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 22, 2006
--------------------
HENRY SCHEIN, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-27078 11-3136595
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(State or other jurisdiction (Commission File IRS Employer
of incorporation) Number) (Identification No.)
135 DURYEA ROAD, MELVILLE, NEW YORK 11747
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (631) 843-5500
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NOT APPLICABLE
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(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 22, 2006, Henry Schein, Inc. issued a press release reporting
the financial results for the three months and full year ended December 31,
2005. 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) Exhibit 99.1 - Press Release dated February 22, 2006.
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,
Chief Financial Officer and Director
(principal financial and accounting
officer)
Date: February 22, 2006
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release dated February 22, 2006.
HENRY SCHEIN
NEWS RELEASE
Henry Schein, Inc. - 135 Duryea Road - Melville, New York 11747
FOR: Henry Schein, Inc.
CONTACT: Steven Paladino
Executive Vice President and
Chief Financial Officer
steven.paladino@henryschein.com
(631) 843-5500
Susan Vassallo
Director, Corporate Communications
susan.vassallo@henryschein.com
FOR IMMEDIATE RELEASE (631) 843-5562
HENRY SCHEIN REPORTS FOURTH QUARTER
DILUTED EPS FROM CONTINUING OPERATIONS OF $0.59
MELVILLE, N.Y. - February 22, 2006 - 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 ended December 31, 2005.
Net sales for the fourth quarter of 2005 were $1.34 billion, an
increase of 16.2% from the fourth quarter of 2004 (See Exhibit A for details of
sales growth). This increase includes 18.4% local currency growth (13.5%
internally generated and 4.9% from acquisitions) offset by a 2.2% decline
related to foreign currency exchange. The fourth quarter of 2005 included an
additional week compared with the fourth quarter of 2004. The Company estimates
that the extra week accounted for approximately 5% to 6% of net sales growth.
Fourth quarter income from continuing operations was $52.5 million, up
78.4% compared with the fourth quarter of 2004, and earnings per diluted share
from continuing operations were $0.59, up 78.8% compared with the prior-year
quarter. Excluding a one-time charge in the fourth quarter of 2004 of $8.4
million after tax, fourth quarter 2005 income and earnings per diluted share
from continuing operations grew by 38.9% and 37.2% respectively (See Exhibit B
for details).
"Our excellent fourth quarter results cap off a year of solid financial
performance by Henry Schein. We are pleased to report record quarterly net
sales that reflect market share gains in our Dental, Medical and International
businesses, which were further bolstered by strategic acquisitions," commented
Stanley M. Bergman, Chairman and Chief Executive Officer of Henry Schein.
For the quarter, Dental sales increased 17.4%, including 17.1% growth
in local currencies (12.2% internally generated and 4.9% from acquisitions) and
0.3% related to foreign currency exchange. Of the 17.1% local currency growth,
Dental consumable merchandise sales increased
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15.9% (11.0% internal growth and 4.9% acquisition growth) and Dental equipment
sales and service revenues were up 20.0% (15.0% internal growth and 5.0%
acquisition growth). Internal sales growth in Dental consumable merchandise and
in equipment sales and service revenues was augmented by the acquisitions of Ash
Temple in Canada and Barton-Cyker in the United States.
Medical sales increased 20.8% during the fourth quarter (19.6% internal
growth and 1.2% acquisition growth), reflecting an acceleration of growth from
recent quarters. Medical sales other than influenza vaccine sales increased
13.2% (11.9% internal growth and 1.3% acquisition growth). Medical sales for
the 2005 fourth quarter reflect the resumption of distribution of Chiron's
Fluvirin(R) influenza vaccine. The Company sold 3.7 million doses of Fluvirin
during the quarter, which was at the high end of its estimate of 2 million to
4 million doses.
For the quarter, International sales increased 10.3%, including 18.5%
growth in local currencies (9.3% internally generated and 9.2% from
acquisitions) offset by a 8.2% decline related to foreign currency exchange.
Internal sales growth was bolstered by the acquisitions of the Demedis
operations in Austria, Halas Dental in Australia and Shalfoon Bros. in New
Zealand.
Technology and Value-Added Services sales were 4.7% ahead of prior
year, including 4.5% growth in local currencies (all internal) and 0.2% related
to foreign currency exchange. Electronic services revenues continued a strong
double-digit growth trend.
