-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O78K4nPqubefe7LY0UUQ1hbVOfDWjK2uBWbRRgBxsGwRbGaP8X5sXu2nEQrZnuIa wtqpcBx925Ht3TFYsYVhdA== 0001000228-09-000009.txt : 20090224 0001000228-09-000009.hdr.sgml : 20090224 20090224083035 ACCESSION NUMBER: 0001000228-09-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20081227 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090224 DATE AS OF CHANGE: 20090224 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HENRY SCHEIN INC CENTRAL INDEX KEY: 0001000228 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-MEDICAL, DENTAL & HOSPITAL EQUIPMENT & SUPPLIES [5047] IRS NUMBER: 113136595 STATE OF INCORPORATION: DE FISCAL YEAR END: 1226 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27078 FILM NUMBER: 09629532 BUSINESS ADDRESS: STREET 1: 135 DURYEA RD CITY: MELVILLE STATE: NY ZIP: 11747 BUSINESS PHONE: 6318435500 MAIL ADDRESS: STREET 1: 135 DURYEA RD CITY: MELVILLE STATE: NY ZIP: 11747 FORMER COMPANY: FORMER CONFORMED NAME: SCHEIN HENRY INC DATE OF NAME CHANGE: 19950907 8-K 1 the8k.txt COVER PAGE UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) February 24, 2009 ------------------- HENRY SCHEIN, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 0-27078 11-3136595 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 135 DURYEA ROAD, MELVILLE, NEW YORK 11747 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (631) 843-5500 ----------------- NOT APPLICABLE - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On February 24, 2009, Henry Schein, Inc. issued a press release reporting the financial results for the three months and full year ended December 27, 2008. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Item 9.01. Financial Statements and Exhibits. (a) Not applicable. (b) Not applicable. (c) Not applicable. (d) Exhibit 99.1 - Press Release dated February 24, 2009. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HENRY SCHEIN, INC. By: /s/ Steven Paladino ------------------------------------ Steven Paladino Executive Vice President and Chief Financial Officer (principal financial and accounting officer) February 24, 2009 EXHIBIT INDEX Exhibit No. Description 99.1 Press Release dated February 24, 2009. EX-99 2 exh99.txt EXHIBITS HENRY SCHEIN NEWS RELEASE Henry Schein, Inc. - 135 Duryea Road - Melville, New York 11747 FOR IMMEDIATE RELEASE HENRY SCHEIN REPORTS FOURTH QUARTER RESULTS EPS from continuing operations increases 8% to $0.90, excluding restructuring costs Company revises 2009 guidance MELVILLE, N.Y. (February 24, 2009) - Henry Schein, Inc. (NASDAQ: HSIC), the largest provider of healthcare products and services to office-based practitioners in the combined North American and European markets, today reported financial results for the quarter and year ended December 27, 2008. Net sales for the fourth quarter of 2008 were $1.6 billion, a decrease of 7.5% compared with the fourth quarter of 2007. This consists of a 1.8% decline in local currencies (3.0% decline in internal net sales and 1.2% growth from acquisitions) and a 5.7% decline related to foreign currency exchange (see Exhibit A for details of sales growth). The Company previously announced an initiative of reducing sales of certain lower-margin pharmaceutical products. Excluding sales of those products, internal net sales in local currencies declined 1.1%. Income from continuing operations for the fourth quarter of 2008 was $64.2 million, or $0.72 per diluted share. These results include certain restructuring costs (discussed below) of $23.2 million (or $0.18 per diluted share, after-tax) related to the elimination of approximately 300 positions from operations and the closing of several smaller facilities. Excluding the impact of these restructuring costs, income from continuing operations for the quarter was $80.2 million, or $0.90 per diluted share, an increase of 4.5% and 8.4%, respectively, compared with the fourth quarter of 2007 (see Exhibit B for reconciliation of GAAP net income and EPS to non-GAAP adjusted net income and EPS). The Company recorded a loss on discontinued operations during the fourth quarter of 2008 of $7.3 million (or $0.08 per diluted share, after-tax) related to the previously announced decision to exit its wholesale ultrasound business. "Although internal net sales declined slightly during the fourth quarter, we are pleased to report that excluding restructuring costs, we had solid operating margin expansion and 8% growth in diluted EPS from continuing operations," said Stanley M. Bergman, Chairman and Chief Executive Officer of Henry Schein. "Operating margin for the quarter, excluding restructuring charges, reached 8.1%, which is up 76 basis points compared with the prior year fourth quarter. 