Henry Schein Reports Record Second Quarter Results

              Henry Schein Reports Record Second Quarter Results

EPS up 9.8% to $1.35

Raises lower end of 2014 financial guidance range

PR Newswire

MELVILLE, N.Y., Aug. 4, 2014

MELVILLE, N.Y., Aug. 4, 2014 /PRNewswire/ --Henry Schein, Inc. (NASDAQ:
HSIC), the world's largest provider of health care products and services to
office-based dental, animal health and medical practitioners, today reported
record financial results for the quarter ended June 28, 2014.

Net sales for the second quarter of 2014 were $2.6 billion, an increase of
9.3% compared with the second quarter of 2013. This consisted of 7.9% growth
in local currencies and 1.4% growth related to foreign currency exchange. In
local currencies, internally generated sales increased 4.3% and acquisition
growth was 3.6% (see Exhibit A for details of sales growth).

Net income attributable to Henry Schein, Inc. for the second quarter of 2014
was $116.2 million, or $1.35 per diluted share, an increase of 7.2% and 9.8%,
respectively, compared with the second quarter of 2013.

"Sales growth was solid during the second quarter with internal sales growth
in local currencies the highest we have reported in the past year and a half.
Domestic sales rebounded from the effects of severe winter weather in the
preceding quarter," said Stanley M. Bergman, Chairman of the Board and Chief
Executive Officer of Henry Schein. "We are also pleased to be raising
thelower endof our 2014 financial guidance range."

Dental sales of $1.4 billion increased 8.6%, consisting of 7.5% growth in
local currencies and 1.1% growth related to foreign currency exchange. In
local currencies, internally generated sales increased 2.6% and acquisition
growth was 4.9%. The 2.6% internal growth in local currencies included 4.3%
growth in North America while International sales were flat.

"We gained market share in our Dental group with growth in North America
exceeding 8% and International growth above 9%. North America internal Dental
merchandise sales growth was bolstered by strategic acquisitions, and
equipment sales and service revenue growth was nearly 11% in local
currencies. International Dental growth also reflects strategic acquisitions,
while internal equipment sales and service revenue in local currencies
declined from a strong prior-year comparison that included the biennial IDS in
Germany," commented Mr. Bergman. "Through strategic dental transactions
during the quarter, we expanded our reach in France and entered Brazil, our
first operation in South America."

Animal Health sales of $754.5 million increased 13.2%, consisting of 10.7%
growth in local currencies and 2.5% growth related to foreign currency
exchange. In local currencies, internally generated sales increased 7.3% and
acquisition growth was 3.4%. The 7.3% internal growth in local currencies
included 7.9% growth in North America and 6.8% growth in International.

"We also gained market share in our Animal Health group with internal sales
growth in local currencies at its highest level in six quarters.
International internal Animal Health sales growth in local currencies was at a
multi-year record,"commented Mr. Bergman. "We also significantly
strengthened our position in the U.S. equine-products market with the
acquisition of a majority ownership position in SmartPak, which was completed
early in the third quarter."

Medical sales of $403.3 million increased 4.0%, including 3.7% growth in local
currencies and 0.3% growth related to foreign currency exchange.

"Medical sales growth in North America, which represents 95% of the group's
total, accelerated sharply from the preceding quarter as we recovered from the
impact of weather and made progress with our strategic focus on large group
practices and integrated delivery networks. Pre-bookings of seasonal
influenza vaccines are running in-line with the prior year," remarked Mr.
Bergman.

Technology and Value-Added Services sales of $89.1 million increased 14.2%,
including 13.2% growth in local currencies and 1.0% growth related to foreign
currency exchange. In local currencies, internally generated sales increased
9.3% and acquisition growth was 3.9%.

"Technology and Value-Added Services sales growth also accelerated in North
America compared with the preceding quarter to its highest growth rate in more
than a year, with particular strength in software sales and value-added
services," commented Mr. Bergman. "We continue to be pleased with our
performance internationally in this category, with double-digit internal sales
growth in local currencies for the past six quarters."

