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HENRY SCHEIN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except per share data) Years ended December 26, December 28, December 29, Operating Income: Health care distribution $ 436,173 $ 591,404 $ 490,988 Technology and value-added services 99,130 126,857 109,631 Total $ 535,303 $ 718,261 $ 600,619 Income from continuing operations before taxes and equity in earnings of affiliates: Health care distribution $ 400,343 $ 553,181 $ 429,429 Technology and value-added services 99,552 127,126 107,407 Total $ 499,895 $ 680,307 $ 536,836 Depreciation and Amortization: Health care distribution $ 142,712 $ 146,960 $ 122,767 Technology and value-added services 42,826 37,982 20,863 Total $ 185,538 $ 184,942 $ 143,630 Interest Income: Health care distribution $ 9,736 $ 15,352 $ 15,106 Technology and value-added services Total $ 9,842 $ 15,757 $ 15,491 Interest Expense: Health care distribution $ 41,307 $ 50,666 $ 76,006 Technology and value-added services Total $ 41,377 $ 50,792 $ 76,016 Income Tax Expense: Health care distribution $ 71,206 $ 129,381 $ 53,660 Technology and value-added services 24,168 30,134 53,772 Total $ 95,374 $ 159,515 $ 107,432 Purchases of Fixed Assets: Health care distribution $ 43,511 $ 69,095 $ 68,577 Technology and value-added services 5,318 7,124 2,706 Total $ 48,829 $ 76,219 $ 71,283 As of December 26, December 28, December 29, Total Assets: Health care distribution $ 6,503,089 $ 5,821,468 $ 5,288,662 Technology and value-added services 1,269,443 1,329,633 995,192 Discontinued operations - - 2,216,673 Total $ 7,772,532 $ 7,151,101 $ 8,500,527 HENRY SCHEIN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except per share data) The following table presents information about our operations by geographic area as of and for the three years ended December 26, 2020. |
Note 21 - Quarterly Information (Unaudited) The following tables present certain quarterly financial data: Quarters ended March 28, June 27, September 26, December 26, Net sales $ 2,428,871 $ 1,684,399 $ 2,840,146 $ 3,165,725 Gross profit 746,039 454,294 754,299 859,711 Restructuring costs (1) 4,787 15,934 6,992 4,380 Operating income (loss) 173,865 (7,433) 187,671 181,200 Net gain on sale of equity investments (2) - - - 1,572 Net income (loss) from continuing operations 133,847 (13,852) 151,813 146,629 Amounts attributable to Henry Schein, Inc. from continuing operations: Net income (loss) 130,543 (11,382) 141,726 141,921 Earnings (loss) per share attributable to Henry Schein, Inc. from continuing operations: Basic $ 0.91 $ (0.08) $ 1.00 $ 1.00 Diluted 0.91 (0.08) 0.99 0.99 Quarters ended March 30, June 29, September 28, December 28, Net sales $ 2,360,268 $ 2,447,827 $ 2,508,767 $ 2,668,941 Gross profit 751,690 767,431 761,167 810,598 Restructuring costs (credits) (1) 4,641 11,925 (802) (1,059) Operating income 172,441 162,288 187,198 196,334 Net gain on sale of equity investments (2) - - - 186,769 Net income from continuing operations 123,640 121,417 143,212 337,192 Amounts attributable to Henry Schein, Inc. from continuing operations: Net income 118,413 116,753 134,916 330,609 Earnings per share attributable to Henry Schein, Inc. from continuing operations: Basic $ 0.79 $ 0.79 $ 0.92 $ 2.27 Diluted 0.78 0.78 0.91 2.25 (1) See Note 12 - Plans of Restructuring for details of the restructuring costs (credits) incurred during our 2020 and 2019 fiscal years. |
)** 21.1 List of our Subsidiaries.+ 23.1 Consent of BDO USA, LLP.+ 31.1 Certification of our Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+ 31.2 Certification of our Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+ 32.1 Certification of our Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.+ 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.+ 101.SCH Inline XBRL Taxonomy Extension Schema Document+ 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document+ 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document+ 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document+ 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document+ The cover page of Henry Schein, Inc.’s Annual Report on Form 10-K for the year ended December 26, 2020, formatted in Inline XBRL (included within Exhibit 101 attachments).+ _________ + Filed or furnished herewith. |
Signature Capacity Date /s/ STANLEY M. BERGMAN Chairman, Chief Executive Officer February 17, 2021 Stanley M. Bergman and Director (principal executive officer) /s/ STEVEN PALADINO Executive Vice President, Chief Financial Officer February 17, 2021 Steven Paladino and Director (principal financial and accounting officer) /s/ JAMES P. BRESLAWSKI Vice Chairman, President and Director February 17, 2021 James P. Breslawski /s/ GERALD A. BENJAMIN Director February 17, 2021 Gerald A. Benjamin /s/ MARK E. MLOTEK Director February 17, 2021 Mark E. Mlotek /s/ MOHAMAD ALI Director February 17, 2021 Mohamad Ali /s/ BARRY J. ALPERIN Director February 17, 2021 Barry J. Alperin /s/ PAUL BRONS Director February 17, 2021 Paul Brons /s/ DEBORAH DERBY Director February 17, 2021 Deborah Derby /s/ SHIRA GOODMAN Director February 17, 2021 Shira Goodman /s/ JOSEPH L. HERRING Director February 17, 2021 Joseph L. Herring /s/ KURT P. KUEHN Director February 17, 2021 Kurt P. Kuehn /s/ PHILIP A. LASKAWY Director February 17, 2021 Philip A. Laskawy /s/ ANNE H. MARGULIES Director February 17, 2021 Anne H. Margulies /s/ CAROL RAPHAEL Director February 17, 2021 Carol Raphael /s/ E. DIANNE REKOW Director February 17, 2021 E. Dianne Rekow, DDS, Ph.D. /s/ BRADLEY T. SHEARES, PH. |
Quarterly results may also be materially adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our suppliers; • timing of the introduction of new products and services by our suppliers; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of supplier contracts or rebate programs; • supplier rebates based upon attaining certain growth goals; • changes in the way suppliers introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • uncertainties regarding potential significant breaches of data security or disruptions of our information technology systems; • unexpected regulatory actions, or government regulation generally; • exclusivity requirements with certain suppliers may prohibit us from distributing competitive products manufactured by other suppliers; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in shipping costs or service issues with our third-party shippers; • fluctuations in the value of foreign currencies; • restructuring costs; • the adoption or repeal of legislation; • changes in accounting principles; and • litigation or regulatory judgments, expenses or settlements. |
Quarterly results may also be materially adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our suppliers; • timing of the introduction of new products and services by our suppliers; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of supplier contracts or rebate programs; • supplier rebates based upon attaining certain growth goals; • changes in the way suppliers introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • uncertainties regarding potential significant breaches of data security or disruptions of our information technology systems; • unexpected regulatory actions, or government regulation generally; • exclusivity requirements with certain suppliers, which may prohibit us from distributing competitive products manufactured by other suppliers; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability, or product recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in shipping costs or service issues with our third-party shippers; • fluctuations in the value of foreign currencies; • restructuring costs; • the adoption or repeal of legislation; • changes in accounting principles; and • litigation or regulatory judgments, expenses or settlements. |
These uncertainties, include, among other things: • the United Kingdom’s vote to leave the European Union (generally referred to as Brexit) and any other similar referenda or actions by other European Union member countries (during 2019, approximately 3% of our consolidated net sales were invoiced to customers in the United Kingdom and approximately 20% of our consolidated net sales were invoiced to customers in Europe overall, including the U.K.); • election results; • changes to laws and policies governing foreign trade (including, without limitation, the United States-Mexico-Canada Agreement (USMCA) and other international trade agreements); • greater restrictions on imports and exports; • changes in laws and policies governing health care or data privacy; • tariffs and sanctions; • sovereign debt levels; • the inability of political institutions to effectively resolve actual or perceived economic, currency or budgetary crises or issues; • consumer confidence; • unemployment levels (and a corresponding increase in the uninsured and underinsured population); • changes in regulatory and tax regulations, including, without limitation, the Tax Act; • increases in interest rates; • availability of capital; • increases in fuel and energy costs; • the effect of inflation on our ability to procure products and our ability to increase prices over time; • changes in tax rates and the availability of certain tax deductions; • increases in health care costs; • the threat or outbreak of war, terrorism or public unrest; and • changes in laws and policies governing manufacturing, development and investment in territories and countries where we do business. |
Among other things, such laws, and the regulations promulgated thereunder: • regulate the storage and distribution, labeling, packaging, handling, reporting, record keeping, introduction, manufacturing and marketing of drugs, HCT/P products and medical devices; • subject us to inspection by the FDA and the DEA; • regulate the storage, transportation and disposal of certain of our products that are considered hazardous materials; • require us to advertise and promote our drugs and devices in accordance with applicable FDA requirements; • require registration with the FDA and the DEA and various state agencies; • require record keeping and documentation of transactions involving drug products; • require us to design and operate a system to identify and report suspicious orders of controlled substances to the DEA; • require us to manage returns of products that have been recalled and subject us to inspection of our recall procedures and activities; and • impose reporting requirements if a pharmaceutical, HCT/P product or medical device causes serious illness, injury or death. |
The risks that our global operations are subject to include, among other things: • difficulties and costs relating to staffing and managing foreign operations; • difficulties in establishing channels of distribution; • fluctuations in the value of foreign currencies (including, without limitation, in connection with Brexit); • longer payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions; • repatriation of cash from our foreign operations to the United States; • regulatory requirements; • anti-bribery, anti-corruption and laws pertaining to the accuracy of our internal books and records; • unexpected difficulties in importing or exporting our products; • imposition of import/export tariffs, quotas, sanctions or penalties; • difficulties and delays inherent in sourcing products and contract manufacturing in foreign markets; • limitations on our ability under local laws to protect our intellectual property; • unexpected regulatory, legal, economic and political changes in foreign markets; • changes in tax regulations that influence purchases of capital equipment; • civil disturbances, geopolitical turmoil, including terrorism, war or political or military coups; and • public health emergencies, including the Coronavirus (as defined below). |
Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: effects of a highly competitive and consolidating market; increased competition by third party commerce sites; our dependence on third parties for the manufacture and supply of our products; our dependence upon sales personnel, customers, suppliers and manufacturers; our dependence on our senior management; fluctuations in quarterly earnings; risks from expansion of customer purchasing power and multi-tiered costing structures; increases in shipping costs for our products or other service issues with our third-party shippers; general global macro-economic conditions; risks associated with currency fluctuations; risks associated with political and economic uncertainty; disruptions in financial markets; volatility of the market price of our common stock; changes in the health care industry; implementation of health care laws; failure to comply with regulatory requirements and data privacy laws; risks associated with our global operations; risks associated with the Coronavirus; risks associated with the United Kingdom’s withdrawal from the European Union; transitional challenges associated with acquisitions, dispositions and joint ventures, including the failure to achieve anticipated synergies/benefits; financial and tax risks associated with acquisitions, dispositions and joint ventures; litigation risks; new or unanticipated litigation developments and the status of litigation matters; the dependence on our continued product development, technical support and successful marketing in the technology segment; our dependence on third parties for certain technologically advanced components; risks from disruption to our information systems; cyberattacks or other privacy or data security breaches; certain provisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation. |
)** 21.1 List of our Subsidiaries.+ 23.1 Consent of BDO USA, LLP.+ 31.1 Certification of our Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+ 31.2 Certification of our Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+ 32.1 Certification of our Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.+ 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.+ 101.SCH Inline XBRL Taxonomy Extension Schema Document+ 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document+ 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document+ 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document+ 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document+ The cover page of Henry Schein, Inc.’s Annual Report on Form 10-K for the year ended December 28, 2019, formatted in Inline XBRL (included within Exhibit 101 attachments).+ _________ + Filed or furnished herewith. |
Signature Capacity Date /s/ STANLEY M. BERGMAN Chairman, Chief Executive Officer February 20, 2020 Stanley M. Bergman and Director (principal executive officer) /s/ STEVEN PALADINO Executive Vice President, Chief Financial February 20, 2020 Steven Paladino Officer and Director (principal financial and accounting officer) /s/ JAMES P. BRESLAWSKI Vice Chairman, Director February 20, 2020 James P. Breslawski /s/ GERALD A. BENJAMIN Director February 20, 2020 Gerald A. Benjamin /s/ MARK E. MLOTEK Director February 20, 2020 Mark E. Mlotek /s/ BARRY J. ALPERIN Director February 20, 2020 Barry J. Alperin /s/ PAUL BRONS Director February 20, 2020 Paul Brons /s/ SHIRA GOODMAN Director February 20, 2020 Shira Goodman /s/ JOSEPH L. HERRING Director February 20, 2020 Joseph L. Herring /s/ KURT P. KUEHN Director February 20, 2020 Kurt P. Kuehn /s/ PHILIP A. LASKAWY Director February 20, 2020 Philip A. Laskawy /s/ ANNE H. MARGULIES Director February 20, 2020 Anne H. Margulies /s/ CAROL RAPHAEL Director February 20, 2020 Carol Raphael /s/ E. DIANNE REKOW Director February 20, 2020 E. Dianne Rekow, DDS, Ph.D. /s/ BRADLEY T. SHEARES, PH. |
The medical practice management and electronic medical records market is very fragmented and we compete with numerous companies such as the NextGen division of Quality Systems, Inc., eClinicalWorks and Allscripts Healthcare Solutions, Inc. We also face significant competition internationally, where we compete on the basis of price and customer service against several large competitors, including the GACD Group, Pluradent AG & Co., Lifco AB, Planmeca Oy, Billericay Dental Supply Co. Ltd., National Veterinary Services Limited (Patterson Veterinary division of Patterson Companies, Inc.), Centaur Services Limited (MWI Animal Health division of AmerisourceBergen) and Alcyon SA, as well as a large number of dental, animal health and medical product distributors and manufacturers in Australia, Austria, Belgium, Brazil, Canada, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong SAR, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, South Africa, Spain, Sweden, Switzerland, Thailand and the United Kingdom. |
Quarterly results may also be materially adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our suppliers; • timing of the introduction of new products and services by our suppliers; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of supplier contracts or rebate programs; • supplier rebates based upon attaining certain growth goals; • changes in the way suppliers introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • uncertainties regarding potential significant breaches of data security or disruptions of our information technology systems; • unexpected regulatory actions, or government regulation generally; • exclusivity requirements with certain suppliers may prohibit us from distributing competitive products manufactured by other suppliers; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in shipping costs or service issues with our third-party shippers; • fluctuations in the value of foreign currencies; • restructuring costs; • the adoption or repeal of legislation; and • changes in accounting principles. |
Quarterly results may also be materially adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our suppliers; • timing of the introduction of new products and services by our suppliers; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of supplier contracts or rebate programs; • supplier rebates based upon attaining certain growth goals; • changes in the way suppliers introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • uncertainties regarding potential significant breaches of data security or disruptions of our information technology systems; • unexpected regulatory actions, or government regulation generally; • exclusivity requirements with certain suppliers may prohibit us from distributing competitive products manufactured by other suppliers; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in shipping costs or service issues with our third-party shippers; • fluctuations in the value of foreign currencies; • restructuring costs; • the adoption or repeal of legislation; and • changes in accounting principles. |
These uncertainties, include, among other things: • the United Kingdom’s vote to leave the European Union (generally referred to as Brexit) and any other similar referenda or actions by other European Union member countries (during 2016, approximately 7% of our consolidated net sales were invoiced to customers in the U.K. and approximately 26% of our consolidated net sales were invoiced to customers in Europe overall, including the U.K.); • election results; • changes to laws and policies governing foreign trade (including, without limitation, North American Free Trade Agreement (NAFTA) and other international trade agreements); • greater restrictions on imports and exports; • changes in laws and policies governing health care, including, without limitation possible repeal of the United States Health Care Reform Law; • tariffs and sanctions; • sovereign debt levels; • the inability of political institutions to effectively resolve actual or perceived economic, currency or budgetary crises or issues; • consumer confidence; • unemployment levels (and a corresponding increase in the uninsured and underinsured population); • changes in regulatory and tax regulations; • increases in interest rates; • availability of capital; • increases in fuel and energy costs; • changes in tax rates and the availability of certain tax deductions; • increases in health care costs; • the threat or outbreak of terrorism or public unrest; and • changes in laws and policies governing manufacturing, development and investment in territories and countries where we do business Additionally, changes in government, government debt and/or budget crises may lead to reductions in government spending in certain countries, which could reduce overall health care spending, and/or higher income or corporate taxes, which could depress spending overall. |
Among other things, such laws, and the regulations promulgated thereunder: • regulate the storage and distribution, labeling, packaging, handling, reporting, record keeping, introduction, manufacturing and marketing of drugs, HCT/P products and medical devices; • subject us to inspection by the FDA and the DEA; • regulate the storage, transportation and disposal of certain of our products that are considered hazardous materials; • require us to advertise and promote our drugs and devices in accordance with applicable FDA requirements; • require registration with the FDA and the DEA and various state agencies; • require record keeping and documentation of transactions involving drug products; • require us to design and operate a system to identify and report suspicious orders of controlled substances to the DEA; • require us to manage returns of products that have been recalled and subject us to inspection of our recall procedures and activities; and • impose reporting requirements if a pharmaceutical, HCT/P product or medical device causes serious illness, injury or death. |
The risks that our global operations are subject to include, among other things: • difficulties and costs relating to staffing and managing foreign operations; • difficulties in establishing channels of distribution; • fluctuations in the value of foreign currencies; • longer payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions; • repatriation of cash from our foreign operations to the United States; • regulatory requirements; • anti-bribery, anti-corruption and laws pertaining to the accuracy of our internal books and records; • unexpected difficulties in importing or exporting our products; • imposition of import/export tariffs, quotas, sanctions or penalties; • difficulties and delays inherent in sourcing products and contract manufacturing in foreign markets; • limitations on our ability under local laws to protect our intellectual property; • unexpected regulatory, legal, economic and political changes in foreign markets; • changes in tax regulations that influence purchases of capital equipment; • civil disturbances, geopolitical turmoil, including terrorism, war or political or military coups; and • public health emergencies. |
Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: effects of a highly competitive and consolidating market; our dependence on third parties for the manufacture and supply of our products; our dependence upon sales personnel, customers, suppliers and manufacturers; our dependence on our senior management; fluctuations in quarterly earnings; risks from expansion of customer purchasing power and multi-tiered costing structures; increases in shipping costs for our products or other service issues with our third-party shippers; general global macro-economic conditions; risks associated with currency fluctuations; risks associated with political and economic uncertainty; disruptions in financial markets; volatility of the market price of our common stock; changes in the health care industry; implementation of health care laws; failure to comply with regulatory requirements and data privacy laws; risks associated with our global operations; transitional challenges associated with acquisitions and joint ventures, including the failure to achieve anticipated synergies; financial risks associated with acquisitions and joint ventures; litigation risks; the dependence on our continued product development, technical support and successful marketing in the technology segment; increased competition by third party online commerce sites; risks from disruption to our information systems; cyberattacks or other privacy or data security breaches; certain provisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation. |
