Henry Schein Reports Record Second Quarter Financial Results

MELVILLE, N.Y., Aug. 8, 2017 /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 second quarter financial results.

Net sales for the quarter ended July 1, 2017 were $3.1 billion, an increase of 6.5% compared with the second quarter of 2016. This consisted of 7.7% growth in local currencies and a 1.2% decline related to foreign currency exchange. In local currencies, internally generated sales increased 4.4% and acquisition growth was 3.3% (see Exhibit A for details of sales growth).

Net income attributable to Henry Schein, Inc. for the second quarter of 2017 was $136.1 million, or $1.71 per diluted share. This represents growth of 13.3% and 17.1%, respectively, compared with GAAP results for the second quarter of 2016. Non-GAAP net income for the second quarter of 2017 was $139.3 million, or $1.75 per diluted share. This represents growth of 2.9% and 6.7%, respectively, compared with non-GAAP results for the second quarter of 2016. Note that the second quarter of 2017 included a litigation settlement expense of $5.3 million pretax, or $0.04 per diluted share, and the second quarter of 2016 included restructuring costs of $20.4 million pretax, or $0.18 per diluted share (see Exhibit B for reconciliation of GAAP net income and EPS to non-GAAP net income and EPS).

"We are pleased with overall sales results for the second quarter of 2017 in each of our global Dental, Animal Health, and Medical businesses. We delivered solid earnings per share growth as we continue to implement our strategy of growing the business organically and through acquisitions," said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein.

Dental sales of $1.5 billion increased 8.4%, consisting of 9.4% growth in local currencies and a 1.0% decline related to foreign currency exchange. In local currencies, internally generated sales increased 3.1% and acquisition growth was 6.3%. The 3.1% internal growth in local currencies included 3.8% growth in North America and 2.0% growth internationally.

"In North America, dental consumable merchandise internal sales in local currencies grew by 0.8%. Dental equipment internal sales in local currencies increased 14.8%, due in part to an easier prior-year comparable," commented Mr. Bergman. "Beginning September 1, 2017, we look forward to offering the full range of Dentsply Sirona dental equipment across North America, including the leading CEREC CAD/CAM restoration system, to complement our offering from key suppliers including 3M, 3Shape, A-dec, Danaher, Ivoclar, Midmark, Planmeca, and many others."

Mr. Bergman continued, "International dental consumable merchandise internal sales increased by 1.4% in local currencies, reflecting a generally stable market environment. International dental equipment internal sales grew by 3.6% in local currencies with strength in Germany following the International Dental Show, partially offset by softness in Australia and Italy."

Animal Health sales of $891.3 million increased 4.4%, consisting of 6.7% growth in local currencies and a 2.3% decline related to foreign currency exchange. In local currencies, internally generated sales increased 5.8% and acquisition growth was 0.9%. The 5.8% internal growth in local currencies included 5.9% growth in North America and 5.7% growth internationally.

"Global Animal Health internal sales growth in local currencies reflects healthy end markets domestically and in the international markets we serve," commented Mr. Bergman. "Through organic growth and strategic acquisitions we continue to build on our success in partnering with our animal health customers to deliver high-quality solutions and support that help promote longer, healthier pet lives."

Medical sales of $571.4 million increased 6.1%, consisting of 6.2% growth in local currencies and a 0.1% decline related to foreign currency exchange. In local currencies, internally generated sales increased 6.1% and acquisition growth was 0.1%.

"We believe continued market share gains in our Medical group are the result of our ability to meet the needs of a dynamic, evolving health care market, particularly among large group practices, where we expect to see further consolidation," remarked Mr. Bergman.

Technology and Value-Added Services sales of $108.5 million increased 1.4%, including 2.8% growth in local currencies and a 1.4% decline related to foreign currency exchange. In local currencies, internally generated sales increased 2.2% and acquisition growth was 0.6%.

"In North America, our Technology and Value-Added Services internal sales growth in local currencies was a modest 0.3%. This growth included 13.6% sales growth in our North America financial services business related to strong dental equipment revenue," said Mr. Bergman. "Sales growth was negatively impacted by a difficult comparison in the prior year related to revenue associated with a government contract as well as reduced sales primarily related to discontinued lower margin products."

