Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 30, 2019 | Apr. 29, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 30, 2019 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 | |
Current Fiscal Year End Date | --12-28 | |
Entity Central Index Key | 0001000228 | |
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 | 149,074,485 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 88,115 | $ 56,885 |
Accounts receivable, net of reserves of $52,205 and $53,121 | 1,193,054 | 1,168,776 |
Inventories, net | 1,370,376 | 1,415,512 |
Prepaid expenses and other | 457,566 | 451,033 |
Assets of discontinued operations | 0 | 1,083,014 |
Total current assets | 3,109,111 | 4,175,220 |
Property and equipment, net | 315,393 | 314,221 |
Operating lease right-of-use asset, net | 248,122 | 0 |
Goodwill | 2,413,566 | 2,081,029 |
Other intangibles, net | 654,668 | 376,031 |
Investments and other | 404,004 | 420,367 |
Assets of discontinued operations | 0 | 1,133,659 |
Total assets | 7,144,864 | 8,500,527 |
Current liabilities: | ||
Accounts payable | 695,204 | 785,756 |
Bank credit lines | 299,914 | 951,458 |
Current maturities of long-term debt | 9,117 | 8,280 |
Operating lease liabilities | 68,460 | 0 |
Liabilities of discontinued operations | 0 | 577,607 |
Accrued expenses: | ||
Payroll and related | 210,016 | 242,876 |
Taxes | 162,483 | 154,613 |
Other | 433,582 | 498,237 |
Total current liabilities | 1,878,776 | 3,218,827 |
Long-term debt | 973,500 | 980,344 |
Deferred income taxes | 76,850 | 27,218 |
Operating lease liabilities | 187,308 | 0 |
Other liabilities | 327,057 | 357,741 |
Liabilities of discontinued operations | 0 | 62,453 |
Total liabilities | 3,443,491 | 4,646,583 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Redeemable noncontrolling interests | 286,700 | 219,724 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value, 1,000,000 shares authorized, none outstanding | 0 | 0 |
Common stock, $.01 par value, 480,000,000 shares authorized, 148,996,092 outstanding on March 31, 2019 and 151,401,668 outstanding on December 29, 2018 | 1,490 | 1,514 |
Additional paid-in capital | 86,128 | 0 |
Retained earnings | 2,859,182 | 3,208,589 |
Accumulated other comprehensive income (loss) | (149,878) | (248,771) |
Total Henry Schein, Inc. stockholders' equity | 2,796,922 | 2,961,332 |
Noncontrolling interests | 617,751 | 580,456 |
Total stockholders' equity | 3,414,673 | 3,541,788 |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | 7,144,864 | 8,500,527 |
Henry Schein Animal Health Business [Member] | ||
Current assets: | ||
Assets of discontinued operations | 1,083,014 | |
Operating lease right-of-use asset, net | 0 | |
Investments and other | 118,003 | |
Assets of discontinued operations | 1,133,659 | |
Current liabilities: | ||
Current maturities of long-term debt | 675 | |
Operating lease liabilities | 0 | |
Liabilities of discontinued operations | 577,607 | |
Accrued expenses: | ||
Long-term debt | 23,529 | |
Operating lease liabilities | 0 | |
Liabilities of discontinued operations | 62,453 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Redeemable noncontrolling interests | $ 0 | $ 92,432 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Current assets: | ||
Accounts receivable, reserves (in dollars) | $ 52,205 | $ 53,121 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 480,000,000 | 480,000,000 |
Common stock, shares outstanding (in shares) | 148,996,092 | 151,401,668 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
CONSOLIDATED STATEMENTS OF INCOME | ||
Net sales | $ 2,360,268 | $ 2,273,450 |
Cost of sales | 1,608,578 | 1,554,321 |
Gross profit | 751,690 | 719,129 |
Operating expenses: | ||
Selling, general and administrative | 574,608 | 554,214 |
Restructuring costs | 4,641 | 2,675 |
Operating income | 172,441 | 162,240 |
Other income (expense): | ||
Interest income | 4,771 | 3,453 |
Interest expense | (16,301) | (16,904) |
Other, net | (419) | (750) |
Income from continuing operations before taxes and equity in earnings of affiliates and noncontrolling interest | 160,492 | 148,039 |
Income taxes | (39,482) | (36,142) |
Equity in earnings of affiliates | 2,630 | 2,820 |
Net income from continuing operations | 123,640 | 114,717 |
Income (loss) from discontinued operations | (8,996) | 33,914 |
Net income | 114,644 | 148,631 |
Less: Net income attributable to noncontrolling interests | (5,227) | (3,183) |
Less: Net (income) loss attributable to noncontrolling interests from discontinued operations | 366 | (5,230) |
Net income attributable to Henry Schein, Inc. | 109,783 | 140,218 |
Continuing operations | 118,413 | 111,534 |
Discontinued operations | (8,630) | 28,684 |
Net income attributable to Henry Schein, Inc. | $ 109,783 | $ 140,218 |
Earnings per share from continuing operations attributable to Henry Schein, Inc.: | ||
Basic (in dollars per share) | $ 0.79 | $ 0.73 |
Diluted (in dollars per share) | 0.78 | 0.72 |
Earnings (loss) per share from discontinued operations attributable to Henry Schein, Inc.: | ||
Basic (in dollars per share) | (0.06) | 0.19 |
Diluted (in dollars per share) | (0.06) | 0.19 |
Earnings per share attributable to Henry Schein, Inc.: | ||
Basic (in dollars per share) | 0.73 | 0.92 |
Diluted (in dollars per share) | $ 0.73 | $ 0.91 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 150,257 | 153,106 |
Diluted (in shares) | 151,156 | 154,130 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 114,644 | $ 148,631 |
Other comprehensive income, net of tax: | ||
Foreign currency translation gain | 6,602 | 34,224 |
Unrealized loss from foreign currency hedging activities | (1,281) | (902) |
Unrealized investment gain | 3 | 0 |
Pension adjustment gain (loss) | 717 | (23) |
Other comprehensive income, net of tax | 6,041 | 33,299 |
Comprehensive income | 120,685 | 181,930 |
Comprehensive income attributable to noncontrolling interests: | ||
Net income | (4,861) | (8,413) |
Foreign currency translation gain (loss) | (556) | (1,120) |
Comprehensive income attributable to noncontrolling interests | (5,417) | (9,533) |
Comprehensive income attributable to Henry Schein, Inc. | $ 115,268 | $ 172,397 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Noncontrolling Interests [Member] |
Cumulative impact of adopting new accounting standards | $ 2,594,000 | $ 0 | $ 0 | $ 2,594,000 | $ 0 | $ 0 |
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 | |||||
Net income (excluding attributable to Redeemable noncontrolling interests from continuing and discontinued operations) | 140,307,000 | $ 0 | 0 | 140,218,000 | 0 | 89,000 |
Foreign currency translation gain (excluding attributable to Redeemable noncontrolling interests and discontinued operations) | 33,327,000 | 0 | 0 | 0 | 33,104,000 | 223,000 |
Unrealized loss from foreign currency hedging activities, net of tax benefit | (902,000) | 0 | 0 | 0 | (902,000) | 0 |
Unrealized investment loss, net of tax of $1 | 0 | |||||
Pension adjustment loss, net of tax impact | (23,000) | 0 | 0 | 0 | (23,000) | 0 |
Dividends paid | (161,000) | 0 | 0 | 0 | 0 | (161,000) |
Other adjustments | 786,000 | 0 | 7,000 | 0 | 0 | 779,000 |
Change in fair value of redeemable securities | (82,361,000) | 0 | (82,361,000) | 0 | 0 | 0 |
Initial noncontrolling interests and adjustments related to business acquisitions | (3,905,000) | 0 | 0 | 0 | 0 | (3,905,000) |
Stock issued upon exercise of stock options | 3,022,000 | $ 2,000 | 3,020,000 | 0 | 0 | 0 |
Stock issued upon exercise of stock options, shares | 151,516 | |||||
Stock-based compensation expense - Value | 8,754,000 | $ 4,000 | 8,750,000 | 0 | 0 | 0 |
Stock-based compensation expense - Shares | 430,330 | |||||
Shares withheld for payroll taxes - Value | (16,394,000) | $ (3,000) | (16,391,000) | 0 | 0 | 0 |
Shares withheld for payroll taxes - Shares | (246,989) | |||||
Settlement of stock-based compensation awards | (182,000) | $ 0 | (182,000) | 0 | 0 | 0 |
Settlement of stock-based compensation awards, shares | 0 | |||||
Deferred tax benefit arising from acquisition of noncontrolling interest in partnership | 2,644,000 | $ 0 | 2,644,000 | 0 | 0 | 0 |
Transfer of charges in excess of capital | 0 | 0 | 84,513,000 | (84,513,000) | 0 | 0 |
Ending Balance at Mar. 31, 2018 | 2,911,916,000 | 1,540,000 | 0 | 2,998,328,000 | (97,888,000) | 9,936,000 |
Cumulative impact of adopting new accounting standards | 0 | 0 | 0 | 0 | 0 | 0 |
Beginning Balance at Dec. 29, 2018 | $ 3,541,788,000 | $ 1,514,000 | 0 | 3,208,589,000 | (248,771,000) | 580,456,000 |
Beginning Balance, shares (in shares) at Dec. 29, 2018 | 151,401,668 | 151,401,668 | ||||
Net income (excluding attributable to Redeemable noncontrolling interests from continuing and discontinued operations) | $ 111,632,000 | $ 0 | 0 | 109,783,000 | 0 | 1,849,000 |
Foreign currency translation gain (excluding attributable to Redeemable noncontrolling interests and discontinued operations) | 6,201,000 | 0 | 0 | 0 | 6,046,000 | 155,000 |
Unrealized loss from foreign currency hedging activities, net of tax benefit | (1,281,000) | 0 | 0 | 0 | (1,281,000) | 0 |
Unrealized investment loss, net of tax of $1 | 3,000 | 0 | 0 | 0 | 3,000 | 0 |
Pension adjustment loss, net of tax impact | 717,000 | 0 | 0 | 0 | 717,000 | 0 |
Dividends paid | (69,000) | 0 | 0 | 0 | 0 | (69,000) |
Other adjustments | (2,000) | 0 | (2,000) | 0 | 0 | 0 |
Change in fair value of redeemable securities | (2,492,000) | 0 | (2,492,000) | 0 | 0 | 0 |
Initial noncontrolling interests and adjustments related to business acquisitions | 35,360,000 | 0 | 0 | 0 | 0 | 35,360,000 |
Repurchase and retirement of common stock - Value | (150,000,000) | $ (25,000) | (32,486,000) | (117,489,000) | 0 | 0 |
Repurchase and retirement of common stock - Shares | (2,523,137) | |||||
Adjustment for Animal Health Spin-off, Value | 1,000 | $ 1,000 | 0 | 0 | 0 | 0 |
Adjustment for Animal Health Spin-off, Shares | 87,629 | |||||
Stock issued upon exercise of stock options | 34,000 | $ 0 | 34,000 | 0 | 0 | 0 |
Stock issued upon exercise of stock options, shares | 2,526 | |||||
Stock-based compensation expense - Value | 7,435,000 | $ 2,000 | 7,433,000 | 0 | 0 | 0 |
Stock-based compensation expense - Shares | 200,877 | |||||
Shares withheld for payroll taxes - Value | (10,445,000) | $ (2,000) | (10,443,000) | 0 | 0 | 0 |
Shares withheld for payroll taxes - Shares | (173,471) | |||||
Settlement of stock-based compensation awards | 356,000 | $ 0 | 356,000 | 0 | 0 | 0 |
Settlement of stock-based compensation awards, shares | 0 | |||||
Share Sale related to Animal Health business | 361,090,000 | $ 0 | 361,090,000 | 0 | 0 | 0 |
Separation of Animal Health business | (485,655,000) | 0 | (35,905,000) | (543,158,000) | 93,408,000 | 0 |
Transfer of charges in excess of capital | 0 | 0 | (201,457,000) | 201,457,000 | 0 | 0 |
Ending Balance at Mar. 30, 2019 | $ 3,414,673,000 | $ 1,490,000 | $ 86,128,000 | $ 2,859,182,000 | $ (149,878,000) | $ 617,751,000 |
Ending Balance, shares (in shares) at Mar. 30, 2019 | 148,996,092 | 148,996,092 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Unrealized gain (loss) from foreign currency hedging activities, (tax benefit) tax | $ (322) |
Unrealized investment gain (loss), (tax benefit) tax | 1 |
Pension adjustment gain (loss), tax benefit (tax) | 224 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Net income attributable to redeemable noncontrolling interests | 3,378 |
Foreign currency translation gain (loss) attributable to Redeemable noncontrolling interests | (191) |
Continuing Operations [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Net income attributable to redeemable noncontrolling interests | 3,378 |
Foreign currency translation gain (loss) attributable to Redeemable noncontrolling interests | (191) |
Discontinued Operations [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Net income attributable to redeemable noncontrolling interests | 366 |
Foreign currency translation gain (loss) attributable to Redeemable noncontrolling interests | $ 592 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 114,644 | $ 148,631 |
Income (loss) from discontinued operations | (8,996) | 33,914 |
Income from continuing operations | 123,640 | 114,717 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 40,300 | 35,706 |
Stock-based compensation expense | 7,110 | 7,699 |
Provision for losses on trade and other accounts receivable | 1,784 | 2,783 |
Provision for deferred income taxes | 7,932 | 4,666 |
Equity in earnings of affiliates | (2,630) | (2,820) |
Distributions from equity affiliates | 52,301 | 3,548 |
Changes in unrecognized tax benefits | 3,214 | 2,413 |
Other | 1,239 | (5,087) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (11,580) | (11,688) |
Inventories | 77,881 | (61,210) |
Other current assets | (17,782) | 9,688 |
Accounts payable and accrued expenses | (150,075) | (165,023) |
Net cash provided by (used in) operating activities from continuing operations | 133,334 | (64,608) |
Net cash used in operating activities from discontinued operations | (167,073) | (6,336) |
Net cash provided by (used in) operating activities | (33,739) | (70,944) |
Cash flows from investing activities: | ||
Purchases of fixed assets | (15,918) | (13,643) |
Payments for equity investments and business acquisitions, net of cash acquired | (603,973) | (364) |
Proceeds from sale of equity investment | 10,500 | 0 |
Proceeds/(payments) for loan to affiliate | 15,940 | (4,500) |
Other | (3,076) | (3,421) |
Net cash provided by (used in) investing activities from continuing operations | (596,527) | (21,928) |
Net cash used in investing activities from discontinued operations | (2,064) | (13,238) |
Net cash provided by (used in) investing activities | (598,591) | (35,166) |
Cash flows from financing activities: | ||
Proceeds from (repayments of) bank borrowings | (652,117) | 212,055 |
Proceeds from issuance of debt | 741 | 100,000 |
Principal payments for long-term debt | (7,376) | (7,341) |
Debt issuance costs | 0 | (30) |
Proceeds from issuance of stock upon exercise of stock options | 34 | 3,022 |
Payments for repurchases of common stock | (150,000) | 0 |
Payments for taxes related to shares withheld for employee taxes | (9,671) | (15,012) |
Proceeds from (distributions to) noncontrolling stockholders | 52,205 | (549) |
Distribution received related to Animal Health Spin-off | 1,120,000 | 0 |
Proceeds related to Animal Health Share Sale | 361,090 | 0 |
Acquisitions of noncontrolling interests in subsidiaries | (6,057) | (261,433) |
Payments to Henry Schein Animal Health Business | (224,773) | (23,503) |
Net cash provided by financing activities from continuing operations | 484,076 | 7,209 |
Net cash provided by financing activities from discontinued operations | 148,053 | 20,550 |
Net cash provided by (used in) financing activities | 632,129 | 27,759 |
Effect of exchange rate changes on cash & cash equivalents-continuing operations | 10,347 | 1,572 |
Effect of exchange rate changes on cash & cash equivalents-discontinued operations | (2,240) | 1,356 |
Net change in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 56,885 | 158,002 |
Cash and cash equivalents, end of period | 88,115 | 80,247 |
Continuing Operations [Member] | ||
Net change in cash and cash equivalents | 31,230 | (77,755) |
Discontinued Operations [Member] | ||
Net change in cash and cash equivalents | $ (23,324) | $ 2,332 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 30, 2019 | |
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. We consolidate a Variable Interest Entity (“VIE”) where we hold a variable interest and are the primary beneficiary. The VIE is a trade accounts receivable securitization. We are the primary beneficiary because we have the power to direct activities that most significantly affect the economic performance and have the obligation to absorb the majority of the losses or benefits. The results of operations and financial position of this VIE are included in our consolidated financial statements. For the consolidated VIE, the trade accounts receivable transferred to the VIE are pledg ed as collateral to the related debt. The creditors have recourse to us for losses on these trade accounts receivable. At March 30, 2019 and December 29, 2018, trade accounts receivable that can only be used to settle obligations of this VIE were $ 432 mil lion and $ 422 million, respectively, and the liabilities of the VIE where the creditors have recourse to us were $ 350 million and $ 350 million, respectively. The consolidated financial statements reflect all adjustments considered necessary for a fair pre sentation of the consolidated results of operations and financial position for the interim periods presented. All such adjustments are of a normal recurring nature. These unaudited interim consolidated financial statements should be read in conjunction w ith the audited consolidated financial statements and notes to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 29, 2018 . On February 7, 2019 (the “Distribution Date”), we completed the separat ion (the “Separation”) and subsequent merger of our animal health business (the “Henry Schein Animal Health Business”) with Direct Vet Marketing, Inc. (d/b/a Vets First Choice, “Vets First Choice”) (the “Merger”). All financial information within this For m 10-Q presents the Henry Schein Animal Health Business as a discontinued operation. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabili ties, 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 three months ended March 30, 2019 are not necessarily indicative of the results to be expected for any other interim period or for the year ending December 28, 2019 . |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 30, 2019 | |
Discontinued Operations | |
