| Basis of Presentation and Significant Accounting Policies | Note 1 – Basis of Presentation and Significant Accounting Policies Nature of Operations We distribute health care products and value-added services primarily to office-based dental and medical practitioners, across dental practices, laboratories, physician practices, government, institutional health care clinics and alternate care clinics. services to health care practitioners. laboratories, schools, government and other institutions. care centers, ambulatory care sites, emergency medical technicians, dialysis centers, governments and large enterprises, such as group practices and integrated delivery across a wide range of specialties. We have operations or affiliates in the United States, Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China, the Czech Republic, France, Germany, Hong Kong SAR, Ireland, Israel, Italy, Japan, Liechtenstein, Luxembourg, Mexico, Morocco, the Netherlands, New Zealand, Peru, Poland, Portugal, South Sweden, Switzerland, Thailand, United Arab Emirates and the United Kingdom. Basis of Presentation Our consolidated financial statements include the accounts of Henry subsidiaries and VIE. unconsolidated affiliates for which we have the ability to influence the operating or accounted for under the equity method. current period presentation. impact on our consolidated financial condition, results of operations The primary beneficiary of a VIE is required to consolidate the assets and be the primary beneficiary of the VIE when we have the power to direct activities economic performance and have the obligation to absorb the majority that could potentially be significant to the VIE. consider factors such as ownership interest, debt investments, management decisions, and contractual and substantive participating rights of each party. receivable transferred to the VIE are pledged as collateral to the related debt. us for losses on these trade accounts receivable. accounts receivable that can only be used to settle obligations of this VIE 241 284 respectively, and the liabilities of this VIE where the creditors have recourse to us were $ 150 210 million, respectively. Fair Value Fair value is defined as the price that would be received to sell an asset or transaction between market participants at the measurement date. (1) market participant assumptions developed based on market data obtained inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the in active markets for identical assets or liabilities (Level 1) and the lowest priority The three levels of the fair value hierarchy are described as follows: • measurement date. • either directly or indirectly. quoted prices for identical or similar assets or liabilities in markets prices that are observable for the asset or liability; and inputs that are observable market data by correlation or other means. • Use of Estimates The preparation of consolidated financial statements in conformity with the United States requires us to make estimates and assumptions that liabilities and disclosure of contingent assets and liabilities at the date of amounts of revenues and expenses during the reporting period. Our consolidated financial statements reflect estimates and assumptions our goodwill, long-lived asset and definite-lived intangible asset valuation; valuation; assessment of the annual effective tax rate; valuation of deferred income contingencies; the allowance for credit losses; hedging activity; supplier cost for certain share-based performance awards and cash bonus plans; and Fiscal Year We report our results of operations and cash flows on a 52 53 Saturday of December. 52 30, 2023 and December 31, 2022 consisted of 52 53 Revenue Recognition Revenue is recognized when a customer obtains control of promised goods consideration that we expect to receive for those goods or services. • • • • • We generate revenue from the sale of dental and medical consumable products, equipment, and services such as equipment repair and financial services (Global Distribution and Value-Added Services revenues), company- manufactured specialty products (Global Specialty Products revenue), and software (Global Technology revenues). revenue adjustments are included in the transaction price at contract based upon historical data and estimates and are provided for in the recognized. Revenue derived from the sale of consumable products and company-manufactured recognized at the point in time when control transfers to the customer, (e.g. when legal title and risks and of ownership transfer to the customer, we have no post-shipment obligations, and we have an enforceable payment). common carriers. Revenue derived from the sale of equipment is recognized when control when the equipment is delivered. equipment service technicians. time of delivery. Our merchandise and equipment products generally carry standard warranty however, in instances where we provide a warranty on company-manufactured products or labor services, the warranty costs are accrued in accordance with Accounting Standards Codification At December 28, 2024 and December 30, 2023, we had accrued approximately 8 12 respectively, for warranty costs. Revenue derived from the sale of software products is recognized when made