Wall Street analysts forecast that Henry Schein (HSIC) will report quarterly earnings of $0.99 per share in its upcoming release, pointing to a year-over-year decline of 18.2%. It is anticipated that revenues will amount to $3.23 billion, exhibiting an increase of 5.5% compared to the year-ago quarter.Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Prior ...

Henry Schein, Inc. (HSIC) is expected to release first-quarter 2024 results on May 7 before the opening bell.The company posted adjusted earnings per share (EPS) of 66 cents in the last reported quarter, which missed the Zacks Consensus Estimate by 5.71%. In the trailing four quarters, Henry Schein’s earnings matched estimates once, surpassed once and missed in two quarters. The average negative surprise is 0.83%.Let’s see how things have shaped up prior to this announcement.Factors at PlayHealth Care Distr ...

Henry Schein (HSIC) is well-positioned to gain from its extensive global foothold and diverse channel mix. However, unfavorable currency movement and global economic uncertainties continue to affect the business. The stock carries a Zacks Rank #3 (Hold) currently.Henry Schein’s business boasts a broad global footprint with 61 distribution centers. Apart from North America, the company has a presence in Australia and New Zealand as well as in emerging nations like China, Brazil, Israel, the Czech Republic an ...

Henry Schein, Inc. (HSIC) is poised to experience growth in the coming quarters, backed by its encouraging strategy to expand digital dentistry globally. Niche acquisitions and partnerships have consistently fueled the company's revenue growth. Further, Henry Schein is upbeat about its dental technology joint venture (JV), Henry Schein One, which has been progressing well despite a challenging business environment.Meanwhile, the impact of the cybersecurity incident on HSIC’s operations remains concerning. M ...

Henry Schein, Inc. (HSIC) has recently completed the acquisition of orthopedic player TriMed for an undisclosed financial term. Integration of TriMed’s business will help the company to provide a wider range of surgical solutions to the existing Integrated Delivery Networks and Ambulatory Surgery Center customers. This will strengthen HSIC’s long-standing relationship with them.Headquartered in Santa Clarita, CA, TriMed is a global developer of solutions for the orthopedic treatment of lower extremities (fo ...

Henry Schein to Maximize Viome's Reach Among Dental and Medical Practices With Patient-Centric and Preventive Models of Care BELLEVUE, Wash., April 2, 2024 /PRNewswire/ -- Viome, a leading innovator of health technology and personalized health solutions, is partnering with Henry Schein to provide better access to Viome's Oral Health Pro™ With CancerDetect™.* Viome's laboratory-developed test* helps detect early biomarkers of oral and throat cancers, enhancing practitioners' ability to effectively harness th ...

Henry Schein has been recognized since 2012 and is one of only two honorees in the Healthcare Products industry. (Graphic: Business Wire)Henry Schein has been recognized since 2012 and is one of only two honorees in the Healthcare Products industry. (Graphic: Business Wire)MELVILLE, N.Y.--(BUSINESS WIRE)--Henry Schein, Inc. (Nasdaq: HSIC), the world’s largest provider of health care solutions to office-based dental and medical practitioners, has received the 2024 World’s Most Ethical Companies® recognition ...