Discontinued Operations | Note 2 – Discontinued Op erations Animal Health Spin-off On the Distribution Date, we completed the Separation and subsequent Merger of the Henry Schein Animal Health Business with Vets First Choice. This was accomplished by a series of transactions among us, Vets First Choice, Covetrus, Inc. (f/k/a HS Spinco, Inc. “Covetrus”), a wholly owned subsidiary of ours prior to the Distribution Date, and HS Merger Sub, Inc., a wholly owned subsidiary of Covetrus (“Merger Sub”). In connection wit h the Separation, we contributed, assigned and transferred to Covetrus certain applicable assets, liabilities and capital stock or other ownership interests relating to the Henry Schein Animal Health Business. On the Distribution Date, we received a tax-f ree distribution of $ 1,120 million from Covetrus pursuant to certain debt financing incurred by Covetrus. On the Distribution Date and prior to the Animal Health Spin-off, Covetrus issued shares of Covetrus common stock to certain institutional accredited investors (the “Share Sale Investors”) for $ 361.1 million (the “Share Sale”). The proceeds of the Share Sale were paid to Covetrus and distributed to us. Subsequent to the Share Sale, we distributed, on a pro rata basis, all of the shares of the common stock of Covetrus held by us to our stockholders of record as of the close of business on January 17, 2019 (the “Animal Health Spin-off”). After the Share Sale and Animal Health Spin-off, Merger Sub consummated the Merger whereby it merged with and into V ets First Choice, with Vets First Choice surviving the Merger as a wholly owned subsidiary of Covetrus. Immediately following the consummation of the Merger, on a fully diluted basis, (i) approximately 63 % of the shares of Covetrus common stock were (a) o wned by our stockholders and the Share Sale Investors, and (b) held by certain employees of the Henry Schein Animal Health Business (in the form of certain equity awards), and (ii) approximately 37 % of the shares of Covetrus common stock were (a) owned by stockholders of Vets First Choice immediately prior to the Merger, and (b) held by certain employees of Vets First Choice (in the form of certain equity awards). After the Separation and the Merger, we no longer beneficially owned any shares of Covetrus c ommon stock and, following the Distribution Date, will not consolidate the financial results of Covetrus for the purpose of our financial reporting. Following the Separation and the Merger, Covetrus was an independent, publicly traded company on the Nasda q Global Select Market. In connection with the completion of the Animal Health S pin-off, we entered into a transition service s agreement with Covetrus under which w e have agreed to provide certain transi tion servic es for up to twenty-four months in areas s uch as information technology , finance and accounting , human resources, supply chain, and real estate and facility services. As a result of the Separation, the financial position and results of operations of the Henry Schein Animal Health Business are pre sented as discontinued operations and have been excluded from continuing operations and segment results for all periods presented. The accompanying Notes to the Consolidated Financial Statements have been revised to reflect the effect of the Separation and all prior year balances have been revised accordingly to reflect continuing operations only. The historical statements of Comprehensive Income (Loss) and Shareholders' Equity have not been revised to reflect the Separation and instead reflect the Separati on as a final adjustment to the balances at March 30, 2019. Summarized financial information for our discontinued operations is as follows: Three Months Ended March 30, March 31, 2019 2018 Net sales $ 319,522 $ 946,988 Gross profit 59,425 176,462 Operating income (loss) (5,469) 43,901 Income taxes 4,764 11,622 Income (loss) from discontinued operations (8,996) 33,914 Net (income) loss attributable to noncontrolling interests 366 (5,230) Net income (loss) from discontinued operations attributable to Henry Schein, Inc. (8,630) 28,684 The financial information above represents activity of the discontinued operations during the quarter through the Distribution Date. The operating loss and the net loss for the three months ended March 30, 2019 was primarily attributable to approximately $ 20.9 million of transaction costs directly related to the Animal Health Spin-off being included in discontinued operations. The following are the amounts of assets and liabilities that were transferred to Covetrus as of February 7, 2019 and December 29, 2018. February 7, December 29, 2019 2018 (unaudited) (unaudited) Cash and cash equivalents $ 6,815 $ 23,324 Accounts receivable, net 432,812 434,935 Inventories, net 536,637 555,230 Prepaid expenses and other 120,546 69,525 Total current assets of discontinued operations 1,096,810 1,083,014 Property and equipment, net 69,790 68,177 Operating lease right-of-use asset, net 57,012 - Goodwill 742,931 739,266 Other intangibles, net 205,793 208,213 Investments and other 120,518 118,003 Total long-term assets of discontinued operations 1,196,044 1,133,659 Total assets of discontinued operations $ 2,292,854 $ 2,216,673 Accounts payable $ 316,162 $ 441,453 Current maturities of long-term debt 657 675 Operating lease liabilities 18,951 - Accrued expenses: Payroll and related 36,847 36,888 Taxes 24,060 17,552 Other 80,400 81,039 Total current liabilities of discontinued operations 477,077 577,607 Long-term debt 1,176,105 23,529 Deferred income taxes 17,019 4,352 Operating lease liabilities 38,668 - Other liabilities 29,209 34,572 Total long-term liabilities of discontinued operations 1,261,001 62,453 Total liabilities of discontinued operations $ 1,738,078 $ 640,060 Redeemable noncontrolling interests $ 28,270 $ 92,432 |
Critical Accounting Policies an
Critical Accounting Policies and Estimates and Accounting Pronouncements Adopted | 3 Months Ended |
Mar. 30, 2019 | |
Critical Accounting Policies and Estimates and Accounting Pronouncements Adopted | |
Critical Accounting Policies and Estimates and Accounting Pronouncements Adopted | Note 3 – Critical Accounting Policies and Estimates and Accounting Pronouncements Adopted 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 29, 2018. Revenue Recognition We generate revenue from the sale of dental and medical consumable products, equipment (Health care distribution revenues), software products and service s and other sources (Technology and value-added services revenues). 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 lik ely amount based 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-shipme nt 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 th e 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 typically 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 “Guarantees”. 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 de rived 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 ot her 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 and handling activities pe rformed 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 excluded 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 software 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. Bu ndled arrangements that include 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 o bservable selling price is 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 st ructure of our business, technical skill required, customer location and other market conditions. Contract Balances Contract balances represent amounts presented in our consolidated balance sheet when either we have transferred goods or services to the c ustomer or the customer has paid consideration to us under the contract. These contract balances include accounts receivable, contract assets and contract liabilities. Accounts Receivable Accounts receivable are generally recognized when heath care distr ibution and technology and value-added services revenues are recognized. 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 deli nquent 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 anticipated changes in any of the se 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 represent amounts owed to us by customers, but not yet billed. Contract assets are transferred to accounts receivable when the right becomes unconditional. The contract assets primarily relate to our bundled arrangements for the sale of equipment and consumables and sales of term so ftware licenses. Current contract assets are included in Prepaid expenses and other and the non-current contract assets are included in Investments and other within our consolidated balance sheet. Current and non-current contract asset balances as of Marc h 30, 2019 and December 29, 2018 were not material. Contract Liabilities Contract liabilities are comprised of advance payments and upfront payments for service arrangements provided over time that are accounted for as 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 consolida ted 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 s ales commissions are amortized over the estimated customer relationship 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 amorti zation period of the assets that we would have recognized is one year or less. Deferred commissions balances as of March 30, 2019 and December 29, 2018 were not material. Leases We determine if an arrangement contains a lease at inception. An arrangement contains a lease if it implicitly or explicitly identifies an asset to be used and conveys the right to control the use of the identified asset in exchange for consideration. As a lessee, we include o p erating leases in O perating lease right-of-use (“ROU”) assets, Accrued expenses-Operating lease liabilities, and N on-current operating lease liabilities in our consolidated balance sheet. Finance leases are included in P roperty and equipment, C urrent maturities of long-term debt, and L ong-term debt in our con solidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized upon commencement of the lease based on the present value of the lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement da te to determine the present value of lease payments. When readily determinable, we use the implicit rate. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense fo r lease payments is recognized on a straight-line basis over the lease term. Leases with a lease term of 12 months or less are not capitalized. We have lease agreements with lease and non-lease components, which are generally accounted for as a single lea se component, except non-lease components for leases of vehicles which are accounted for separately. When a vehicle lease contains both lease and non-lease components, we allocate the transaction price based on the relative standalone selling price. Accounting Pronouncements Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-02 “Leases (Topic 842)” related to leases requiring the recognition of ROU assets and lease liabilities on the balance sheet. Most significant among the changes in the standard is the recognition of ROU assets and lease liabilities by lessors for those leases classified as operating leases. Under the standard, disclosures are re quired to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. We adopted the standard on December 30, 2018 using a modified retrospective approach utilizing a transit ion relief expedient method whereby we continue to apply existing lease guidance during the comparative periods and apply the new lease requirements through a cumulative-effect adjustment in the period of adoption , rather than in the earliest period presen ted without adjusting historical financial statements. We elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward the historical lease classificati on . Information related to leases as of March 30, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported under legacy guidance in Topic 840. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. Adoption of the new standard resulted in the recording of additional net operating lease assets of $ 259.9 million and operating lease li abilities of $ 267.3 million, and a decrease of $ 1.1 million and $ 8.5 million in prepaid rent and deferred rent liabilities, respectively. The standard did not materially impact our consolidated net income and had no impact on cash flows. In February 2018, the FASB issued ASU No. 2018-02 , "Treatment of Stranded Tax Effects in Accumulated Other Comprehensive Income Resulting From the Tax Cuts and Jobs Act of 2017," which allows the reclassification from accumulated comprehensive income to retained earnings t he income tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). This ASU is effective for interim and annual reporting periods beginning after December 15, 2018. The adoption of this ASU did not have a material impact on our conso lidated financial statements. In August 2017, the FASB issued ASU No. 2017-12 , “Derivatives and Hedging” (Topic 815) (“ASU 2017 – 12”), which simplified the requirements for hedge accounting, more closely aligns hedge accounting risk with risk management activities and increases transparency of the scope and results of hedging activities. This ASU amends the presentation and disclosure requirements and changes how we can assess the effectiveness of our hedging relationships. This ASU will make more financi al and nonfinancial hedging strategies eligible for hedge accounting. This ASU is effective for interim and annual reporting periods beginning after December 15, 2018. The adoption of this ASU did not have a material impact on our consolidated financial s tatements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 30, 2019 | |
Revenue from Contracts with Customers | |
Revenue from Contracts with Customers | Note 4 – Revenue from Contracts with Customers Revenue is recognized in accordance with the policies discussed in Note 2 - Accounting Pronouncements Adopted and Critical Accounting Policies and Estimates. Disaggregation of Revenue The following table disaggregates our revenue by segment and geography: Three Months Ended March 30, 2019 North America International Global Revenues: Health care distribution Dental $ 923,594 $ 622,874 $ 1,546,468 Medical 662,295 21,365 683,660 Total health care distribution 1,585,889 644,239 2,230,128 Technology and value-added services 98,917 16,593 115,510 Total excluding Corporate TSA revenues (1) 1,684,806 660,832 2,345,638 Corporate TSA revenues (1) 1,261 13,369 14,630 Total revenues $ 1,686,067 $ 674,201 $ 2,360,268 Three Months Ended March 31, 2018 North America International Global Revenues: Health care distribution Dental $ 904,041 $ 643,517 $ 1,547,558 Medical 619,393 21,007 640,400 Total health care distribution 1,523,434 664,524 2,187,958 Technology and value-added services 69,241 16,251 85,492 Total excluding Corporate TSA revenues (1) 1,592,675 680,775 2,273,450 Corporate TSA revenues (1) - - - Total revenues $ 1,592,675 $ 680,775 $ 2,273,450 (1) Corporate TSA revenues represents sales of certain animal health products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which we expect to continue through 2020. At December 29, 2018, the current portion of contract liabilities of $ 65.3 million was reported in Accrued expenses: Other, and $ 5.0 million related to non-current contract liabilities was reported in Other liabilities. During the three months ended March 30, 2019, we recogniz ed $ 29.4 million of the amounts previously deferred at December 29, 2018. At March 30, 2019, the current and non-current portion of contract liabilities were $ 63.4 million and $ 6.2 million, respectively. |
Segment Data
Segment Data | 3 Months Ended |
Mar. 30, 2019 | |
Segment Data | |
Segment Data | Note 5 – Segment Data We conduct our business through two reportable segments: (i) health care distribution and (ii) technology and value-added services. These segments offer different products and services to the same customer base. The health care distribution reportable segment aggregates our global dental and medical operating segments. This segment distributes consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceut icals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. Our global dental group serves office-based dental practitioners, dental laboratories, schools and other institutions. Our global medical group serves office-bas ed medical practitioners, ambulatory surgery centers, other alternate-care settings and other institutions . Our global dental and medical groups serve practitioners in 31 countries worldwide. Our global technology and value-added servic es group provides software, technology and other value-added services to health care practitioners. Our technology group offerings include practice management software systems for dental and medical practitioners. Our value-added practice solutions include financial services on a non-recourse basis, e-services, practice technology, network and hardware services, as well as continuing education services for practitioners. The following tables present information about our reportable and operating segments: Three Months Ended March 30, March 31, 2019 2018 Net Sales: Health care distribution (1): Dental $ 1,546,468 $ 1,547,558 Medical 683,660 640,400 Total health care distribution 2,230,128 2,187,958 Technology and value-added services (2) 115,510 85,492 Total excluding Corporate TSA revenue 2,345,638 2,273,450 *CS Corporate TSA revenues (3) 14,630 - Total $ 2,360,268 $ 2,273,450 (1) Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. (2) Consists of practice management software and other value-added products, which are distributed primarily to health care providers, and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. (3) Corporate TSA revenues represents sales of certain animal health products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which we expect to continue through 2020. Three Months Ended March 30, March 31, 2019 2018 Operating Income: Health care distribution $ 144,612 $ 137,146 Technology and value-added services 27,829 25,094 Total $ 172,441 $ 162,240 |
Debt
Debt | 3 Months Ended |
Mar. 30, 2019 | |
Debt | |