Quarterly results may also be materially adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our suppliers; • timing of the introduction of new products and services by our suppliers; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of supplier contracts or rebate programs; • supplier rebates based upon attaining certain growth goals; • changes in the way suppliers introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • uncertainties regarding potential significant breaches of data security or disruptions of our information technology systems; • unexpected regulatory actions, or government regulation generally; • exclusivity requirements with certain suppliers may prohibit us from distributing competitive products manufactured by other suppliers; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in shipping costs or service issues with our third-party shippers; • fluctuations in the value of foreign currencies; HENRY SCHEIN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (in thousands, except per share data) • restructuring costs; • the adoption or repeal of legislation; and • changes in accounting principles. |
The medical practice management and electronic medical records market is very fragmented and we compete with numerous companies such as the NextGen division of Quality Systems, Inc., eClinicalWorks and Allscripts Healthcare Solutions, Inc. We also face significant competition internationally, where we compete on the basis of price and customer service against several large competitors, including the GACD Group, Pluradent AG & Co., Lifco AB, Planmeca Oy, Billericay Dental Supply Co. Ltd., National Veterinary Services Limited (Patterson Veterinary division of Patterson Companies, Inc.), Centaur Services Limited (MWI Animal Health division of AmerisourceBergen) and Alcyon SA, as well as a large number of dental, animal health and medical product distributors and manufacturers in Australia, Austria, Belgium, Brazil, Canada, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong SAR, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, South Africa, Spain, Sweden, Switzerland, Thailand and the United Kingdom. |
Quarterly results may also be materially adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our suppliers; • timing of the introduction of new products and services by our suppliers; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of supplier contracts or rebate programs; • supplier rebates based upon attaining certain growth goals; • changes in the way suppliers introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • uncertainties regarding potential significant breaches of data security or disruptions of our information technology systems; • unexpected regulatory actions, or government regulation generally; • exclusivity requirements with certain suppliers may prohibit us from distributing competitive products manufactured by other suppliers; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in shipping costs or service issues with our third-party shippers; • fluctuations in the value of foreign currencies; • restructuring costs; • the adoption or repeal of legislation; and • changes in accounting principles. |
Quarterly results may also be materially adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our suppliers; • timing of the introduction of new products and services by our suppliers; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of supplier contracts or rebate programs; • supplier rebates based upon attaining certain growth goals; • changes in the way suppliers introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • uncertainties regarding potential significant breaches of data security or disruptions of our information technology systems; • unexpected regulatory actions, or government regulation generally; • exclusivity requirements with certain suppliers may prohibit us from distributing competitive products manufactured by other suppliers; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in shipping costs or service issues with our third-party shippers; • fluctuations in the value of foreign currencies; • restructuring costs; • the adoption or repeal of legislation; and • changes in accounting principles. |
Among other things, such laws, and the regulations promulgated thereunder: • regulate the storage and distribution, labeling, packaging, handling, reporting, record keeping, introduction, manufacturing and marketing of drugs, HCT/P products and medical devices; • subject us to inspection by the FDA and the DEA; • regulate the storage, transportation and disposal of certain of our products that are considered hazardous materials; • require us to advertise and promote our drugs and devices in accordance with applicable FDA requirements; • require registration with the FDA and the DEA and various state agencies; • require record keeping and documentation of transactions involving drug products; • require us to design and operate a system to identify and report suspicious orders of controlled substances to the DEA; • require us to manage returns of products that have been recalled and subject us to inspection of our recall procedures and activities; and • impose reporting requirements if a pharmaceutical, HCT/P product or medical device causes serious illness, injury or death. |
The risks that our global operations are subject to include, among other things: • difficulties and costs relating to staffing and managing foreign operations; • difficulties in establishing channels of distribution; • fluctuations in the value of foreign currencies; • longer payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions; • repatriation of cash from our foreign operations to the United States; • regulatory requirements; • anti-bribery, anti-corruption and laws pertaining to the accuracy of our internal books and records; • unexpected difficulties in importing or exporting our products; • imposition of import/export duties, quotas, sanctions or penalties; • difficulties and delays inherent in sourcing products and contract manufacturing in foreign markets; • limitations on our ability under local laws to protect our intellectual property; • unexpected regulatory, legal, economic and political changes in foreign markets; • changes in tax regulations that influence purchases of capital equipment; • civil disturbances, geopolitical turmoil, including terrorism, war or political or military coups; and • public health emergencies. |
Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: effects of a highly competitive and consolidating market; our dependence on third parties for the manufacture and supply of our products; our dependence upon sales personnel, customers, suppliers and manufacturers; our dependence on our senior management; fluctuations in quarterly earnings; risks from expansion of customer purchasing power and multi-tiered costing structures; increases in shipping costs for our products or other service issues with our third-party shippers; general global macroeconomic conditions; disruptions in financial markets; volatility of the market price of our common stock; changes in the health care industry; implementation of health care laws; failure to comply with regulatory requirements and data privacy laws; risks associated with our global operations; transitional challenges associated with acquisitions and joint ventures, including the failure to achieve anticipated synergies; financial risks associated with acquisitions and joint ventures; litigation risks; the dependence on our continued product development, technical support and successful marketing in the technology segment; increased competition by third party online commerce sites; risks from disruption to our information systems; cyberattacks or other privacy or data security breaches; certain provisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation. |
Quarterly results may also be materially adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our suppliers; • timing of the introduction of new products and services by our suppliers; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of supplier contracts or rebate programs; • supplier rebates based upon attaining certain growth goals; • changes in the way suppliers introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • uncertainties regarding potential significant breaches of data security or disruptions of our information technology systems; • unexpected regulatory actions, or government regulation generally; • exclusivity requirements with certain suppliers may prohibit us from distributing competitive products manufactured by other suppliers; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in shipping costs or service issues with our third-party shippers; HENRY SCHEIN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (in thousands, except per share data) Note 18 - Quarterly Information (Unaudited) - (Continued) • fluctuations in the value of foreign currencies; • restructuring costs; • the adoption or repeal of legislation; and • changes in accounting principles. |
Quarterly results may also be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • fluctuations in the value of foreign currencies; • restructuring costs; and • changes in accounting principles. |
Quarterly results may also be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • fluctuations in the value of foreign currencies; • restructuring costs; and • changes in accounting principles. |
Among other things, such laws, and the regulations promulgated thereunder: • regulate the storage and distribution, labeling, packaging, handling, reporting, record keeping, introduction, manufacturing and marketing of drugs, HCT/P products and medical devices; • subject us to inspection by the FDA and the DEA; • regulate the storage, transportation and disposal of certain of our products that are considered hazardous materials; • require us to advertise and promote our drugs and devices in accordance with applicable FDA requirements; • require registration with the FDA and the DEA and various state agencies; • require record keeping and documentation of transactions involving drug products; • require us to design and operate a system to identify and report suspicious orders of controlled substances to the DEA; • require us to manage returns of products that have been recalled and subject us to inspection of our recall procedures and activities; and • impose reporting requirements if a pharmaceutical, HCT/P product or medical device causes serious illness, injury or death. |
The risks that our global operations are subject to include, among other things: • difficulties and costs relating to staffing and managing foreign operations; • difficulties in establishing channels of distribution; • fluctuations in the value of foreign currencies; • longer payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions; • repatriation of cash from our foreign operations to the United States; • regulatory requirements; • anti-bribery, anti-corruption and laws pertaining to the accuracy of our internal books and records; • unexpected difficulties in importing or exporting our products; • imposition of import/export duties, quotas, sanctions or penalties; • difficulties and delays inherent in sourcing products and contract manufacturing in foreign markets; • limitations on our ability under local laws to protect our intellectual property; • unexpected regulatory, legal, economic and political changes in foreign markets; • changes in tax regulations that influence purchases of capital equipment; • civil disturbances, geopolitical turmoil, including terrorism, war or political or military coups; and • public health emergencies. |
Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: effects of a highly competitive market; our dependence on third parties for the manufacture and supply of our products; our dependence upon sales personnel, customers, suppliers and manufacturers; our dependence on our senior management; fluctuations in quarterly earnings; risks from expansion of customer purchasing power and multi-tiered costing structures; possible increases in the cost of shipping our products or other service issues with our third-party shippers; general global macro-economic conditions; disruptions in financial markets; possible volatility of the market price of our common stock; changes in the health care industry; implementation of health care laws; failure to comply with regulatory requirements and data privacy laws; risks associated with our global operations; transitional challenges associated with acquisitions and joint ventures, including the failure to achieve anticipated synergies; financial risks associated with acquisitions and joint ventures; litigation risks; the dependence on our continued product development, technical support and successful marketing in the technology segment; risks from challenges associated with the emergence of potential increased competition by third-party online commerce sites; risks from disruption to our information systems; certain provisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation. |
Quarterly results may also be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • fluctuations in the value of foreign currencies; • restructuring costs; and • changes in accounting principles. |
Quarterly results also may be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • restructuring costs; and • changes in accounting principles. |
Quarterly results may also be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • restructuring costs; and • changes in accounting principles. |
Among other things, such laws, and the regulations promulgated thereunder: • regulate the storage and distribution, labeling, packaging, handling, reporting, record keeping, introduction, manufacturing and marketing of drugs, HCT/P products and medical devices; • subject us to inspection by the FDA and the United States Drug Enforcement Administration; • regulate the storage, transportation and disposal of certain of our products that are considered hazardous materials; • require us to advertise and promote our drugs and devices in accordance with applicable FDA requirements; • require registration with the FDA and the United States Drug Enforcement Administration and various state agencies; • require record keeping and documentation of transactions involving drug products; • require us to design and operate a system to identify and report suspicious orders of controlled substances to the United States Drug Enforcement Agency; • require us to manage returns of products that have been recalled and subject us to inspection of our recall procedures and activities; and • impose reporting requirements if a pharmaceutical, HCT/P product or medical device causes serious illness, injury or death. |
The risks that our global operations are subject to include, among other things: • difficulties and costs relating to staffing and managing foreign operations; • difficulties in establishing channels of distribution; • fluctuations in the value of foreign currencies; • longer payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions; • repatriation of cash from our foreign operations to the United States; • regulatory requirements; • anti-bribery, anti-corruption and laws pertaining to the accuracy of our internal books and records; • unexpected difficulties in importing or exporting our products; • imposition of import/export duties, quotas, sanctions or penalties; • difficulties and delays inherent in sourcing products and contract manufacturing in foreign markets; • limitations on our ability under local laws to protect our intellectual property; • unexpected regulatory, legal, economic and political changes in foreign markets; • civil disturbances, geopolitical turmoil, including terrorism, war or political or military coups; and • public health emergencies. |
Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: effects of a highly competitive market; our dependence on third parties for the manufacture and supply of our products; our dependence upon sales personnel, customers, suppliers and manufacturers; our dependence on our senior management; fluctuations in quarterly earnings; risks from expansion of customer purchasing power and multi-tiered costing structures; possible increases in the cost of shipping our products or other service issues with our third-party shippers; general global macro-economic conditions; disruptions in financial markets; possible volatility of the market price of our common stock; changes in the health care industry; implementation of health care laws; failure to comply with regulatory requirements and data privacy laws; risks associated with our global operations; transitional challenges associated with acquisitions and joint ventures, including the failure to achieve anticipated synergies; financial risks associated with acquisitions and joint ventures; litigation risks; the dependence on our continued product development, technical support and successful marketing in the technology segment; risks from challenges associated with the emergence of potential increased competition by third-party online commerce sites; risks from disruption to our information systems; certain provisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation. |
Quarterly results also may be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • our ability to correctly identify customer needs and preferences and predict future needs and preferences; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • restructuring costs; and • changes in accounting principles. |
Quarterly results also may be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • restructuring costs; and • changes in accounting principles. |
Quarterly results may also be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • restructuring costs; and • changes in accounting principles. |
Among other things, such laws, and the regulations promulgated thereunder: • regulate the storage and distribution, labeling, packaging, handling, reporting, record keeping, introduction, manufacturing and marketing of drugs, HCT/P products and medical devices; • subject us to inspection by the United States Food and Drug Administration and the United States Drug Enforcement Administration; • regulate the storage, transportation and disposal of certain of our products that are considered hazardous materials; • require us to advertise and promote our drugs and devices in accordance with applicable United States Food and Drug Administration requirements; • require registration with the United States Food and Drug Administration and the United States Drug Enforcement Administration and various state agencies; • require record keeping and documentation of transactions involving drug products; • require us to design and operate a system to identify and report suspicious orders of controlled substances to the United States Drug Enforcement Agency; • require us to manage returns of products that have been recalled and subject us to inspection of our recall procedures and activities; and • impose reporting requirements if a pharmaceutical, HCT/P products or medical device causes serious illness, injury or death. |
The risks that our global operations are subject to include, among other things: • difficulties and costs relating to staffing and managing foreign operations; • difficulties in establishing channels of distribution; • fluctuations in the value of foreign currencies; • longer payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions; • repatriation of cash from our foreign operations to the United States; • regulatory requirements; • anti-bribery, anti-corruption and laws pertaining to the accuracy of our internal books and records; • unexpected difficulties in importing or exporting our products; • imposition of import/export duties, quotas, sanctions or penalties; • difficulties and delays inherent in sourcing products and contract manufacturing in foreign markets; • limitations on our ability under local laws to protect our intellectual property; • unexpected regulatory, legal, economic and political changes in foreign markets; • civil disturbances, geopolitical turmoil, including terrorism, war or political or military coups; and • public health emergencies. |
Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: effects of a highly competitive market; our dependence on third parties for the manufacture and supply of our products; our dependence upon sales personnel, customers, suppliers and manufacturers; our dependence on our senior management; fluctuations in quarterly earnings; risks from expansion of customer purchasing power and multi-tiered costing structures; possible increases in the cost of shipping our products or other service issues with our third-party shippers; general global macro-economic conditions; disruptions in financial markets; possible volatility of the market price of our common stock; changes in the health care industry; implementation of health care laws; failure to comply with regulatory requirements and data privacy laws; risks associated with our global operations; transitional challenges associated with acquisitions and joint ventures, including the failure to achieve anticipated synergies; financial risks associated with acquisitions and joint ventures; litigation risks; the dependence on our continued product development, technical support and successful marketing in the technology segment; risks from rapid technological change; risks from disruption to our information systems; certain provisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation. |
Quarterly results also may be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical and dental insurance programs; • general market and economic conditions, as well as those specific to the health care industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • restructuring costs; and • changes in accounting principles. |
Quarterly results also may be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical insurance program; • general economic conditions, as well as those specific to the healthcare industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • restructuring costs; and • changes in accounting principles. |
Quarterly results may also be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical insurance program; • general economic conditions, as well as those specific to the healthcare industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • restructuring costs; and • changes in accounting principles. |
Among other things, such laws, and the regulations promulgated thereunder: • regulate the storage and distribution, labeling, packaging, handling, reporting, record keeping, introduction, manufacturing and marketing of drugs, HCT/P products and medical devices; • subject us to inspection by the United States Food and Drug Administration and the United States Drug Enforcement Administration; • regulate the storage, transportation and disposal of certain of our products that are considered hazardous materials; • require registration with the United States Food and Drug Administration and the United States Drug Enforcement Administration and various state agencies; • require record keeping and documentation of transactions involving drug products; • require us to design and operate a system to identify and report suspicious orders of controlled substances to the United States Drug Enforcement Agency; • require us to manage returns of products that have been recalled and subject us to inspection of our recall procedures and activities; and • impose reporting requirements if a pharmaceutical, HCT/P products or medical device causes serious illness, injury or death. |
Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: effects of a highly competitive market; our dependence on third parties for the manufacture and supply of our products; our dependence upon sales personnel, customers, suppliers and manufacturers; our dependence on our senior management; fluctuations in quarterly earnings; risks from expansion of customer purchasing power and multi-tiered costing structures; possible increases in the cost of shipping our products or other service issues with our third-party shippers; general global macro-economic conditions; disruptions in financial markets; possible volatility of the market price of our common stock; changes in the healthcare industry; implementation of healthcare laws; failure to comply with regulatory requirements and data privacy laws; risks associated with our international operations; transitional challenges associated with acquisitions and joint ventures, including the failure to achieve anticipated synergies; financial risks associated with acquisitions and joint ventures; litigation risks; the dependence on our continued product development, technical support and successful marketing in the technology segment; risks from rapid technological change; risks from disruption to our information systems; certain provisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation. |
HENRY SCHEIN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (in thousands, except per share data) Note 10 - Plans of Restructuring - (Continued) The following table shows the amounts expensed and paid for restructuring costs that were incurred during our 2011, 2010 and 2009 fiscal years and the remaining accrued balance of restructuring costs as of December 31, 2011, which is included in Accrued expenses: Other and Other liabilities within our consolidated balance sheet: The following table shows, by reportable segment, the restructuring costs incurred during 2011, 2010 and 2009 and the remaining accrued balance of restructuring costs as of December 31, 2011, December 25, 2010 and December 26, 2009: HENRY SCHEIN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (in thousands, except per share data) Note 11 - Earnings Per Share Basic earnings per share is computed by dividing net income attributable to Henry Schein, Inc. by the weighted-average number of common shares outstanding for the period. |
Quarterly results also may be adversely affected by a variety of other factors, including: • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • timing of the release of upgrades and enhancements to our technology-related products and services; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • costs of developing new applications and services; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • costs related to acquisitions and/or integrations of technologies or businesses; • costs associated with our self-insured medical insurance program; • general economic conditions, as well as those specific to the healthcare industry and related industries; • our success in establishing or maintaining business relationships; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; • increases in the cost of shipping or service issues with our third-party shippers; • restructuring costs; and • changes in accounting principles. |
Quarterly results also may be adversely affected by a variety of other factors, including: • costs of developing new applications and services; • costs related to acquisitions and/or integrations of technologies or businesses; • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • general economic conditions, as well as those specific to the healthcare industry and related industries; • timing of the release of upgrades and enhancements to our technology-related products and services; • our success in establishing or maintaining business relationships; • restructuring costs; • changes in accounting principles; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; and • increases in the cost of shipping or service issues with our third-party shippers. |
Among other things, such laws, and the regulations promulgated thereunder: · regulate the storage and distribution, labeling, packaging, handling, reporting, record keeping, introduction, manufacturing and marketing of drugs, HCT/P products and medical devices; · subject us to inspection by the United States Food and Drug Administration and the United States Drug Enforcement Administration; · regulate the storage, transportation and disposal of certain of our products that are considered hazardous materials; · require registration with the United States Food and Drug Administration and the United States Drug Enforcement Administration and various state agencies; · require record keeping and documentation of transactions involving drug products; · require us to design and operate a system to identify and report suspicious orders of controlled substances to the United States Drug Enforcement Agency; · require us to manage returns of products that have been recalled and subject us to inspection of our recall procedures and activities; and · impose reporting requirements if a pharmaceutical, HCT/P products or medical device causes serious illness, injury or death. |
Quarterly results may also be adversely affected by a variety of other factors, including: · costs of developing new applications and services; · costs related to acquisitions and/or integrations of technologies or businesses; · timing and amount of sales and marketing expenditures; · timing of pricing changes offered by our vendors; · timing of the introduction of new products and services by our vendors; · changes in or availability of vendor contracts or rebate programs; · vendor rebates based upon attaining certain growth goals; · changes in the way vendors introduce or deliver products to market; · exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; · loss of sales representatives; · general economic conditions, as well as those specific to the healthcare industry and related industries; · timing of the release of upgrades and enhancements to our technology-related products and services; · our success in establishing or maintaining business relationships; · restructuring costs; · changes in accounting principles; · unexpected difficulties in developing and manufacturing products; · product demand and availability or recalls by manufacturers; · exposure to product liability and other claims in the event that the use of the products we sell results in injury; and · increases in the cost of shipping or service issues with our third-party shippers. |
Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: recently enacted healthcare legislation; effects of a highly competitive market; changes in the healthcare industry; changes in regulatory requirements; risks from expansion of customer purchasing power and multi-tiered costing structures; 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; risks from disruption to our information systems; general economic conditions; decreased customer demand and changes in vendor credit terms; disruptions in financial markets; our dependence upon sales personnel, manufacturers and 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; 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. |
Quarterly results may also be adversely affected by a variety of other factors, including: • costs of developing new applications and services; • costs related to acquisitions and/or integrations of technologies or businesses; • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • general economic conditions, as well as those specific to the healthcare industry and related industries; • timing of the release of upgrades and enhancements to our technology-related products and services; • our success in establishing or maintaining business relationships; • restructuring costs; • changes in accounting principles; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; and • increases in the cost of shipping or service issues with our third-party shippers. |
Quarterly results also may be adversely affected by a variety of other factors, including: • costs of developing new applications and services; • costs related to acquisitions and/or integrations of technologies or businesses; • timing and amount of sales and marketing expenditures; • timing of pricing changes offered by our vendors; • timing of the introduction of new products and services by our vendors; • changes in or availability of vendor contracts or rebate programs; • vendor rebates based upon attaining certain growth goals; • changes in the way vendors introduce or deliver products to market; • exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; • loss of sales representatives; • changes in accounting principles; • unexpected difficulties in developing and manufacturing products; • product demand and availability or recalls by manufacturers; • exposure to product liability and other claims in the event that the use of the products we sell results in injury; and • increases in the cost of shipping or service issues with our third-party shippers. |
Among other things, such laws, and the regulations promulgated thereunder: · regulate the storage and distribution, labeling, packaging, handling, reporting, record keeping, introduction, manufacturing and marketing of drugs, HCT/P and medical devices; · subject us to inspection by the United States Food and Drug Administration and the United States Drug Enforcement Administration; · regulate the storage, transportation and disposal of certain of our products that are considered hazardous materials; · require registration with the United States Food and Drug Administration and the United States Drug Enforcement Administration and various state agencies; · require record keeping and documentation of transactions involving drug products; · require us to design and operate a system to identify and report suspicious orders of controlled substances to the United States Drug Enforcement Agency; · require us to manage returns of products that have been recalled and subject us to inspection of our recall procedures and activities; and · impose reporting requirements if a pharmaceutical, HCT/P or medical device causes serious illness, injury or death. |
Quarterly results may also be adversely affected by a variety of other factors, including: · costs of developing new applications and services; · costs related to acquisitions and/or integrations of technologies or businesses; · timing and amount of sales and marketing expenditures; · timing of pricing changes offered by our vendors; · timing of the introduction of new products and services by our vendors; · changes in or availability of vendor contracts or rebate programs; · vendor rebates based upon attaining certain growth goals; · changes in the way vendors introduce or deliver products to market; · exclusivity requirements with certain vendors may prohibit us from distributing competitive products manufactured by other vendors; · loss of sales representatives; · general economic conditions, as well as those specific to the healthcare industry and related industries; · timing of the release of upgrades and enhancements to our technology-related products and services; · our success in establishing or maintaining business relationships; · restructuring charges; · changes in accounting principles; · unexpected difficulties in developing and manufacturing products; · product demand and availability or recalls by manufacturers; · exposure to product liability and other claims in the event that the use of the products we sell results in injury; and · increases in the cost of shipping or service issues with our third-party shippers. |
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; effects of a highly competitive market; changes in the healthcare industry; changes in regulatory requirements; risks from expansion of customer purchasing power and multi-tiered costing structures; 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; risks from disruption to our information systems; our dependence upon sales personnel, manufacturers and 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; 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. |
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. |
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 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 trouble 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. |