Financial Performance & Impact Factors - Worldwide sales decreased by 10.5% in Q4 2023, with total sales of $3.017 billion compared to $3.371 billion in Q4 2022 [10, 11, 14, 35, 51] - The cybersecurity incident led to an estimated reduction in sales of $350 million to $400 million, representing approximately 10% to 12% impact [10, 11, 15] - Non-GAAP diluted EPS was $0.66 in Q4 2023, a decrease of 51.1% compared to $1.35 in Q4 2022 [10, 11, 33, 51] - The cybersecurity incident impacted EPS by approximately $0.70-$0.75 per diluted share, and acquisition-related expenses & adjustments added $0.05 [10, 24] - Operating income decreased by 46.7% from $72 million to $39 million [11, 61] Segment Performance - Global Dental sales experienced a decrease of 10.2% [10, 14, 69] - Global Medical sales decreased by 14.9% [10, 14, 55] - Global Technology/VAS sales increased by 13.4% [10, 14, 29, 38, 41] - Dental Specialties sales grew by 17.2% [10, 41] Strategic Initiatives & Outlook - The company introduced 2024 Non-GAAP Diluted EPS guidance of $5.00 to $5.16, reflecting growth of 11% to 15% compared with 2023 [9, 45] - Adjusted EBITDA is expected to increase by more than 15% vs 2023 [9, 45]

Financial Data and Key Metrics Changes - The fourth quarter global sales were $3.0 billion, reflecting an LCI sales decrease of 12%, primarily impacted by the cybersecurity incident, which affected sales growth by an estimated 10% to 12% [25][57] - The non-GAAP operating margin for the fourth quarter was 4.86%, a decline of 279 basis points compared to the prior year, largely due to the cybersecurity incident and sales recovery initiatives [26][59] - Fourth quarter 2023 non-GAAP EPS was $0.66, down from $1.35 in the prior year, with the cybersecurity incident impacting EPS by approximately $0.70 to $0.75 [59][60] Business Line Data and Key Metrics Changes - Global Dental sales were $1.8 billion, with LCI sales decreasing by 10.9%, affected by the cybersecurity incident [28] - Global Technology and Value-Added Services sales were $212 million, with total sales growth of 13.4% and LCI sales growth of 7.1% [29] - Global Medical sales were $1.0 billion, with LCI sales decreasing by 17% due to the cybersecurity incident [30] Market Data and Key Metrics Changes - North American and international distribution businesses experienced merchandise sales below pre-cybersecurity levels, with a low-single digit percentage headwind to merchandise sales growth [12] - European, Latin American, and Asian markets posted significant growth, mainly from acquisitions, while U.S. implant sales showed low-single digit growth [16] - The late flu season negatively impacted patient visits and point of care diagnostic sales, but is expected to drive higher sales in the first quarter [52][47] Company Strategy and Development Direction - The company is focused on executing its BOLD+1 Strategic Plan, aiming for high-single digit to low-double digit operating income and EPS growth [13][54] - The company plans to enhance technology and product development, particularly in integrated digital workflows and specialty products [55] - Recent acquisitions, including a majority interest in TriMed, are expected to complement existing product lines and drive growth [19][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery from the cybersecurity incident and expects to strengthen market position despite short-term impacts [5][69] - The company anticipates that sales of COVID test kits and PPE have normalized, with some residual impact from lower PPE pricing expected in the first quarter [35][92] - Management expects 2024 non-GAAP diluted EPS to be in the range of $5 to $5.16, reflecting growth of 11% to 15% compared to 2023 [34][92] Other Important Information - The company repurchased approximately 692,000 shares in the fourth quarter at an average price of $72.32 per share, totaling $50 million [30] - Operating cash flow for the fourth quarter was an outflow of $32 million, compared to positive $254 million in the previous year, primarily due to delayed billings related to the cybersecurity incident [64] - The company expects to incur additional expenses related to the cybersecurity incident in 2024, but at a lower amount [65] Q&A Session Summary Question: Can you provide more detail on the end market environment and quantify the expected push out into Q1 from the cybersecurity impact, specifically on equipment? - Management indicated that dental equipment backlog was generally flat, with North America down mid-single digits and international backlog high-single digits. They expect good equipment sales growth in Q1 due to orders pushed from Q4 [71][74] Question: What are the margin assumptions for 2024? - Management confirmed that there will be some margin pressure due to ongoing recovery from the cybersecurity incident, but improvements in margins are expected as revenues ramp up throughout the year [83] Question: How does the company plan to close the gap in merchandise sales related to the cybersecurity incident? - Management noted that the incident affected impulse shoppers and pricing visibility, but they are confident in their e-commerce recovery efforts and expect to regain business over the next few months [122][126]