Debt | Note 6 – Debt Bank Credit Line s Bank credit lines consisted of the following: March 30, December 29, 2019 2018 Revolving credit agreement $ 225,000 $ 175,000 Other short-term bank credit lines 74,914 376,458 Committed loan associated with Animal Health Spin-off - 400,000 Total $ 299,914 $ 951,458 Revolving Credit Agreement O n April 18, 2017 , we entered into a $ 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. The Credit Agreement provides, among other things, that we are requir ed to maintain maximum leverage ratios, and contains customary representations, warranties and affirmative covenants. The Credit Agreement also contains customary negative covenants, subject to negotiated exceptions on liens, indebtedness, significant cor porate changes (including mergers), dispositions and certain restrictive agreements. As of March 30, 2019 and December 29, 2018 , the borrowings on this revolving credit facility were $ 225.0 million and $ 175.0 million , respectively. As of March 30, 2019 and December 29, 2018 , there were $ 9.6 m illion and $ 11.2 million of letters of credit , respectively, provided to third parties under the credit facility . Other Short-Term Cr edit Lines As of March 30, 2019 and December 29, 2018 , we had various other short-term bank credit lines available, of which $ 74.9 m illion and $ 376.5 million, respectively, were outstanding. At March 30, 2019 and December 29, 2018 , borrowings under all of our credit lines had a weighted average interest rate of 3.44 % and 3.30 %, respectively. Committed Loan Associated with Animal Health Spi n-off On May 21, 2018, we obtained a $ 400 million committed loan which matured on the earlier of (i) March 31, 2019 and (ii) the consummation of the Animal Health Spin-off. The proceeds of this loan were used, among other things, to fund our purchase of all of the equity interests in Butler Animal Health Holding Company, LLC (“BAHHC”) directly or indirectly owned by Darby Group Companies, Inc. (“Darby”) and certain other sellers pursuant to the terms of that certain Amendment to Put Rights Agreements, dat ed as of April 20, 2018, by and among us, Darby, BAHHC and the individual sellers party thereto for an aggregate purchase price of $ 365 million. As of December 29, 2018, the balance outstanding on this loan was $ 400 million and is included within the “Bank credit lines” caption within our consolidated balance sheet. At December 29, 2018, the interest rate on this loan was 3.38 %. Concurrent with the completion of the Animal Health Spin-off on February 7, 2019, we re-paid the balance of this loan. Long-term debt Long-term debt consisted of the following: March 30, December 29, 2019 2018 Private placement facilities $ 621,104 $ 628,189 U.S. trade accounts receivable securitization 350,000 350,000 Various collateralized and uncollateralized loans payable with interest in varying installments through 2023 at interest rates ranging from 2.61% to 4.17% at March 30, 2019 and ranging from 2.61% to 4.17% at December 29, 2018 7,467 6,491 Finance lease obligations payable through 2029 with interest rates ranging from 1.45% to 6.00% at March 30, 2019 and ranging from 1.45% to 6.00% at December 29, 2018 4,046 3,944 Total 982,617 988,624 Less current maturities (9,117) (8,280) Total long-term debt $ 973,500 $ 980,344 Private Placement Facilities On September 15, 2017, we increased our available private placement facilities with three insurance companies to a total facility amount of $ 1 billion, and extended the expiration date to September 15, 2020. These facilities are available on an uncommitted basis at fixed rate economic terms to be agreed upon at the time of issuance, from time to time through September 15, 2020 . The facilities allow us to issue senior promissory notes to the lenders at a fixed rate based on an agreed upon spread over applicable treasury notes at the time of issuance. The term of each possible issuance will be selected by us and can range from five 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 a cquisitions. The agreements provide, among other things, that we maintain certain maximum leverage ratios, and contain restrictions relating to subsidiary indebtedness, liens, affiliate transactions, disposal of assets and certain changes in ownership. T hese 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 March 30, 2019 are presented in the following table (in t housands): 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) 21,429 3.09 January 20, 2022 December 24, 2012 50,000 3.00 December 24, 2024 June 2, 2014 100,000 3.19 June 2, 2021 June 16, 2017 100,000 3.42 June 16, 2027 September 15, 2017 100,000 3.52 September 15, 2029 January 2, 2018 100,000 3.32 January 2, 2028 Less: Deferred debt issuance costs (325) $ 621,104 (1) Annual repayments of approximately $7.1 million for this borrowing commenced on January 20, 2016. U.S. Trade Accounts Receivable Securitization We have a facility agreement with a bank, as agent, based on the securitization of our U.S. trade accounts receivable that is structured as an asset-backed securitization program with pricing committed for up to three years. Our current facility, which has a purchase limit of $ 350 million, expires on April 29, 2020 . The borrowings outstanding under this securitization facility were $ 350 million as of both March 30, 2019 a nd December 29, 2018 , respectivel y. At March 30, 2019 , the interest rate on borrowings under this facility was based on the asset-backed commercial paper rate of 2.65 % plus 0.75 %, for a combined rate of 3.40 %. At December 29, 2018 , the interest rate on borrowings under this facility was based on the asset-backed commercial paper rate of 2.66 % plus 0.75 %, for a combined rate of 3.41 %. We are required to pay a commitment fee of 30 basis points on the daily balance of the unused portion of the facility if our usage is greater than or equal to 50 % of the facilit y 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 consoli dated balance sheet. |
Leases
Leases | 3 Months Ended |
Mar. 30, 2019 | |
Leases | |
Leases | Note 7 – Leases Leases We have operating and finance leases for corporate offices, office space, distribution and other facilities, vehicles, and certain equipment. Our leases have remaining terms of less than 1 year to 11 years , some of which may include options to extend the leases for up to 10 years . The components of lease expense were as follows (in thousands): March 30, 2019 Operating lease cost (1) $ 22,635 Finance lease cost: Amortization of right-of-use assets $ 248 Interest on lease liabilities 23 Total finance lease cost $ 271 (1) Includes variable lease expenses. Supplemental cash flow information related to leases is as follows (in thousands): March 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 19,955 Operating cash flows from finance leases 22 Financing cash flows from finance leases 355 Right-of-use assets obtained in exchange for lease obligations: Operating leases (2) $ 266,346 Finance leases 350 (2) Includes leases that commenced during the three months ended March 30, 2019 as well as balances related to leases in existence as of the date of the adoption of ASU 2016-02. Supplemental balance sheet information related to leases is as follows: (in thousands, except lease term and discount rate) March 30, 2019 Operating Leases Operating lease right-of-use assets, net $ 248,122 Current operating lease liabilities $ 68,460 Non-current operating lease liabilities 187,308 Total operating lease liabilities $ 255,768 Finance Leases Property and equipment, net of accumulated depreciation $ 4,643 Current maturities of long-term debt $ 964 Long-term debt 3,082 Total finance lease liabilities $ 4,046 Weighted Average Remaining Lease Term in Years Operating leases 5.6 Finance leases 7.0 Weighted Average Discount Rate Operating leases 3.6% Finance leases 2.2% Maturities of lease liabilities are as follows: Operating Leases Finance Leases 2019 (excluding the three months ended March 30, 2019) $ 56,043 $ 865 2020 63,269 912 2021 48,258 590 2022 33,034 340 2023 22,416 281 Thereafter 58,676 1,404 Total lease payments 281,696 4,392 Less imputed interest (25,928) (346) Total $ 255,768 $ 4,046 As of March 30, 2019 we have additional operating leases with total lease payments of $ 12.8 million for buildings and automobiles that have not yet commenced. These operating leases will commence w ithin 2019 with lease terms of two to ten years . |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 3 Months Ended |
Mar. 30, 2019 | |
Redeemable Noncontrolling Interests | |
Redeemable Noncontrolling Interests | Note 8 – Redeem able 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 three months ended March 30, 2019 and the year ended December 29, 2018 are presented in the following table: March 30, December 29, 2019 2018 Balance, beginning of period $ 219,724 $ 465,585 Decrease in redeemable noncontrolling interests due to redemptions (6,057) (287,767) Increase in redeemable noncontrolling interests due to business acquisitions 69,795 4,655 Net income attributable to redeemable noncontrolling interests 3,378 15,327 Dividends declared (2,441) (8,206) Effect of foreign currency translation gain attributable to redeemable noncontrolling interests (191) (11,330) Change in fair value of redeemable securities 2,492 41,460 Balance, end of period $ 286,700 $ 219,724 Changes in the estimated redemption amounts of the noncontrolling interests subject to put options are adjusted at each reporting period with a corresponding adjustment to Additional paid-in capital. Future reductions in the carrying amounts are subject to a floor amount that is equal to the fair value of the redeemable noncontrolling interests at the time they were originally recorded. The recorded value of the redeemable noncontrolling interests cannot go below the floor level. These adjustments do no t impact the calculation of earnings per share. |
Comprehensive Income
Comprehensive Income | 3 Months Ended |
Mar. 30, 2019 | |
Comprehensive Income | |
Comprehensive Income | Note 9 – Comprehensive Income Comprehensive income includes certain gains and losses that, under U.S. GAAP, are excluded from net income as such amounts are recorded directly as an adjustment to stockholders’ equity. The following table summarizes our Accumu lated other comprehensive loss , net of applicable taxes as of: March 30, December 29, 2019 2018 Attributable to Redeemable noncontrolling interests: Foreign currency translation adjustment $ (18,194) $ (18,595) Attributable to noncontrolling interests: Foreign currency translation adjustment $ (271) $ (426) Attributable to Henry Schein, Inc.: Foreign currency translation loss $ (134,904) $ (234,799) Unrealized loss from foreign currency hedging activities (1,437) (156) Unrealized investment loss (3) (6) Pension adjustment loss (13,534) (13,810) Accumulated other comprehensive loss $ (149,878) $ (248,771) Total Accumulated other comprehensive loss $ (168,343) $ (267,792) The following table summarizes the components of comprehensive income, net of applicable taxes as follows: Three Months Ended March 30, March 31, 2019 2018 Net income $ 114,644 $ 148,631 Foreign currency translation gain 6,602 34,224 Tax effect - - Foreign currency translation gain 6,602 34,224 Unrealized loss from foreign currency hedging activities (1,603) (1,084) Tax effect 322 182 Unrealized loss from foreign currency hedging activities (1,281) (902) Unrealized investment gain 4 - Tax effect (1) - Unrealized investment gain 3 - Pension adjustment gain (loss) 941 (23) Tax effect (224) - Pension adjustment gain (loss) 717 (23) Comprehensive income $ 120,685 $ 181,930 During the three months ended March 30, 2019 and March 31, 2018 , we recognized as a component of our comprehensive income, a foreign currency translation gain of $ 6.6 million and $ 34.2 million, respectively, due to changes in foreign exchange rates from the beginning of the period to the end of the period . Our financial statements are denominated in the U.S. Dollar currency. Fluctuations in the value of foreign currencies as compared to the U.S. Dollar may have a significant impact on our comprehensive income. The foreign currency translation gain ( loss ) during the three months ended March 30, 2019 and three months ended March 31, 2018 was primarily impacted b y changes in foreign currency exchange rates of the Euro, Brazilian Real, British Pound and the Australian Dollar. The following table summarizes our total comprehensive income, net of applicable taxes , as follows: Three Months Ended March 30, March 31, 2019 2018 Comprehensive income attributable to Henry Schein, Inc. $ 115,268 $ 172,397 Comprehensive income attributable to noncontrolling interests 2,004 312 Comprehensive income attributable to Redeemable noncontrolling interests 3,413 9,221 Comprehensive income $ 120,685 $ 181,930 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10 – Fair Value Measurements ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC Topic 820”) provides a framework for measuring fair value in generally accepted accounting principles. ASC Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that distinguishes between (1) market participant 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 March 30, 2019 and December 29, 2018 was estimated at $ 1,282.5 million and $ 1,940.1 million, respectively. Factors that we considered when estimating the fair value of our debt include market conditions, such as interest rates and credit spreads. Derivative contracts Derivative contracts are valued using quoted market prices and significant other observable and unobservable inputs. We use derivative instruments to minimize our exposure to fluctuations in foreign currency exchange rates. Our derivative instruments primarily include foreign currency forward agreements related to intercompany loans and certain forecasted inventory purchase commitments with suppliers. The fair values for the majority of our foreign currency derivative contracts are obtained by comparing our contract rate to a published forward price of the underlying market rates, which is based on market rates for comparable transactions and are class ified 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 8 . The following table presents our assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of March 30, 2019 and December 29, 2018 : March 30, 2019 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 1,661 $ - $ 1,661 Total assets $ - $ 1,661 $ - $ 1,661 Liabilities: Derivative contracts $ - $ 1,055 $ - $ 1,055 Total liabilities $ - $ 1,055 $ - $ 1,055 Redeemable noncontrolling interests $ - $ - $ 286,700 $ 286,700 *CS *CE December 29, 2018 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 12,533 $ - $ 12,533 Total assets $ - $ 12,533 $ - $ 12,533 Liabilities: Derivative contracts $ - $ 1,708 $ - $ 1,708 Total liabilities $ - $ 1,708 $ - $ 1,708 Redeemable noncontrolling interests $ - $ - $ 219,724 $ 219,724 |
Business Acquisitions
Business Acquisitions | 3 Months Ended |
Mar. 30, 2019 | |
Business Acquisitions | |
Business Acquisitions | N ote 11 – Business Acquisitions Acquisitions The operating results of all acquisitions are reflected in our financial statements from their respective acquisition dates. D uring the three months ended March 30, 2019 we completed the following acquisitions: On March 4, 2019, we announced that we acquired North American Rescue (“NAR”), the leading provider of survivability and casualty-care medical products to the defense and public-safety markets . NAR has annual sal es of approximately $ 184 million. As of March 30, 2019 , we have recorded $ 160.1 million of goodwill related to this acquisition. On March 18, 2019, we announced that our Henry Schein One subsidiary acquired Lighthouse 360, a provider of easy-to-us e dental practice management and patient communication software. Lighthouse 360 has annual sales of approximately $ 50 million. As of March 30, 2019 , we have recorded $ 143.9 million of goodwill related to this acquisition. We completed certain ot her acquisitions d uring the three months ended March 30, 2019 which were immaterial to our financial statements individually and in the aggregate. Some prior owners of acquired subsidiaries are eligible to receive additional purchase price cash consideration if certain financial targets are met. We have accrued liabilities for the estimated fair value of additional purchase price consid eration at the time of the acquisition. Any adjustments to these accrual amounts are recorded in ou r consolidated statements of income. For the three months ended March 30, 2019 and March 31, 2018 , there were no material adjustments recorded in our consolidated statement of income relating to changes in estimated contingent purc hase price liabilities. |
Plans of Restructuring
Plans of Restructuring | 3 Months Ended |