On November 3, 2005, Henry Schein celebrated its 10-year anniversary as
a publicly traded company. Commenting on this milestone, Mr. Bergman said,
"Among our reasons for pursuing an initial public offering was to provide
funding for future growth, and as measured by any number of metrics, our growth
during the past decade has been impressive. To cite just a couple of examples
of our financial performance, since 1995 our net sales have grown at a compound
annual growth rate of slightly more than 22%, rising seven-fold from $616
million in 1995 to $4.6 billion in 2005.
"The 10-year income from continuing operations compound annual growth
rate was even higher, at 33%," he continued. "Income from continuing operations
during this period rose 18-fold, from $9 million in 1995 to $162 million in
2005. And our earnings per diluted share, which stood at a split-adjusted $0.35
in 1995, reached $1.82 per share in 2005 as we reported today, representing a
10-year compound annual growth rate of 18%."
The Company noted that all 1995 financial data does not reflect
subsequent restatements for pooling of interest transactions and excludes
certain proforma adjustments.
Stock Repurchase Plan
In June 2004 and again in November 2005 the Company announced share
repurchase programs of up to $100 million worth of common stock each, under
which 632,000 shares were
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repurchased during the fourth quarter at an average price of $39.81 per share.
The impact of the repurchase of shares under this program on fourth quarter
diluted EPS was immaterial.
2006 EPS Guidance
Henry Schein affirms 2006 financial guidance, as first announced on
November 28, 2005, as follows:
o 2006 diluted EPS is expected to be $2.20 to $2.26, excluding the impact
of expensing stock options per Financial Accounting Standards No.
123(R), which the Company estimates to be $0.12 per diluted share.
o Diluted EPS growth is expected to be in the low double digits
percentage range for the first half of 2006, and then to accelerate for
the second half of the year due to the impact of seasonal influenza
vaccine sales and the timing of certain expenses.
o This 2006 diluted EPS guidance includes Henry Schein's expectations
that it will distribute approximately 15 million to 17 million doses of
influenza vaccine during 2006, including product manufactured by
GlaxoSmithKline Biologicals (which includes the former ID Biomedical),
Chiron Corporation and sanofi pasteur.
o All guidance is for current continuing operations including completed
acquisitions, and does not include the impact of potential future
acquisitions.
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 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, 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 475,000
customers worldwide, including dental practices and laboratories, physician
practices and veterinary clinics, as well as government and other institutions.
The Company's sales reached a record $4.6 billion in 2005. The Company
operates through a centralized and automated distribution network, which
provides customers in more than 125 countries
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with a comprehensive selection of more than 160,000 national and Henry Schein
private-brand products.
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 been installed in more than 50,000 practices -
DENTRIX(R) and Easy Dental(R) for dental practices, and AVImark(R) for
veterinary clinics.
Headquartered in Melville, N.Y., Henry Schein employs nearly 11,000
people and has operations in 19 countries. 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, the Company provides the following
cautionary remarks regarding important factors which, 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 the
Company's 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 the Company's operations and financial
condition, including factors that may affect its business and future prospects,
is contained in documents the Company has filed with the SEC and will be
contained in all subsequent periodic filings made with the SEC. These documents
identify in detail important risk factors that could cause the Company's 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: competitive factors; changes in the healthcare industry; changes in
government regulations that affect the Company; financial risks associated with
the Company's international operations; fluctuations in quarterly earnings;
transitional challenges associated with acquisitions; regulatory and litigation
risks; the dependence on the Company's continued product development, technical
support and successful marketing in the technology segment; the Company's
dependence upon sales personnel and key customers; the Company's dependence on
its senior management; the Company's dependence on third parties for the
manufacture and supply of its products; possible increases in the cost of
shipping the Company's products or other service trouble with the Company's
third-party shippers; risks from rapid technological change; and risks from
potential increases in variable interest rates.
The order in which these factors appear should not be construed to
indicate their relative importance or priority. The Company cautions that these
factors may not be exhaustive and that many of these factors are beyond the
Company's ability to control or predict. Accordingly, forward-looking
statements should not be relied upon as a prediction of actual results. The
Company undertakes no duty and has no obligation to update forward-looking
statements.