Part I [Business](index=3&type=section&id=ITEM%201.%20Business) Henry Schein is a global healthcare solutions company serving dental and medical practitioners through its Health Care Distribution and Technology segments [General Overview and Business Segments](index=3&type=section&id=General%20Overview%20and%20Business%20Segments) Henry Schein provides healthcare products and services to over one million dental and medical practitioners via Health Care Distribution and Technology segments - The company is a solutions provider for healthcare professionals, serving over **one million customers worldwide** with operations in **33 countries and territories**[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) - Business is conducted through **two reportable segments**: (i) health care distribution and (ii) technology and value-added services, serving the same customer base[17](index=17&type=chunk) - The Health Care Distribution segment combines global dental and medical operations, distributing a wide range of products from consumables and equipment to pharmaceuticals and PPE[18](index=18&type=chunk) - The Technology and Value-Added Services segment, led by Henry Schein One, offers dental practice management software, electronic health records, patient communication services, and financial service facilitation[19](index=19&type=chunk) [Industry, Competition, and Strengths](index=4&type=section&id=Industry%2C%20Competition%2C%20and%20Strengths) The global healthcare distribution industry is growing due to an aging population and shift to alternate-care sites, with Henry Schein leveraging its customer focus and broad offerings - The health care distribution industry is experiencing growth due to an aging population, increased health awareness, and a shift of procedures to alternate-care sites, with consolidation among distributors and customers as a key trend[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) - Key competitors in the U.S. dental market are Patterson Companies and Benco Dental Supply, while in the medical market, they are McKesson Corporation and Medline Industries, Inc[28](index=28&type=chunk) - Competitive strengths include a focus on customer needs, direct sales and marketing expertise, broad product offerings, superior customer service, integrated information systems, and efficient distribution[30](index=30&type=chunk)[31](index=31&type=chunk)[34](index=34&type=chunk) [Products, Services, and Business Strategy](index=7&type=section&id=Products%2C%20Services%2C%20and%20Business%20Strategy) In 2023, dental products comprised **61.1%** of net sales, medical products **32.4%**, and technology/value-added services **6.5%**, with the BOLD+1 Strategic Plan guiding growth Percentage of Consolidated Net Sales by Product Category | | December 30, 2023 | December 31, 2022 | December 25, 2021 | | :--- | :--- | :--- | :--- | | **Health care distribution:** | | | | | Dental products | 61.1% | 59.1% | 60.8% | | Medical products | 32.4% | 35.2% | 34.0% | | Total health care distribution | 93.5% | 94.3% | 94.8% | | **Technology and value-added services:** | | | | | Software and other value-added products | 6.5% | 5.7% | 5.2% | | **Total** | **100.0%** | **100.0%** | **100.0%** | - The company's BOLD+1 Strategic Plan focuses on: (B)uilding complementary businesses, (O)perationalizing One Distribution, (L)everaging One Schein, and (D)riving digital transformation[40](index=40&type=chunk) - Core strategies include increasing sales to the existing one million customers, acquiring new customers in various care settings, cross-selling key product lines like software and vaccines, and pursuing strategic acquisitions to expand geographic footprint and access new technologies[44](index=44&type=chunk) [Governmental Regulations](index=9&type=section&id=Governmental%20Regulations) The company is subject to extensive and complex governmental regulations globally, covering pharmaceuticals, medical devices, healthcare fraud, and data privacy - The company is subject to extensive local, state, federal, and foreign laws for the distribution, manufacturing, and sale of pharmaceuticals and medical devices, with increased government enforcement in areas like fraud, anti-bribery, and data privacy[47](index=47&type=chunk)[49](index=49&type=chunk) - U.S. regulations include the Controlled Substances Act, the FDC Act, and the Drug Supply Chain Security Act (DSCSA), which mandates an electronic system for tracing prescription drugs[54](index=54&type=chunk)[55](index=55&type=chunk) - In the EU, the company is regulated by the EU Medical Device Regulation (EU MDR), which imposes stricter requirements for placing medical devices on the market, post-market surveillance, and traceability[64](index=64&type=chunk)[65](index=65&type=chunk) - The company must comply with numerous data privacy and security laws, including HIPAA in the U.S., GDPR in the EU, PIPL in China, and CCPA/CPRA in California, which govern the handling of personal and health information[90](index=90&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) [Human Capital and Executive Officers](index=19&type=section&id=Human%20Capital%20and%20Executive%20Officers) Henry Schein employs over **25,000** people globally, emphasizing a values-based culture focused on diversity, inclusion, and wellness, with key executive officers detailed - The company employs over **25,000** people, with about **45%** based outside the United States, emphasizing a purpose-driven model focusing on five key stakeholders: suppliers, customers, employees (TSMs), stockholders, and society[108](index=108&type=chunk)[109](index=109&type=chunk) - In 2023, human capital efforts focused on pay equity, expanding Diversity & Inclusion (D&I) learning, and driving a culture of wellness and engagement, with a global culture survey showing high employee satisfaction driven by the company's values-based culture[110](index=110&type=chunk)[111](index=111&type=chunk) - The report provides detailed information on key executive officers, including Stanley M. Bergman (Chairman & CEO), James P. Breslawski (Vice Chairman & President), and Ronald N. South (SVP & CFO)[116](index=116&type=chunk)[117](index=117&type=chunk)[123](index=123&type=chunk) [Risk Factors](index=25&type=section&id=ITEM%201A.%20Risk%20Factors) The company faces significant risks from supplier dependency, new technology development, acquisitions, and a material cybersecurity incident in October 2023, alongside intense competition and extensive regulatory burdens - **Company Risks:** Dependency on third-party suppliers (top **10** account for ~**25%** of purchases), risks in developing new technology, and challenges in integrating acquisitions[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - **Industry Risks:** A significant cybersecurity incident in October 2023 disrupted North American and European distribution businesses, impacting financial results and leading to remediation costs, highlighting the vulnerability of the company's information systems to cyberattacks[141](index=141&type=chunk)[149](index=149&type=chunk) - **Regulatory & Litigation Risks:** The business is subject to complex laws regarding healthcare fraud (Anti-Kickback, Stark Law), data privacy (HIPAA, GDPR, CCPA), and medical device regulations (EU MDR), with non-compliance posing risks of severe penalties[161](index=161&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - **Macro-Economic & General Risks:** Uncertain global conditions, including inflation, supply chain disruptions, and geopolitical conflicts, could adversely affect operations, and the business is also dependent on its senior management, particularly Chairman and CEO Stanley M. Bergman[157](index=157&type=chunk)[198](index=198&type=chunk)[200](index=200&type=chunk) [Unresolved Staff Comments](index=39&type=section&id=ITEM%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved comments from the staff of the SEC that were issued **180** days or more before the end of the 2023 fiscal year - There are no unresolved SEC staff comments[202](index=202&type=chunk) [Cybersecurity](index=39&type=section&id=ITEM%201C.%20Cybersecurity) Henry Schein's cybersecurity strategy aligns with NIST, but a significant October 2023 incident disrupted operations and led to unauthorized data access, with Board oversight from the Regulatory, Compliance and Cybersecurity Committee - The company has a cybersecurity risk mitigation strategy aligned with the NIST Cybersecurity Framework, overseen by a Chief Information Security Officer (CISO) and an Office of Cybersecurity (OCS)[204](index=204&type=chunk)[205](index=205&type=chunk) - In October 2023, a cybersecurity incident primarily affected North American and European dental and medical distribution operations, disrupting business and resulting in a threat actor obtaining personal and sensitive information[210](index=210&type=chunk) - A related disruption to the e-commerce platform occurred on November 22, 2023, which has since been remediated, and the incident adversely impacted financial results for Q4 and full-year 2023[211](index=211&type=chunk) - Board oversight is provided by the Regulatory, Compliance and Cybersecurity Committee and the Audit Committee, which receive regular updates from the CISO and CTO[213](index=213&type=chunk)[214](index=214&type=chunk) [Properties](index=41&type=section&id=ITEM%202.