Mr. Bergman continued, "In international markets, internal growth in local currencies was a robust 12.4%, highlighted by strong software revenue in the U.K. as well as solid growth in our financial services business. We remain confident in our strategic portfolio of technology solutions and value-added services and look forward to continued enhancements as we grow that business over time."

Stock Repurchase Plan

The Company announced that it repurchased approximately 289,000 shares of its common stock during the second quarter at an average price of $173.16 per share, or approximately $50 million. The impact of the repurchase of shares on second quarter 2017 diluted EPS was immaterial. At the close of the second quarter, Henry Schein had approximately $150 million authorized for future repurchases of its common stock.

Year-to-Date Results

Net sales for the first half of 2017 were $6.0 billion, an increase of 7.1% compared with the first half of 2016. This consisted of 8.2% growth in local currencies and a decline of 1.1% related to foreign currency exchange. In local currencies, internally generated sales increased 5.2% and acquisition growth was 3.0%.

Net income attributable to Henry Schein, Inc. for the first half of 2017 was $276.8 million, or $3.48 per diluted share, an increase of 18.4% and 23.0%, respectively, compared with the first half of 2016. Excluding the litigation settlement expense in the first half of 2017, non-GAAP net income for the first half of 2017 was $280.0 million, or $3.52 per diluted share, an increase of 11.0% and 15.4%, respectively, compared with non-GAAP net income for the first half of 2016 (see Exhibit B for reconciliation of GAAP net income and EPS to non-GAAP adjusted net income and EPS).

2017 EPS Guidance

Henry Schein expects full year 2017 diluted EPS to be in the same range as previously disclosed, except for the $0.04 litigation settlement expense.

    --  2017 GAAP diluted EPS attributable to Henry Schein, Inc., which includes
        the litigation settlement expense of $0.04 per diluted share, is
        expected to be $7.13 to $7.26. This guidance reflects growth of 15% to
        17% compared with 2016 GAAP diluted EPS of $6.19. The prior GAAP diluted
        EPS guidance range was $7.17 to $7.30.
    --  2017 non-GAAP diluted EPS, which excludes the litigation settlement
        expense of $0.04 per diluted share, is expected to be $7.17 to $7.30.
        This guidance reflects growth of 8% to 10% compared with 2016 non-GAAP
        diluted EPS of $6.61. Note that full year 2016 non-GAAP diluted EPS
        excludes restructuring charges of $0.42 per diluted share.
    --  The Company notes that fiscal year 2017 includes one less week than
        fiscal year 2016.
    --  Guidance for 2017 GAAP and non-GAAP diluted EPS 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. Guidance also assumes foreign exchange rates that
        are generally consistent with current levels.

Second Quarter 2017 Conference Call Webcast

The Company will hold a conference call to discuss second quarter 2017 financial results today, beginning at 10:00 a.m. Eastern time. Individual investors are invited to listen to the conference call 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. (Nasdaq: HSIC) 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 S&P 500® and the Nasdaq 100® indexes, Henry Schein employs more than 21,000 Team Schein Members and serves more than 1 million 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 120,000 branded products and Henry Schein private-brand products in stock, as well as more than 180,000 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 32 countries. The Company's sales reached a record $11.6 billion in 2016, and have grown at a compound annual rate of approximately 15% since Henry Schein became a public company in 1995. For more information, visit Henry Schein at www.henryschein.com, Facebook.com/HenrySchein and @HenrySchein on Twitter.

Cautionary Note Regarding Forward-Looking Statements and Use of Non-GAAP Financial Information

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 United States Securities and Exchange Commission, or 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 and consolidating 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; increases in shipping costs for our products or other service issues with our third-party shippers; general global macro-economic conditions; risks associated with currency fluctuations; risks associated with political and economic uncertainty; disruptions in financial markets; 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; increased competition by third party online commerce sites; risks from disruption to our information systems; cyberattacks or other privacy or data security breaches; 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.

