396 | 0 | ||
Employee Severance [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 3,218 | 22,354 | 22,354 | ||
Provision | 26,474 | ||||
Payments and other adjustments | (16,908) | (19,136) | |||
Restructuring Reserve, ending balance | 12,784 | 12,784 | 3,218 | ||
Facility Closing [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 1,315 | 2,454 | 2,454 | ||
Provision | 757 | ||||
Payments and other adjustments | (1,441) | (1,139) | |||
Restructuring Reserve, ending balance | 631 | 631 | 1,315 | ||
Other Restructuring [Member] | |||||
Restructuring Reserve [Roll Forward] | |||||
Restructuring Reserve, beginning balance | 24 | $ 895 | 895 | ||
Provision | 280 | ||||
Payments and other adjustments | (206) | (871) | |||
Restructuring Reserve, ending balance | $ 98 | $ 98 | $ 24 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 152,533 | 156,914 | 152,970 | 157,386 |
Effect of dilutive securities: | ||||
Stock options, restricted stock and restricted stock units (in shares) | 1,081 | 1,357 | 1,012 | 1,480 |
Diluted (in shares) | 153,614 | 158,271 | 153,982 | 158,866 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Effective tax rate (in hundredths) | 23.30% | 26.30% | |||
Unrecognized tax benefits | $ 104,600 | $ 104,600 | |||
Unrecognized tax benefits that would affect the effective tax rate if recognized | 83,000 | 83,000 | |||
Total interest | 15,300 | 15,300 | |||
Total penalties | 0 | $ 0 | |||
Other Information Pertaining to Income Taxes | In 2016, we reached a settlement on a portion of the IRS audit of tax years 2012 and 2013, and 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. During the quarter ended June 30, 2017, we filed a protest with the Appellate Division regarding the remaining open audit issues for the years 2012 and 2013. We had an initial Appeals Conference during the third quarter of 2018. In addition, we are working on finalizing our submission for an Advanced Pricing Agreement pursuant to which Henry Schein, Inc. and the IRS would agree on an appropriate transfer pricing methodology for future tax years. We do not expect this to have a material effect on our consolidated financial position, liquidity or results of operations. | ||||
Income Tax Examination [Line Items] | |||||
Income Tax Expense (Benefit) | $ 29,401 | $ 59,340 | $ 124,084 | $ 156,276 | |
Provision for transitional tax | $ 140,000 | ||||
Revaluation of deferred tax assets and liabilities | $ 3,000 | ||||
Tax Cuts and Jobs Act, Incomplete Accounting, Provisional Income Tax (Benefit) | 10,000 | ||||
Tax Cuts and Jobs Act, revaluation of deferred tax asset (liability) | 1,500 | ||||
Accounting Standards Update 2016-09 [Member] | |||||
Income Tax Examination [Line Items] | |||||
Income Tax Expense (Benefit) | $ (1,000) | $ (19,500) |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Details) | 9 Months Ended |
Sep. 29, 2018 | |
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 ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Pre-tax share-based compensation expense | $ 10.9 | $ 12.6 | $ 34.2 | $ 32 |
After-tax share-based compensation expense | 8.7 | $ 9 | 26.2 | $ 23.6 |
Total unrecognized compensation cost related to non-vested awards | $ 91.4 | $ 91.4 | ||
Weighted-average period of recognition for unrecognized compensation costs on nonvested awards (in years) | 2 years 2 months 6 days | |||
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] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||
Period Over Which Earnings Per Share Performance Is Measured Against Specified Targets | 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. 29, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at beginning of period (in shares) | shares | 155 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (154) |
Forfeited (in shares) | shares | 0 |
Outstanding at end of period (in shares) | shares | 1 |
Ending balance, options exercisable (in shares) | shares | 1 |
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 | $ 29.65 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 29.81 |
Forfeited (in dollars per share) | $ / shares | 0 |
Outstanding at end of period (in dollars per share) | $ / shares | 17.22 |
Ending balance, options exercisable (in dollars per share) | $ / shares | $ 17.22 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Weighted average remaining contractual life, options outstanding (in years) | 4 months 24 days |
Weighted average remaining contractual life, options exercisable (in years) | 4 months 24 days |
Stock option outstanding aggregate intrinsic value as of period end | $ | $ 136 |
Stock option exercisable aggregate intrinsic value as of period end | $ | $ 136 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Resticted Stock Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 29, 2018$ / 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 | 1,233 |
Granted (in shares) | shares | 363 |
Vested (in shares) | shares | (311) |
Forfeited (in shares) | shares | (78) |
Ending balance outstanding (in shares) | shares | 1,207 |
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) | $ 70.28 |
Granted (in dollars per share) | 65.88 |
Vested (in dollars per share) | 62.96 |
Forfeited (in dollars per share) | 77.96 |
Ending balance outstanding (in dollars per share) | 70.34 |