Mar. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Plans of Restructuring | N ote 12 – 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 are expected to 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 were $ 54.4 million from continuing operations, consisting primarily of severance costs. We plan to continue restructuring activities in the first half of 2019 and expect to incur additional restructuring costs r elated to these activities during Q1 and Q2 2019. At this time we are identifying specific opportunities and cannot reasonably estimate the amount of additional restructuring costs in 2019. During the three months ended March 30, 2019 , we recorded restructuring costs of $ 4.6 million for certain redundancies. The costs associated with this restructuring are included in a separate line item, “Restructuring costs” within our consolidated statements of income. The following table shows the amounts expensed and paid for restructuring costs that were incurred during the three months ended March 30, 2019 and during our 2018 fiscal year and the remaining accrued balance of restructuring cos ts as of March 30, 2019 , which is included in Accrued expenses: Other and Other liabilities within our consolidated balance sheet : Facility Severance Closing Costs Costs Other Total Balance, December 30, 2017 $ 3,087 $ 1,315 $ 24 $ 4,426 Provision 50,197 3,153 1,017 54,367 Payments and other adjustments (23,320) (2,865) (883) (27,068) Balance, December 29, 2018 $ 29,964 $ 1,603 $ 158 $ 31,725 Provision 4,462 155 24 4,641 Payments (15,611) (444) (24) (16,079) Balance, March 30, 2019 $ 18,815 $ 1,314 $ 158 $ 20,287 The following table shows, by reportable segment, the amounts expensed and paid for restructuring costs that were incurred during the three months ended March 30, 2019 and during our 2018 fiscal year and the remaining accrued balance of restructuring costs as of March 30, 2019 : Technology and Health Care Value-Added Distribution Services Total Balance, December 30, 2017 $ 4,426 $ - $ 4,426 Provision 50,824 3,543 54,367 Payments and other adjustments (24,959) (2,109) (27,068) Balance, December 29, 2018 $ 30,291 $ 1,434 $ 31,725 Provision 3,806 835 4,641 Payments (14,645) (1,434) (16,079) Balance, March 30, 2019 $ 19,452 $ 835 $ 20,287 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 13 – Earnings Per Share Basic earnings per share is computed by dividing net income attributable to Henry Schein, Inc. by the weighted-average number of common shares outstanding for the period. Our diluted earnings per share is computed similarly to basic earnings per share, except that it reflects the effect of common shares issuable for presently unvested restricted stock and restricted stock units and upon exercise of stock options, using the treasury stock method in periods in which t hey have a dilutive effect. A reconciliation of shares used in calculating earnings per basic and diluted share follows: Three Months Ended March 30, March 31, 2019 2018 Basic 150,257 153,106 Effect of dilutive securities: Stock options, restricted stock and restricted stock units 899 1,024 Diluted 151,156 154,130 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 14 – Income Taxes For the three months ended March 30, 2019 , our effective tax rate was 24.6 % compared to 24.4 % for the prior year period. The difference between our effective tax rates and the federal statutory tax rate primarily relates to state and foreign income taxes and interest expense. On December 22, 2017, the U.S. government passed the Tax Act. The T ax Act is comprehensive tax legislation that implemented complex changes to the U.S. tax code including, but not limited to, the reduction of the corporate tax rate from 35% to 21%, modification of accelerated depreciation, the repeal of the domestic manuf acturing deduction and changes to the limitations of the deductibility of interest. Additionally, the Tax Act moved from a global tax regime to a modified territorial regime, which requires U.S. companies to pay a mandatory one-time transition tax on hist orical offshore earnings that have not been repatriated to the U.S. The transition tax is payable over eight years. The Tax Act also included provisions to tax global intangible low-taxed income (“GILTI”), a beneficial tax rate for eign Derived Intangible Income (“FDII”), a base erosion and anti-abuse tax (“BEAT”) that imposes tax on certain foreign related-party payments, and IRC Section 163(j) interest limitation ( “ Interest Limitation ” ). We became subject to the GILTI, FDII, BEAT and Interest Limitation provisions effective January 1, 2018. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expecte d to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. We elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. For the BEAT, FDII and Interest Limitati on computations, we have not recorded an estimate in our effective tax rate for the three months ended March 30, 2019 because we have concluded that these provisions of the Tax Act will not apply to us in 2019. The total amount of unrecognized tax benefits , which are included in “Other liabilities” within our consolidated balance sheets as of March 30, 2019, was approximately $ 109.7 million, of which $ 86.2 million would affect the effective tax rate if recognized. It is expected that the amount of unrecogn ized 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 the provision for income taxes and included in “Other liabilities”, were approximately $ 16.7 million and $ 0 , respectively , as of March 30, 2019. The tax years subject to examination by major tax jurisdictions include the years 2012 and forward by the U.S. Internal Revenue Service (“IRS”), as well as the years 2008 and forward for certain states and certain foreign jurisdictions. During the quarter ended December 31, 2016 , we filed a Mutual Agreement Procedure request with the IRS for assistance from the U.S. Compet ent Authority for an open Transfer Pricing issue which resulted in a partial settlement during the quarter ended December 30, 2017. We received a 30 Day Letter from the IRS during the quarter ended April 1, 2017 for the remaining open audit issues for the years 2012 and 2013. We filed a Protest with the Appellate Division regarding these issues during the second quarter of 2017. We had an initial Appeals Conference during the third quarter of 2018, of which we are awaiting a final settlement. During the quarter ended December 29, 2018, we submitted the first draft of our proposed Advanced Pricing Agreement covering tax years 2014-2024 to the IRS in which Henry Schein, Inc. and the IRS would agree on an appropriate transfer pricing methodology. We have p rovided all necessary documentation to the Appellate Division and the Advance Pricing and Mutual Agreement program to date and are waiting for responses. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 3 Months Ended |
Mar. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Note 15 – Derivatives and Hedging Activities We are exposed to market risks as well as changes in foreign currency exchange rates as measured against the U.S. dollar and each other, and changes to the credit risk of the derivative counterparties . We attempt to minimize these risks by primarily using foreign currency forward contracts and by maintaining counter-party credit limits. These hedging activities provide only limited protection against currency exchange and credit risks. Factors that could influence the effectiveness of our hedging programs include currency markets and availability of hedging instruments and liquidity of the credit markets. All foreign currency forward contracts that we enter into are components of hedging programs and are entered into for the sole purpo se 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 c apital. 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 f orward 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 p rofits 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 d erivatives and hedging activities required by ASC Topic 815 have been omitted. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | N ote 16 – Stock-Based Compensation Our accompanying consolidated statements of income reflect pre-tax share-based compensation expense of $ 7.1 m illion ($ 5.4 m illion after-tax) and $ 7.7 m illion ($ 5.8 m illi on after-tax) for the three months ended March 30, 2019 and March 31, 2018 , respectively. Stock-based compensation represents the cost related to stock-based awards granted to employees and non-employee directors. We measure stock-based compensa tion at the grant date, based on the estimated fair value of the award, and recognize the cost (net of estimated forfeitures) as compensation expense on a straight-line basis over the requisite service period. Our stock-based compensation expense is refle cted in selling, general and administrative expenses in our consolidated statements of income. S tock-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-E mployee 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 option s 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. Gra nts of restricted stock/units are stock-based awards granted to recipients with specified vesting provisions. In the case of restricted stock, common stock is delivered on the date of grant, subject to vesting conditions. In the case of restricted stock units, common stock is generally delivered on or following satisfaction of vesting conditions. W e 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 the 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 (primaril y 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 ultima tely vest and are received by the recipient is based upon our performance as measured against specified targets over a specified period, as determined by the Compensation Committee of the Board of Directors. Although there is no guarantee that performance targets will be achieved, we estimate the fair value of performance-based restricted stock/units based on our closing stock price at time of grant. The Plans provide for adjustments to the performance-based restricted stock/units targets for significant even ts, including, without limitation, acquisitions, divestitures, new business ventures, certain capital transactions (including share repurchases ), restructuring costs, if any, certain litigation settlements or payments, if any, changes in accounting principles or in applicable laws or regulations and foreign exchange fluctuations. Over the performance period, the number of shares of common stock that will ultimately vest and be issued and the related compensation expense is adjusted upward or downwar d 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. As a result of the Separation, the number of our unvested equity-based awards from previous grants made under our Long-term Incentive Program under the Plans was increased by a factor of approximately 1.2633 , along with a corresponding decrease in our p rice per share. Total unrecognized c ompensation cost related to un vested awards as of March 30, 2019 was $ 112.3 m illion, which is expected to be recognized over a weighted-average period of approximately 2.6 years. The following table summarizes stock option activity under the Plans during the three months ended March 30, 2019 : Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Life in Intrinsic Shares Price Years Value Outstanding at beginning of period 3 $ 13.63 Granted - - Exercised (3) 13.63 Forfeited - - Outstanding at end of period - $ - - $ - Options exercisable at end of period - $ - - $ - The following tables summarize the activity of our un vested restricted stock/units for the three months ended March 30, 2019 : Time-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,513 $ 57.94 Granted 385 58.88 Vested (323) 55.45 Forfeited (191) 60.37 Outstanding at end of period 1,384 $ 58.45 $ 60.11 Performance-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,163 $ 40.26 Granted 359 58.86 Vested (179) 66.48 Forfeited (146) 61.49 Outstanding at end of period 1,197 $ 52.33 $ 60.11 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Note 17 – Supplemental Cash Flow Information Cash paid for interest and income taxes was : Three Months Ended March 30, March 31, 2019 2018 Interest $ 20,725 $ 16,452 Income taxes 16,629 20,143 During the three months ended March 30, 2019 and March 31, 2018 , we had $ 1.6 million and $ 1.1 million of non-cash net unrealized losses related to foreign currency hedging activities, respectively. |
Legal Proceedings
Legal Proceedings | 3 Months Ended |
Mar. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Note 18 – Legal Proceedings Beginning in January 2016, purported class action complaints were filed against Patterson Companies, Inc. (“Patterson”), Benco Dental Supply Co. (“Benco”) and Henry Schein, Inc. Although there were factual and legal variations among these complaints, each of these complaints alleges, among other things, that defendants conspired to fix prices, allocate customers and foreclose competitors by boycotting manufacturers, state dental associations and others that deal with defendants’ competitors. On February 9, 2016, the U.S. District Court for the Eastern District of New York ordered all of these actions, and all other actions filed thereafter asserting substantially similar claims a gainst 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 Ne lson, 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 D ental Supplies Antitrust Litigation, Civil Action No. 1:16-CV-00696-BMC-GRB. In the consolidated class action complaint, putative class representatives allege a nationwide agreement among Henry Schein, Benco, Patterson and non-party Burkhart Dental Supply Company, Inc. (“Burkhart”) not to compete on price. The consolidated class action complaint asserts a single count under Section 1 of the Sherman Act, and seeks equitable relief, compensatory and treble damages, jointly and severally, and reasonable costs and expenses, including attorneys’ fees and expert fees. On September 28, 2018, the parties executed a settlement agreement that proposes, subject to court approval, a full and final settlement of the lawsuit on a classwide basis. The court has schedule d a fairness hearing for June 14, 2019. Subject to certain exceptions, the settlement class consists of all persons or entities that purchased dental products directly from Henry Schein, Patterson, Benco, Burkhart, or any combination thereof, during the p eriod August 31, 2008 through and including March 31, 2016. As a result, in our third quarter of fiscal 2018, we recorded a charge of $38.5 million, which was paid into a settlement fund in January 2019. On August 31, 2012, Archer and White Sales, In c. (“Archer”) filed a complaint against Henry Schein, Inc. as well as Danaher Corporation and its subsidiaries Instrumentarium Dental, Inc., Dental Equipment, LLC, Kavo Dental Technologies, LLC and Dental Imaging Technologies Corporation (collectively, the “Danaher Defendants”) in the U.S. District Court for the Eastern District of Texas, Civil Action No. 2:12-CV-00572-JRG, styled as an antitrust action under Section 1 of the Sherman Act, and the Texas Free Enterprise Antitrust Act. Archer alleges a conspi racy between Henry Schein, an unnamed company and the Danaher Defendants to terminate or limit Archer’s distribution rights. On August 1, 2017, Archer filed an amended complaint, adding Patterson and Benco as defendants, and alleging that Henry Schein, Pa tterson, 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 boyc ott by reducing the distribution territory of, and eventually terminating, their price-cutting competing distributor Archer. Archer seeks damages in an amount to be proved at trial, to be trebled with interest and costs, including attorneys’ fees, jointly and severally, as well as injunctive relief. On October 30, 2017, Archer filed a second amended complaint, to add additional allegations that it believes support its claims. The named parties and causes of action are the same as the August 1, 2017 amend ed 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 m otion for reconsideration and lifted the stay. Defendants appealed the District Court’s order. On December 21, 2017, the U.S. Court of Appeals for the Fifth Circuit affirmed the District Court’s order denying the motions to compel arbitration. On June 25, 2018, the Supreme Court of the United States granted defendants’ petition for writ of certiorari. On October 29, 2018, the Supreme Court heard oral arguments. On January 8, 2019, the Supreme Court issued its published decision vacating the judgment of the Fifth Circuit and remanding the case to the Fifth Circuit for further proceedings consistent with the Supreme Court’s opinion. We intend to defend ourselves vigorously against this action. On August 17, 2017, IQ Dental Supply, Inc. (“IQ Dental”) fi led 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 distri butor of dental supplies and equipment, and sells dental products through an online dental distribution platform operated by SourceOne Dental (“SourceOne”). SourceOne had previously brought an antitrust lawsuit against Henry Schein, Patterson and Benco, w hich Henry Schein settled in the second quarter of 2017 and which is described in our prior filings with the SEC. IQ Dental alleges, among other things, that defendants conspired to suppress competition from IQ Dental and SourceOne for the marketing, dist ribution and sale of dental supplies and equipment in the United States, and that defendants unlawfully agreed with one another to boycott dentists, manufacturers and state dental associations that deal with, or considered dealing with, plaintiff and Sourc eOne. Plaintiff claims that this alleged conduct constitutes unreasonable restraint of trade in violation of Section 1 of the Sherman Act, New York’s Donnelly Act and the New Jersey Antitrust Act, and also makes pendant state law claims for tortious inter ference with prospective business relations, civil conspiracy and aiding and abetting. Plaintiff seeks injunctive relief, compensatory, treble and punitive damages, jointly and severally, and reasonable costs and expenses, including attorneys’ fees and ex pert 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 Sept ember 13, 2018. The court’s decision is pending. We intend to defend ourselves vigorously against this action. On February 12, 2018, the United States Federal Trade Commission (“FTC”) filed a complaint against Benco Dental Supply Co., Henry Schein, Inc. and Patterson Companies, Inc. The FTC alleges, among other things, that defendants violated U.S. antitrust laws by conspiring, and entering into an agreement, to refuse to provide discounts to or otherwise serve buying groups representing dental practiti oners. The FTC alleges that defendants conspired in violation of Section 5 of the FTC Act. The complaint seeks equitable relief only and does not seek monetary damages. We deny the allegation that we conspired to refuse to provide discounts to or otherw ise serve dental buying groups and intend to defend ourselves vigorously against this action. A hearing before an administrative law judge began on October 16, 2018 and the hearing record was closed on February 21 , 2019 . The matter is ongoing and a decision has not yet been issued. We believe this matter will not have a material adverse effect on our consolidated financial position, liquidity or results of operations. On March 7, 2018, Joseph Salkowitz, individually and on behalf of all others similarly situated, filed a putative class action complaint for violation of the federal securities laws against Henry Schein, Inc., Stanley M. Bergman and Steven Paladino in the U.S. District Court for the Eastern District of New York, Case No. 1:18-cv-01428. The complaint sought to certify a class consisting of all persons and entities who, subject to certain exclusions, purchased Henry Schein securities from March 7, 2013 through February 12, 2018 (the “Class Period”). The complaint alleged, among other things, that the defendants had made materially false and misleading statements about Henry Schein’s business, operations and prospects during the Class Period, including matters relating to the issues in the antitrust class action and the FTC action described above, there by 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 Litigati on 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 conso lidated class action complaint on September 14, 2018. The consolidated class action complaint asserts similar claims against the same defendants (plus Timothy Sullivan) on behalf of the same putative class of purchasers during the Class Period. It allege s that Henry Schein’s stock price was inflated