1 -more- For the year our operating margin, excluding restructuring charges, was 6.9%, which is up 35 basis points and is in line with our stated Company goal for annual operating margin expansion." Dental Group sales of $665 million declined 2.4%, consisting of a 0.3% decline in local currencies (all internal) and a 2.1% decline related to foreign currency exchange. The 0.3% internal decline in local currencies consists of a Dental consumable merchandise sales increase of 1.4% and a Dental equipment sales and service revenues decline of 3.6%. "Our fourth quarter Dental Group results reflect the current economic environment and uncertainty, particularly impacting overall demand for dental equipment," commented Mr. Bergman. Medical Group sales of $349 million declined 12.6%, consisting of a 13.5% decline in internally generated sales and 0.9% growth due to acquisitions. Excluding sales of certain lower-margin pharmaceutical products, noted above, internal Medical Group sales declined approximately 6% and declined approximately 1% when also excluding sales of influenza vaccine. Fourth quarter Medical Group sales growth was negatively impacted by the timing of influenza vaccine sales compared to prior year. "During the fourth quarter we sold 3.1 million doses of influenza vaccine. For the year we sold 13.6 million doses, which is at the midpoint of our guidance range," said Mr. Bergman. "We are also pleased with the results from our animal health business. Sales to our veterinary customers represented about 14% of the Medical Group's fourth quarter total sales and were up approximately 4.3%." For the quarter, International Group sales of $528 million declined 10.8%, consisting of 2.9% growth in local currencies (0.1% internally generated and 2.8% from acquisitions) and a 13.7% decline related to foreign currency exchange. "Results in our International Group reflect a strengthening of the U.S. dollar," added Mr. Bergman. "Yet we are pleased to report solid internal sales growth in most of our major markets, with double-digit internal sales gains in local currencies reported in Australia and New Zealand." Technology and Value-Added Services Group sales of $42 million increased 6.5% during the quarter, consisting of 10.9% growth in local currencies (all internally generated) and a 4.4% decline related to foreign currency exchange. "During the quarter we saw continued strong growth in financial services as equipment and practice financing transactions posted 10.4% growth, which follows 30% growth reported in the previous quarter. Our electronic services business also was strong during the quarter," stated Mr. Bergman. 2 -more- Full Year Results For the 2008 full year, net sales of $6.4 billion represent an increase of 8.3% compared with 2007. This increase consists of 7.5% local currency growth (1.3% internally generated and 6.2% from acquisitions) and 0.8% related to foreign currency exchange. Excluding sales of certain lower-margin pharmaceutical products, noted above, internal net sales growth in local currencies was 3.6%. Income from continuing operations for 2008 was $251.0 million, or $2.75 per diluted share. Excluding the charge in the third quarter of 2008 related to the Lehman Brothers bankruptcy ($0.03 per diluted share, after-tax) and the fourth quarter restructuring costs, income from continuing operations for 2008 was $270.0 million, or $2.96 per diluted share, reflecting growth of 14.4% and 14.3%, respectively, compared with 2007. Stock Repurchase Plan Henry Schein repurchased 568,410 shares of common stock during the fourth quarter of 2008 for a total purchase price of approximately $28 million. The impact of this share repurchase was immaterial to fourth quarter diluted EPS. During 2008 the Company repurchased 1,621,710 shares of common stock for a total purchase price of approximately $83 million. Approximately $58 million remains authorized for future common stock repurchases. Restructuring Costs In November 2008 Henry Schein announced plans to eliminate approximately 300 positions from its operations around the world and to close several smaller facilities. This initiative is substantially complete. The Company recorded costs associated with this initiative of $23.2 million in the fourth quarter of 2008, and expects to record remaining costs of $1 million to $3 million in the first quarter of 2009. Annual pretax cost savings from this initiative are expected to be approximately $24 million to $27 million and are included in our 2009 EPS guidance. 