Intrinsic value (in dollars per share) | $ 85.03 |
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 | 1,226 |
Granted (in shares) | shares | 397 |
Vested (in shares) | shares | (426) |
Forfeited (in shares) | shares | (72) |
Ending balance outstanding (in shares) | shares | 1,125 |
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) | $ 60.81 |
Granted (in dollars per share) | 68.76 |
Vested (in dollars per share) | 71.33 |
Forfeited (in dollars per share) | 77.39 |
Ending balance outstanding (in dollars per share) | 55.75 |
Intrinsic value (in dollars per share) | $ 85.03 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | |
Supplemental Cash Flow Information [Abstract] | ||||
Interest | $ 52,108 | $ 33,640 | ||
Income taxes | 207,474 | 179,445 | ||
Unrealized gain (loss) from foreign currency hedging activities | $ (406) | $ 26 | $ 1,079 | $ (1,278) |
Noncash or Part Noncash Acquisitions [Line Items] | ||||
Business Acquisition, non-cash transaction | 1,300 | |||
Henry Schein One [Member] | Scenario, Plan [Member] | Internet Brands Inc [Member] | ||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||
Business Acquisition, non-cash transaction | $ 337,000 | |||
Noncontrolling Interest, Ownership Percentage by Parent | 26.00% | 26.00% | ||
Henry Schein One [Member] | Scenario, Plan [Member] | Internet Brands Inc [Member] | Internet Brands Inc [Member] | ||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||
Business Acquisition, non-cash transaction | $ 95,000 | |||
Noncash or Part Noncash Acquisition, Interest Acquired | 9.20% |
Legal Proceedings (Details)
Legal Proceedings (Details) - USD ($) $ in Thousands | Oct. 09, 2018 | Sep. 29, 2018 | Sep. 30, 2017 | Sep. 29, 2018 | Sep. 30, 2017 | Dec. 30, 2017 |
Loss Contingency, Information about Litigation Matters [Abstract] | ||||||
Litigation settlements | $ 38,488 | $ 0 | $ 38,488 | $ 5,325 | ||
Loss Contingency, Management's Assessment and Process | As of September 29, 2018, 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 2,016 | |||||
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 allege, 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. | |||||
Litigation settlements | $ 38,500 | |||||
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 a conspiracy 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 | 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”), Patterson Companies, Inc. (“Patterson”), Benco Dental Supply Co. (“Benco”) | |||||
Loss Contingency, Name of Plaintiff | Archer and White Sales, Inc. | |||||
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 | 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”), Patterson Companies, Inc. (“Patterson”), Benco Dental Supply Co. (“Benco”) | |||||
Loss Contingency, Name of Plaintiff | Archer and White Sales, Inc. | |||||
Loss Contingency, Allegations | 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, 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, et al. v. Becton, Dickinson, and Co., et al [Member] | ||||||
Loss Contingency, Information about Litigation Matters [Abstract] | ||||||
Loss Contingency, Lawsuit Filing Date | May 3, 2018 | |||||
Loss Contingency, Name of Defendant | Becton, Dickinson, and Co. (“Becton”); Vizient, Inc. (“Vizient”); Cardinal Health, Inc. (“Cardinal”); Owens & Minor Inc. (“O&M”); and Henry Schein, Inc. | |||||
Loss Contingency, Name of Plaintiff | Marion Diagnostic Center, LLC | |||||
Loss Contingency, Allegations | The complaint alleges that the defendants entered into a vertical conspiracy to force healthcare providers into long-term exclusionary contracts that restrain trade in the nationwide markets for conventional and safety syringes and safety IV catheters and that 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 | Plaintiffs allege 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 to monitor and restrict the improper distribution of those drugs. | |||||
City of Barberton, et al. v. Purdue Pharma, L.P., et al. [Member] | ||||||
Loss Contingency, Information about Litigation Matters [Abstract] | ||||||
Loss Contingency, Lawsuit Filing Date | July 3, 2018 | |||||
Loss Contingency, Name of Defendant | Henry Schein, Inc., Henry Schein Medical Systems, Inc. and others | |||||
Loss Contingency, Name of Plaintiff | City of Barberton, Ohio (and related entities) | |||||
Loss Contingency, Allegations | similar to The County of Summit complaint | |||||
City of Barberton, et al. v. Purdue Pharma, L.P., et al. [Member] | North America [Member] | ||||||
Loss Contingency, Information about Litigation Matters [Abstract] | ||||||
Sales of opioids, percentage | 1.00% | |||||
Kramer v. Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and Unnamed Co-Conspirators [Member] | Subsequent Event [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 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. |
Uncategorized Items - hsic-2018
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 2,594,000 |
Noncontrolling Interests [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Accumulated Other Comprehensive Income (Loss) [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 0 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 2,594,000 |
Common Stock [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 0 |