during that period because Henry Schein had misleadingly portrayed its dental-distribution business “as successfully producing excellent profits while operating in a highly competitive environment” even though , “in reality, [Henry Schein] had engaged for years in collusive and anticompetitive practices in order to maintain Schein’s margins, profits, and market share.” The complaint alleges that the stock price started to fall from August 8, 2017, when the comp any announced below-expected financial performance that allegedly “revealed that Schein’s poor results were a product of abandoning prior attempts to inflate sales volume and margins through anticompetitive collusion,” through February 13, 2018, after the FTC filed a complaint against Benco, Henry Schein and Patterson alleging that they violated U.S. antitrust laws. The complaint alleges violations of Section 10(b) of the Exchange Act and Rule 10b-5 and Section 20(a) of the Exchange Act. We intend to defe nd ourselves vigorously against this action. Henry Schein has also received a request under 8 Del. C. § 220 to inspect corporate books and records relating to the issues raised in the securities class action and the antitrust matters discussed above. On Ma y 3, 2018, a purported class action complaint, Marion Diagnostic Center, LLC, et al. v. Becton, Dickinson, and Co., et al., Case No. 3:18-cv-010509, was filed in the U.S. District Court for the Southern District of Illinois against Becton, Dickinson, and C o. (“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 health care providers into long-term exclusionary contracts that restrain trade in the nationwide markets for conventional and safety syringes and safety IV catheters and inflate the prices of certain Becton products to abov e-competitive levels. The named plaintiffs seek to represent three separate classes consisting of all health care providers that purchased (i) Becton’s conventional syringes, (ii) Becton’s safety syringes, or (iii) Becton’s safety catheters directly from Becton, Premier, Vizient, Cardinal, O&M or Henry Schein on or after May 3, 2014. The complaint asserts a single count under Section 1 of the Sherman Act, and seeks equitable relief, treble damages, reasonable attorneys’ fees and costs and expenses, and pr e-judgment and post-judgment interest. On June 15, 2018, an amended complaint was filed asserting the same allegations against the same parties and adding McKesson Medical-Surgical, Inc. as an additional defendant. On November 30, 2018, the District Cour t granted defendants’ motion to dismiss and entered a final judgment, dismissing plaintiffs’ complaint with prejudice. On December 27, 2018, plaintiffs appealed the District Court’s decision to the Seventh Circuit Court of Appeals. We intend to defend ou rselves vigorously against this action. On May 29, 2018, an amended complaint was filed in the MultiDistrict Litigation (“MDL”) proceeding In Re National Prescription Opiate Litigation (MDL No. 2804; Case No. 17-md-2804) in an action entitled The County o f Summit, Ohio et al. v. Purdue Pharma, L.P., et al., Civil Action No. 1:18-op-45090-DAP (“County of Summit Action”), in the U.S. District Court for the Northern District of Ohio, adding Henry Schein, Inc., Henry Schein Medical Systems, Inc. and others as defendants. 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. a nd 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. a nd 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 curren tly set for trial on October 21, 2019. We intend to defend ourselves vigorously against this action. In addition to the County of Summit Action, Henry Schein and/or one or more of its affiliated companies have currently been named as a defendant in mult iple lawsuits ( currently less than fifty (50) ) , which allege claims similar to those alleged in the County of Summit Action. None of these other cases have been set for trial. These actions consist of some that have been consolidated within the MDL and are currently abated for discovery purposes, and others which remain pending in state courts and are proceeding independently and outside of the MDL. Sales of opioids in North America (excluding the Henry Schein Animal Health Business) in 2018 were less t han 1 % of Henry Schein’s North American sales (excluding the Henry Schein Animal Health Business) . We intend to defend ourselves vigorously against these actions. On October 9, 2018, a purported class action complaint entitled Kramer v. Henry Schein, Inc ., Patterson Co., Inc., Benco Dental Supply Co., and Unnamed Co-Conspirators, was filed in the U.S. District Court for the Northern District of California. The complaint alleges that members of the proposed class, comprised of purchasers of dental service s from dental practices in California, suffered antitrust injury due to an unlawful boycott, price-fixing or otherwise anticompetitive conspiracy among Henry Schein, Patterson and Benco. The complaint alleges that the alleged conspiracy overcharged Califo rnia dental practices, orthodontic practices and dental laboratories on their purchase of dental supplies, which in turn passed on some or all of such overcharges to members of the California class purchasing dental services. Subject to certain exclusions , the complaint defines the class as “all persons residing in California purchasing and/or reimbursing for dental services from California dental practices on or after August 31, 2012.” The complaint alleges violations of California antitrust laws, includi ng the Cartwright Act (Cal. Bus. and Prof. Code § 16720) and the Unfair Competition Act (Cal. Bus. and Prof. Code § 17200), and seeks a permanent injunction, actual damages to be determined at trial, trebled, reasonable attorneys’ fees and costs, and pre- and post-judgment interest. On December 7, 2018, an amended complaint was filed asserting the same claims against the same parties. We intend to defend ourselves vigorously against this action. On January 29, 2019, a purported class action complaint was filed by R. Lawrence Hatchett, M.D. against Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and unnamed co-conspirators in the U.S. District Court for the Southern District of Illinois. The complaint alleges that members of the proposed class suffered antitrust injury due to an unlawful boycott, price-fixing or otherwise anticompetitive conspiracy among Henry Schein, Patterson and Benco. The complaint alleges that the alleged conspiracy overcharged Illinois dental practices, orthodontic practices and dental laboratories on their purchase of dental supplies, which in turn passed on some or all of such overcharges to members of the class. Subject to certain exclusions, the complaint defines the class as “all persons residing in Illinois pu rchasing and/or reimbursing for dental care provided by independent Illinois dental practices purchasing dental supplies from the defendants, or purchasing from buying groups purchasing these supplies from the defendants, on or after January 29, 2015.” Th e complaint alleges violations of the Illinois Antitrust Act, 740 Ill. Comp. Stat. §§ 10/3(2), 10/7(2), and seeks a permanent injunction, actual damages to be determined at trial, trebled, reasonable attorneys’ fees and costs, and pre- and post-judgment in terest. We intend to defend ourselves vigorously against this action. From time to time, we may become a party to other legal proceedings, including, without limitation, product liability claims, employment matters, commercial disputes, governmental inquiries and investigations (which may in some cases involve our entering i nto settlement arrangements or consent decrees), and other matters arising out of the ordinary course of our business. While the results of any legal proceeding cannot be predicted with certainty, in our opinion none of these other pending matters are cur rently anticipated to have a material adverse effect on our consolidated financial position, liquidity or results of operations. As of March 30, 2019, we had accrued our best estimate of potential losses relating to claims that were probable to result in liability and for which we were able to reasonably estimate a loss. This accrued amount, as well as related expenses, was not material to our financial position, results of operations or cash flows. Our method for determining estimated losses considers c urrently available facts, presently enacted laws and regulations and other factors, including probable recoveries from third parties. |
Adoption of New Accounting Stan
Adoption of New Accounting Standards & Accounting Policy Updates (Policies) | 3 Months Ended |
Mar. 30, 2019 | |
Critical Accounting Policies and Estimates and Accounting Pronouncements Adopted | |
Revenue Recognition | Revenue Recognition We generate revenue from the sale of dental and medical consumable products, equipment (Health care distribution revenues), software products and service s and other sources (Technology and value-added services revenues). 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 lik ely amount based 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-shipme nt 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 th e 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 typically 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 “Guarantees”. 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 de rived 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 ot her 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 and handling activities pe rformed 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 excluded 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 software 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. Bu ndled arrangements that include 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 o bservable selling price is 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 st ructure of our business, technical skill required, customer location and other market conditions. Contract Balances Contract balances represent amounts presented in our consolidated balance sheet when either we have transferred goods or services to the c ustomer or the customer has paid consideration to us under the contract. These contract balances include accounts receivable, contract assets and contract liabilities. Accounts Receivable Accounts receivable are generally recognized when heath care distr ibution and technology and value-added services revenues are recognized. 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 deli nquent 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 anticipated changes in any of the se 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 represent amounts owed to us by customers, but not yet billed. Contract assets are transferred to accounts receivable when the right becomes unconditional. The contract assets primarily relate to our bundled arrangements for the sale of equipment and consumables and sales of term so ftware licenses. Current contract assets are included in Prepaid expenses and other and the non-current contract assets are included in Investments and other within our consolidated balance sheet. Current and non-current contract asset balances as of Marc h 30, 2019 and December 29, 2018 were not material. Contract Liabilities Contract liabilities are comprised of advance payments and upfront payments for service arrangements provided over time that are accounted for as 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 consolida ted 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 s ales commissions are amortized over the estimated customer relationship 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 amorti zation period of the assets that we would have recognized is one year or less. Deferred commissions balances as of March 30, 2019 and December 29, 2018 were not material. |
Leases | Leases We determine if an arrangement contains a lease at inception. An arrangement contains a lease if it implicitly or explicitly identifies an asset to be used and conveys the right to control the use of the identified asset in exchange for consideration. As a lessee, we include o p erating leases in O perating lease right-of-use (“ROU”) assets, Accrued expenses-Operating lease liabilities, and N on-current operating lease liabilities in our consolidated balance sheet. Finance leases are included in P roperty and equipment, C urrent maturities of long-term debt, and L ong-term debt in our con solidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized upon commencement of the lease based on the present value of the lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement da te to determine the present value of lease payments. When readily determinable, we use the implicit rate. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense fo r lease payments is recognized on a straight-line basis over the lease term. Leases with a lease term of 12 months or less are not capitalized. We have lease agreements with lease and non-lease components, which are generally accounted for as a single lea se component, except non-lease components for leases of vehicles which are accounted for separately. When a vehicle lease contains both lease and non-lease components, we allocate the transaction price based on the relative standalone selling price. |
Short-term Leases | Leases with a lease term of 12 months or less are not capitalized. |
Separation of Lease and Nonlease Components | We have lease agreements with lease and non-lease components, which are generally accounted for as a single lea se component, except non-lease components for leases of vehicles which are accounted for separately. When a vehicle lease contains both lease and non-lease components, we allocate the transaction price based on the relative standalone selling price. |
Accounting Pronouncements Adopted | Accounting Pronouncements Adopted In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2016-02 “Leases (Topic 842)” related to leases requiring the recognition of ROU assets and lease liabilities on the balance sheet. Most significant among the changes in the standard is the recognition of ROU assets and lease liabilities by lessors for those leases classified as operating leases. Under the standard, disclosures are re quired to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. We adopted the standard on December 30, 2018 using a modified retrospective approach utilizing a transit ion relief expedient method whereby we continue to apply existing lease guidance during the comparative periods and apply the new lease requirements through a cumulative-effect adjustment in the period of adoption , rather than in the earliest period presen ted without adjusting historical financial statements. We elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward the historical lease classificati on . Information related to leases as of March 30, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported under legacy guidance in Topic 840. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. Adoption of the new standard resulted in the recording of additional net operating lease assets of $ 259.9 million and operating lease li abilities of $ 267.3 million, and a decrease of $ 1.1 million and $ 8.5 million in prepaid rent and deferred rent liabilities, respectively. The standard did not materially impact our consolidated net income and had no impact on cash flows. In February 2018, the FASB issued ASU No. 2018-02 , "Treatment of Stranded Tax Effects in Accumulated Other Comprehensive Income Resulting From the Tax Cuts and Jobs Act of 2017," which allows the reclassification from accumulated comprehensive income to retained earnings t he income tax effects resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). This ASU is effective for interim and annual reporting periods beginning after December 15, 2018. The adoption of this ASU did not have a material impact on our conso lidated financial statements. In August 2017, the FASB issued ASU No. 2017-12 , “Derivatives and Hedging” (Topic 815) (“ASU 2017 – 12”), which simplified the requirements for hedge accounting, more closely aligns hedge accounting risk with risk management activities and increases transparency of the scope and results of hedging activities. This ASU amends the presentation and disclosure requirements and changes how we can assess the effectiveness of our hedging relationships. This ASU will make more financi al and nonfinancial hedging strategies eligible for hedge accounting. This ASU is effective for interim and annual reporting periods beginning after December 15, 2018. The adoption of this ASU did not have a material impact on our consolidated financial s tatements. |
