SEC Comment Letter for HENRY SCHEIN INC (HSIC) (CIK 0001000228) (HSIC) — Feb 26, 2016
HENRY SCHEIN INC (HSIC) (CIK 0001000228)
Date: Feb. 26, 2016 · CIK: 0001000228 · Accession: 0000000000-16-066421
AI Filing Summary & Sentiment
Reasoning
Letter
Mail Stop 3561 February 26 , 2016 Via E -mail Steven Paladino Executive Vice President and Chief Financial Officer Henry Schein , Inc. 135 Duryea Road Melville , NY 11747
Re: Henry Schein, Inc. Form 10-K for the Fis cal Year Ended December 26, 2015 Filed February 10, 2016 File No. 0 -27078
Dear Mr. Paladino :
We have reviewed your filing an d have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances , please tell us why in your response.
After reviewing your response to these comments, we may have additional comments.
Form 10 -K for the Fis cal Year Ended December 26, 2015 Notes to Consolidated Financial Stat ements Note 15. Segment and Geographic Data, page 96
1. Almost 97% of your total sales in fiscal 2015 were from the health care distribution reportable segment. Each of the three operating segments (dental, animal health and medical) aggregated into this re portable segment represented 19% or more of your total sales in fiscal 2015. Your disclosures of sales by operating segment for each of the last five fiscal years on page 36 and your discussions of changes in sales on pages 46 and 49 indicate that each of these operating segments may have experienced significant variances in sales trends in recent years. In addition, based upon the North America and International sales information disclosed in Exhibit A of the Form 8 -K filed February 10, 2016, it appears each of these operating segments have varying proportions of sales from forei gn countries. Please explain in detail how you concluded each of these operating segments have similar economic characteristics . For each operating segment, please also
Steven Paladino Henry Schein, Inc. February 26 , 2016 Page 2
provide us with your historical and projected sales , gross profit, operating income and measure of segment profitability. Please show each profit measure in dollars and as a percentage of sales. Please also show both the dollar and percentage changes from period to period in your analysis. Please include detailed explanations for any ap parent differences in economic characteristics and trends for a given operating segment when compared to another operating segment for a given period or over several periods. Please also explain why each of these differences would not be considered an ind ication of differences in economic characteristics between the operating segments and your basis for concluding that aggregation is appropriate . Refer to the guidance outlined in ASC 280-10-50-11 and ASC 280 -10-55-7A through 55 -7C.
2. Your dental and medica l operating segments sell their products to dental and medical establishments and your animal health segment sells its products to veterinary and other animal health providers. Please explain how you determined each operating segment sells their products to the same type or class of customer as required by ASC 280 -10-50- 11(c).
3. Based on your disclosures under Governmental Regulations beginning on page 10, it appears both your dental and medical operating segments may be subject to different regulatory req uirements than your animal health operating segment. For example, it appears that various provisions of the United States Health Care Reform Law and HIPAA may apply to your medical and dental operating segments but not to the operations of your animal hea lth operating segment. Please tell us how each of these three operating segments are subject to a similar regulatory environment as outlined in ASC 280 -10-50- 11(e). Your response should clearly distinguish between regulatory matters or requirements that are applicable to all three of these operating segments and those that apply to only one or two of these operating segments.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the fili ng includes the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In responding to our comments, please provide a written statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
Steven Paladino Henry Schein, Inc. February 26 , 2016 Page 3
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
You may contact Linda Cvrkel at 202-551-3813 or Rufus Decker at 202 -551-3769 with any questions.
Sincerely,
/s/Craig Arakawa for
Show Raw Text
Mail Stop 3561 February 26 , 2016 Via E -mail Steven Paladino Executive Vice President and Chief Financial Officer Henry Schein , Inc. 135 Duryea Road Melville , NY 11747 Re: Henry Schein, Inc. Form 10-K for the Fis cal Year Ended December 26, 2015 Filed February 10, 2016 File No. 0 -27078 Dear Mr. Paladino : We have reviewed your filing an d have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances , please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Form 10 -K for the Fis cal Year Ended December 26, 2015 Notes to Consolidated Financial Stat ements Note 15. Segment and Geographic Data, page 96 1. Almost 97% of your total sales in fiscal 2015 were from the health care distribution reportable segment. Each of the three operating segments (dental, animal health and medical) aggregated into this re portable segment represented 19% or more of your total sales in fiscal 2015. Your disclosures of sales by operating segment for each of the last five fiscal years on page 36 and your discussions of changes in sales on pages 46 and 49 indicate that each of these operating segments may have experienced significant variances in sales trends in recent years. In addition, based upon the North America and International sales information disclosed in Exhibit A of the Form 8 -K filed February 10, 2016, it appears each of these operating segments have varying proportions of sales from forei gn countries. Please explain in detail how you concluded each of these operating segments have similar economic characteristics . For each operating segment, please also Steven Paladino Henry Schein, Inc. February 26 , 2016 Page 2 provide us with your historical and projected sales , gross profit, operating income and measure of segment profitability. Please show each profit measure in dollars and as a percentage of sales. Please also show both the dollar and percentage changes from period to period in your analysis. Please include detailed explanations for any ap parent differences in economic characteristics and trends for a given operating segment when compared to another operating segment for a given period or over several periods. Please also explain why each of these differences would not be considered an ind ication of differences in economic characteristics between the operating segments and your basis for concluding that aggregation is appropriate . Refer to the guidance outlined in ASC 280-10-50-11 and ASC 280 -10-55-7A through 55 -7C. 2. Your dental and medica l operating segments sell their products to dental and medical establishments and your animal health segment sells its products to veterinary and other animal health providers. Please explain how you determined each operating segment sells their products to the same type or class of customer as required by ASC 280 -10-50- 11(c). 3. Based on your disclosures under Governmental Regulations beginning on page 10, it appears both your dental and medical operating segments may be subject to different regulatory req uirements than your animal health operating segment. For example, it appears that various provisions of the United States Health Care Reform Law and HIPAA may apply to your medical and dental operating segments but not to the operations of your animal hea lth operating segment. Please tell us how each of these three operating segments are subject to a similar regulatory environment as outlined in ASC 280 -10-50- 11(e). Your response should clearly distinguish between regulatory matters or requirements that are applicable to all three of these operating segments and those that apply to only one or two of these operating segments. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the fili ng includes the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In responding to our comments, please provide a written statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and Steven Paladino Henry Schein, Inc. February 26 , 2016 Page 3 the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. You may contact Linda Cvrkel at 202-551-3813 or Rufus Decker at 202 -551-3769 with any questions. Sincerely, /s/Craig Arakawa for Rufus Decker Accounting Branch Chief Office of Beverages, Apparel and Mining