Stock Repurchase Plan
The Company announced that it repurchased approximately 654,000 shares of its
common stock during the second quarter at an average price of $116.43 per
share, or approximately $76.1 million. The impact of the repurchase of shares
on second quarter diluted EPS was immaterial. At the close of the second
quarter, Henry Schein had approximately $148 million authorized for future
repurchases of its common stock.

Year-to-Date Results
Net sales for the first half of 2014 were $5.0 billion, an increase of 7.7%
compared with the first half of 2013. This consisted of 6.8% growth in local
currencies and 0.9% growth related to foreign currency exchange. In local
currencies, internally generated sales increased 3.6% and acquisition growth
was 3.2%.

Net income attributable to Henry Schein, Inc. for the first half of 2014 was
$218.3 million or $2.53 per diluted share, an increase of 7.8% and 10.0%,
respectively, compared with the first half of 2013 excluding a non-cash,
one-time expense related to debt refinancing.

2014 EPS Guidance
Henry Schein today raised thelower endof its 2014 financial guidance range,
as follows:

  oFor 2014, the Company expects diluted EPS attributable to Henry Schein,
    Inc. to be $5.33 to $5.39. This represents growth of 8% to 9% compared
    with 2013 results excluding certain one-time items, and compares with
    previous guidance for 2014 diluted EPS to be $5.29 to $5.39.
  oGuidance for 2014 diluted EPS attributable to Henry Schein, Inc. is for
    current continuing operations as well as completed or previously announced
    acquisitions, and does not include the impact of potential future
    acquisitions, if any.

Second Quarter Conference Call Webcast
The Company will hold a conference call to discuss second quarter financial
results today, beginning at 10:00 a.m. Eastern time. Individual investors are
invited to listen to the conference call over the Internet through Henry
Schein's website at www.henryschein.com. In addition, a replay will be
available beginning shortly after the call has ended.

About Henry Schein, Inc.
Henry Schein, Inc. is the world's largest provider of health care products and
services to office-based dental, animal health and medical practitioners. The
Company also serves dental laboratories, government and institutional health
care clinics, and other alternate care sites. A Fortune 500® Company and a
member of the NASDAQ 100® Index, Henry Schein employs more than 17,000 Team
Schein Members and serves more than 800,000 customers.

The Company offers a comprehensive selection of products and services,
including value-added solutions for operating efficient practices and
delivering high-quality care. Henry Schein operates through a centralized and
automated distribution network, with a selection of more than 96,000 branded
products and Henry Schein private-brand products in stock, as well as more
than 110,000 additional products available as special-order items. The Company
also offers its customers exclusive, innovative technology solutions,
including practice management software and e-commerce solutions, as well as a
broad range of financial services.

Headquartered in Melville, N.Y., Henry Schein has operations or affiliates in
27 countries. The Company's sales reached a record $9.6 billion in 2013, and
have grown at a compound annual rate of approximately 16percentsince Henry
Schein became a public company in 1995. For more information, visit the Henry
Schein website at www.henryschein.com.

Cautionary Note Regarding Forward-Looking Statements

In accordance with the "Safe Harbor" provisions of the Private Securities
Litigation Reform Act of 1995, we provide the following cautionary remarks
regarding important factors that, among others, could cause future results to
differ materially from the forward-looking statements, expectations and
assumptions expressed or implied herein. All forward-looking statements made
by us are subject to risks and uncertainties and are not guarantees of future
performance. These forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause our actual results,
performance and achievements or industry results to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. These statements are identified by the use
of such terms as "may," "could," "expect," "intend," "believe," "plan,"
"estimate," "forecast," "project," "anticipate" or other comparable terms. A
full discussion of our operations and financial condition, including factors
that may affect our business and future prospects, is contained in documents
we have filed with the SEC and will be contained in all subsequent periodic
filings we make with the SEC. These documents identify in detail important
risk factors that could cause our actual performance to differ materially from
current expectations.