%20Properties) The company leases and/or owns approximately **5.7 million** square feet of property for its health care distribution segment, including distribution centers, offices, and manufacturing facilities across numerous countries - The company leases and/or owns approximately **5.7 million** square feet of properties for its health care distribution segment, including distribution, office, manufacturing, and sales space across its global locations[215](index=215&type=chunk) [Legal Proceedings](index=41&type=section&id=ITEM%203.%20Legal%20Proceedings) Henry Schein is a defendant in multiple opioid-related lawsuits and a putative class action lawsuit concerning the October 2023 cybersecurity incident, intending to vigorously defend itself - The company is a defendant in under **175** opioid-related lawsuits alleging failure to properly monitor and restrict improper drug distribution, with sales of opioids representing less than **0.4%** of 2023 net sales[612](index=612&type=chunk) - In January 2024, a putative class action lawsuit was filed against the company related to the October 2023 cybersecurity incident, alleging harm from compromised personal and health information[616](index=616&type=chunk)[617](index=617&type=chunk) [Mine Safety Disclosures](index=42&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[218](index=218&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=42&type=section&id=ITEM%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Henry Schein's common stock trades on Nasdaq under HSIC, with **$265 million** available for future share repurchases as of December 30, 2023, and no cash or stock dividends declared in 2022 or 2023 - The company's common stock is traded on the Nasdaq Global Select Market under the symbol HSIC[220](index=220&type=chunk) - Under its stock repurchase program, the company has repurchased approximately **$4.7 billion** of common stock as of December 30, 2023, with **$265 million** remaining available for future repurchases[222](index=222&type=chunk)[223](index=223&type=chunk) - The company has not declared any cash or stock dividends in fiscal 2023 or 2022 and does not anticipate doing so in the foreseeable future, intending to retain earnings for business expansion and share repurchases[225](index=225&type=chunk) [Reserved](index=43&type=section&id=ITEM%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=ITEM%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, net sales decreased **2.4%** to **$12.34 billion**, primarily due to lower PPE/COVID-19 test kit sales and the October 2023 cybersecurity incident, leading to a decline in operating income and a significant increase in debt to fund acquisitions [Recent Developments and Cybersecurity Incident](index=45&type=section&id=Recent%20Developments%20and%20Cybersecurity%20Incident) Sales of PPE and COVID-19 test kits continued to decrease in 2023, and a significant cybersecurity incident in October 2023 adversely impacted financial results for Q4 and full year 2023 - Sales of PPE and COVID-19 test kits decreased in 2023 compared to 2022 due to lower market pricing and demand[235](index=235&type=chunk) - A cybersecurity incident in October 2023 disrupted North American and European distribution businesses, adversely impacting Q4 and full-year 2023 financial results, with a short-term residual impact expected in 2024[238](index=238&type=chunk) [Results of Operations (2023 vs. 2022)](index=49&type=section&id=Results%20of%20Operations%20%282023%20vs.%202022%29) For fiscal year 2023, net sales decreased by **2.4%** to **$12.34 billion**, while gross profit increased by **0.8%** to **$3.86 billion**, but operating income decreased by **17.7%** to **$615 million** due to higher operating expenses Operating Results Summary (in millions) | | 2023 | 2022 | | :--- | :--- | :--- | | **Net sales** | $12,339 | $12,647 | | **Gross profit** | $3,861 | $3,831 | | **Operating income** | $615 | $747 | | **Net income attributable to Henry Schein, Inc.** | $416 | $538 | - Global net sales decreased **2.4%** in 2023, with internally generated local currency sales, excluding PPE and COVID-19 test kits, flat compared to the prior year, negatively impacted by the cybersecurity incident[276](index=276&type=chunk)[277](index=277&type=chunk) - Sales of PPE and COVID-19 test kits were approximately **$713 million** in 2023, a decrease of **$532 million** (**42.7%**) from **$1,245 million** in 2022[278](index=278&type=chunk)[279](index=279&type=chunk) - Operating expenses increased by **5.3%** to **$3.25 billion**, driven by higher payroll, travel, and acquisition-related costs, as well as **$11 million** in direct costs for cybersecurity incident remediation[290](index=290&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) In 2023, net cash from operating activities decreased to **$500 million**, while net cash used in investing activities surged to **$1.14 billion** due to acquisitions, leading to a significant increase in total debt to **$2.35 billion** Cash Flow Summary (in millions) | | Year Ended Dec 30, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $500 | $602 | | Net cash used in investing activities | $(1,135) | $(276) | | Net cash provided by (used in) financing activities | $701 | $(315) | Selected Liquidity Measures (in millions) | | Dec 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $171 | $117 | | Working capital | $1,805 | $1,764 | | Total debt | $2,351 | $1,149 | - The company's acquisition strategy focuses on adding customers, increasing geographic footprint, and accessing new technologies, with recent acquisitions in implant systems, clear aligners, and homecare medical products[300](index=300&type=chunk) [Critical Accounting Estimates](index=57&type=section&id=Critical%20Accounting%20Estimates) Management identifies critical accounting estimates including inventory valuation, business combinations, goodwill impairment (no impairment in 2023), definite-lived intangible asset impairment (**$19 million** charge in 2023), redeemable noncontrolling interests, and income tax provisions - Key estimates include inventory valuation, especially for PPE and COVID-19 test kits, which have experienced price and demand volatility[313](index=313&type=chunk)[314](index=314&type=chunk) - Goodwill is tested for impairment annually, with no impairment recorded in 2023, but a **$20 million** goodwill impairment was recorded in 2022 related to the disposal of an unprofitable business[316](index=316&type=chunk)[321](index=321&type=chunk) - Impairment charges for definite-lived intangible assets were **$19 million** in 2023, primarily related to customer lists and a planned business exit[324](index=324&type=chunk) - Redeemable noncontrolling interests are carried at their estimated redemption amounts, based on expected future earnings and cash flows, with the balance increasing to **$864 million** in 2023 from **$576 million** in 2022[327](index=327&type=chunk)[310](index=310&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=ITEM%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from foreign currency exchange rates and interest rates, using forward contracts and interest rate swaps to manage these exposures - The company is exposed to foreign currency risk, where a hypothetical **5%** change in the average value of the U.S. dollar in 2023 would have changed net income by approximately **$5 million**[333](index=333&type=chunk) - Interest rate risk is managed through hedging, with the company entering into interest rate swap agreements to hedge its variable-rate **$750 million** term loan, effectively creating a fixed rate of **5.79%**[341](index=341&type=chunk) - The company uses total return swaps to economically hedge its unfunded non-qualified supplemental retirement plan and deferred compensation plan obligations[335](index=335&type=chunk) [Financial Statements and Supplementary Data](index=62&type=section&id=ITEM%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for fiscal year 2023, including balance sheets, income statements, cash flow statements, and detailed notes on significant accounting policies, the cybersecurity incident, acquisitions, debt, and legal contingencies [Consolidated Financial Statements](index=65&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets of **$10.57 billion** and total liabilities of **$5.42 billion** as of December 30, 2023, with net sales of **$12.34 billion** and net income of **$416 million** for the year Key Balance Sheet Data (in millions) | | Dec 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total current assets | $4,488 | $3,988 | | Total assets | $10,573 | $8,607 | | Total current liabilities | $2,683 | $2,224 | | Total liabilities | $5,420 | $3,936 | | Total stockholders' equity | $4,289 | $4,095 | Key Income Statement Data (in millions) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net sales | $12,339 | $12,647 | $12,401 | | Gross profit | $3,861 | $3,831 | $3,674 | | Operating income | $615 | $747 | $852 | | Net income attributable to Henry Schein, Inc. | $416 | $538 | $631 | | Diluted EPS | $3.16 | $3.91 | $4.45 | [Notes to Consolidated Financial Statements](index=70&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the **$11 million** in direct expenses from the October 2023 cybersecurity incident, major acquisitions (Shield Healthcare, S.I.N. Implant System, Biotech Dental) that increased goodwill, a rise in total debt to **$2.35 billion** including a new **$750 million** term loan, and **$80 million** in restructuring costs - **Note 2 - Cybersecurity Incident:** The company incurred **$11 million** in expenses directly related to the October 2023 incident, primarily professional fees, and maintains a **$60 million** insurance policy with a **$5 million** retention[455](index=455&type=chunk) - **Note 5 - Business Acquisitions:** Major acquisitions in 2023 included Shield Healthcare (homecare medical products), S.I.N. Implant System (dental implants), and Biotech