Included within the press release are non-GAAP financial measures that supplement the Company's Consolidated Statements of Income prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Company's actual results prepared under GAAP to exclude certain items. In the schedules attached to this press release, the non-GAAP measures have been reconciled to and should be considered together with the Consolidated Statements of Income. Management believes that non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures.

(TABLES TO FOLLOW)


                                                                                                                           HENRY SCHEIN, INC.

                                                                                                                    CONSOLIDATED STATEMENTS OF INCOME

                                                                                                                  (in thousands, except per share data)

                                                                                                                               (unaudited)


                                                                                                                              Three Months Ended                  Six Months Ended
                                                                                                                              ------------------                  ----------------

                                                                                                              July 1,                                   June 25,       July 1,             June 25,

                                                                                                                  2017                                       2016                     2017         2016
                                                                                                                  ----                                       ----                     ----         ----


    Net sales                                                                                                                          $3,059,458                          $2,872,630                   $5,982,406   $5,585,586

    Cost of sales                                                                                                                       2,220,285                           2,071,161                    4,320,313    4,006,275
                                                                                                                                        ---------                           ---------                    ---------    ---------

                                                                                                                                          839,173                             801,469                    1,662,093    1,579,311

    Gross profit

    Operating expenses:

                                                                                                                                          628,511                             600,409                    1,257,463    1,197,999

    Selling, general and administrative

                                                                                                                                                -                             20,383                            -      24,441

    Restructuring costs


                                                                                                                                          210,662                             180,677                      404,630      356,871

    Operating income

    Other income (expense):

                                                                                                                                            4,107                               3,556                        8,411        6,904

    Interest income

                                                                                                                                         (12,198)                            (7,367)                    (23,628)    (14,494)

    Interest expense

                                                                                                                                              728                                 268                          683        3,405

    Other, net




    Income before taxes and equity in earnings

                                                                                                                                          203,299                             177,134                      390,096      352,686

         of affiliates

    Income taxes                                                                                                                         (58,306)                           (48,965)                    (96,936)   (102,498)

    Equity in earnings of affiliates                                                                                                        4,589                               4,929                        6,675        7,443
                                                                                                                                            -----                               -----                        -----        -----

    Net income                                                                                                                            149,582                             133,098                      299,835      257,631

    Less: Net income attributable to noncontrolling interests                                                                            (13,527)                           (13,001)                    (23,032)    (23,782)
                                                                                                                                          -------                             -------                      -------      -------

    Net income attributable to Henry Schein, Inc.                                                                                        $136,055                            $120,097                     $276,803     $233,849
                                                                                                                                         ========                            ========                     ========     ========


    Earnings per share attributable to Henry Schein, Inc.:


                                                                                                                                            $1.72                               $1.47                        $3.51        $2.87

    Basic


                                                                                                                                            $1.71                               $1.46                        $3.48        $2.83

    Diluted



    Weighted-average common shares outstanding:

                                                                                                                                           78,874                              81,458                       78,839       81,516

    Basic


                                                                                                                                           79,538                              82,394                       79,630       82,565

    Diluted



    Note: Certain prior quarter amounts have been reclassified to conform to the current period presentation.


                                                                                                  HENRY SCHEIN, INC.

                                                                                              CONSOLIDATED BALANCE SHEETS

                                                                                    (in thousands, except share and per share data)


                                                                                                                                      July 1,              December 31,

                                                                                                                                           2017                     2016
                                                                                                                                           ----                     ----

                                                                                                                                    (unaudited)

    ASSETS

    Current assets:

                                                                                                                                                   $74,654                  $62,381

    Cash and cash equivalents

                                                                                                                                                 1,409,060                1,254,139

    Accounts receivable, net of reserves of $89,145 and $90,329

                                                                                                                                                 1,567,159                1,635,750

    Inventories, net

                                                                                                                                                   412,904                  360,510

    Prepaid expenses and other


                                                                                                                                                 3,463,777                3,312,780

    Total current assets

    Property and equipment, net                                                                                                                    351,381                  333,906

    Goodwill                                                                                                                                     2,172,563                2,019,740