2009 EPS Guidance "We are revising our full-year 2009 financial guidance due to worsening economic conditions, our expectation for continued economic weakness and the strengthening of the U.S. dollar," commented Mr. Bergman. Henry Schein's 2009 financial guidance now is as follows: o 2009 diluted EPS is expected to be $3.11 to $3.26, representing growth of 5% to 10% compared with reported 2008 results, excluding charges related to the Lehman Brothers 3 - more - bankruptcy, as well as restructuring costs. This compares with previous guidance for 2009 diluted EPS of $3.27 to $3.36. The 2009 guidance does not include any restructuring costs expected to be recorded during the year. o For the first quarter of 2009, the Company expects diluted EPS to be in the range of flat to growth in the low-single-digit percentages, compared with the first quarter of 2008, excluding restructuring costs expected to be recorded during the quarter, as described above. o 2009 diluted EPS guidance is for current continuing operations including completed or previously announced acquisitions, and does not include the impact of potential future acquisitions, if any. Fourth Quarter Conference Call Webcast The Company will hold a conference call to discuss fourth quarter financial results today, beginning at 10:00 a.m. Eastern Standard Time. Individual investors are invited to listen to the conference call over the Internet through Henry Schein's Web site at www.henryschein.com. In addition, a replay will be available beginning shortly after the call has ended. About Henry Schein Henry Schein, a Fortune 500(R) company and a member of the NASDAQ 100(R) Index, is recognized for its excellent customer service and highly competitive prices. The Company's four business groups - Dental, Medical, International and Technology - serve more than 575,000 customers worldwide, including dental practitioners and laboratories, physician practices and animal health clinics, as well as government and other institutions. The Company operates through a centralized and automated distribution network, which provides customers in more than 200 countries with a comprehensive selection of more than 90,000 national and Henry Schein private- brand products in stock, as well as more than 100,000 additional products available as special-order items. Henry Schein also offers a wide range of innovative value-added practice solutions for healthcare professionals, such as ArubA(R), the Company's electronic catalog and ordering system. Its leading practice-management software solutions have an active user base of more than 60,000 practices, including DENTRIX(R), Easy Dental(R), Oasis(R) and EXACT(R) for dental practices, MicroMD(R) for physician practices, and AVImark(R) for animal health clinics. 4 - more - Headquartered in Melville, N.Y., Henry Schein employs over 12,500 people and has operations or affiliates in 23 countries. The Company's net sales reached a record $6.4 billion in 2008. For more information, visit the Henry Schein Web site at www.henryschein.com. In accordance with the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995, we provide the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied herein. All forward-looking statements made by us are subject to risks and uncertainties and are not guarantees of future performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. These statements are identified by the use of such terms as "may," "could," "expect," "intend," "believe," "plan," "estimate," "forecast," "project," "anticipate" or other comparable terms. A full discussion of our operations and financial condition, including factors that may affect our business and future prospects, is contained in documents we have filed with the SEC and will be contained in all subsequent periodic filings we make with the SEC. These documents identify in detail important risk factors that could cause our actual performance to differ materially from current expectations. Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: decreased customer demand and changes in vendor credit terms; disruptions in financial markets; general economic conditions; competitive factors; changes in the healthcare industry; changes in regulatory requirements that affect us; risks associated with our international operations; fluctuations in quarterly earnings; our dependence on third parties for the manufacture and supply of our products; transitional challenges associated with acquisitions, including the failure to achieve anticipated synergies; financial risks associated with acquisitions; regulatory and litigation risks; the dependence on our continued product development, technical support and successful marketing in the technology segment; our dependence upon sales personnel and key customers; our dependence on our senior management; possible increases in the cost of shipping our products or other service issues with our third-party shippers; risks from rapid technological change; risks from potential increases in variable interest rates; possible volatility of the market price of our common stock; certain provisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation that affect us. The order in which these factors appear should not be construed to indicate their relative importance or priority. We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control or predict. Accordingly, any forward- looking statements contained herein should not be relied upon as a prediction of actual results. We undertake no duty and have no obligation to update forward- looking statements. (TABLES TO FOLLOW) 5 - more - HENRY SCHEIN, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data)