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 us; financial 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; 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 trouble 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. |
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 us; financial 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; 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 trouble with our third-party shippers; risks from rapid technological change; risks from potential increases in variable interest rates; financial risks associated with acquisitions; 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. |
HENRY SCHEIN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (In thousands, except share and per share data) Note 11-Segment and Geographic Data - (Continued) HENRY SCHEIN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (In thousands, except share and per share data) Note 11-Segment and Geographic Data-(Continued) The following table reconciles segment totals to consolidated totals as of and for the three years ended December 25, 2004: The following table sets forth our net sales by principal categories of products offered by our healthcare distribution and technology segments and certain top selling types of products in each category: (1) Includes x-ray products, infection control, handpieces, preventatives, impression materials, composites and anesthetics HENRY SCHEIN, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (In thousands, except share and per share data) Note 11-Segment and Geographic Data-(Continued) (2) Includes dental chairs, delivery units and lights, x-rays, equipment repair and high-tech equipment (3) Includes teeth, dental implants, composites, gypsum, acrylics, articulators and abrasives (4) Includes branded and generic pharmaceuticals, surgical products, diagnostic tests, vaccines, infection control products, x-ray products and vitamins (5) Includes branded and generic pharmaceuticals, surgical products and dental products (6) Includes software and related products and other value-added products, including financial products and continuing education The following table presents information about us by geographic area as of, and for the three years ended, December 25, 2004. |
10.5 Separation Agreement dated as of September 30, 1994 by and between us, Schein Pharmaceutical, Inc. and Schein Holdings, Inc. 10.6 Restructuring Agreement dated September 30, 1994 among Schein Holdings, Inc., us, the Estate of Jacob M. Schein, Marvin H. Schein, the Trust established by Marvin H. Schein under Trust Agreement dated December 31, 1993, the Trust established by Marvin H. Schein under Trust Agreement dated September 9, 1994, the Charitable Trust established by Marvin H. Schein under Trust Agreement dated September 12, 1994, Pamela Schein, Pamela Joseph, the Trust established by Pamela Joseph under Trust Agreement dated February 9, 1994, the Trusts under Articles Third and Fourth of the Will of Jacob M. Schein; Stanley M. Bergman, the Trust established by Stanley M. Bergman under Trust Agreement dated September 15, 1994, Martin Sperber, the Trust established by Martin Sperber under Trust Agreement dated December 31, 1993, and the Trust established by Martin Sperber under Trust Agreement dated September 19, 1994. |
10.5 Separation Agreement dated as of September 30, 1994 by and between the Company, Schein Pharmaceutical, Inc. and Schein Holdings, Inc. 10.6 Restructuring Agreement dated September 30, 1994 among Schein Holdings, Inc., the Company, the Estate of Jacob M. Schein, Marvin H. Schein, the Trust established by Marvin H. Schein under Trust Agreement dated December 31, 1993, the Trust established by Marvin H. Schein under Trust Agreement dated September 9, 1994, the Charitable Trust established by Marvin H. Schein under Trust Agreement dated September 12, 1994, Pamela Schein, Pamela Joseph, the Trust established by Pamela Joseph under Trust Agreement dated February 9, 1994, the Trusts under Articles Third and Fourth of the Will of Jacob M. Schein; Stanley M. Bergman, the Trust established by Stanley M. Bergman under Trust Agreement dated September 15, 1994, Martin Sperber, the Trust established by Martin Sperber under Trust Agreement dated December 31, 1993, and the Trust established by Martin Sperber under Trust Agreement dated September 19, 1994. |
PRODUCTS The following chart sets forth the principal categories of products offered by the Company's healthcare distribution and technology businesses and certain top selling types of products in each category, with the percentage of 2001 consolidated net sales in parenthesis: - -------------------------------------------------------------------------------- HEALTHCARE DISTRIBUTION (97.2%) - -------------------------------------------------------------------------------- ----------------------------------------- Dental Products (53.6%) ----------------------------------------- Consumable Dental Products and Small Large Dental Dental Laboratory Equipment (40.9%) Equipment (9.7%) Products (3.0%) - ------------------------- ----------------------- -------------------------- X-Ray Products; Infection Dental Chairs; Delivery Teeth; Composites; Gypsum; Control; Handpieces; Units and Lights; Acrylics; Articulators; Preventatives; X-Rays; and Equipment and Abrasives Impression Materials; Repair Composites and Anesthetics ------------------------------------ ----------------------------------- Medical Products (39.8%) Veterinary Products (3.8%) ------------------------------------ ----------------------------------- Branded and Generic Pharmaceuticals; Branded and Generic Surgical Products; Diagnostic Tests; Pharmaceuticals; Surgical Products; Infection Control; X-Ray Products; and Dental Products and Vitamins - -------------------------------------------------------------------------------- TECHNOLOGY AND OTHER VALUE-ADDED PRODUCTS AND SERVICES (2.8%) - -------------------------------------------------------------------------------- Software and Related Products and Other Value-Added Products, including Financial Products and Continuing Education The percentage of 2000 and 1999 net sales was as follows: consumable dental products and small equipment, 43.5% and 45.2%, respectively; large dental equipment, 9.7% and 9.7%, respectively; dental laboratory products, 3.0% and 3.0%, respectively; medical products, 36.9% and 35.2%, respectively; veterinary products, 4.1% and 4.0%, respectively; and technology and other value-added products and services, 2.8% and 2.9%, respectively. |
These risks and uncertainties include, but are not limited to, the effect of economic and market conditions, the impact of the consolidation of healthcare practitioners, the impact of healthcare reform, opportunities for acquisitions and the Company's ability to effectively integrate acquired companies, the acceptance and quality of software products, acceptance and ability to manage operations in foreign markets, the ability to maintain favorable supplier arrangements and relationships, possible disruptions in the Company's computer systems or telephone systems, possible increases in shipping rates or interruptions in shipping service, the level and volatility of interest rates and currency values, economic and political conditions in international markets, including civil unrest, government changes and restriction on the ability to transfer capital across borders, the impact of current or pending legislation, regulation and changes in accounting standards and taxation requirements, environmental laws in domestic and foreign jurisdictions, as well as certain other risks described above in this ITEM 1 and below in ITEM 3, Legal Proceedings and in ITEM 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. |
PROPERTIES The Company owns or leases the following properties: Approximate Lease Own or Square Expiration Property Location Lease Footage Date - ------------------------ -------------------- ----- ---------- ------------- Corporate Headquarters.. Melville, NY (1) Lease 105,000 December 2005 Corporate Headquarters.. Melville, NY Lease 67,000 November 2005 Distribution Center..... Denver, PA Lease 413,000 February 2013 Distribution Center..... Pelham, NY (2) Lease 108,000 July 2007 Distribution Center..... Jacksonville, FL (3) Lease 136,000 December 2009 Distribution Center..... Secaucus, NJ Lease 138,000 November 2008 Distribution Center..... Indianapolis, IN (3) Own 287,000 N/A Distribution Center..... Indianapolis, IN Lease 225,000 April 2002 Distribution Center..... West Allis, WI Lease 106,000 October 2011 Distribution Center..... Grapevine, TX Lease 132,000 July 2008 Distribution Center..... Sparks, NV Lease 115,000 June 2003 Distribution Center..... United Kingdom Lease 85,000 August 2005 Distribution Center..... Gallin, Germany Own 172,000 N/A (1) The Company purchased this facility on January 10, 2002. |
HENRY SCHEIN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (In thousands, except per share data) NOTE 2--EARNINGS PER SHARE A reconciliation of shares used in calculating basic and diluted earnings per share follows: Years ended ---------------------------------------- December 29, December 30, December 25, 2001 2000 1999 ------------ ------------ ------------ Basic ......................... 42,366 41,244 40,585 Effect of assumed conversion of employee stock options ... 1,179 763 853 ------ ------ ------ Diluted ....................... 43,545 42,007 41,438 ====== ====== ====== Options to purchase approximately 1,114, 3,011, and 2,485 shares of common stock at prices ranging from $35.50 to $46.00, $19.73 to $46.00, and $24.56 to $46.00 per share that were outstanding during 2001, 2000, and 1999, respectively, were not included in the computation of diluted earnings per share for each of the respective years because the options' exercise prices exceeded the fair market value of the Company's common stock. |
NOTE 10--TAXES ON INCOME Taxes on income are based on income before taxes on income, minority interest and equity in earnings (losses) of affiliates as follows: Years ended --------------------------------------------------- December 29, December 30, December 25, 2001 2000 1999 ------------ ------------ ------------ Domestic ................ $ 140,675 $ 102,777 $ 84,877 Foreign ................. (324) (6,243) 4,906 --------- --------- --------- Total .............. $ 140,351 $ 96,534 $ 89,783 ========= ========= ========= The provision (benefit) for taxes on income was as follows: Years ended ------------------------------------------ December 29, December 30, December 25, 2001 2000 1999 ------------ ------------ ------------ Current tax expense: U.S. Federal ................. $ 46,225 $ 33,989 $ 28,137 State and local .............. 3,806 2,882 5,579 Foreign ...................... 1,607 614 1,860 -------- -------- -------- Total current ........... 51,638 37,485 35,576 -------- -------- -------- Deferred tax expense (benefit): U.S. Federal ................. (162) (1,046) 954 State and local .............. 234 90 (1,338) Foreign ...................... 220 (379) 397 -------- -------- -------- Total deferred .......... 292 (1,335) 13 -------- -------- -------- Total provision ......... $ 51,930 $ 36,150 $ 35,589 ======== ======== ======== HENRY SCHEIN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (In thousands, except share data) NOTE 10--TAXES ON INCOME--(CONTINUED) The tax effects of temporary differences that give rise to the Company's deferred tax asset (liability) are as follows: The net deferred tax asset is realizable as the Company has sufficient taxable income in prior years to realize the tax benefit for deductible temporary differences. |