Risk factors and uncertainties that could cause actual results to differ
materially from current and historical results include, but are not limited
to: effects of a highly competitive market; our dependence on third parties
for the manufacture and supply of our products; our dependence upon sales
personnel, customers, suppliers and manufacturers; our dependence on our
senior management; fluctuations in quarterly earnings; risks from expansion of
customer purchasing power and multi-tiered costing structures; possible
increases in the cost of shipping our products or other service issues with
our third-party shippers; general global macroeconomic conditions; disruptions
in financial markets; possible volatility of the market price of our common
stock; changes in the health care industry; implementation of health care
laws; failure to comply with regulatory requirements and data privacy laws;
risks associated with our global operations; transitional challenges
associated with acquisitions and joint ventures, including the failure to
achieve anticipated synergies; financial risks associated with acquisitions
and joint ventures; litigation risks; the dependence on our continued product
development, technical support and successful marketing in the technology
segment; risks from challenges associated with the emergence of potential
increased competition by third party online commerce sites; risks from
disruption to our information systems; certain provisions in our governing
documents that may discourage third-party acquisitions of us; and changes in
tax legislation. The order in which these factors appear should not be
construed to indicate their relative importance or priority.

We caution that these factors may not be exhaustive and that many of these
factors are beyond our ability to control or predict. Accordingly, any
forward-looking statements contained herein should not be relied upon as a
prediction of actual results. We undertake no duty and have no obligation to
update forward-looking statements.

(TABLES TO FOLLOW)



HENRY SCHEIN, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
                             Three Months Ended        Six Months Ended
                             June 28,     June 29,     June 28,     June 29,
                             2014         2013         2014         2013
Net sales                  $ 2,615,406  $ 2,391,810  $ 5,045,565  $ 4,685,321
Cost of sales                1,886,934    1,721,954    3,620,380    3,368,474
 Gross profit           728,472      669,856      1,425,185    1,316,847
Operating expenses:
 Selling, general and      547,628      493,791      1,087,073    987,153
administrative
 Operating income       180,844      176,065      338,112      329,694
Other income (expense):
 Interest income           3,416        3,303        6,871        6,508
 Interest expense          (5,670)      (4,890)      (10,928)     (17,617)
 Other, net                1,032        (34)         4,612        (404)
 Income before taxes
and equity in earnings
 of affiliates       179,622      174,444      338,667      318,181
Income taxes                 (55,322)     (54,775)     (104,945)    (100,627)
Equity in earnings of        2,817        1,766        3,523        2,567
affiliates
Net income                   127,117      121,435      237,245      220,121
 Less: Net income
attributable to              (10,881)     (13,005)     (18,910)     (20,213)
noncontrolling interests
Net income attributable    $ 116,236    $ 108,430    $ 218,335    $ 199,908
to Henry Schein, Inc.
Earnings per share
attributable to Henry
Schein, Inc.:
 Basic                   $ 1.37       $ 1.26       $ 2.58       $ 2.31
 Diluted                 $ 1.35       $ 1.23       $ 2.53       $ 2.27
Weighted-average common
shares outstanding:
 Basic                     84,620       86,370       84,716       86,483
 Diluted                   85,980       87,968       86,189       88,205





HENRY SCHEIN, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
                                                     June 28,     December 28,
                                                     2014         2013
                                                     (unaudited)
ASSETS
Current assets:
 Cash and cash equivalents                           $ 89,698     $  188,616
 Accounts receivable, net of reserves of $81,932       1,188,143     1,055,216
 and $78,298
 Inventories, net                                      1,257,235     1,250,403
 Deferred income taxes                                 66,431        63,865
 Prepaid expenses and other                            310,496       276,565
              Total current assets                     2,912,003     2,834,665
Property and equipment, net                            292,972       275,888
Goodwill                                               1,832,377     1,635,005
Other intangibles, net                                 594,358       417,133
Investments and other                                  360,044       461,945
              Total assets                           $ 5,991,754  $  5,624,636
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                                    $ 755,999    $  824,495
 Bank credit lines                                     83,671        29,508
 Current maturities of long-term debt                  6,302         5,441
 Accrued expenses:
   Payroll and related                                 208,886       216,629
   Taxes                                               158,363       145,161
   Other                                               330,680       329,429
              Total current liabilities                1,543,901     1,550,663
Long-term debt                                         665,909       450,233
Deferred income taxes                                  278,456       198,674
Other liabilities                                      152,029       139,526
              Total liabilities                        2,640,295     2,339,096
Redeemable noncontrolling interests                    497,927       497,539
Commitments and contingencies
Stockholders' equity:
  Preferred stock, $.01 par value, 1,000,000
 shares authorized,
   none outstanding                                    -             -
 Common stock, $.01 par value, 240,000,000 shares
 authorized,
   85,022,123 outstanding on June 28, 2014 and
   85,622,452 outstanding on December 28, 2013         850           856
 Additional paid-in capital                            265,469       318,225
 Retained earnings                                     2,505,721     2,398,267
 Accumulated other comprehensive income                78,703        67,849
   Total Henry Schein, Inc. stockholders' equity       2,850,743     2,785,197
 Noncontrolling interests                              2,789         2,804
              Total stockholders' equity               2,853,532     2,788,001
   Total liabilities, redeemable noncontrolling      $ 5,991,754  $  5,624,636
   interests and stockholders' equity