    Other intangibles, net                                                                                                                         636,813                  621,180

    Investments and other                                                                                                                          472,922                  442,790
                                                                                                                                                   -------                  -------

                                                                                                                                                $7,097,456               $6,730,396

    Total assets



    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

                                                                                                                                                  $882,674                 $977,249

    Accounts payable

                                                                                                                                                   577,477                  437,476

    Bank credit lines

                                                                                                                                                    17,241                   65,923

    Current maturities of long-term debt



    Accrued expenses:

                                                                                                                                                   246,402                  266,463

    Payroll and related

                                                                                                                                                   152,719                  151,750

    Taxes

                                                                                                                                                   353,432                  391,785

    Other


                                                                                                                                                 2,229,945                2,290,646

    Total current liabilities

    Long-term debt                                                                                                                                 807,625                  715,457

    Deferred income taxes                                                                                                                           89,756                   51,589

    Other liabilities                                                                                                                              288,478                  264,264
                                                                                                                                                   -------                  -------

                                                                                                                                                 3,415,804                3,321,956

    Total liabilities


    Redeemable noncontrolling interests                                                                                                            747,022                  607,636

    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,



    79,194,792 outstanding on July 01, 2017 and

                                                                                                                                                       792                      794

    79,402,505 outstanding on December 31, 2016

                                                                                                                                                         -                 127,536

    Additional paid-in capital

                                                                                                                                                 3,134,989                2,981,777

    Retained earnings

                                                                                                                                                 (209,526)               (317,041)

    Accumulated other comprehensive loss


                                                                                                                                                 2,926,255                2,793,066

    Total Henry Schein, Inc. stockholders' equity

                                                                                                                                                     8,375                    7,738

    Noncontrolling interests


                                                                                                                                                 2,934,630                2,800,804

    Total stockholders' equity


                                                                                                                                                $7,097,456               $6,730,396

    Total liabilities, redeemable noncontrolling interests and stockholders' equity


                                                                                                                       HENRY SCHEIN, INC.

                                                                                                             CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                                         (in thousands)

                                                                                                                          (unaudited)


                                                                                                                   Three Months Ended                           Six Months Ended
                                                                                                                   ------------------                         ----------------

                                                                                                                         July 1,                             June 25,            July 1,           June 25,

                                                                                                                                 2017                             2016                        2017         2016
                                                                                                                                 ----                             ----                        ----         ----

    Cash flows from operating activities:

                                                                                                                                                    $149,582                         $133,098                      $299,835     $257,631

    Net income



    Adjustments to reconcile net income to net cash



    provided by operating activities:

                                                                                                                                                      47,789                           42,431                        92,538       83,398

    Depreciation and amortization

                                                                                                                                                      10,858                           13,312                        19,355       27,456

    Stock-based compensation expense



    Provision for losses on trade and other

                                                                                                                                                       1,239                              210                         4,049          790

    accounts receivable

                                                                                                                                                     (9,081)                        (11,621)                        4,415      (4,658)

    Provision for (benefit from) deferred income taxes

                                                                                                                                                     (4,589)                         (4,929)                      (6,675)     (7,443)

    Equity in earnings of affiliates

                                                                                                                                                       6,640                            4,156                         9,678        6,337

    Distributions from equity affiliates

                                                                                                                                                       3,249                             (53)                      (7,627)       2,451

    Changes in unrecognized tax benefits

                                                                                                                                                       2,326                            2,534                         5,015        2,361

    Other



    Changes in operating assets and liabilities,



       net of acquisitions:

                                                                                                                                                    (21,174)                        (16,935)                    (122,938)    (56,702)

    Accounts receivable

                                                                                                                                                      87,522                           20,465                       115,800       34,395

    Inventories

                                                                                                                                                    (60,388)                        (13,958)                     (57,699)    (38,876)

    Other current assets

    Accounts payable and accrued expenses                                                                                                             14,757                          108,527                     (179,607)   (107,701)
                                                                                                                                                      ------                          -------                      --------     --------

    Net cash provided by operating activities                                                                                                        228,730                          277,237                       176,139      199,439
                                                                                                                                                     -------                          -------                       -------      -------