Three Months Ended Years Ended ----------------------------- ----------------------------- December 27, December 29, December 27, December 29, 2008 2007 2008 2007 ------------- ------------- ------------- ------------- (unaudited) (unaudited) Net sales .................................................... $ 1,584,653 $ 1,712,836 $ 6,394,874 $ 5,904,416 Cost of sales ................................................ 1,116,987 1,229,143 4,510,336 4,187,842 ------------- ------------- ------------- ------------- Gross profit .......................................... 467,666 483,693 1,884,538 1,716,574 Operating expenses: Selling, general and administrative ...................... 339,580 358,251 1,441,695 1,328,635 Restructuring costs ...................................... 23,240 -- 23,240 -- ------------- ------------- ------------- ------------- Operating income ...................................... 104,846 125,442 419,603 387,939 Other income (expense): Interest income .......................................... 4,138 3,765 16,355 16,531 Interest expense ......................................... (6,464) (6,685) (29,439) (24,836) Other, net ............................................... (239) 288 (5,704) 4,630 ------------- ------------- ------------- ------------- Income from continuing operations before taxes, minority interest and equity in earnings (losses) of affiliates ...................... 102,281 122,810 400,815 384,264 Income taxes ................................................. (32,832) (40,237) (132,924) (130,603) Minority interest in net income of subsidiaries .............. (6,258) (6,438) (21,917) (17,442) Equity in earnings (losses) of affiliates .................... 1,017 614 5,037 (73) ------------- ------------- ------------- ------------- Income from continuing operations ............................ 64,208 76,749 251,011 236,146 Discontinued operations: Income (loss) from operations of discontinued components (including write-down of long- lived assets of $8.5 million in 2008 and a write-down of long-lived assets of $32.7 million and a net gain on sale of discontinued operations of $1.1 million in 2007) .................... (11,186) 2,315 (12,146) (33,441) Income tax benefit (expense) ............................. 3,889 (795) 4,278 12,468 ------------- ------------- ------------- ------------- Income (loss) from discontinued operations ............... (7,297) 1,520 (7,868) (20,973) ------------- ------------- ------------- ------------- Net income ................................................... $ 56,911 $ 78,269 $ 243,143 $ 215,173 ============= ============= ============= ============= Earnings from continuing operations per share: Basic .................................................... $ 0.72 $ 0.86 $ 2.82 $ 2.67 ============= ============= ============= ============= Diluted .................................................. $ 0.72 $ 0.83 $ 2.75 $ 2.59 ============= ============= ============= ============= Income (loss) from discontinued operations per share: Basic .................................................... $ (0.08) $ 0.02 $ (0.09) $ (0.24) ============= ============= ============= ============= Diluted .................................................. $ (0.08) $ 0.02 $ (0.08) $ (0.23) ============= ============= ============= ============= Earnings per share: Basic .................................................... $ 0.64 $ 0.88 $ 2.73 $ 2.43 ============= ============= ============= ============= Diluted .................................................. $ 0.64 $ 0.85 $ 2.67 $ 2.36 ============= ============= ============= ============= Weighted-average common shares outstanding: Basic .................................................... 88,673 89,082 89,080 88,559 ============= ============= ============= ============= Diluted .................................................. 89,405 92,031 91,221 91,163 ============= ============= ============= =============
Note: The above prior period amounts have been adjusted to reflect the effects of our discontinued operations. 6 - more -