available electronically. training. training, is generally recognized over time using time elapsed as the input method control to the customer. over the subscription period as control is transferred to the customer. Revenue derived from other sources, including freight charges, equipment repairs recognized when the related product revenue is recognized or when practical expedient to treat shipping and handling activities performed after fulfillment activities, rather than a separate performance obligation in the Sales, value-add and other taxes we collect concurrent with revenue-producing revenue. Some of our revenue is derived from bundled arrangements that include which are accounted for separately. and technical support), we allocate the transaction price to each estimated standalone selling price for each performance obligation. that are not considered software consist primarily of equipment and the related revenue for such arrangements based on the relative selling prices of the goods price is not available (i.e., because we or others do not sell the goods or following techniques to estimate the standalone selling price: adjusted approach; or the residual method. selling price reflects our best estimate of what the selling prices of each deliverable regularly on a standalone basis taking into consideration the cost structure customer location and other market conditions. Sales Returns Sales returns are recognized as a reduction of revenue by the amount liability within accrued expenses-other within our consolidated balance sheets. liability based on historical data for specific products, adjusted as necessary returns is presented gross as a refund liability and we record a right of to cost of sales) for any products that we expect to be returned and resaleable. Cost of Sales The primary components of cost of sales include the cost of the product chargebacks and rebates) and inbound and outbound freight charges. Costs related to purchasing, receiving, inspections, warehousing, distribution network are included in selling, general and administrative Total distribution network costs were $ 105 105 103 28, 2024, December 30, 2023 and December 31, 2022, respectively. Supplier Rebates Supplier rebates are included as a reduction of cost of sales and are recognized factors we consider in estimating supplier rebate accruals include forecasted rebate contract terms, which generally provide for increasing rebates based volumes. Direct Shipping and Handling Costs Freight and other direct shipping costs are included in cost of sales. primarily direct compensation costs of employees who pick, pack and otherwise for shipment to our customers are reflected in selling, general and administrative were $ 106 98 96 December 31, 2022, respectively. Advertising and Promotional Costs We expense advertising and promotional costs as incurred. 43 million, $ 47 47 31, 2022, respectively. Stock-Based Compensation Costs We measure stock-based compensation at the grant date, based on the estimated recognize the cost (net of estimated forfeitures) as compensation expense on service period for time-based restricted stock units and on a graded vesting performance-based awards, at each reporting date, we reassess whether achievement is probable and accrue compensation expense when achievement of stock-based compensation expense is reflected in selling, general and administrative Employment Benefit Plans and other Postretirement Benefit Plans Some of our employees in our international markets participate We recognize the funded status, measured as the difference between the fair value of plan assets and the projected benefit obligation. asset or liability based on its funded status. Net periodic pension costs and valuations are dependent on assumptions those amounts. compensation levels, retirement rates, mortality rates, and other factors. net pension cost in selling, general and administrative expenses within Gains and losses that result from changes in actuarial assumptions or actuarial assumptions are recognized in and then amortized from Accumulated Cash and Cash Equivalents We consider all highly liquid short-term investments with an original maturity of three months or less to be cash equivalents. fair value. 33 52 payments for inventory, were classified as accounts payable as of December 28, 2024 and December 30, 2023. Accounts Receivable and Allowance for Credit Losses Accounts receivable are generally recognized when revenues are recognized. credit loss” model, the carrying amount of accounts receivable is reduced best estimate of the amounts that we do not expect to collect. receivable, we consider many factors in estimating our reserve, including worthiness, experience and historical data adjusted for current conditions We record allowances for credit losses based upon a specific review of all those invoices not specifically reviewed, provisions are provided at differing rates, receivable, the collection history associated with the geographic region economic trends and reasonable supportable forecasts. We write off a receivable and charge it against its recorded allowance when we deem them uncollectible. Our net accounts receivable balance was $ 1,482 1,863 1,442 December 30, 2023 and December 31, 2022, respectively. The