HENRY SCHEIN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
                            Three Months Ended        Six Months Ended
                            June 28,     June 29,     June 28,     June 29,
                            2014         2013         2014         2013
Cash flows from operating
activities:
 Net income                 $ 127,117    $ 121,435    $ 237,245    $ 220,121
 Adjustments to reconcile
 net income to net cash
  provided by operating
  activities:
   Depreciation and           37,353       31,843       73,489       64,236
   amortization
   Accelerated
   amortization of            -            -            -            6,203
   deferred financing
   costs
   Stock-based                10,542       11,422       19,505       16,732
   compensation expense
   Provision for losses on
   trade and other
        accounts              1,092        1,314        2,415        2,154
        receivable
   Provision for (benefit
   from) deferred income      (9,735)      9,179        6,009        15,550
   taxes
   Equity in earnings of      (2,817)      (1,766)      (3,523)      (2,567)
   affiliates
   Distributions from         3,368        3,569        5,340        6,450
   equity affiliates
   Other                      13,480       2,076        15,453       5,367
   Changes in operating
   assets and liabilities,
    net of acquisitions:
        Accounts              (56,597)     (19,763)     (86,199)     (45,155)
        receivable
        Inventories           6,991        28,026       48,550       82,037
        Other current         195          (26,927)     (23,251)     (12,924)
        assets
        Accounts payable
        and accrued           68,243       114,390      (151,050)    (121,453)
        expenses
Net cash provided by          199,232      274,798      143,983      236,751
operating activities
Cash flows from investing
activities:
 Purchases of fixed assets    (19,492)     (10,072)     (37,976)     (21,934)
 Payments for equity
 investments and business
  acquisitions, net of        (78,178)     (1,349)      (222,857)    (33,708)
  cash acquired
 Other                        (2,566)      (5,003)      (6,497)      (5,071)
Net cash used in investing    (100,236)    (16,424)     (267,330)    (60,713)
activities
Cash flows from financing
activities:
 Proceeds from (repayments    (61,529)     (34,467)     53,239       (11,640)
 of) bank borrowings
 Proceeds from issuance of    124,400      155,781      314,787      483,781
 long-term debt
 Debt issuance costs          -            (1,083)      -            (1,319)
 Principal payments for       (100,470)    (305,095)    (100,866)    (538,000)
 long-term debt
 Proceeds from issuance of
 stock upon exercise
  of stock options            4,827        7,653        21,277       19,452
 Payments for repurchases     (76,137)     (78,062)     (151,443)    (151,511)
 of common stock
 Excess tax benefits
 related to stock-based
  compensation                1,229        1,964        4,579        5,328
 Distributions to
 noncontrolling               (13,926)     (10,216)     (17,689)     (13,008)
 shareholders
 Acquisitions of
 noncontrolling interests
 in
  subsidiaries                (18,759)     (5,219)      (102,552)    (5,754)
Net cash provided by (used    (140,365)    (268,744)    21,332       (212,671)
in) financing activities
Effect of exchange rate
changes on cash and
 cash equivalents             1,952        (1,353)      3,097        (6,608)
Net change in cash and        (39,417)     (11,723)     (98,918)     (43,241)
cash equivalents
Cash and cash equivalents,    129,115      90,562       188,616      122,080
beginning of period
Cash and cash equivalents,  $ 89,698     $ 78,839     $ 89,698     $ 78,839
end of period