    Cash flows from investing activities:

                                                                                                                                                    (19,654)                        (13,575)                     (36,965)    (26,180)

    Purchases of fixed assets



    Payments for equity investments and business

                                                                                                                                                   (137,766)                        (39,879)                    (149,586)    (92,441)

    acquisitions, net of cash acquired

                                                                                                                                                         677                            4,064                       (4,872)     (1,765)

    Other


    Net cash used in investing activities                                                                                                          (156,743)                        (49,390)                    (191,423)   (120,386)
                                                                                                                                                    --------                          -------                      --------     --------


    Cash flows from financing activities:

                                                                                                                                                    (94,775)                       (192,590)                      139,262     (97,479)

    Proceeds from (repayments of) bank borrowings

                                                                                                                                                     100,000                           34,000                       100,000      244,000

    Proceeds from issuance of long-term debt

                                                                                                                                                     (1,133)                           (175)                      (1,133)       (233)

    Debt issuance costs

                                                                                                                                                     (2,817)                           (367)                     (59,184)     (7,921)

    Principal payments for long-term debt



    Proceeds from issuance of stock upon exercise

                                                                                                                                                         749                            2,661                         4,701        9,059

    of stock options

                                                                                                                                                    (50,000)                        (57,012)                    (100,006)   (157,009)

    Payments for repurchases of common stock



    Payments for taxes related to shares withheld for employee

                                                                                                                                                     (3,809)                         (2,853)                     (44,414)    (26,567)

    taxes

                                                                                                                                                    (16,337)                        (18,064)                     (19,601)    (20,160)

    Distributions to noncontrolling shareholders



    Acquisitions of noncontrolling interests in

                                                                                                                                                        (62)                         (2,921)                      (4,151)    (35,632)

    subsidiaries


    Net cash provided by (used in) financing activities                                                                                             (68,184)                       (237,321)                       15,474     (91,942)
                                                                                                                                                     -------                         --------                        ------      -------


    Effect of exchange rate changes on cash and

                                                                                                                                                       7,963                            1,420                        12,083        4,363

    cash equivalents


    Net change in cash and cash equivalents                                                                                                           11,766                          (8,054)                       12,273      (8,526)

    Cash and cash equivalents, beginning of period                                                                                                    62,888                           71,614                        62,381       72,086
                                                                                                                                                      ------                           ------                        ------       ------

    Cash and cash equivalents, end of period                                                                                                         $74,654                          $63,560                       $74,654      $63,560
                                                                                                                                                     =======                          =======                       =======      =======


    Note: Certain prior period amounts have been reclassified to conform to the current period presentation.


    Exhibit A - QTD Sales


                                                                     Henry Schein, Inc.

                                                                     2017 Second Quarter

                                                                        Sales Summary

                                                                       (in thousands)

                                                                         (unaudited)


                                                                    Q2 2017 over Q2 2016


    Global                              Q2 2017             Q2 2016                  Total Sales            Foreign              Local             Acquisition          Local Internal
                                                                         Growth                    Exchange             Currency            Growth               Growth
                                                                                                    Growth               Growth
    ---


       Dental                                    $1,488,167                             $1,373,188                 8.4%               -1.0%                 9.4%                         6.3%    3.1%


       Animal Health                              891,331                                853,598                 4.4%               -2.3%                 6.7%                         0.9%    5.8%


       Medical                                    571,427                                538,825                 6.1%               -0.1%                 6.2%                         0.1%    6.1%
                                                  -------                                -------


    Total Health Care Distribution              2,950,925                              2,765,611                 6.7%               -1.2%                 7.9%                         3.4%    4.5%


    Technology and value-added services           108,533                                107,019                 1.4%               -1.4%                 2.8%                         0.6%    2.2%
                                                  -------                                -------


    Total Global                                 $3,059,458                             $2,872,630                 6.5%               -1.2%                 7.7%                         3.3%    4.4%
                                                 ==========                             ==========