Dental (dental implants and software), contributing to a significant increase in goodwill and intangible assets[474](index=474&type=chunk)[479](index=479&type=chunk)[484](index=484&type=chunk) - **Note 13 - Debt:** Total debt increased to **$2.35 billion**, and in July 2023, the company entered into a new three-year **$750 million** term loan and amended its **$1.0 billion** revolving credit agreement, extending the maturity to 2028[561](index=561&type=chunk)[557](index=557&type=chunk)[571](index=571&type=chunk) - **Note 15 - Restructuring:** The company recorded **$80 million** in restructuring costs in 2023 as part of its BOLD+1 strategic plan, primarily for severance, asset impairments, and business exit costs[595](index=595&type=chunk)[596](index=596&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=126&type=section&id=ITEM%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were no changes in or disagreements with accountants on accounting and financial disclosure - None[669](index=669&type=chunk) [Controls and Procedures](index=126&type=section&id=ITEM%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls were effective as of December 30, 2023, despite the independent auditor issuing an adverse opinion on internal control over financial reporting due to a material weakness in IT access management - Management concluded that disclosure controls and procedures were effective as of December 30, 2023[670](index=670&type=chunk) - The independent auditor, BDO USA, P.C., issued an adverse opinion on internal control over financial reporting as of December 30, 2023[682](index=682&type=chunk) - The auditor identified a material weakness related to logical and user access management and segregation of duties at the application control level in certain IT environments[687](index=687&type=chunk) - Management's assessment of internal controls excluded the recently acquired Shield, S.I.N., and Biotech Dental businesses, as permitted by SEC guidance[671](index=671&type=chunk) [Other Information](index=130&type=section&id=ITEM%209B.%20Other%20Information) This item is not applicable - Not applicable[692](index=692&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=130&type=section&id=ITEM%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable - Not applicable[693](index=693&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=130&type=section&id=ITEM%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's definitive 2024 Proxy Statement, which also includes the Code of Ethics for senior financial officers - Most information required by this item is incorporated by reference from the company's definitive 2024 Proxy Statement[695](index=695&type=chunk) - The company has adopted a Code of Ethics for its CEO and senior financial officers, available on its website[698](index=698&type=chunk) [Executive Compensation](index=130&type=section&id=ITEM%2011.%20Executive%20Compensation) Information required by this item, including the Compensation Discussion and Analysis and Compensation Committee Report, is incorporated by reference from the company's definitive 2024 Proxy Statement - Information is incorporated by reference from the definitive 2024 Proxy Statement[699](index=699&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=131&type=section&id=ITEM%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of December 30, 2023, **7,166,543** common shares were available for future issuance under stockholder-approved equity incentive plans, with other information incorporated by reference from the 2024 Proxy Statement - As of December 30, 2023, **7,166,543** common shares were available for future issuance under stockholder-approved plans[701](index=701&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=131&type=section&id=ITEM%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required by this item is incorporated by reference from the company's definitive 2024 Proxy Statement - Information is incorporated by reference from the definitive 2024 Proxy Statement[702](index=702&type=chunk) [Principal Accounting Fees and Services](index=131&type=section&id=ITEM%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information required by this item is incorporated by reference from the company's definitive 2024 Proxy Statement - Information is incorporated by reference from the definitive 2024 Proxy Statement[703](index=703&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=131&type=section&id=ITEM%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Form 10-K report, including the consolidated financial statements and a detailed index of all exhibits - This section contains the list of financial statements and an index to all exhibits filed with the report[705](index=705&type=chunk)[706](index=706&type=chunk) [Form 10-K Summary](index=138&type=section&id=ITEM%2016.%20Form%2010-K%20Summary) No Form 10-K summary is provided - None[716](index=716&type=chunk)