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(TABLES TO FOLLOW)
HENRY SCHEIN, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Ended Years Ended
-------------------------- --------------------------
December 31, December 25, December 31, December 25,
2005 2004 2005 2004
----------- ----------- ----------- -----------
(unaudited) (unaudited)
Net sales ................................................ $ 1,343,141 $ 1,156,122 $ 4,635,929 $ 3,898,485
Cost of sales ............................................ 965,666 841,792 3,318,993 2,844,020
----------- ----------- ----------- -----------
Gross profit ...................................... 377,475 314,330 1,316,936 1,054,465
Operating expenses:
Selling, general and administrative .................. 288,240 264,085 1,035,848 844,715
----------- ----------- ----------- -----------
Operating income .................................. 89,235 50,245 281,088 209,750
Other income (expense):
Interest income ...................................... 2,846 1,143 7,315 6,110
Interest expense ..................................... (7,222) (5,582) (25,508) (17,596)
Other, net ........................................... 744 (83) 1,659 365
----------- ----------- ----------- -----------
Income from continuing operations before
taxes, minority interest and equity in
earnings of affiliates ........................... 85,603 45,723 264,554 198,629
Income taxes ............................................. (31,247) (16,913) (97,002) (73,506)
Minority interest in net loss (income) of subsidiaries ... (2,215) 221 (5,991) (1,486)
Equity in earnings of affiliates ......................... 313 368 827 1,699
----------- ----------- ----------- -----------
Income from continuing operations ........................ 52,454 29,399 162,388 125,336
Discontinued operations:
Income (loss) from operations of discontinued
components ........................................ (1,268) 176 (18,448)(1) 4,745
Income tax benefit (expense).......................... 514 (25) 7,386 (1,898)
----------- ----------- ----------- -----------
Income (loss) from discontinued operations ........... (754) 151 (11,062) 2,847
----------- ----------- ----------- -----------
Net income ............................................... $ 51,700 $ 29,550 $ 151,326 $ 128,183
=========== =========== =========== ===========
Earnings from continuing operations per share:
Basic ................................................ $ 0.60 $ 0.34 $ 1.87 $ 1.44
=========== =========== =========== ===========
Diluted .............................................. $ 0.59 $ 0.33 $ 1.82 $ 1.40
=========== =========== =========== ===========
Earnings (loss) from discontinued operations per share:
Basic ................................................ $ (0.01) $ 0.00 $ (0.13) $ 0.03
=========== =========== =========== ===========
Diluted .............................................. $ (0.01) $ 0.00 $ (0.12) $ 0.03
=========== =========== =========== ===========
Earnings per share:
Basic ................................................ $ 0.59 $ 0.34 $ 1.74 $ 1.47
=========== =========== =========== ===========
Diluted .............................................. $ 0.58 $ 0.33 $ 1.70 $ 1.43
=========== =========== =========== ===========
Weighted-average common shares outstanding:
Basic ................................................ 87,075 86,595 87,006 87,253
=========== =========== =========== ===========
Diluted .............................................. 89,261 88,546 89,187 89,462
=========== =========== =========== ===========
Note: The above prior period amounts have been adjusted to reflect the effects
of our discontinued operations.
(1) Includes write-down of long-lived assets of $11.9 million recorded in the
third quarter of 2005.