following table presents our allowances for credit losses: As of Description December 28, 2024 December 30, 2023 December 31, 2022 Balance at beginning of year $ 83 $ 65 $ 67 Provision for credit losses 14 17 6 Adjustments to existing allowances for late fees, foreign currency exchange rates, and write-offs (19) 1 (8) Balance at end of year $ 78 $ 83 $ 65 Contract Assets Contract assets include amounts related to any conditional right to consideration as of the reporting date. unconditional. consumables and sales of term software licenses. other and the non-current contract assets are included in investments and other sheets. material. Contract Liabilities Contract liabilities are comprised of advance payments and upfront payments over time that are accounted for as deferred revenue amounts. the performance obligation has been satisfied. and the non-current contract liabilities are included in other liabilities During the years ended December 28, 2024, December 30, 2023, and December substantially all of the current contract liability amounts that were previously year. The following table presents our contract liabilities: As of Description December 28, 2024 December 30, 2023 December 31, 2022 Current contract liabilities $ 81 $ 89 $ 86 Non-current contract liabilities 8 9 8 Total contract $ 89 $ 98 $ 94 Inventories and Reserves Inventories consist primarily of finished goods, cost or net realizable value. for large equipment and high-tech equipment. (oral surgery solutions including dental implants, endodontics, and orthopedics). inventory valuation, we consider many factors including the sales, forecasted sales and market and economic trends. anticipated changes in any of these or other factors expected to affect the value of inventory. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation or computed under the straight-line method using estimated useful lives Amortization of leasehold improvements is computed using the straight-line over the lesser of the useful life of the assets or the remaining lease term. Capitalized Software Development Costs Capitalized software costs consist of costs to purchase and develop software customers. application development stage and include such costs within property balance sheets. costs when technological feasibility is reached, and for cloud-based applications capitalize costs incurred during the application development stage, other within our consolidated balance sheets. Leases We determine if an arrangement contains a lease at inception. explicitly identifies an asset to be used and conveys the right to control for consideration. operating lease liabilities, and non-current operating lease liabilities in our leases are included in property and equipment, current maturities of consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease obligation to make lease payments arising from the lease. upon commencement of the lease based on the present value of the lease payments our leases do not provide an implicit interest rate, we generally use our incremental estimated rate of interest for fully collateralized and fully amortizing borrowings payments at commencement date to determine the present value of 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. over the lease term. and administrative and interest expense, respectively within our consolidated leases with a term of 12 months or less are not capitalized. We have lease agreements with lease and non-lease components, which are lease component, except non-lease components for leases of vehicles, which vehicle lease contains both lease and non-lease components, we allocate the standalone selling price. Business Acquisitions We account for business acquisitions under the acquisition method of accounting, under which the net assets of acquired businesses are recorded at their fair value at the acquisition include the acquired businesses’ results of operations from that date. Some prior owners of acquired subsidiaries are eligible to receive additional we may be entitled to recoup a portion of purchase price cash consideration have accrued liabilities for the estimated fair value of additional purchase acquisition, using the income approach, including a probability-weighted pricing method, where applicable. administrative within our consolidated statements of income. While we use our best estimates and assumptions to accurately value acquisition date, our estimates are inherently uncertain and subject 12 months following the date of acquisition, or the measurement period, we liabilities assumed with the corresponding offset to goodwill within our consolidated balance the measurement period or final determination of the values of such assets whichever comes first, any subsequent adjustments are recognized Goodwill Any excess of acquisition consideration over the fair value of identifiable goodwill. business combination that are not individually identified and separately technology, as well as the assembled workforce. Goodwill represents, for acquired business, the excess of the purchase price assets acquired, including the amount assigned to identifiable intangible analysis annually or more frequently if needed. the fair value to the carrying value of reporting units. segments based