    North America                       Q2 2017             Q2 2016                  Total Sales            Foreign              Local             Acquisition          Local Internal
                                                                         Growth                    Exchange             Currency            Growth               Growth
                                                                                                    Growth               Growth
    ---


       Dental                                      $912,471                               $865,585                 5.4%               -0.4%                 5.8%                         2.0%    3.8%


       Animal Health                              473,201                                445,918                 6.1%                0.0%                 6.1%                         0.2%    5.9%


       Medical                                    553,734                                520,332                 6.4%                0.0%                 6.4%                         0.1%    6.3%
                                                  -------                                -------


    Total Health Care Distribution              1,939,406                              1,831,835                 5.9%               -0.2%                 6.1%                         1.1%    5.0%


    Technology and value-added services            90,292                                 90,090                 0.2%               -0.1%                 0.3%                         0.0%    0.3%
                                                   ------                                 ------


    Total North America                          $2,029,698                             $1,921,925                 5.6%               -0.2%                 5.8%                         1.0%    4.8%
                                                 ==========                             ==========


    International                       Q2 2017             Q2 2016                  Total Sales            Foreign              Local             Acquisition          Local Internal
                                                                         Growth                    Exchange             Currency            Growth               Growth
                                                                                                    Growth               Growth
    ---


       Dental                                      $575,696                               $507,603                13.4%               -2.0%                15.4%                        13.4%    2.0%


       Animal Health                              418,130                                407,680                 2.6%               -4.8%                 7.4%                         1.7%    5.7%


       Medical                                     17,693                                 18,493                -4.3%               -3.8%                -0.5%                         0.0%   -0.5%
                                                   ------                                 ------


    Total Health Care Distribution              1,011,519                                933,776                 8.3%               -3.3%                11.6%                         8.1%    3.5%


    Technology and value-added services            18,241                                 16,929                 7.8%               -7.9%                15.7%                         3.3%   12.4%
                                                   ------                                 ------


    Total International                          $1,029,760                               $950,705                 8.3%               -3.4%                11.7%                         8.0%    3.7%
                                                 ==========                               ========


    Exhibit A - YTD Sales


                                                                       Henry Schein, Inc.

                                                                2017 Second Quarter Year to Date

                                                                          Sales Summary

                                                                         (in thousands)

                                                                          (unaudited)


                                                                 Q2 2017 YTD over Q2 2016 YTD
                                                                 ----------------------------


    Global                              Q2 2017 YTD             Q2 2016 YTD                  Total Sales            Foreign              Local             Acquisition            Local
                                                                                 Growth                    Exchange             Currency            Growth               Internal
                                                                                                            Growth               Growth                                   Growth
    ---


       Dental                                        $2,893,325                                 $2,674,943                 8.2%               -0.6%                 8.8%                  5.8%    3.0%


       Animal Health                                1,704,270                                  1,625,011                 4.9%               -2.5%                 7.4%                  1.0%    6.4%


       Medical                                      1,170,313                                  1,076,942                 8.7%               -0.1%                 8.8%                  0.0%    8.8%
                                                    ---------                                  ---------


    Total Health Care Distribution                  5,767,908                                  5,376,896                 7.3%               -1.1%                 8.4%                  3.2%    5.2%


    Technology and value-added services               214,498                                    208,690                 2.8%               -1.3%                 4.1%                  0.3%    3.8%
                                                      -------                                    -------


    Total Global                                     $5,982,406                                 $5,585,586                 7.1%               -1.1%                 8.2%                  3.0%    5.2%
                                                     ==========                                 ==========


    North America                       Q2 2017 YTD             Q2 2016 YTD                  Total Sales            Foreign              Local             Acquisition            Local
                                                                                 Growth                    Exchange             Currency            Growth               Internal
                                                                                                            Growth               Growth                                   Growth
    ---


       Dental                                        $1,762,927                                 $1,700,422                 3.7%                0.0%                 3.7%                  1.4%    2.3%


       Animal Health                                  895,845                                    845,245                 6.0%                0.0%                 6.0%                  0.3%    5.7%


       Medical                                      1,133,771                                  1,039,773                 9.0%                0.0%                 9.0%                  0.0%    9.0%
                                                    ---------                                  ---------