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HENRY SCHEIN, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
December 31, December 25,
2005 2004
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents .................................................. $ 254,498 $ 186,621
Available-for-sale securities............................................... 80,195 --
Accounts receivable, net of reserves of $52,308 and $44,852 ................ 582,617 554,666
Inventories ................................................................ 505,542 486,494
Deferred income taxes ...................................................... 35,505 28,795
Prepaid expenses and other ................................................. 126,052 174,167
----------- -----------
Total current assets ............................................... 1,584,409 1,430,743
Property and equipment, net .................................................... 190,746 176,103
Goodwill ....................................................................... 626,869 627,215
Other intangibles, net ......................................................... 123,204 129,285
Investments and other .......................................................... 57,892 70,324
----------- -----------
Total assets ....................................................... $ 2,583,120 $ 2,433,670
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ........................................................... $ 371,392 $ 367,213
Bank credit lines .......................................................... 2,093 5,969
Current maturities of long-term debt ....................................... 33,013 3,906
Accrued expenses:
Payroll and related ..................................................... 96,113 89,431
Taxes ................................................................... 65,070 70,970
Other ................................................................... 156,433 156,410
----------- -----------
Total current liabilities .......................................... 724,114 693,899
Long-term debt ................................................................. 489,520 525,682
Deferred income taxes ........................................................... 74,042 66,599
Other liabilities .............................................................. 53,547 28,999
Minority interest .............................................................. 12,353 12,438
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,
87,092,238 outstanding on December 31, 2005 and
120,000,000 shares authorized, 86,650,428 outstanding on
December 25, 2004 ....................................................... 871 867
Additional paid-in capital .................................................. 472,960 445,573
Retained earnings ........................................................... 735,079 615,265
Accumulated other comprehensive income ...................................... 21,059 44,785
Deferred compensation ....................................................... (425) (437)
----------- -----------
Total stockholders' equity ......................................... 1,229,544 1,106,053
----------- -----------
Total liabilities and stockholders' equity ......................... $ 2,583,120 $ 2,433,670
=========== ===========
Note: Included above, as of December 31, 2005, there are approximately $44
million of accounts receivable, net of reserves, and approximately $16 million
of inventories, net of reserves, related to our discontinued operations.
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HENRY SCHEIN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended December 31, 2005 and December 25, 2004
(in thousands)
Three Months Ended
--------------------------
2005 2004
----------- -----------
(unaudited) (unaudited)
Cash flows from operating activities:
Net income ................................................................. $ 51,700 $ 29,550
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ....................................... 17,798 18,095
Impairment from write-down of long-lived assets ..................... -- --
Provision for losses on trade and other accounts receivable ......... 889 2,031
Deferred income taxes ............................................... 1,609 10,095
Stock issued to 401(k) plan ......................................... -- --
Undistributed earnings of affiliates ................................ (313) (368)
Minority interest in net income (loss) of subsidiaries .............. 2,215 (221)
Other ............................................................... (1,299) (2,514)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable ........................................... 27,643 (2,023)
Inventories ................................................... (27,641) (18,338)
Other current assets .......................................... (11,505) (18,406)
Accounts payable and accrued expenses ......................... 90,463 114,629
----------- -----------
Net cash provided by operating activities....................................... 151,559 132,530
----------- -----------
Cash flows from investing activities:
Purchases of fixed assets ................................................. (14,625) (13,150)
Payments for business acquisitions, net of cash acquired .................. (9,665) 19,654 (1)
Payments related to pending business acquisitions ......................... -- (3,950)
Purchases of available-for-sale securities ................................ (103,520) --
Proceeds from sales of marketable securities .............................. 31,749 --
Proceeds from settlement of note receivable ............................... 2,616 --
Net proceeds from (payments for) foreign exchange
forward contract settlements ............................................. 7,188 (5,013)
Other ..................................................................... (9,414) 10,717
----------- -----------
Net cash provided by (used in) investing activities ............................ (95,671) 8,258
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt .................................. -- --
Payments for debt issuance costs .......................................... -- (627)
Net payments for bank borrowings .......................................... (637) (1,258)