HENRY SCHEIN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (In thousands, except share data) NOTE 15--SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest and income taxes amounted to the following: Years ended ------------------------------------------------ December 29, December 30, December 25, 2001 2000 1999 ------------ ------------ ------------ Interest............ $ 17,541 $ 19,810 $ 19,528 Income taxes........ $ 37,222 $ 28,219 $ 23,266 The fair value of assets acquired through business acquisitions is indicated in the following table: Years ended ------------------------------------------ December 29, December 30, December 25, 2001 2000 1999 ------------ ------------ ------------ Fair value of assets acquired, excluding cash ........ $ 10,074 $ 6,838 $239,278 Less liabilities assumed and created upon acquisition .... 1,486 -- 106,726 -------- -------- -------- Net cash paid ........................ $ 8,588 $ 6,838 $132,552 ======== ======== ======== HENRY SCHEIN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (In thousands, except share data) NOTE 16--QUARTERLY INFORMATION (UNAUDITED) The following presents certain unaudited quarterly financial data: The Company's business is subject to seasonal and other quarterly influences. |
E. MLOTEK Director March 19, 2002 - ----------------------- Mark E. Mlotek /s/ BARRY ALPERIN Director March 19, 2002 - ----------------------- Barry Alperin /s/ PAMELA JOSEPH Director March 19, 2002 - ----------------------- Pamela Joseph /s/ DONALD J. KABAT Director March 19, 2002 - ----------------------- Donald J. Kabat /s/ PHILIP LASKAWY Director March 19, 2002 - ----------------------- Philip Laskawy /s/ NORMAN MATTHEWS Director March 19, 2002 - ----------------------- Norman Matthews /s/ MARVIN H. SCHEIN Director March 19, 2002 - ----------------------- Marvin H. Schein /s/ IRVING SHAFRAN Director March 19, 2002 - ----------------------- Irving Shafran REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors and Stockholders Henry Schein, Inc. Melville, New York The audits referred to in our report dated March 1, 2002 relating to the consolidated financial statements of Henry Schein, Inc. and subsidiaries, which is contained in ITEM 8 of the Form 10-K included the audit of the financial statement schedule listed in the accompanying index. |
These risks and uncertainties include, but are not limited to, the effect of economic and market conditions, the impact of the consolidation of healthcare practitioners, the impact of healthcare reform, opportunities for acquisitions and the Company's ability to effectively integrate acquired companies, the acceptance and quality of software products, acceptance and ability to manage operations in foreign markets, the ability to maintain favorable supplier arrangements and relationships, possible disruptions in the Company's computer systems or telephone systems, possible increases in shipping rates or interruptions in shipping service, the level and volatility of interest rates and currency values, economic and political conditions in international markets, including civil unrest, government changes and restriction on the ability to transfer capital across borders, the impact of current or pending legislation, regulation and changes in accounting standards and taxation requirements, environmental laws in domestic and foreign jurisdictions, as well as certain other risks described above in this ITEM 1 and below in ITEM 3, Legal Proceedings and in ITEM 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. |
These risks and uncertainties include, but are not limited to, the effect of economic and market conditions, the impact of the consolidation of healthcare practitioners, the impact of healthcare reform, opportunities for acquisitions and the Company's ability to effectively integrate acquired companies, the acceptance and quality of software products, acceptance and ability to manage operations in foreign markets, the ability to maintain favorable supplier arrangements and relationships, possible disruptions in the Company's computer systems or telephone systems, possible increases in shipping rates or interruptions in shipping service, the level and volatility of interest rates and currency values, economic and political conditions in international markets, including civil unrest, government changes and restriction on the ability to transfer capital across borders, the impact of current or pending legislation, regulation and changes in accounting standards and taxation requirements, environmental laws in domestic and foreign jurisdictions, as well as certain other risks described above in this ITEM under "Competition" and "Government Regulation", and below in ITEM 3 in "Legal Proceedings" and in ITEM 7 in "Management's Discussion and Analysis of Financial Condition and Results of Operations". |
Combined financial data for substantially all of these companies are as follows: HENRY SCHEIN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (In thousands, except share data) Note 6-Business Acquisitions The Company has completed the acquisition of 38 healthcare distribution and technology businesses between 1997 and 1999, the most significant of which were; (i) in transactions accounted for under the purchase method of accounting during 1999; General Injectables and Vaccines, Inc. ("GIV") through the purchase of all of the outstanding common stock of Biological Popular Culture, Inc., a leading independent direct marketer of vaccines and other injectables to office based practitioners throughout the United States; and the Heiland Group GmbH ("Heiland"), the largest direct marketer of healthcare supplies to the medical, dental, and veterinarian office-based practitioners, in Germany; and (ii) in transactions accounted for under the pooling of interests method of accounting during 1998 and 1997, respectively; the H. Meer Dental Supply Co., Inc, ("Meer") a distributor of consumable dental supplies and equipment with sales and service centers located throughout the United States; Sullivan Dental Products, Inc. ("Sullivan"), distributor of consumable dental supplies and dental equipment with 52 sales and service centers located throughout the United States; Micro Bio-Medics, Inc. ("MBMI"), a distributor of medical supplies to physicians and hospitals as well as to other healthcare professionals nationwide; and Dentrix Dental Systems, Inc. ("Dentrix"), a leading provider of clinically-based dental practice management systems. |
These risks and uncertainties include, but are not limited to, the effect of economic and market conditions, the impact of the consolidation of healthcare practitioners, the impact of healthcare reform, opportunities for acquisitions and the Company's ability to effectively integrate acquired companies, the acceptance and quality of software products, acceptance and ability to manage operations in foreign markets, the ability to maintain favorable supplier arrangements and relationships, possible disruptions in the Company's computer systems or telephone systems, the Company's ability and its customers' and suppliers' ability to replace, modify or upgrade computer programs in ways that adequately address the Year 2000 issue, possible increases in shipping rates or interruptions in shipping service, the level and volatility of interest rates and currency values, economic and political conditions in international markets, including civil unrest, government changes and restriction on the ability to transfer capital across borders, the impact of current or pending legislation, regulation and changes in accounting standards and taxation requirements, environmental laws in domestic and foreign juristictions, as well as certain other risks described above in this Item under "Competition" and "Government Regulation," and below in Item 3 in "Legal Proceedings" and in Item 7 in "Management's Discussion and Analysis of Financial Condition and Results of Operations." |
(2) Includes: (a) for 1995, non-cash special management compensation charges of $17.5 million arising from final mark-to-market adjustments (reflecting an increase in estimated market value from 1994 to the initial public offering price of $16.00 per share) for stock grants made to an executive officer of the Company in 1992 and other stock issuances made to certain other senior management of the Company (because of certain repurchase features which expired with the initial public offering), an approximate $2.8 million non-cash special management compensation charge (also based on the initial public offering price of $16.00 per share) relating to compensatory options granted in 1995, and a cash payment of $0.5 million for additional income taxes resulting from such stock issuances; and (b) for 1994, non-cash special management compensation arising from accelerated amortization of deferred compensation arising from the 1992 stock grants to an executive officer of the Company of $17.3 million, which included a 1994 mark-to-market adjustment (because of the repurchase features referred to above) of $9.1 million, due to the resolution, with the closing of the Reorganization, of certain contingencies surrounding the issuance of the stock grants, non-cash special management compensation charges of $1.6 million (net of prior accruals of approximately $1.9 million under an executive incentive plan) arising from stock issuances to certain other senior management of the Company, valued at $3.5 million, and cash payments for income taxes of approximately $2.4 million resulting from these stock issuances and $0.3 million for additional income taxes resulting from the 1992 stock grants. |
Combined financial data for substantially all of these companies are as follows: December 26, December 27, 1998 1997 ------------ ------------ Current assets............................ $51,683 $39,688 Total assets.............................. 76,238 56,239 Liabilities............................... 57,356 35,753 Stockholders equity....................... 18,882 20,486 HENRY SCHEIN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except share data) NOTE 6--BUSINESS ACQUISITIONS The Company has completed the acquisition of 49 healthcare distribution and technology businesses between 1996 and 1998, the most significant of which were; the H. Meer Dental Supply Co., Inc, ("Meer") a distributor of consumable dental supplies and equipment with sales and service centers located throughout the United States, Sullivan Dental Products, Inc. ("Sullivan"), a distributor of consumable dental supplies and dental equipment through 52 sales and service centers located throughout the United States, Micro Bio-Medics, Inc. ("MBMI"), a distributor of medical supplies to physicians and hospitals as well as to other healthcare professionals nationwide, and Dentrix Dental Systems, Inc. ("Dentrix"), a leading provider of clinically-based dental practice management systems, in merger transactions accounted for as poolings of interests. |
HENRY SCHEIN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except share data) NOTE 9--TAXES ON INCOME Taxes on income are based on income before taxes on income, minority interest and equity in earnings of affiliates as follows: The provision for taxes on income was as follows: HENRY SCHEIN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except share data) NOTE 9--TAXES ON INCOME (Continued) The tax effects of temporary differences that give rise to the Company's deferred tax asset (liability) are as follows: December 26, December 27, 1998 1997 ------------ ------------ Current deferred tax assets: Inventory, premium coupon redemptions and accounts receivable valuation allowances.............................. $ 6,645 $ 4,145 Uniform capitalization adjustments to inventories.............................. 2,613 2,838 Other accrued liabilities....................... 5,274 6,340 ------- ------- Total current deferred tax asset .................. 14,532 13,323 ------- ------- Non-current deferred tax asset (liability): Property and equipment.......................... (3,581) (2,591) Provision for other long-term liabilities....... (2,721) (1,573) Net operating loss carryforward................. 91 175 Net operating losses of foreign subsidiaries.... 2,482 2,375 ------- ------- Total non-current deferred tax liability........... (3,729) (1,614) Valuation allowance for non-current deferred tax assets............................... (2,549) (2,421) ------- ------- Net non-current deferred tax liabilities........... (6,278) (4,035) ------- ------- Net deferred tax asset............................. $ 8,254 $ 9,288 ======= ======= The net deferred tax asset is realizable as the Company has sufficient taxable income in prior years to realize the tax benefit for deductible temporary differences. |