Income Taxes | On December 22, 2017, the U.S. government passed the Tax Act. The T ax Act is comprehensive tax legislation that implemented complex changes to the U.S. tax code including, but not limited to, the reduction of the corporate tax rate from 35% to 21%, modification of accelerated depreciation, the repeal of the domestic manuf acturing deduction and changes to the limitations of the deductibility of interest. Additionally, the Tax Act moved from a global tax regime to a modified territorial regime, which requires U.S. companies to pay a mandatory one-time transition tax on hist orical offshore earnings that have not been repatriated to the U.S. The transition tax is payable over eight years. The Tax Act also included provisions to tax global intangible low-taxed income (“GILTI”), a beneficial tax rate for eign Derived Intangible Income (“FDII”), a base erosion and anti-abuse tax (“BEAT”) that imposes tax on certain foreign related-party payments, and IRC Section 163(j) interest limitation ( “ Interest Limitation ” ). We became subject to the GILTI, FDII, BEAT and Interest Limitation provisions effective January 1, 2018. The FASB Staff Q&A, Topic 740 No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary differences expecte d to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred. We elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. For the BEAT, FDII and Interest Limitati on computations, we have not recorded an estimate in our effective tax rate for the three months ended March 30, 2019 because we have concluded that these provisions of the Tax Act will not apply to us in 2019. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Summarized financial information for discontinued operations | Three Months Ended March 30, March 31, 2019 2018 Net sales $ 319,522 $ 946,988 Gross profit 59,425 176,462 Operating income (loss) (5,469) 43,901 Income taxes 4,764 11,622 Income (loss) from discontinued operations (8,996) 33,914 Net (income) loss attributable to noncontrolling interests 366 (5,230) Net income (loss) from discontinued operations attributable to Henry Schein, Inc. (8,630) 28,684 February 7, December 29, 2019 2018 (unaudited) (unaudited) Cash and cash equivalents $ 6,815 $ 23,324 Accounts receivable, net 432,812 434,935 Inventories, net 536,637 555,230 Prepaid expenses and other 120,546 69,525 Total current assets of discontinued operations 1,096,810 1,083,014 Property and equipment, net 69,790 68,177 Operating lease right-of-use asset, net 57,012 - Goodwill 742,931 739,266 Other intangibles, net 205,793 208,213 Investments and other 120,518 118,003 Total long-term assets of discontinued operations 1,196,044 1,133,659 Total assets of discontinued operations $ 2,292,854 $ 2,216,673 Accounts payable $ 316,162 $ 441,453 Current maturities of long-term debt 657 675 Operating lease liabilities 18,951 - Accrued expenses: Payroll and related 36,847 36,888 Taxes 24,060 17,552 Other 80,400 81,039 Total current liabilities of discontinued operations 477,077 577,607 Long-term debt 1,176,105 23,529 Deferred income taxes 17,019 4,352 Operating lease liabilities 38,668 - Other liabilities 29,209 34,572 Total long-term liabilities of discontinued operations 1,261,001 62,453 Total liabilities of discontinued operations $ 1,738,078 $ 640,060 Redeemable noncontrolling interests $ 28,270 $ 92,432 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Revenue from Contracts with Customers | |
Disaggregation of Revenue | Three Months Ended March 30, 2019 North America International Global Revenues: Health care distribution Dental $ 923,594 $ 622,874 $ 1,546,468 Medical 662,295 21,365 683,660 Total health care distribution 1,585,889 644,239 2,230,128 Technology and value-added services 98,917 16,593 115,510 Total excluding Corporate TSA revenues (1) 1,684,806 660,832 2,345,638 Corporate TSA revenues (1) 1,261 13,369 14,630 Total revenues $ 1,686,067 $ 674,201 $ 2,360,268 Three Months Ended March 31, 2018 North America International Global Revenues: Health care distribution Dental $ 904,041 $ 643,517 $ 1,547,558 Medical 619,393 21,007 640,400 Total health care distribution 1,523,434 664,524 2,187,958 Technology and value-added services 69,241 16,251 85,492 Total excluding Corporate TSA revenues (1) 1,592,675 680,775 2,273,450 Corporate TSA revenues (1) - - - Total revenues $ 1,592,675 $ 680,775 $ 2,273,450 (1) Corporate TSA revenues represents sales of certain animal health products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which we expect to continue through 2020. |
Segment Data (Tables)
Segment Data (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Segment Data | |
Business segment information | Three Months Ended March 30, March 31, 2019 2018 Net Sales: Health care distribution (1): Dental $ 1,546,468 $ 1,547,558 Medical 683,660 640,400 Total health care distribution 2,230,128 2,187,958 Technology and value-added services (2) 115,510 85,492 Total excluding Corporate TSA revenue 2,345,638 2,273,450 *CS Corporate TSA revenues (3) 14,630 - Total $ 2,360,268 $ 2,273,450 (1) Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. (2) Consists of practice management software and other value-added products, which are distributed primarily to health care providers, and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. (3) Corporate TSA revenues represents sales of certain animal health products to Covetrus under the transition services agreement entered into in connection with the Animal Health Spin-off, which we expect to continue through 2020. Three Months Ended March 30, March 31, 2019 2018 Operating Income: Health care distribution $ 144,612 $ 137,146 Technology and value-added services 27,829 25,094 Total $ 172,441 $ 162,240 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Debt | |
Bank credit lines | March 30, December 29, 2019 2018 Revolving credit agreement $ 225,000 $ 175,000 Other short-term bank credit lines 74,914 376,458 Committed loan associated with Animal Health Spin-off - 400,000 Total $ 299,914 $ 951,458 |
Long-term debt | March 30, December 29, 2019 2018 Private placement facilities $ 621,104 $ 628,189 U.S. trade accounts receivable securitization 350,000 350,000 Various collateralized and uncollateralized loans payable with interest in varying installments through 2023 at interest rates ranging from 2.61% to 4.17% at March 30, 2019 and ranging from 2.61% to 4.17% at December 29, 2018 7,467 6,491 Finance lease obligations payable through 2029 with interest rates ranging from 1.45% to 6.00% at March 30, 2019 and ranging from 1.45% to 6.00% at December 29, 2018 4,046 3,944 Total 982,617 988,624 Less current maturities (9,117) (8,280) Total long-term debt $ 973,500 $ 980,344 |
Private placement facilities | Amount of Borrowing Borrowing Date of Borrowing Outstanding Rate Due Date September 2, 2010 $ 100,000 3.79 % September 2, 2020 January 20, 2012 50,000 3.45 January 20, 2024 January 20, 2012 (1) 21,429 3.09 January 20, 2022 December 24, 2012 50,000 3.00 December 24, 2024 June 2, 2014 100,000 3.19 June 2, 2021 June 16, 2017 100,000 3.42 June 16, 2027 September 15, 2017 100,000 3.52 September 15, 2029 January 2, 2018 100,000 3.32 January 2, 2028 Less: Deferred debt issuance costs (325) $ 621,104 (1) Annual repayments of approximately $7.1 million for this borrowing commenced on January 20, 2016. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Leases | |
Components of lease expense, supplemental cash flow, and supplemental balance sheet information | March 30, 2019 Operating lease cost (1) $ 22,635 Finance lease cost: Amortization of right-of-use assets $ 248 Interest on lease liabilities 23 Total finance lease cost $ 271 (1) Includes variable lease expenses. Supplemental cash flow information related to leases is as follows (in thousands): March 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 19,955 Operating cash flows from finance leases 22 Financing cash flows from finance leases 355 Right-of-use assets obtained in exchange for lease obligations: Operating leases (2) $ 266,346 Finance leases 350 (2) Includes leases that commenced during the three months ended March 30, 2019 as well as balances related to leases in existence as of the date of the adoption of ASU 2016-02. Supplemental balance sheet information related to leases is as follows: (in thousands, except lease term and discount rate) March 30, 2019 Operating Leases Operating lease right-of-use assets, net $ 248,122 Current operating lease liabilities $ 68,460 Non-current operating lease liabilities 187,308 Total operating lease liabilities $ 255,768 Finance Leases Property and equipment, net of accumulated depreciation $ 4,643 Current maturities of long-term debt $ 964 Long-term debt 3,082 Total finance lease liabilities $ 4,046 Weighted Average Remaining Lease Term in Years Operating leases 5.6 Finance leases 7.0 Weighted Average Discount Rate Operating leases 3.6% Finance leases 2.2% |
Maturities of operating lease liabilities | Maturities of lease liabilities are as follows: Operating Leases Finance Leases 2019 (excluding the three months ended March 30, 2019) $ 56,043 $ 865 2020 63,269 912 2021 48,258 590 2022 33,034 340 2023 22,416 281 Thereafter 58,676 1,404 Total lease payments 281,696 4,392 Less imputed interest (25,928) (346) Total $ 255,768 $ 4,046 |
Maturities of finance lease liabilities | Maturities of lease liabilities are as follows: Operating Leases Finance Leases 2019 (excluding the three months ended March 30, 2019) $ 56,043 $ 865 2020 63,269 912 2021 48,258 590 2022 33,034 340 2023 22,416 281 Thereafter 58,676 1,404 Total lease payments 281,696 4,392 Less imputed interest (25,928) (346) Total $ 255,768 $ 4,046 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Redeemable Noncontrolling Interests | |
Change in fair value of redeemable noncontrolling interests | March 30, December 29, 2019 2018 Balance, beginning of period $ 219,724 $ 465,585 Decrease in redeemable noncontrolling interests due to redemptions (6,057) (287,767) Increase in redeemable noncontrolling interests due to business acquisitions 69,795 4,655 Net income attributable to redeemable noncontrolling interests 3,378 15,327 Dividends declared (2,441) (8,206) Effect of foreign currency translation gain attributable to redeemable noncontrolling interests (191) (11,330) Change in fair value of redeemable securities 2,492 41,460 Balance, end of period $ 286,700 $ 219,724 |
Comprehensive Income (Tables)
Comprehensive Income (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Comprehensive Income | |
Accumulated other comprehensive income, net of applicable taxes | March 30, December 29, 2019 2018 Attributable to Redeemable noncontrolling interests: Foreign currency translation adjustment $ (18,194) $ (18,595) Attributable to noncontrolling interests: Foreign currency translation adjustment $ (271) $ (426) Attributable to Henry Schein, Inc.: Foreign currency translation loss $ (134,904) $ (234,799) Unrealized loss from foreign currency hedging activities (1,437) (156) Unrealized investment loss (3) (6) Pension adjustment loss (13,534) (13,810) Accumulated other comprehensive loss $ (149,878) $ (248,771) Total Accumulated other comprehensive loss $ (168,343) $ (267,792) |
Components of comprehensive income, net of applicable taxes | Three Months Ended March 30, March 31, 2019 2018 Net income $ 114,644 $ 148,631 Foreign currency translation gain 6,602 34,224 Tax effect - - Foreign currency translation gain 6,602 34,224 Unrealized loss from foreign currency hedging activities (1,603) (1,084) Tax effect 322 182 Unrealized loss from foreign currency hedging activities (1,281) (902) Unrealized investment gain 4 - Tax effect (1) - Unrealized investment gain 3 - Pension adjustment gain (loss) 941 (23) Tax effect (224) - Pension adjustment gain (loss) 717 (23) Comprehensive income $ 120,685 $ 181,930 |
Total comprehensive income, net of applicable taxes | Three Months Ended March 30, March 31, 2019 2018 Comprehensive income attributable to Henry Schein, Inc. $ 115,268 $ 172,397 Comprehensive income attributable to noncontrolling interests 2,004 312 Comprehensive income attributable to Redeemable noncontrolling interests 3,413 9,221 Comprehensive income $ 120,685 $ 181,930 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value - assets and liabilities measured and recognized on a recurring basis | March 30, 2019 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 1,661 $ - $ 1,661 Total assets $ - $ 1,661 $ - $ 1,661 Liabilities: Derivative contracts $ - $ 1,055 $ - $ 1,055 Total liabilities $ - $ 1,055 $ - $ 1,055 Redeemable noncontrolling interests $ - $ - $ 286,700 $ 286,700 *CS *CE December 29, 2018 Level 1 Level 2 Level 3 Total Assets: Derivative contracts $ - $ 12,533 $ - $ 12,533 Total assets $ - $ 12,533 $ - $ 12,533 Liabilities: Derivative contracts $ - $ 1,708 $ - $ 1,708 Total liabilities $ - $ 1,708 $ - $ 1,708 Redeemable noncontrolling interests $ - $ - $ 219,724 $ 219,724 |
Plans of Restructuring (Tables)
Plans of Restructuring (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve by type of cost | Facility Severance Closing Costs Costs Other Total Balance, December 30, 2017 $ 3,087 $ 1,315 $ 24 $ 4,426 Provision 50,197 3,153 1,017 54,367 Payments and other adjustments (23,320) (2,865) (883) (27,068) Balance, December 29, 2018 $ 29,964 $ 1,603 $ 158 $ 31,725 Provision 4,462 155 24 4,641 Payments (15,611) (444) (24) (16,079) Balance, March 30, 2019 $ 18,815 $ 1,314 $ 158 $ 20,287 |
Schedule of restructuring reserve by segment | Technology and Health Care Value-Added Distribution Services Total Balance, December 30, 2017 $ 4,426 $ - $ 4,426 Provision 50,824 3,543 54,367 Payments and other adjustments (24,959) (2,109) (27,068) Balance, December 29, 2018 $ 30,291 $ 1,434 $ 31,725 Provision 3,806 835 4,641 Payments (14,645) (1,434) (16,079) Balance, March 30, 2019 $ 19,452 $ 835 $ 20,287 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted shares used to calculate earnings per share | Three Months Ended March 30, March 31, 2019 2018 Basic 150,257 153,106 Effect of dilutive securities: Stock options, restricted stock and restricted stock units 899 1,024 Diluted 151,156 154,130 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the stock option activity under the plans | Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Life in Intrinsic Shares Price Years Value Outstanding at beginning of period 3 $ 13.63 Granted - - Exercised (3) 13.63 Forfeited - - Outstanding at end of period - $ - - $ - Options exercisable at end of period - $ - - $ - |
Status of non-vested restricted shares/units | Time-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,513 $ 57.94 Granted 385 58.88 Vested (323) 55.45 Forfeited (191) 60.37 Outstanding at end of period 1,384 $ 58.45 $ 60.11 Performance-Based Restricted Stock/Units Weighted Average Grant Date Fair Intrinsic Value Shares/Units Value Per Share Per Share Outstanding at beginning of period 1,163 $ 40.26 Granted 359 58.86 Vested (179) 66.48 Forfeited (146) 61.49 Outstanding at end of period 1,197 $ 52.33 $ 60.11 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash paid for interest and income taxes | Three Months Ended March 30, March 31, 2019 2018 Interest $ 20,725 $ 16,452 Income taxes 16,629 20,143 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 30, 2019 | Dec. 29, 2018 | |
Discontinued Operation, Name | Henry Schein Animal Health Business | |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Variable Interest Entity, Consolidated, Assets, Pledged | $ 432 | $ 422 |
Variable Interest Entity, Consolidated, Liabilities, Recourse | $ 350 | $ 350 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Feb. 07, 2019 | Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | Dec. 30, 2017 | |
Summarized financial information for our discontinued operations | |||||
Income (loss) from discontinued operations | $ (8,996) | $ 33,914 | |||
Net (income) loss attributable to noncontrolling interests | (366) | 5,230 | |||
Net income (loss) from discontinued operations atrributable to Henry Schein, Inc. | (8,630) | 28,684 | |||
Assets transferred | |||||
Total current assets of discontinued operations | 0 | $ 1,083,014 | |||
Operating lease right-of-use asset, net | 248,122 | 0 | |||
Investments and other | 404,004 | 420,367 | |||
Total long-term assets of discontinued operations | 0 | 1,133,659 | |||
Liabilities transferred | |||||
Current maturities of long-term debt | 9,117 | 8,280 | |||
Operating lease liabilities | 68,460 | 0 | |||
Accrued expenses: | |||||
Total current liabilities of discontinued operations | 0 | 577,607 | |||
Long-term debt | 973,500 | 980,344 | |||
Operating lease liabilities | 187,308 | 0 | |||
Total long-term liabilities of discontinued operations | 0 | 62,453 | |||
Redeemable noncontrolling interests | 286,700 | 219,724 | $ 465,585 | ||
Henry Schein Animal Health Business [Member] | |||||
Summarized financial information for our discontinued operations | |||||
Net sales | $ 946,988 | 319,522 | |||
Gross profit | 176,462 | 59,425 | |||
Operating income (loss) | 43,901 | (5,469) | |||
Income taxes | 11,622 | 4,764 | |||
Net (income) loss attributable to noncontrolling interests | (5,230) | 366 | |||
Net income (loss) from discontinued operations atrributable to Henry Schein, Inc. | 28,684 | $ (8,630) | |||
Assets transferred | |||||
Cash and cash equivalents | 6,815 | 23,324 | |||
Accounts receivable, net | 432,812 | 434,935 | |||
Inventories, net | 536,637 | 555,230 | |||
Prepaid expenses and other | 120,546 | 69,525 | |||
Total current assets of discontinued operations | 1,096,810 | 1,083,014 | |||
Property and equipment, net | 69,790 | 68,177 | |||
Operating lease right-of-use asset, net | 57,012 | 0 | |||
Goodwill | 742,931 | 739,266 | |||
Other intangibles, net | 205,793 | 208,213 | |||
Investments and other | 120,518 | 118,003 | |||
Total long-term assets of discontinued operations | 1,196,044 | 1,133,659 | |||
Total assets of discontinued operations | 2,292,854 | 2,216,673 | |||
Liabilities transferred | |||||
Accounts Payable | 316,162 | 441,453 | |||
Current maturities of long-term debt | 657 | 675 | |||
Operating lease liabilities | 18,951 | 0 | |||
Accrued expenses: | |||||
Payroll and related | 36,847 | 36,888 | |||
Taxes | 24,060 | 17,552 | |||
Other | 80,400 | 81,039 | |||
Total current liabilities of discontinued operations | 477,077 | 577,607 | |||
Long-term debt | 1,176,105 | 23,529 | |||
Deferred income taxes | 17,019 | 4,352 | |||
Operating lease liabilities | 38,668 | 0 | |||
Other liabilities | 29,209 | 34,572 | |||
Total long-term liabilities of discontinued operations | 1,261,001 | 62,453 | |||
Total liabilities of discontinued operations | 1,738,078 | 640,060 | |||
Redeemable noncontrolling interests | $ 28,270 | $ 0 | $ 92,432 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Thousands | Feb. 07, 2019 | Feb. 07, 2019 | Mar. 30, 2019 | Mar. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Distribution received related to Animal Health Spin-off | $ 1,120,000 | $ 0 | ||
Proceeds related to Animal Health Share Sale | $ 361,090 | $ 0 | ||
Discontinued Operation, Name | Henry Schein Animal Health Business | |||
Henry Schein Animal Health Business [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Distribution received related to Animal Health Spin-off | $ 1,120,000 | |||
Proceeds of the Share Sale | $ 361,100 | |||
Transaction costs related to Animal Health spin-off | $ 20,900 | |||
Deconsolidation, Nature of Continuing Involvement, Description | In connection with the completion of the Animal Health Spin-off, we entered into a transition services agreement with Covetrus under which we have agreed to provide certain transition services for up to twenty-four months in areas such as information technology, finance and accounting, human resources, supply chain, and real estate and facility services. | |||
Henry Schein Animal Health Business [Member] | Henry Schein stockholders and the Share Sale Investors [Member] | Covetrus Inc [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Noncontrolling Interest, Ownership Percentage by Parent | 63.00% | |||