Repayments of debt assumed in business acquisitions ....................... -- --
Principal payments for long-term debt ..................................... (3,005) (295)
Proceeds from issuance of stock upon exercise of stock options ............ 4,222 2,172
Payments for repurchases of common stock .................................. (25,159) (11,547)
Other ..................................................................... 182 144
----------- -----------
Net cash provided by (used in) financing activities ............................ (24,397) (11,411)
----------- -----------
Net change in cash and cash equivalents ........................................ 31,491 129,377
Effect of exchange rate changes on cash and cash equivalents ................... 2,930 (15,727)
Cash and cash equivalents, beginning of period ................................. 220,077 72,971
----------- -----------
Cash and cash equivalents, end of period ....................................... $ 254,498 $ 186,621
=========== ===========
Years Ended
--------------------------
2005 2004
----------- -----------
Cash flows from operating activities:
Net income ................................................................. $ 151,326 $ 128,183
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ....................................... 60,345 51,326
Impairment from write-down of long-lived assets ..................... 11,928 --
Provision for losses on trade and other accounts receivable ......... 6,524 3,820
Deferred income taxes ............................................... 2,792 13,294
Stock issued to 401(k) plan ......................................... 3,223 2,805
Undistributed earnings of affiliates ................................ (827) (1,699)
Minority interest in net income (loss) of subsidiaries .............. 5,991 1,486
Other ............................................................... (231) 1,519
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable ........................................... (14,002) (35,075)
Inventories ................................................... 6,484 (28,614)
Other current assets .......................................... 30,147 (13,919)
Accounts payable and accrued expenses ......................... 1,441 67,873
----------- -----------
Net cash provided by operating activities....................................... 265,141 190,999
----------- -----------
Cash flows from investing activities:
Purchases of fixed assets ................................................. (50,829) (37,837)
Payments for business acquisitions, net of cash acquired .................. (68,213) (132,375)
Payments related to pending business acquisitions ......................... -- (17,439)
Purchases of available-for-sale securities ................................ (111,945) --
Proceeds from sales of marketable securities .............................. 31,749 14,472
Proceeds from settlement of note receivable ............................... 14,395 --
Net proceeds from (payments for) foreign exchange
forward contract settlements ............................................. 30,818 (8,234)
Other ..................................................................... (8,841) 9,584
----------- -----------
Net cash provided by (used in) investing activities ............................ (162,866) (171,829)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt .................................. -- 240,000
Payments for debt issuance costs .......................................... (650) (5,781)
Net payments for bank borrowings .......................................... (3,525) (7,339)
Repayments of debt assumed in business acquisitions ....................... -- (135,718)
Principal payments for long-term debt ..................................... (8,483) (3,359)
Proceeds from issuance of stock upon exercise of stock options ............ 29,500 21,425
Payments for repurchases of common stock .................................. (52,276) (82,213)
Other ..................................................................... (3,432) (645)
----------- -----------
Net cash provided by (used in) financing activities ............................ (38,866) 26,370
----------- -----------
Net change in cash and cash equivalents ........................................ 63,409 45,540
Effect of exchange rate changes on cash and cash equivalents ................... 4,468 (16,270)
Cash and cash equivalents, beginning of period ................................. 186,621 157,351
----------- -----------
Cash and cash equivalents, end of period ....................................... $ 254,498 $ 186,621
=========== ===========
NOTE: Certain prior period amounts have been reclassified to conform with the
current period presentation.
(1) Primarily reflects proceeds received from the divestiture of DentalMV GmbH
in July 2004 which was treated as a reduction of purchase price of the Demedis
Group acquired in June 2004.
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Exhibit A
Henry Schein, Inc.
2005 Fourth Quarter and Full Year
Sales Growth Rate Summary
(unaudited)
Q4 2005 over Q4 2004
--------------------
Consolidated Dental Medical International Technology
------------ ----------- ------------ ------------- ------------
Internal 13.5% 12.2% 19.6% 9.3% 4.5%
Acquisitions 4.9% 4.9% 1.2% 9.2% --
------------ ----------- ------------ ------------- ------------
Local Currency Sales Growth 18.4% 17.1% 20.8% 18.5% 4.5%
Foreign Currency Exchange -2.2% 0.3% -- -8.2% 0.2%
------------ ----------- ------------ ------------- ------------
Total Sales Growth 16.2% 17.4% 20.8% 10.3% 4.7%
============ =========== ============ ============= ============
Full Year 2005 over Full Year 2004
----------------------------------
Consolidated Dental Medical International Technology
------------ ----------- ------------ ------------- ------------
Internal 8.4% 11.3% 7.6% 4.8% 5.4%
Acquisitions 10.4% 6.6% 1.0% 30.9% --
------------ ----------- ------------ ------------- ------------
Local Currency Sales Growth 18.8% 17.9% 8.6% 35.7% 5.4%
Foreign Currency Exchange 0.1% 0.5% -- -0.3% 0.2%
------------ ----------- ------------ ------------- ------------
Total Sales Growth 18.9% 18.4% 8.6% 35.4% 5.6%
============ =========== ============ ============= ============
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Exhibit B
Henry Schein, Inc.