HENRY SCHEIN, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) December 27, December 29, 2008 2007 ------------- ------------- ASSETS Current assets: Cash and cash equivalents .................................................. $ 369,570 $ 247,590 Available-for-sale securities............................................... -- 997 Accounts receivable, net of reserves of $42,855 and $41,315 ................ 734,027 708,307 Inventories, net ........................................................... 731,654 666,786 Deferred income taxes ...................................................... 36,974 32,827 Prepaid expenses and other ................................................. 194,047 192,292 ------------- ------------- Total current assets ............................................... 2,066,272 1,848,799 Property and equipment, net .................................................... 247,835 247,671 Goodwill ....................................................................... 922,952 917,194 Other intangibles, net ......................................................... 214,093 192,420 Investments and other .......................................................... 148,482 107,900 ------------- ------------- Total assets ....................................................... $ 3,599,634 $ 3,313,984 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable ........................................................... $ 554,773 $ 474,009 Bank credit lines .......................................................... 4,936 8,977 Current maturities of long-term debt ....................................... 156,405 24,319 Accrued expenses: Payroll and related ..................................................... 135,523 136,291 Taxes ................................................................... 69,792 73,278 Other ................................................................... 262,236 223,765 ------------- ------------- Total current liabilities .......................................... 1,183,665 940,639 Long-term debt ................................................................. 266,646 423,274 Deferred income taxes ........................................................... 91,249 80,260 Other liabilities .............................................................. 58,109 53,906 Minority interest .............................................................. 67,780 35,923 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, 89,351,849 outstanding on December 27, 2008 and 89,603,660 outstanding on December 29, 2007 ............................. 894 896 Additional paid-in capital .................................................. 705,799 673,763 Retained earnings ........................................................... 1,195,771 1,005,055 Accumulated other comprehensive income ...................................... 29,721 100,268 ------------- ------------- Total stockholders' equity ......................................... 1,932,185 1,779,982 ------------- ------------- Total liabilities and stockholders' equity ......................... $ 3,599,634 $ 3,313,984 ============= =============
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HENRY SCHEIN, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended ----------------------------- December 27, December 29, 2008 2007 ------------- ------------- (unaudited) (unaudited) Cash flows from operating activities: Net income ................................................................. $ 56,911 $ 78,269 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sale of discontinued operation, net of tax .................. -- (1,602) Impairment from write-down of long-lived assets of discontinued operations ....................................... 8,484 -- Depreciation and amortization ....................................... 18,944 20,915 Stock-based compensation expense .................................... 2,369 5,833 Provision for losses on trade and other accounts receivable ......... 2,544 322 Provision for (benefit from) deferred income taxes .................. (2,792) 9,326 Stock issued to 401(k) plan ......................................... -- -- Undistributed (earnings) losses of affiliates ....................... (1,017) (614) Minority interest in net income of subsidiaries ..................... 6,258 6,438 Other ............................................................... 2,282 (3,642) Changes in operating assets and liabilities, net of acquisitions: Accounts receivable ........................................... 39,917 60,557 Inventories ................................................... (178) 15,995 Other current assets .......................................... 14,710 (48,353) Accounts payable and accrued expenses ......................... 47,653 (23,158) ------------- ------------- Net cash provided by operating activities ...................................... 196,085 120,286 ------------- ------------- Cash flows from investing activities: Purchases of fixed assets ................................................. (12,751) (23,798) Payments for equity investment and business acquisitions, net of cash acquired ................................................... (102,540) (81,884) Cash received from business divestitures .................................. -- 10,766 Purchases of available-for-sale securities ................................ -- -- Proceeds from sales of available-for-sale securities ...................... 4,150 27,750 Net proceeds from (payments for) foreign exchange forward contract settlements ................................................... 32,246 (15,261) Other ..................................................................... (3,377) 408 ------------- ------------- Net cash used in investing activities .......................................... (82,272) (82,019) ------------- ------------- Cash flows from financing activities: Proceeds from issuance of long-term debt .................................. -- -- Proceeds from (repayments of) bank borrowings ............................. (1,411) 5,766 Principal payments for long-term debt ..................................... (3,582) (5,374) Proceeds from issuance of stock upon exercise of stock options ............ 608 2,740 Payments for repurchases of common stock .................................. (27,843) -- Excess tax benefits related to stock-based compensation ................... 406 1,071 Other ..................................................................... 902 (471) ------------- ------------- Net cash provided by (used in) financing activities ............................ (30,920) 3,732 ------------- ------------- Net change in cash and cash equivalents ........................................ 82,893 41,999 Effect of exchange rate changes on cash and cash equivalents ................... (1,687) (1,867) Cash and cash equivalents, beginning of period ................................. 288,364 207,458 ------------- ------------- Cash and cash equivalents, end of period ....................................... $ 369,570 $ 247,590 ============= ============= Years Ended ----------------------------- December 27, December 29, 2008 2007 ------------- ------------- Cash flows from operating activities: Net income ................................................................. $ 243,143 $ 215,173 Adjustments to reconcile net income to net cash provided by operating activities: Gain on sale of discontinued operation, net of tax .................. -- (673) Impairment from write-down of long-lived assets of discontinued operations ....................................... 8,484 32,667 Depreciation and amortization ....................................... 78,127 73,936 Stock-based compensation expense .................................... 25,429 22,553 Provision for losses on trade and other accounts receivable ......... 6,255 1,384 Provision for (benefit from) deferred income taxes .................. (4,083) (7,404) Stock issued to 401(k) plan ......................................... 4,662 4,104 Undistributed (earnings) losses of affiliates ....................... (5,037) 73 Minority interest in net income of subsidiaries ..................... 21,917 17,442 Other ............................................................... 150 (6,512) Changes in operating assets and liabilities, net of acquisitions: Accounts receivable ........................................... (26,834) (21,964) Inventories ................................................... (68,360) (15,946) Other current assets .......................................... 11,216 (58,194) Accounts payable and accrued expenses ......................... 89,580 13,572 ------------- ------------- Net cash provided by operating activities ...................................... 384,649 270,211 ------------- ------------- Cash flows from investing activities: Purchases of fixed assets ................................................. (50,870) (56,821) Payments for equity investment and business acquisitions, net of cash acquired ................................................... (128,470) (206,182) Cash received from business divestitures .................................. -- 15,827 Purchases of available-for-sale securities ................................ (35,925) (115,066) Proceeds from sales of available-for-sale securities ...................... 5,722 163,065 Net proceeds from (payments for) foreign exchange forward contract settlements ................................................... 41,336 (32,241) Other ..................................................................... 330 (10,629) ------------- ------------- Net cash used in investing activities .......................................... (167,877) (242,047) ------------- ------------- Cash flows from financing activities: Proceeds from issuance of long-term debt .................................. -- 483 Proceeds from (repayments of) bank borrowings ............................. (7,197) 1,212 Principal payments for long-term debt ..................................... (33,721) (47,903) Proceeds from issuance of stock upon exercise of stock options ............ 