Henry Schein Animal Health Business [Member] | Vets First Corp [Member] | Covetrus Inc [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Noncontrolling Interest, Ownership Percentage by Parent | 37.00% |
Critical Accounting Policies _2
Critical Accounting Policies and Estimates and Accounting Pronouncements Adopted - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Dec. 29, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use asset, net | $ 248,122 | $ 0 |
Operating lease liabilities | $ 255,768 | |
Lessee, Operating Lease, Assumptions and Judgments, Discount Rate, Description | As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. When readily determinable, we use the implicit rate. | |
Lessee, Operating Lease, Assumptions and Judgments, Allocation of Lease and Nonlease Component | When a vehicle lease contains both lease and non-lease components, we allocate the transaction price based on the relative standalone selling price. | |
Lessee, Operating Lease, Assumptions and Judgments, Whether Contract is or Contains Lease | We determine if an arrangement contains a lease at inception. An arrangement contains a lease if it implicitly or explicitly identifies an asset to be used and conveys the right to control the use of the identified asset in exchange for consideration. | |
Lessee, Operating Lease, Option to Extend | Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. | |
Lessee, Operating Lease, Option to Terminate | Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. | |
Lease, Practical Expedients, Package [true false] | true | |
Accounting Standards Update 2016-02 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |
New Accounting Pronouncement or Change in Accounting Principle, Prior Period Not Restated [true false] | true | |
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected [Fixed List] | Modified retrospective | |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Dec. 30, 2018 | |
Operating lease right-of-use asset, net | $ 259,900 | |
Operating lease liabilities | 267,300 | |
Decrease in prepaid rent | 1,100 | |
Decrease in deferred rent liabilities | $ 8,500 | |
Accounting Standards Update 2018-02 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true | |
Accounting Standards Update 2017-12 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2019 | Mar. 31, 2018 | ||
Disaggregation of Revenue [Abstract] | |||
Net sales | $ 2,360,268 | $ 2,273,450 | |
Total excluding Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 2,345,638 | 2,273,450 | |
Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 14,630 | 0 | |
North America [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 1,686,067 | 1,592,675 | |
North America [Member] | Total excluding Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 1,684,806 | 1,592,675 | |
North America [Member] | Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 1,261 | 0 | |
International [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 674,201 | 680,775 | |
International [Member] | Total excluding Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 660,832 | 680,775 | |
International [Member] | Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 13,369 | 0 | |
Healthcare Distribution [Member] | Total excluding Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | [1] | 2,230,128 | 2,187,958 |
Healthcare Distribution [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 1,585,889 | 1,523,434 | |
Healthcare Distribution [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 644,239 | 664,524 | |
Healthcare Distribution [Member] | Dental [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | [1] | 1,546,468 | 1,547,558 |
Healthcare Distribution [Member] | Dental [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 923,594 | 904,041 | |
Healthcare Distribution [Member] | Dental [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 622,874 | 643,517 | |
Healthcare Distribution [Member] | Medical [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | [1] | 683,660 | 640,400 |
Healthcare Distribution [Member] | Medical [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 662,295 | 619,393 | |
Healthcare Distribution [Member] | Medical [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 21,365 | 21,007 | |
Technology [Member] | Total excluding Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | [2] | 115,510 | 85,492 |
Technology [Member] | North America [Member] | Total excluding Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | 98,917 | 69,241 | |
Technology [Member] | International [Member] | Total excluding Corporate TSA revenues [Member] | |||
Disaggregation of Revenue [Abstract] | |||
Net sales | $ 16,593 | $ 16,251 | |
[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 | ||
[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. |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 30, 2019 | Dec. 29, 2018 | |
Revenue from Contracts with Customers | ||
Contract with Customer, Liability, Current | $ 63.4 | $ 65.3 |
Contract with Customer, Liability, Noncurrent | 6.2 | $ 5 |
Contract with Customer, Liability, Revenue Recognized | $ 29.4 |
Segment Data (Details)
Segment Data (Details) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2019USD ($)numbersegments | Mar. 31, 2018USD ($) | ||
Segment Data | |||
Number of reportable segments | segments | 2 | ||
Number of countries served globally | number | 31 | ||
Segment Reporting Information [Line Items] | |||
Net sales | $ 2,360,268 | $ 2,273,450 | |
Operating income | 172,441 | 162,240 | |
Total excluding Corporate TSA revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 2,345,638 | 2,273,450 | |
Corporate TSA revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 14,630 | 0 | |
Healthcare Distribution [Member] | Total excluding Corporate TSA revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | [1] | 2,230,128 | 2,187,958 |
Operating income | 144,612 | 137,146 | |
Healthcare Distribution [Member] | Dental [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | [1] | 1,546,468 | 1,547,558 |
Healthcare Distribution [Member] | Medical [Member] | Total excluding Corporate TSA revenues [Member] | Reportable Subsegments [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | [1] | 683,660 | 640,400 |
Technology [Member] | Total excluding Corporate TSA revenues [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | [2] | 115,510 | 85,492 |
Operating income | $ 27,829 | $ 25,094 | |
[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 | ||
[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 Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Line of Credit Facility [Line Items] | ||
Bank Credit lines | $ 299,914 | $ 951,458 |
Revolving Credit Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Bank Credit lines | 225,000 | 175,000 |
Other short-term bank credit lines [Member] | ||
Line of Credit Facility [Line Items] | ||
Bank Credit lines | 74,914 | 376,458 |
Committed Loan Associated with Animal Health Spin-off [Member] | ||
Line of Credit Facility [Line Items] | ||
Bank Credit lines | $ 0 | $ 400,000 |
Debt - Revolving Credit Agreeme
Debt - Revolving Credit Agreement and Other Short-Term Credit Lines - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 4 Months Ended | |
Mar. 30, 2019 | Apr. 18, 2017 | Dec. 29, 2018 | |
Line of Credit Facility [Line Items] | |||
Bank credit lines | $ 299,914 | $ 951,458 | |
Weighted average interest rate on borrowings under credit lines at period end (in hundredths) | 3.44% | 3.30% | |
Revolving Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Bank credit lines | $ 225,000 | $ 175,000 | |
Revolving credit facility maturing in April 2022 [Member] | |||
Line of Credit Facility [Line Items] | |||
Revolving credit facility borrowing capacity | $ 750,000 | ||
Revolving credit facility expiration date | Apr. 1, 2022 | ||
Bank credit lines | $ 225,000 | 175,000 | |
Outstanding letters of credit provided to third parties | 9,600 | 11,200 | |
Revolving Credit Facility maturing in September 2019 [Member] | |||
Line of Credit Facility [Line Items] | |||
Extinguishment Of Line of Credit | $ 500,000 | ||
Revolving credit facility expiration date | Sep. 1, 2019 | ||
Other short-term bank credit lines [Member] | |||
Line of Credit Facility [Line Items] | |||
Bank credit lines | $ 74,914 | $ 376,458 |
Debt - Committed Loan Associate
Debt - Committed Loan Associated with Animal Health Spin-off - Narrative (Details) - USD ($) $ in Thousands | Feb. 07, 2019 | Mar. 30, 2019 | Dec. 29, 2018 | Apr. 20, 2018 |
Line of Credit Facility [Line Items] | ||||
Bank Credit lines | $ 299,914 | $ 951,458 | ||
Line of Credit Facility, Interest Rate at Period End | 3.44% | 3.30% | ||
Committed Loan Associated with Animal Health Spin-off [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Bank Credit lines | $ 0 | $ 400,000 | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000 | |||
Equity Method Investment Aggregate Cost | $ 365,000 | |||
Line of Credit Facility, Interest Rate at Period End | 3.38% | |||
Repayments of Lines of Credit | $ 400,000 |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 982,617 | $ 988,624 |
Less current maturities | (9,117) | (8,280) |
Long-term debt | 973,500 | 980,344 |
Finance lease obligations payable through 2029 with interest rates ranging from 1.45% to 6.0% at March 30, 2019 and ranging from 1.45% to 6.0% at December 29, 2018 | $ 4,046 | $ 3,944 |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Finance lease obligations, interest rates | 1.45% | 1.45% |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Finance lease obligations, interest rates | 6.00% | 6.00% |
Private placement facilities [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 621,104 | $ 628,189 |
U.S. trade accounts receivable securitization [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 350,000 | 350,000 |
Various collateralized and uncollateralized loans payable with interest in varying installments through 2023 at interest rates ranging from 2.61% to 4.17% at March 30, 2019 and ranging from 2.61% to 4.17% at December 29, 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 7,467 | $ 6,491 |
Various collateralized and uncollateralized loans payable with interest in varying installments through 2023 at interest rates ranging from 2.61% to 4.17% at March 30, 2019 and ranging from 2.61% to 4.17% at December 29, 2018 [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.61% | 2.61% |
Various collateralized and uncollateralized loans payable with interest in varying installments through 2023 at interest rates ranging from 2.61% to 4.17% at March 30, 2019 and ranging from 2.61% to 4.17% at December 29, 2018 [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.17% | 4.17% |
Debt - Private Placement Facili
Debt - Private Placement Facilities - Narrative (Details) - Private placement facilities [Member] $ in Billions | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Debt Instrument [Line Items] | |
Debt instrument, maximum borrowing capacity | $ 1 |
Debt instrument, maturity date | Sep. 15, 2020 |
Minimum [Member] | |
Debt Instrument [Line Items] | |
Term of issuances under private placement facilities | 5 years |
Maximum [Member] | |
Debt Instrument [Line Items] | |
Term of issuances under private placement facilities | 15 years |
Average term of issuances under private placement facilities | 12 years |
Debt - Private Placement Borrow
Debt - Private Placement Borrowings (Details) - USD ($) $ in Thousands | Jan. 20, 2016 | Mar. 30, 2019 | Dec. 29, 2018 | |
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 982,617 | $ 988,624 | ||
Private placement facilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Less: Deferred debt issuance costs | (325) | |||
Total long-term debt | $ 621,104 | $ 628,189 | ||
Debt Instrument, Maturity Date | Sep. 15, 2020 | |||
Private placement facilities [Member] | Private placement facilities maturing in September 2020 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Sep. 2, 2010 | |||
Long-term Debt, Gross | $ 100,000 | |||
Borrowing Rate | 3.79% | |||
Debt Instrument, Maturity Date | Sep. 2, 2020 | |||
Private placement facilities [Member] | Private placement facilities maturing in January 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Jan. 20, 2012 | |||
Long-term Debt, Gross | $ 50,000 | |||
Borrowing Rate | 3.45% | |||
Debt Instrument, Maturity Date | Jan. 20, 2024 | |||
Private placement facilities [Member] | Private placement facilities maturing in January 2022 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | [1] | Jan. 20, 2012 | ||
Long-term Debt, Gross | $ 21,429 | |||
Borrowing Rate | [1] | 3.09% | ||
Debt Instrument, Maturity Date | [1] | Jan. 20, 2022 | ||
Private placement facility, frequency of periodic payment | Annual | |||
Private placement facility annual payment | $ 7,100 | |||
Debt Instrument, Date of First Required Payment | Jan. 20, 2016 | |||
Private placement facilities [Member] | Private placement facilities maturing in December 2024 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Dec. 24, 2012 | |||
Long-term Debt, Gross | $ 50,000 | |||
Borrowing Rate | 3.00% | |||
Debt Instrument, Maturity Date | Dec. 24, 2024 | |||
Private placement facilities [Member] | Private placement facilities maturing in June 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Jun. 2, 2014 | |||
Long-term Debt, Gross | $ 100,000 | |||
Borrowing Rate | 3.19% | |||
Debt Instrument, Maturity Date | Jun. 2, 2021 | |||
Private placement facilities [Member] | Private Placement facilities maturing in June 2027 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Jun. 16, 2017 | |||
Long-term Debt, Gross | $ 100,000 | |||
Borrowing Rate | 3.42% | |||
Debt Instrument, Maturity Date | Jun. 16, 2027 | |||
Private placement facilities [Member] | Private Placement facilities maturing in September 2029 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Sep. 15, 2017 | |||
Long-term Debt, Gross | $ 100,000 | |||
Borrowing Rate | 3.52% | |||
Debt Instrument, Maturity Date | Sep. 15, 2029 | |||
Private placement facilities [Member] | Private Placement facilities maturing in January 2028 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Issuance Date | Jan. 2, 2018 | |||
Long-term Debt, Gross | $ 100,000 | |||
Borrowing Rate | 3.32% | |||
Debt Instrument, Maturity Date | Jan. 2, 2028 | |||
[1] | Annual repayments of approximately $7.1 million for this borrowing commenced on January 20, 2016. |
Debt - U.S. Trade Accounts Rece
Debt - U.S. Trade Accounts Receivable Securitization - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 30, 2019 | Jul. 06, 2017 | Dec. 29, 2018 | |
Debt Instrument [Line Items] | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities | $ 982,617 | $ 988,624 | |
U.S. trade accounts receivable securitization [Member] | |||
Debt Instrument [Line Items] | |||
Pricing commitment period | 3 years | ||
Debt Instrument, Maturity Date | Apr. 29, 2020 | ||
Debt Instrument Maximum Borrowing Capacity | $ 350,000 | 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] | |||
Debt instrument, variable rate basis at period end | 2.65% | 2.66% | |
Debt instrument, basis spread on variable rate | 0.75% | 0.75% | |
Debt instrument, interest rate at period end | 3.40% | 3.41% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Lessee, Operating Lease, Description | We have operating and finance leases for corporate offices, office space, distribution and other facilities, vehicles, and certain equipment. |
Lessee, Operating Lease, Option to Extend | Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. |
Lessee, Operating Lease, Lease Not yet Commenced, Description | buildings and automobiles |
Operating lease assets, Lease not yet commenced | $ 12.8 |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee operating lease, remaining lease term | 1 year |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 2 years |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lessee operating lease, remaining lease term | 11 years |
Lessee, Operating Lease, Option to Extend | may include options to extend the leases for up to 10 years |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 10 years |
Leases - Components of lease ex
Leases - Components of lease expense (Details) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019USD ($) | ||
Leases | ||
Operating lease cost | $ 22,635 | [1] |
Finance lease cost: | ||
Amortization of right-of-use assets | 248 | |
Interest on lease liabilities | 23 | |
Finance lease cost | $ 271 | |
[1] | Includes variable lease expenses. |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019USD ($) | ||
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 19,955 | |
Operating cash flows from finance leases | 22 | |
Financing cash flows from finance leases | 355 | |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 266,346 | [1] |
Finance leases | $ 350 | |
[1] | Includes leases that commenced during the three months ended March 30, 2019 as well as balances related to leases in existence as of the date of the adoption of ASU 2016-02. |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Supplemental balance sheet information | ||
Operating lease right-of-use asset, net | $ 248,122 | $ 0 |
Current operating lease liabilities | 68,460 | 0 |
Operating lease liabilities | 187,308 | 0 |
Total operating lease liabilities | 255,768 | |
Finance Lease | $ 4,643 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net | |
Finance Lease, Liability, Current | $ 964 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations, Current | |
Finance Lease, Liability, Noncurrent | $ 3,082 | |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term Debt and Capital Lease Obligations | |
Total finance lease liabilities | $ 4,046 | $ 3,944 |
Operating Lease, Weighted Average Remaining Lease Term, in years | 5 years 7 months 6 days | |
Finance Lease, Weighted Average Remaining Lease Term, in years | 7 years | |
Operating Lease, Weighted Average Discount Rate, Percent | 3.60% | |
Finance Lease, Weighted Average Discount Rate, Percent | 2.20% |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Thousands | Mar. 30, 2019USD ($) |
Operating Leases | |
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 56,043 |
2020 | 63,269 |
2021 | 48,258 |
2022 | 33,034 |
2023 | 22,416 |
Thereafter | 58,676 |
Total lease payments | 281,696 |
Finance Leases | |