on economic similarities, the nature of their products, customer as follows: Global Distribution and Value-Added Services; Global Specialty Products; Goodwill was allocated to such reporting units, for the purpose of specific identification basis. During the fourth quarter of our fiscal year ended December 28, 2024, with how our Chairman and Chief Executive Officer manages the business, assesses resources. Global Specialty Products; impairment, and no impairment was identified. segments, we reallocated goodwill to each of our new reporting units using the impairment test under the new structure, it was determined that the than not exceeded their carrying values, resulting in no impairment. goodwill impairment tests as of September 30, 2024, the fair values of reporting methodology described above. Application of the goodwill impairment test requires judgment, including assignment of assets and liabilities that are considered shared services determination of the fair value of each reporting unit. applying the discounted cash flow methodology and confirming with uncertainties related to fair value models, the inputs and our judgments significant inputs include estimation of future cash flows based on budget comparable companies to develop a weighted average cost of capital for each In connection with our restructuring initiatives, during the year ended 11 million impairment of goodwill in the Global Specialty Products segment, business; such impairment was calculated based on the relative fair value December 31, 2022, we recorded a $ 20 relating to the disposal of an unprofitable business for which estimated Intangible Assets In connection with our business acquisitions, the major classes of allocate acquisition consideration to, excluding goodwill, include relationships and lists, trademarks and trade names, product development and accounts receivable. and assumptions derived from analysis of market conditions, including rates (which are based on historical trends and assessment of financial projections), projected cash flows. earnings method, the relief-from-royalty method, and the with and without assumptions are forward-looking and could be affected by future economic and Intangible assets, other than goodwill, are evaluated for impairment whenever indicate that the carrying amount of the assets may not be recoverable expected to be derived from such asset or asset group. Definite and indefinite-lived intangible assets primarily consist of non-compete names, customer lists, customer relationships and product development. impairment losses are only recorded if the asset or asset groups carrying amount undiscounted future cash flows. amount and the estimated fair value. During the years ended December 28, 2024, December 30, 2023 impairment charges within the selling, general and administrative line of our consolidated statements intangible assets of $ 0 7 34 During the years ended December 28, 2024, December 30, 2023 December 31, 2022, we recorded impairment charges, within the restructuring and consolidated statements of income, of $ 14 12 , million, and $ 35 Income Taxes We account for income taxes under an asset and liability approach that requires the recognition of deferred income tax assets and liabilities for the expected future tax consequences of events financial statements or tax returns. events other than expected enactments of changes in tax laws or rates. liabilities of a change in tax rates is recognized as income or expense in We file a consolidated U.S. federal income tax return with our 80% or greater owned U.S. subsidiaries. Redeemable Noncontrolling Interests Some minority stockholders in certain of our consolidated subsidiaries have to acquire their ownership interest in those entities at fair value. outside permanent equity on our consolidated balance sheets and are The redemption amounts have been estimated based on recent transactions and, if such earnings and cash flows are not achieved, the value of the impacted. reflected at each reporting period with a corresponding adjustment in the carrying amounts are subject to a “floor” amount that is equal noncontrolling interests at the time they were originally recorded. noncontrolling interests cannot go below the floor level. interests to reflect a fair value redemption feature do not impact the income is reduced by the portion of the subsidiaries’ net income interests. Noncontrolling Interests Noncontrolling interest represents the ownership interests of certain subsidiaries. noncontrolling interests. Comprehensive Income Comprehensive income includes certain gains and losses that, under accounting United States, are excluded from net income as such amounts are recorded stockholders’ equity. translation gain (loss), unrealized gain (loss) from hedging activities Risk Management and Derivative Financial Instruments We use derivative instruments to minimize our exposure to fluctuations in foreign currency exchange rates, interest rates, and our unfunded non-qualified supplemental retirement plan (“SERP”) (“DCP”). recognized asset and liability fair values, earnings and cash flows, as well subsidiaries, the interest rate risk on variable rate debt, and the returns on management policy requires that derivative contracts used