Exhibit A -
QTD Sales
Henry Schein, Inc.
2014 Second Quarter
Sales Summary
(in thousands)
(unaudited)
Q2 2014 over Q2 2013
                                        Total   Foreign   Local     Acquisition  Local
Global        Q2 2014      Q2 2013      Sales   Exchange  Currency  Growth       Internal
                                        Growth  Growth    Growth                 Growth
 Dental     $ 1,368,481  $ 1,259,581  8.6%    1.1%      7.5%      4.9%         2.6%
 Animal       754,549      666,297    13.2%   2.5%      10.7%     3.4%         7.3%
Health
 Medical      403,257      387,887    4.0%    0.3%      3.7%      0.0%         3.7%
Total Health
Care            2,526,287    2,313,765  9.2%    1.4%      7.8%      3.6%         4.2%
Distribution
Technology
and             89,119       78,045     14.2%   1.0%      13.2%     3.9%         9.3%
value-added
services
Total Global  $ 2,615,406  $ 2,391,810  9.3%    1.4%      7.9%      3.6%         4.3%
                                        Total   Foreign   Local     Acquisition  Local
North America Q2 2014      Q2 2013      Sales   Exchange  Currency  Growth       Internal
                                        Growth  Growth    Growth                 Growth
 Dental     $ 833,055    $ 768,800    8.4%    -0.7%     9.1%      4.8%         4.3%
 Animal       351,523      325,821    7.9%    0.0%      7.9%      0.0%         7.9%
Health
 Medical      381,811      367,312    3.9%    0.0%      3.9%      0.0%         3.9%
Total Health
Care            1,566,389    1,461,933  7.1%    -0.4%     7.5%      2.5%         5.0%
Distribution
Technology
and             72,145       66,675     8.2%    -0.3%     8.5%      0.0%         8.5%
value-added
services
Total North   $ 1,638,534  $ 1,528,608  7.2%    -0.4%     7.6%      2.4%         5.2%
America
                                        Total   Foreign   Local     Acquisition  Local
International Q2 2014      Q2 2013      Sales   Exchange  Currency  Growth       Internal
                                        Growth  Growth    Growth                 Growth
 Dental     $ 535,426    $ 490,781    9.1%    4.2%      4.9%      4.9%         0.0%
 Animal       403,026      340,476    18.4%   5.0%      13.4%     6.6%         6.8%
Health
 Medical      21,446       20,575     4.2%    5.6%      -1.4%     0.0%         -1.4%
Total Health
Care            959,898      851,832    12.7%   4.6%      8.1%      5.4%         2.7%
Distribution
Technology
and             16,974       11,370     49.3%   8.4%      40.9%     26.5%        14.4%
value-added
services
Total         $ 976,872    $ 863,202    13.2%   4.6%      8.6%      5.8%         2.8%
International