2019 (excluding the three months ended March 30, 2019) | 865 |
2020 | 912 |
2021 | 590 |
2022 | 340 |
2023 | 281 |
Thereafter | 1,404 |
Total lease payments | $ 4,392 |
Leases - Present value of lease
Leases - Present value of lease liabilities (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 |
Present value of lease liabilities - Operating Leases | ||
Total lease payments | $ 281,696 | |
Less imputed interest | (25,928) | |
Total operating lease liabilities | 255,768 | |
Present value of lease liabilities - Finance Leases | ||
Total lease payments | 4,392 | |
Less imputed interest | (346) | |
Total finance lease liabilities | $ 4,046 | $ 3,944 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | |
Components of the change in the redeemable noncontrolling interests [Abstract] | |||
Balance, beginning of period | $ 219,724 | $ 465,585 | $ 465,585 |
Decrease in redeemable noncontrolling interests due to redemptions | (6,057) | (287,767) | |
Increase in redeemable noncontrolling interests due to business acquisitions | 69,795 | 4,655 | |
Net income attributable to redeemable noncontrolling interests | 3,378 | 8,324 | 15,327 |
Dividends declared | (2,441) | (8,206) | |
Effect of foreign currency translation gain (loss) attributable to redeemable noncontrolling interests | (191) | $ 897 | (11,330) |
Change in fair value of redeemable securities | 2,492 | 41,460 | |
Balance, end of period | $ 286,700 | $ 219,724 |
Comprehensive Income - Accumula
Comprehensive Income - Accumulated Other Comprehensive Income and Comprehensive Income Components (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | |
Attributable to Redeemable noncontrolling interests: | |||
Foreign currency translation adjustment | $ (18,194) | $ (18,595) | |
Attributable to noncontrolling interests: | |||
Foreign currency translation adjustment | (271) | (426) | |
Attributable to Henry Schein, Inc.: | |||
Foreign currency translation gain (loss) | (134,904) | (234,799) | |
Unrealized gain (loss) from foreign currency hedging activities | (1,437) | (156) | |
Unrealized investment gain (loss) | (3) | (6) | |
Pension adjustment gain (loss) | (13,534) | (13,810) | |
Accumulated other comprehensive income (loss) | (149,878) | (248,771) | |
Total Accumulated other comprehensive income (loss) | (168,343) | $ (267,792) | |
Components of comprehensive income [Abstract] | |||
Net income | 114,644 | $ 148,631 | |
Foreign currency translation gain (loss) | 6,602 | 34,224 | |
Tax effect | 0 | 0 | |
Foreign currency translation gain (loss) | 6,602 | 34,224 | |
Unrealized gain (loss) from foreign currency hedging activities | (1,603) | (1,084) | |
Tax effect | 322 | 182 | |
Unrealized gain (loss) from foreign currency hedging activities | (1,281) | (902) | |
Unrealized investment gain (loss) | 4 | 0 | |
Tax effect | (1) | 0 | |
Unrealized investment gain (loss) | 3 | 0 | |
Pension adjustment gain (loss) | 941 | (23) | |
Tax effect | (224) | 0 | |
Pension adjustment gain (loss) | 717 | (23) | |
Comprehensive income | $ 120,685 | $ 181,930 |
Comprehensive Income - Total Co
Comprehensive Income - Total Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Comprehensive Income Net Of Applicable Taxes [Abstract] | ||
Comprehensive income attributable to Henry Schein, Inc. | $ 115,268 | $ 172,397 |
Comprehensive income (loss) attributable to noncontrolling interests | 2,004 | 312 |
Comprehensive income (loss) attributable to Redeemable noncontrolling interests | 3,413 | 9,221 |
Comprehensive income (loss) | $ 120,685 | $ 181,930 |
Comprehensive Income - Comprehe
Comprehensive Income - Comprehensive Income Components - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Comprehensive Income | ||
Foreign currency translation gain (loss) | $ 6,602 | $ 34,224 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 30, 2019 | Dec. 29, 2018 | Dec. 30, 2017 |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | $ 286,700 | $ 219,724 | $ 465,585 |
Estimate of Fair Value Measurement [Member] | |||
Debt Instrument, Fair Value Disclosure [Abstract] | |||
Fair value of debt | 1,282,500 | 1,940,100 | |
Fair value, measurements, recurring [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 1,661 | 12,533 | |
Total assets | 1,661 | 12,533 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 1,055 | 1,708 | |
Total liabilities | 1,055 | 1,708 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | 286,700 | 219,724 | |
Fair value, measurements, recurring [Member] | Level 1 [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 0 | 0 | |
Total assets | 0 | 0 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 0 | 0 | |
Total liabilities | 0 | 0 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | 0 | 0 | |
Fair value, measurements, recurring [Member] | Level 2 [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 1,661 | 12,533 | |
Total assets | 1,661 | 12,533 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 1,055 | 1,708 | |
Total liabilities | 1,055 | 1,708 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | 0 | 0 | |
Fair value, measurements, recurring [Member] | Level 3 [Member] | |||
Assets [Abstract] | |||
Derivative contracts - assets | 0 | 0 | |
Total assets | 0 | 0 | |
Liabilities [Abstract] | |||
Derivative contracts - liabilities | 0 | 0 | |
Total liabilities | 0 | 0 | |
Attributable To Redeemable Noncontrolling Interests [Abstract] | |||
Redeemable noncontrolling interests | $ 286,700 | $ 219,724 |
Business Acquisitions- Narrativ
Business Acquisitions- Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Dec. 29, 2018 | |
Business Acquisition [Line Items] | ||
Business acquisition allocated initial goodwill amount | $ 2,413,566 | $ 2,081,029 |
North American Rescue [Member] | ||
Business Acquisition [Line Items] | ||
Business Acquisition, Name of Acquired Entity | North American Rescue | |
Business acquisition, approximate annual sales of acquired entity | $ 184,000 | |
Business acquisition allocated initial goodwill amount | $ 160,100 | |
Lighthouse 360 [Member] | Henry Schein One, LLC. [Member] | ||
Business Acquisition [Line Items] | ||
Business Acquisition, Name of Acquired Entity | Lighthouse 360 | |
Business acquisition, approximate annual sales of acquired entity | $ 50,000 | |
Business acquisition allocated initial goodwill amount | $ 143,900 |
Plans of Restructuring - Narrat
Plans of Restructuring - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | Jul. 09, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges, pre-tax | $ 4,641 | $ 2,675 | $ 54,367 | |
Strategic Plan, 2018 to 2020 [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges, pre-tax | $ 4,600 | $ 54,400 | ||
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% | |||
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% |
Plans of Restructuring - Restru
Plans of Restructuring - Restructuring Reserve Roll Forward by Expense and Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | Dec. 29, 2018 | |
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, beginning balance | $ 31,725 | $ 4,426 | $ 4,426 |
Provision | 4,641 | 2,675 | 54,367 |
Payments and other adjustments | (16,079) | (27,068) | |
Restructuring Reserve, ending balance | 20,287 | 31,725 | |
Healthcare Distribution [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, beginning balance | 30,291 | 4,426 | 4,426 |
Provision | 3,806 | 50,824 | |
Payments and other adjustments | (14,645) | (24,959) | |
Restructuring Reserve, ending balance | 19,452 | 30,291 | |
Technology [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, beginning balance | 1,434 | 0 | 0 |
Provision | 835 | 3,543 | |
Payments and other adjustments | (1,434) | (2,109) | |
Restructuring Reserve, ending balance | 835 | 1,434 | |
Employee Severance [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, beginning balance | 29,964 | 3,087 | 3,087 |
Provision | 4,462 | 50,197 | |
Payments and other adjustments | (15,611) | (23,320) | |
Restructuring Reserve, ending balance | 18,815 | 29,964 | |
Facility Closing [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, beginning balance | 1,603 | 1,315 | 1,315 |
Provision | 155 | 3,153 | |
Payments and other adjustments | (444) | (2,865) | |
Restructuring Reserve, ending balance | 1,314 | 1,603 | |
Other [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, beginning balance | 158 | $ 24 | 24 |
Provision | 24 | 1,017 | |
Payments and other adjustments | (24) | (883) | |
Restructuring Reserve, ending balance | $ 158 | $ 158 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 150,257 | 153,106 |
Effect of dilutive securities: | ||
Stock options, restricted stock and restricted stock units (in shares) | 899 | 1,024 |
Diluted (in shares) | 151,156 | 154,130 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate (in hundredths) | 24.60% | 24.40% |
Effect of Tax Cuts and Jobs Act [Abstract] | ||
Unrecognized tax benefits | $ 109.7 | |
Unrecognized tax benefits that would affect the effective tax rate if recognized | 86.2 | |
Total interest | 16.7 | |
Total penalties | $ 0 | |
Other Information Pertaining to Income Taxes | The tax years subject to examination by major tax jurisdictions include the years 2012 and forward by the U.S. Internal Revenue Service (“IRS”), as well as the years 2008 and forward for certain states and certain foreign jurisdictions. During the quarter ended December 31, 2016, we filed a Mutual Agreement Procedure request with the IRS for assistance from the U.S. Competent Authority for an open Transfer Pricing issue which resulted in a partial settlement during the quarter ended December 30, 2017. We received a 30 Day Letter from the IRS during the quarter ended April 1, 2017 for the remaining open audit issues for the years 2012 and 2013. We filed a Protest with the Appellate Division regarding these issues during the second quarter of 2017. We had an initial Appeals Conference during the third quarter of 2018, of which we are awaiting a final settlement. During the quarter ended December 29, 2018, we submitted the first draft of our proposed Advanced Pricing Agreement covering tax years 2014-2024 to the IRS in which Henry Schein, Inc. and the IRS would agree on an appropriate transfer pricing methodology. We have provided all necessary documentation to the Appellate Division and the Advance Pricing and Mutual Agreement program to date and are waiting for responses. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Details) | 3 Months Ended |
Mar. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Maximum duration of foreign currency forward contracts | 18 months |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Pre-tax share-based compensation expense | $ 7.1 | $ 7.7 |
After-tax share-based compensation expense | 5.4 | $ 5.8 |
Total unrecognized compensation cost related to non-vested awards | $ 112.3 | |
Weighted-average period of recognition for unrecognized compensation costs on nonvested awards (in years) | 2 years 7 months 6 days | |
Restricted Stock And Restricted Stock Unit Awards [Member] | Long-term Incentive Program [Member] | Henry Schein Animal Health Business [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Period Increase (Decrease) | 1.2633 | |
Decrease in price per share | $ (1.2633) | |
Time Based Restricted Stock Restricted Units [Member] | 2013 Stock Incentive Plan, as amended [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |
Time Based Restricted Stock Restricted Units [Member] | 2015 Non-Employee Director Stock Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 12 months | |
Performance Based Restricted Stock Restricted Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
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] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at beginning of period (in shares) | 3 | |
Granted (in shares) | 0 | |
Exercised (in shares) | (3) | |
Forfeited (in shares) | 0 | |
Outstanding at end of period (in shares) | 0 | |
Ending balance, options exercisable (in shares) | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding at beginning of period (in dollars per share) | $ 13.63 | |
Granted (in dollars per share) | $ 0 | |
Exercised (in dollars per share) | 13.63 | |
Forfeited (in dollars per share) | $ 0 | |
Outstanding at end of period (in dollars per share) | 0 | |
Ending balance, options exercisable (in dollars per share) | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Stock option outstanding aggregate intrinsic value as of period end | $ 0 | |
Stock option exercisable aggregate intrinsic value as of period end | $ 0 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Resticted Stock Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 30, 2019$ / sharesshares | |
Time Based Restricted Stock Restricted Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance outstanding (in shares) | shares | 1,513 |
Granted (in shares) | shares | 385 |
Vested (in shares) | shares | (323) |
Forfeited (in shares) | shares | (191) |
Ending balance outstanding (in shares) | shares | 1,384 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning balance outstanding (in dollars per share) | $ 57.94 |
Granted (in dollars per share) | 58.88 |
Vested (in dollars per share) | 55.45 |
Forfeited (in dollars per share) | 60.37 |
Ending balance outstanding (in dollars per share) | 58.45 |
Intrinsic value (in dollars per share) | $ 60.11 |
Performance Based Restricted Stock Restricted Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance outstanding (in shares) | shares | 1,163 |
Granted (in shares) | shares | 359 |
Vested (in shares) | shares | (179) |
Forfeited (in shares) | shares | (146) |
Ending balance outstanding (in shares) | shares | 1,197 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning balance outstanding (in dollars per share) | $ 40.26 |
Granted (in dollars per share) | 58.86 |
Vested (in dollars per share) | 66.48 |
Forfeited (in dollars per share) | 61.49 |
Ending balance outstanding (in dollars per share) | 52.33 |
Intrinsic value (in dollars per share) | $ 60.11 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2019 | Mar. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | ||
Interest | $ 20,725 | $ 16,452 |
Income taxes | 16,629 | 20,143 |
Unrealized gain (loss) from foreign currency hedging activities | $ (1,603) | $ (1,084) |
Legal Proceedings (Details)
Legal Proceedings (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 30, 2019 | Sep. 29, 2018 | Dec. 29, 2018 | |
Loss Contingency, Information about Litigation Matters [Abstract] | |||
Loss Contingency, Management's Assessment and Process | As of March 30, 2019, we had accrued our best estimate of potential losses relating to claims that were probable to result in liability and for which we were able to reasonably estimate a loss. This accrued amount, as well as related expenses, was not material to our financial position, results of operations or cash flows. Our method for determining estimated losses considers currently available facts, presently enacted laws and regulations and other factors, including probable recoveries from third parties. | ||
Class Action Complaints Against Patterson Companies, Inc., Benco Dental Supply Co. and Henry Schein, Inc. [Member] | |||
Loss Contingency, Information about Litigation Matters [Abstract] | |||
Loss Contingency, Lawsuit Filing Date | January 2016 | ||
Loss Contingency, Name of Defendant | Patterson Companies, Inc. (“Patterson”), Benco Dental Supply Co. (“Benco”) and Henry Schein, Inc. | ||
Loss Contingency, Name of Plaintiff | class action complaints | ||
Loss Contingency, Allegations | Each of these complaints 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 | $ 38.5 | ||
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, Inc., 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, Inc., 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 alleges, among other things, that Defendants 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 actions and the FTC action described above, thereby causing Plaintiff and members of the purported class to pay artificially inflated prices for Henry Schein securities. | ||
Marion Diagnostic Center, LLC v. Dickinson, and Co., 3:18-cv-01509 (S.D. Ill) [Member] | |||
Loss Contingency, Information about Litigation Matters [Abstract] | |||
Loss Contingency, Lawsuit Filing Date | May 3, 2018 | ||
Loss Contingency, Name of Defendant | 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, et al. | ||
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 or otherwise failing to monitor appropriately and restrict the improper distribution of those drugs. | ||
Actions consolidated in the MultiDistrict Litigation [Member] | |||
Loss Contingency, Information about Litigation Matters [Abstract] | |||
Loss Contingency, Name of Defendant | Henry Schein and/or one or more of its affiliated companies | ||
Loss Contingency, Allegations | allege claims similar to those alleged in the Summit County Action | ||
Maximum sales of opioids in North America during the year, percentage | 1.00% | ||
Kramer v. Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and Unnamed Co-Conspirators [Member] | |||
Loss Contingency, Information about Litigation Matters [Abstract] | |||
Loss Contingency, Lawsuit Filing Date | October 9, 2018 | ||
Loss Contingency, Name of Defendant | Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and Unnamed Co-Conspirators | ||
Loss Contingency, Name of Plaintiff | Kramer | ||
Loss Contingency, Allegations | The complaint alleges that the alleged conspiracy overcharged California dental practices, orthodontic practices and dental laboratories on their purchase of dental supplies, which in turn passed on some or all of such overcharges to members of the California class purchasing dental services. | ||
R. Lawrence Hatchett, M.D. against Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and unnamed co-conspirators [Member] | |||
Loss Contingency, Information about Litigation Matters [Abstract] | |||
Loss Contingency, Lawsuit Filing Date | January 29, 2019 | ||
Loss Contingency, Name of Defendant | Henry Schein, Inc., Patterson Co., Inc., Benco Dental Supply Co., and unnamed co-conspirators | ||
Loss Contingency, Name of Plaintiff | R. Lawrence Hatchett, M.D. | ||
Loss Contingency, Allegations | The complaint alleges that members of the proposed class suffered antitrust injury due to an unlawful boycott, price-fixing or otherwise anticompetitive conspiracy among Henry Schein, Patterson and Benco. |