as hedges be with the exposure being hedged and be designated hedges at inception derivative instruments for speculative purposes. forward contracts, total return swaps, and interest rate swaps. Foreign currency forward agreements related to forecasted inventory foreign currency swaps related to foreign currency denominated debt, and debt are designated as cash flow hedges. changes in the fair value of the derivatives are recorded as a income in stockholders’ equity and subsequently reclassified into transactions affect earnings. consolidated statements of cash flows as the cash flows related Foreign currency forward contracts related to our euro-denominated investment hedges. value of the derivatives are recorded in the foreign currency translation gain other comprehensive income in stockholders’ equity until the net Interest swap agreements are entered into for the purpose of hedging loan. Our foreign currency forward agreements related to foreign currency hedges but are not designated as hedges for accounting purposes. For agreements not designated as hedges, changes in the value of the derivative, loss on the hedged item, are recorded in other, net, within our consolidated statements of income. Total return swaps are entered into for the purpose of economically hedging our SERP and DCP. expected to be renewed on an annual basis. selling, general, and administrative expenses within our consolidated changes in the fair values of our SERP and DCP liabilities. Foreign Currency Translation The financial position and results of operations of our foreign subsidiaries the functional currencies. each year-end. Translation adjustments arising from the use of differing exchange rates from period to period are included Accumulated other comprehensive income in stockholders’ equity. currency transactions are included in earnings. Accounting Pronouncements Adopted During the year ended December 28, 2024, we adopted Accounting Standards Segment Reporting (Topic 280): Improvements to Reportable Segments ” (“Topic 280”), reporting by requiring disclosure of incremental segment information on an annual entities to enable investors to develop more decision-useful financial analyses. not change how a public entity identifies its operating segments, aggregates the quantitative thresholds to determine its reportable segments. which resulted in the required additional disclosures included in our 2024 statements. During the year ended December 30, 2023, we adopted ASC Topic 848, “Reference Rate Reform” (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” and exceptions for applying GAAP to contracts, hedging relationships and discontinuation of the London Interbank Offered Rate or by another reference rate because of reference rate reform. financial statements. Recently Issued Accounting Standards In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “ Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40) : Disaggregation of Income Statement Expenses ,” which requires additional disclosure about the specific expense categories in the notes to financial statements at interim and amendments in this ASU do not change or remove current expense information appears in the notes to financial statements. beginning after December 15, 2026, and interim reporting periods beginning adoption permitted. evaluating the impact that ASU 2024-03 will have on our consolidated In March 2024, the FASB issued ASU 2024-01, “ Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, ” which clarifies how to determine whether profits interest and similar awards should be accounted for as a share-based payment arrangement of other guidance. of paragraph 718-10-15-3 of Topic 718 to improve its clarity and operability. applies to all entities that issue profits interest awards as compensation for goods or services. financial statements or prospectively to profits interest awards granted If prospective application is elected, an entity must disclose the nature principle that resulted from the adoption of the ASU. December 15, 2024, including interim periods within those fiscal years. ASU 2024-01 will have a material impact on our consolidated financial In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic Disclosures ,” which requires public business entities to disclose additional respect to the reconciliation of the effective tax rate to the statutory rate for federal, state and It also requires greater detail about individual reconciling items in those items exceeds a specified threshold. ASU requires information pertaining to taxes paid (net of refunds received) and foreign taxes and further disaggregated for specific jurisdictions quantitative threshold. determined by reference to the item’s fundamental or essential characteristics, such as the transaction or event triggered the establishment of the reconciling item and the activity with which The ASU eliminates the historic requirement that entities disclose information benefits having a reasonable possibility of significantly increasing reporting date. permitted for annual financial statements that have not yet been should be applied on a prospective basis; however, retrospective application is permitted. evaluating the impact that ASU 2023-09 will have on our consolidated |