Exhibit A -
YTD Sales
Henry Schein, Inc.
2014 Second Quarter Year to Date
Sales Summary
(in thousands)
(unaudited)
Q2 2014 YTD over Q2 2013 YTD
                                        Total   Foreign   Local     Acquisition  Local
Global        Q2 2014 YTD  Q2 2013 YTD  Sales   Exchange  Currency  Growth       Internal
                                        Growth  Growth    Growth                 Growth
 Dental     $ 2,665,409  $ 2,450,376  8.8%    0.8%      8.0%      4.9%         3.1%
 Animal       1,409,037    1,305,439  7.9%    1.4%      6.5%      1.8%         4.7%
Health
 Medical      800,671      776,749    3.1%    0.3%      2.8%      0.0%         2.8%
Total Health
Care            4,875,117    4,532,564  7.6%    0.9%      6.7%      3.2%         3.5%
Distribution
Technology
and             170,448      152,757    11.6%   0.7%      10.9%     3.1%         7.8%
value-added
services
Total Global  $ 5,045,565  $ 4,685,321  7.7%    0.9%      6.8%      3.2%         3.6%
                                        Total   Foreign   Local     Acquisition  Local
North America Q2 2014 YTD  Q2 2013 YTD  Sales   Exchange  Currency  Growth       Internal
                                        Growth  Growth    Growth                 Growth
 Dental     $ 1,602,651  $ 1,481,754  8.2%    -0.8%     9.0%      5.0%         4.0%
 Animal       657,172      632,651    3.9%    0.0%      3.9%      0.0%         3.9%
Health
 Medical      756,929      734,944    3.0%    0.0%      3.0%      0.0%         3.0%
Total Health
Care            3,016,752    2,849,349  5.9%    -0.4%     6.3%      2.6%         3.7%
Distribution
Technology
and             139,029      130,537    6.5%    -0.3%     6.8%      0.1%         6.7%
value-added
services
Total North   $ 3,155,781  $ 2,979,886  5.9%    -0.4%     6.3%      2.5%         3.8%
America
                                        Total   Foreign   Local     Acquisition  Local
International Q2 2014 YTD  Q2 2013 YTD  Sales   Exchange  Currency  Growth       Internal
                                        Growth  Growth    Growth                 Growth
 Dental     $ 1,062,758  $ 968,622    9.7%    3.2%      6.5%      4.9%         1.6%
 Animal       751,865      672,788    11.8%   2.9%      8.9%      3.4%         5.5%
Health
 Medical      43,742       41,805     4.6%    4.8%      -0.2%     0.0%         -0.2%
Total Health
Care            1,858,365    1,683,215  10.4%   3.1%      7.3%      4.1%         3.2%
Distribution
Technology
and             31,419       22,220     41.4%   6.2%      35.2%     20.9%        14.3%
value-added
services
Total         $ 1,889,784  $ 1,705,435  10.8%   3.1%      7.7%      4.4%         3.3%
International





Exhibit B
Henry Schein, Inc.
2014 Second Quarter and YTD
Reconciliation of reported GAAP net income and diluted EPS attributable to
Henry Schein, Inc. to
non-GAAP net income and diluted EPS attributable to Henry Schein, Inc.
(in thousands, except per share data)
(unaudited)
                  Second Quarter                  YTD
                                      %                               %
                  2014       2013     Growth      2014       2013     Growth
Net Income
attributable to $ 116,236  $ 108,430  7.2    %  $ 218,335  $ 199,908  9.2    %
Henry Schein,
Inc.
Diluted EPS
attributable to $ 1.35     $ 1.23     9.8    %  $ 2.53     $ 2.27     11.5   %
Henry Schein,
Inc.
Non-GAAP
Adjustments
(after-tax)
Accelerated
amortization of
deferred
 financing     $ -        $ -                  $ -        $ 2,679
costs (1)
Total non-GAAP
adjustments to
Net Income
attributable to
Henry Schein,   $ -        $ -                  $ -        $ 2,679
Inc.
Total non-GAAP
adjustments to
diluted EPS
attributable to
Henry Schein,   $ -        $ -                  $ -        $ 0.03
Inc.
Non-GAAP Net
Income
attributable to
Henry Schein,   $ 116,236  $ 108,430  7.2    %  $ 218,335  $ 202,587  7.8    %
Inc.
Non-GAAP
diluted EPS
attributable to
Henry Schein,   $ 1.35     $ 1.23     9.8    %  $ 2.53     $ 2.30     10.0   %
Inc.

This non-GAAP comparison is being presented in order to provide a more
comparable basis for analysis. Earnings per share numbers may not sum due to
rounding.
(1)           Represents non-cash, one-time expenses related to the debt
              refinancing of Henry Schein Animal Health.





SOURCE Henry Schein, Inc.

Website: http://www.henryschein.com
Contact: Investors: Steven Paladino, Executive Vice President and Chief
Financial Officer, steven.paladino@henryschein.com, (631) 843-5500 or
Carolynne Borders, Vice President, Investor Relations,
carolynne.borders@henryschein.com, (631) 390-8105; Media: Susan Vassallo, Vice
President, Corporate Communications, susan.vassallo@henryschein.com, (631)
843-5562
 
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