    Total Health Care Distribution                  3,792,543                                  3,585,440                 5.8%                0.0%                 5.8%                  0.7%    5.1%


    Technology and value-added services               179,345                                    176,125                 1.8%                0.0%                 1.8%                  0.0%    1.8%
                                                      -------                                    -------


    Total North America                              $3,971,888                                 $3,761,565                 5.6%                0.0%                 5.6%                  0.7%    4.9%
                                                     ==========                                 ==========


    International                       Q2 2017 YTD             Q2 2016 YTD                  Total Sales            Foreign              Local             Acquisition            Local
                                                                                 Growth                    Exchange             Currency            Growth               Internal
                                                                                                            Growth               Growth                                   Growth
    ---


       Dental                                        $1,130,398                                   $974,521                16.0%               -1.7%                17.7%                 13.4%    4.3%


       Animal Health                                  808,425                                    779,766                 3.7%               -5.1%                 8.8%                  1.6%    7.2%


       Medical                                         36,542                                     37,169                -1.7%               -4.2%                 2.5%                  0.0%    2.5%
                                                       ------                                     ------


    Total Health Care Distribution                  1,975,365                                  1,791,456                10.3%               -3.2%                13.5%                  8.0%    5.5%


    Technology and value-added services                35,153                                     32,565                 7.9%               -8.6%                16.5%                  1.8%   14.7%
                                                       ------                                     ------


    Total International                              $2,010,518                                 $1,824,021                10.2%               -3.4%                13.6%                  7.9%    5.7%
                                                     ==========                                 ==========


    Exhibit B


                                                                                            Henry Schein, Inc.

                                                                                       2017 Second Quarter and YTD

                                                            Reconciliation of GAAP results of net income attributable to Henry Schein, Inc. to

                                                                    non-GAAP results of net income attributable to Henry Schein, Inc.

                                                                          (in thousands, except per share data)

                                                                                       (unaudited)



                                                                                                        Second Quarter                                           Year-to-Date
                                                                                                        --------------                                           ------------

                                                                                                                                                      %                                                                 %

                                                                                         2017                                      2016              Growth                        2017                 2016             Growth
                                                                                         ----                                      ----              ------                        ----                 ----             ------

    Net Income attributable to Henry Schein, Inc.                                                 $136,055                                  $120,097        13.3%                       $276,803              $233,849          18.4%


    Diluted EPS attributable to Henry Schein, Inc.                                                   $1.71                                     $1.46        17.1%                          $3.48                 $2.83          23.0%
    ----------------------------------------------                                                   -----                                     -----         ----                           -----                 -----           ----


    Non-GAAP Adjustments

    Restructuring costs - Pre-tax                                                           $            -                                  $20,383                                  $        -              $24,441

    Income tax benefit for restructuring costs                                              -                                  (5,096)                                              -             (6,110)

    Litigation settlement - Pre-Tax                                                     5,325                                         -                                          5,325                    -

    Income tax benefit for litigation settlement                                      (2,130)                                        -                                        (2,130)                   -
                                                                                       ------                                       ---                                         ------                  ---


    Total non-GAAP adjustments to Net Income

    attributable to Henry Schein, Inc.                                                              $3,195                                   $15,287                                      $3,195               $18,331


    Total non-GAAP adjustments to diluted EPS

    attributable to Henry Schein, Inc.                                                               $0.04                                     $0.18                                       $0.04                 $0.22


    Non-GAAP Net Income attributable to Henry Schein, Inc.                                        $139,250                                  $135,384         2.9%                       $279,998              $252,180          11.0%


    Non-GAAP diluted EPS attributable to Henry Schein, Inc.                                          $1.75                                     $1.64         6.7%                          $3.52                 $3.05          15.4%
    -------------------------------------------------------                                          -----                                     -----          ---                           -----                 -----           ----

Management believes that non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures.

View original content:http://www.prnewswire.com/news-releases/henry-schein-reports-record-second-quarter-financial-results-300500996.html

SOURCE Henry Schein, Inc.