25,649 35,459 Payments for repurchases of common stock .................................. (82,788) (30,689) Excess tax benefits related to stock-based compensation ................... 11,041 12,668 Other ..................................................................... (954) (2,350) ------------- ------------- Net cash provided by (used in) financing activities ............................ (87,970) (31,120) ------------- ------------- Net change in cash and cash equivalents ........................................ 128,802 (2,956) Effect of exchange rate changes on cash and cash equivalents ................... (6,822) 1,899 Cash and cash equivalents, beginning of period ................................. 247,590 248,647 ------------- ------------- Cash and cash equivalents, end of period ....................................... $ 369,570 $ 247,590 ============= =============
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Exhibit A Henry Schein, Inc. 2008 Fourth Quarter Sales Growth Rate Summary (unaudited) Q4 2008 over Q4 2007 -------------------- Consolidated Dental Medical International Technology ------------ ----------- ------------ ------------- ------------ Internal Sales Growth -3.0% -0.3% -13.5% 0.1% 10.9% Acquisitions 1.2% 0.0% 0.9% 2.8% 0.0% ------------ ----------- ------------ ------------- ------------ Local Currency Sales Growth -1.8% -0.3% -12.6% 2.9% 10.9% Foreign Currency Exchange -5.7% -2.1% 0.0% -13.7% -4.4% ------------ ----------- ------------ ------------- ------------ Total Sales Growth -7.5% -2.4% -12.6% -10.8% 6.5% ============ =========== ============ ============= ============ Q4 YTD 2008 over Q4 YTD 2007 ---------------------------- Consolidated Dental Medical International Technology ------------ ----------- ------------ ------------- ------------ Internal Sales Growth 1.3% 4.0% -7.8% 4.9% 8.7% Acquisitions 6.2% 0.8% 0.6% 17.9% 16.6% ------------ ----------- ------------ ------------- ------------ Local Currency Sales Growth 7.5% 4.8% -7.2% 22.8% 25.3% Foreign Currency Exchange 0.8% 0.0% 0.0% 2.7% -1.5% ------------ ----------- ------------ ------------- ------------ Total Sales Growth 8.3% 4.8% -7.2% 25.5% 23.8% ============ =========== ============ ============= ============
9 - more - Exhibit B Henry Schein, Inc. 2008 Fourth Quarter and Full Year Reconciliation of GAAP results of continuing operations to non-GAAP results of continuing operations (in thousands, except per share data) (unaudited)
Fourth Quarter % Full Year % 2008 2007 Growth 2008 2007 Growth From Continuing Operations - ------------------------------------------------------------------------------------------------------------------------------------ Net Sales $1,584,653 $1,712,836 -7.5% $6,394,874 $5,904,416 8.3% Operating Income 104,846 125,442 -16.4% 419,603 387,939 8.2% Margin 6.6% 7.3% -71 bp 6.6% 6.6% -1 bp Income from Continuing Operations $ 64,208 $ 76,749 -16.3% $ 251,011 $ 236,146 6.3% Diluted EPS from Continuing Operations 0.72 0.83 -13.3% 2.75 2.59 6.2% Net Income 56,911 78,269 -27.3% 243,143 215,173 13.0% Diluted EPS 0.64 0.85 -24.7% 2.67 2.36 13.1% - ------------------------------------------------------------------------------------------------------------------------------------ Subtract: Non-GAAP Adjustments Net Sales -- -- -- -- Operating Income $ 23,240 -- $ 23,240 -- Income from Continuing Operations 15,991 -- 19,036 -- Diluted EPS from Continuing Operations 0.18 -- 0.21 -- Net Income 15,991 -- 19,036 -- Diluted EPS 0.18 -- 0.21 -- Adjusted Results - ------------------------------------------------------------------------------------------------------------------------------------ Net Sales $1,584,653 $1,712,836 -7.5% $6,394,874 $5,904,416 8.3% Operating Income 128,086 125,442 2.1% 442,843 387,939 14.2% Margin 8.1% 7.3% 76 bp 6.9% 6.6% 35 bp Income from Continuing Operations $ 80,199 $ 76,749 4.5% $ 270,047 $ 236,146 14.4% Diluted EPS from Continuing Operations 0.90 0.83 8.4% 2.96 2.59 14.3% Net Income 72,902 78,269 -6.9% 262,179 215,173 21.8% Diluted EPS 0.82 0.85 -3.5% 2.87 2.36 21.6% - ------------------------------------------------------------------------------------------------------------------------------------
Note: Above reflects adjusted results from continuing operations excluding restructuring costs of $23,240 ($15,991 after tax) recorded in the fourth quarter and losses of $4,511 ($3,045 after tax) related to the Lehman Brothers bankruptcy recorded in the third quarter. This non-GAAP comparison is being presented in order to provide a more comparable basis for analysis. CONTACTS: Investors: Steven Paladino Executive Vice President and Chief Financial Officer steven.paladino@henryschein.com (631) 843-5500 Media: Susan Vassallo Vice President, Corporate Communications susan.vassallo@henryschein.com (631) 843-5562 10 ### -----END PRIVACY-ENHANCED MESSAGE-----