2005 Fourth Quarter and Full Year
Details of Growth Comparison
Income Statement Summary
(in thousands, except per share data)
(unaudited)
Fourth Quarter % Full Year %
2005 2004 Growth 2005 2004 Growth
As Reported
- ------------------------------------------------------------------------------------------------------------------------------------
Net Sales $1,343,141 $1,156,122 16.2% $4,635,929 $3,898,485 18.9%
Operating Income $ 89,235 $ 50,245 77.6% $ 281,088 $ 209,750 34.0%
Margin 6.6% 4.3% 230 bp 6.1% 5.4% 68 bp
Income from Continuing Operations $ 52,454 $ $29,399 78.4% $ 162,388 $ 125,336 29.6%
Diluted EPS from Continuing Operations $ 0.59 $ 0.33 78.8% $ 1.82 $ 1.40 30.0%
Net Income $ 51,700 $ $29,550 75.0% $ 151,326 $ 128,183 18.1%
Diluted EPS $ 0.58 $ 0.33 75.8% $ 1.70 $ 1.43 18.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Add: One-Time Charge Related to Influenza Vaccine Contract (1)
Net Sales -- -- -- --
Operating Income -- $13,246 -- $13,246
Income from Continuing Operations -- 8,358 -- 8,358
Diluted EPS from Continuing Operations -- 0.10 -- 0.10
Net Income -- 8,358 -- 8,358
Diluted EPS -- 0.10 -- 0.10
Comparable Basis
- ------------------------------------------------------------------------------------------------------------------------------------
Net Sales $1,343,141 $1,156,122 16.2% $4,635,929 $3,898,485 18.9%
Operating Income $ 89,235 $ 63,491 40.5% $ 281,088 $ 222,996 26.1%
Margin 6.6% 5.5% 115 bp 6.1% 5.7% 34 bp
Income from Continuing Operations $ 52,454 $ 37,757 38.9% $ 162,388 $ 133,694 21.5%
Diluted EPS from Continuing Operations $ 0.59 $ 0.43 37.2% $ 1.82 $ 1.50 21.3%
Net Income $ 51,700 $ 37,908 36.4% $ 151,326 $ 136,541 10.8%
Diluted EPS $ 0.58 $ 0.43 34.9% $ 1.70 $ 1.53 11.1%
- ------------------------------------------------------------------------------------------------------------------------------------
(1) In the fourth quarter of 2004, there was a $13.2 million pre-tax ($8.4
million post-tax) one-time charge associated with an agreement with Chiron
Corporation to distribute Fluvirin influenza vaccine. This one-time charge
was included in the "Selling, general and administrative" expense line on
the statements of income.
Use of Non-GAAP Measures: The above information includes financial measures that
are not calculated and presented in accordance with accounting principles
generally accepted in the United States ("GAAP"). The above table reconciles
operating income from continuing operations, net income and diluted earnings per
share, the Company's most directly comparable measure calculated and presented
in accordance with GAAP, to comparable amounts as adjusted to eliminate the
effect of a one-time item.
Management eliminated the effect of such one-time item to assist in evaluating
the underlying operational performance of the Company's business, excluding such
one-time item, over the periods presented. Management believes that this
presentation is appropriate and facilitates such an evaluation by management,
investors and analysts. This measure should be considered supplemental to, and
not a substitute for or superior to, financial measures calculated in accordance
with GAAP.
Note: Prior periods adjusted to reflect the effect of our discontinued
operations.
9
-more-
Exhibit C
Henry Schein, Inc.
Discontinued Operations 2005 Quarterly and Full Year Results
(in thousands, except per share data)
(unaudited)
Q1 2005 Q2 2005 Q3 2005 Q4 2005 YTD Q4 2005
----------- ----------- ----------- ----------- -----------
Sales $ 38,413 $ 37,192 $ 37,306 $ 39,845 $ 152,756
Income (loss) from discontinued operations (including
write-down of long-lived assets of $7.0 million,
after tax) $ 407 $ (762) $ (9,953) $ (754) $ (11,062)
Earnings (loss) from discontinued operations per share:
Basic $ 0.00 $ 0.00 $ (0.12) $ (0.01) $ (0.13)
Diluted $ 0.00 $ 0.00 $ (0.12) $ (0.01) $ (0.12)
10
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