HENRY SCHEIN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except share data) NOTE 14--SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest and income taxes amounted to the following: Years Ended ------------------------------------------- December 26, December 27, December 28, 1998 1997 1996 ------------ ------------ ------------ Interest.......................... $10,047 $ 8,354 $ 5,710 Income taxes...................... $15,420 $13,055 $14,791 In conjunction with business acquisitions, the Company used cash as follows: Years Ended ------------------------------------------- December 26, December 27, December 28, 1998 1997 1996 ------------ ------------ ------------ Fair value of assets acquired, excluding cash.................. $22,725 $74,035 $62,149 Less liabilities assumed and created upon acquisition........ 8,842 31,768 29,927 ------- ------- ------- Net cash paid..................... $13,883 $42,267 $32,222 ======= ======= ======= HENRY SCHEIN, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except share data) NOTE 15--QUARTERLY INFORMATION (Unaudited) The following presents certain unaudited quarterly financial data. |
- ---------- (1) Includes: (a) for 1995, non-cash special management compensation charges of $17.5 million arising from final mark-to-market adjustments (reflecting an increase in estimated market value from 1994 to the initial public offering price of $16.00 per share) for stock grants made to an executive officer of the Company in 1992 and other stock issuances made to certain other senior management of the Company (because of certain repurchase features which expired with the initial public offering), an approximate $2.8 million non-cash special management compensation charge (also based on the initial public offering price of $16.00 per share) relating to compensatory options granted in 1995, and a cash payment of $0.5 million for additional income taxes resulting from such stock issuances; (b) for 1994, non-cash special management compensation arising from accelerated amortization of deferred compensation arising from the 1992 stock grants to an executive officer of the Company of $17.3 million, which included a 1994 mark-to-market adjustment (because of the repurchase features referred to above) of $9.1 million, due to the resolution, with the closing of the Reorganization, of certain contingencies surrounding the issuance of the stock grants, non-cash special management compensation charges of $1.6 million (net of prior accruals of approximately $1.9 million under an executive incentive plan) arising from stock issuances to certain other senior management of the Company, valued at $3.5 million, and cash payments for income taxes of approximately $2.4 million resulting from these stock issuances and $0.3 million for additional income taxes resulting from the 1992 stock grants; (c) for 1993, non-cash special management compensation charges of $0.6 million in amortization of deferred compensation arising from the 1992 stock grants; and (d) for 1992, cash payments of $5.3 million for income taxes resulting from stock grants made to an executive officer of the Company. |
Financial Statements and Supplementary Data HENRY SCHEIN, INC. AND SUBSIDIARIES Page Number Report of Independent Certified Public Accountants............................27 Consolidated Financial Statements: Balance Sheets as of December 28, 1996 and December 30, 1995.............. 28 Statements of Operations for the years ended December 28, 1996, December 30, 1995 and December 31, 1994 ..........................29 Statements of Stockholders' Equity for the years ended December 28, 1996, December 30, 1995 and December 31, 1994 .........30 Statements of Cash Flows for the years ended December 28, 1996, December 30, 1995 and December 31, 1994 ............................31 Notes to Consolidated Financial Statements .............................32-56 Schedule, years ended December 28, 1996, December 30, 1995 and December 31, 1994 II - Valuation and Qualifying Accounts ...............................72 All other schedules are omitted because the required information is either inapplicable or is included in the consolidated financial statements or the notes thereto. |
33-96528) 3.1 Form of Amended and Restated Articles of Incorporation 3.2 Form of Bylaws 9.1 Voting Trust Agreement dated September 30, 1994, as amended, among the Company, the Estate of Jacob M. Schein, the Trusts under Articles Third and Fourth of the Will of Jacob M. Schein, the Trust established by Pamela Joseph under Trust Agreement dated February 9, 1994, the Trust established by Martin Sperber under Trust Agreement dated September 19, 1994, management stockholders and Stanley M. Bergman, as voting trustee 9.2 Agreements dated December 27, 1994 among the Company, various executive officers and Stanley M. Bergman, as voting trustee 9.3 Agreements dated as of May 1, 1995 among the Company, various executive officers and Stanley M. Bergman, as voting trustee 10.1 Amended and Restated HSI Agreement (the "HSI Agreement"), effective as of February 16, 1994, among the Company, Marvin H. Schein, the Trust established by Marvin H. Schein under Trust Agreement dated September 9, 1994, the Charitable Trust established by Marvin H. Schein under Trust Agreement dated September 12, 1994, the Estate of Jacob M. Schein, the Trusts established by Articles Third and Fourth of the Will of Jacob M. Schein, the Trust established by Pamela Joseph under Trust Agreement dated February 9, 1994, the Trust established by Martin Sperber under Trust Agreement dated September 19, 1994, the Trust established by Stanley M. Bergman under Trust Agreement dated September 15, 1994, Pamela Schein, Pamela Joseph, Martin Sperber, Stanley M. Bergman, Steven Paladino and James P. Breslawski (collectively, the "HSI Parties") 10.2 HSI Registration Rights Agreement dated September 30, 1994, among the Company, Pamela Schein, the Trust established by Pamela Joseph under Trust Agreement dated February 9, 1994, Marvin H. Schein, the Trust established by Marvin H. Schein under Trust Agreement dated December 31, 1993, the Trust established by Marvin H. Schein under Trust Agreement dated September 19, 1994, the Charitable Trust established by Marvin H. Schein under Trust Agreement dated September 12, 1994, Martin Sperber, the Trust established by Martin Sperber under Trust Agreement dated September 19, 1994, Stanley M. Bergman and the Trust established by Stanley M. Bergman under Trust Agreement dated September 15, 1994 10.3 Letter Agreement dated September 30, 1994 to the Company from Marvin H. Schein, Pamela Joseph and Pamela Schein 10.4 Release to the HSI Agreement dated September 30, 1994 Exhibit No. |
- ----------- ----------- -------- 10.5 Separation Agreement dated as of September 30, 1994 by and between the Company, Schein Pharmaceutical, Inc. and Schein Holdings, Inc. 10.6 Restructuring Agreement dated September 30, 1994 among Schein Holdings, Inc., the Company, the Estate of Jacob M. Schein, Marvin H. Schein, the Trust established by Marvin H. Schein under Trust Agreement dated December 31, 1993, the Trust established by Marvin H. Schein under Trust Agreement dated September 9, 1994, the Charitable Trust established by Marvin H. Schein under Trust Agreement dated September 12, 1994, Pamela Schein, Pamela Joseph, the Trust established by Pamela Joseph under Trust Agreement dated February 9, 1994; the Trusts under Articles Third and Fourth of the Will of Jacob M. Schein; Stanley M. Bergman, the Trust established by Stanley M. Bergman under Trust Agreement dated September 15, 1994, Martin Sperber, the Trust established by Martin Sperber under Trust Agreement dated December 31, 1993, and the Trust established by Martin Sperber under Trust Agreement dated September 19, 1994 10.7 Agreement and Plan of Corporate Separation and Reorganization dated as of September 30, 1994 among Schein Holdings, Inc., the Company, the Estate of Jacob M. Schein, Marvin H. Schein, the Trust established by Marvin H. Schein under Trust Agreement dated December 31, 1993, the Trust established by Marvin H. Schein under Trust Agreement dated September 9, 1994, the Charitable Trust established by Marvin H. Schein under Trust Agreement dated September 12, 1994, Pamela Schein, the Trust established Article Fourth of the Will of Jacob M. Schein for the benefit of Pamela Schein and her issue under Trust Agreement dated September 29, 1994, Pamela Joseph, the Trust established by Pamela Joseph under Trust Agreement dated February 9, 1994, the Trust established by Pamela Joseph under Trust Agreement dated September 28, 1994 and the Trusts under Articles Third and Fourth of the Will of Jacob M. Schein 10.8 Henry Schein, Inc. 1994 Stock Option Plan, as amended and restated effective as of July 1, 1995** 10.9 Henry Schein, Inc. Amendment and Restatement of the Supplemental Executive Retirement Plan** 10.10 Henry Schein, Inc. Summary Executive Incentive Plan** 10.11 Consulting Agreement dated September 30, 1994 between the Company and Marvin H. Schein** 10.12 Employment Agreement dated as of January 1, 1992 between the Company and Stanley M. Bergman** 10.13 Amended and Restated Stock Issuance Agreement dated as of December 24, 1992 between the Company and Stanley M. Bergman** 10.14 Stock Issuance Agreements dated December 27, 1994 between the Company and various executive officers** 10.15 Agreement and Plan of Merger dated as of September 1, 1995, among Henry Schein, Inc., Schein Dental Equipment Corp., Marvin Schein and others 10.16 Stock Purchase Agreement dated August 25, 1995, by Henry Schein, Inc., PRN Medical, Inc. and its shareholders, and Florida Doctor Supply, Inc. and its shareholders 10.17 Restated Standard Indemnity Agreement dated February 8, 1993, as amended January 25, 1993, by and between Showa Denko America, Inc. and the Company Exhibit No. |
and the Company+ 10.29 Commercial Guaranty dated August 1, 1994 by the Company in favor of the Mid-City National Bank 10.30 Discretionary Line of Credit dated August 18, 1995 between PNC Bank, Delaware and one of the Company's 50% owned companies 10.31 Discretionary Line of Credit Demand Note dated August 18, 1995 in favor of one of the Company's 50% owned companies 10.32 Loan Agreement dated March 30, 1992 between the Royal Bank of Scotland plc, Henry Schein U.K. Holdings Limited and BDG U.K. Holdings Limited 10.33 Loan Agreement dated January 28, 1994 between the Royal Bank of Scotland plc, Henry Schein U.K. Holdings Limited and Dental Express (Supplies) Limited 10.34 Credit Agreement dated June 5, 1995 among Canadian Imperial Bank of Commerce and one of the Company's 50% owned companies 10.35 Master Lease Agreement dated as of February 28, 1991 between General Electric Capital Corporation and the Company 10.36 Master Lease Agreement dated December 2, 1994 between Chase Equipment Leasing, Inc. and the Company 10.37 Software License Agreement dated as of June 20, 1995 between the Company and XcelleNet, Inc. 10.38 Software License Agreement dated as of October 31, 1994, as amended, between J.D. |
Edwards & Company 10.41 Lease dated December 3, 1990 between WRC Properties, Inc. and the Company 10.42 Lease dated March 2, 1992 between Vista Distribution Center, Inc. and the Company 10.43 Lease dated as of September 30, 1993, as amended October 14, 1993 and May 23, 1995, by and between Broad Hollow Realty Co. and the Company 10.44 Lease dated April 27, 1995 by Lyndean Investments Limited to Kent Dental Limited and Henry Schein U.K. Holdings Limited 10.45 Lease dated October 23, 1994 between Georg and Pia Netzhammer and Henry-Schein Dentina GmbH (English translation and original version) 10.46 Lease dated January 11, 1995 between Lyndean Investments Limited, Kent Dental Limited and Henry Schein U.K. Holdings Limited 10.47 Stock Purchase Agreement dated as of August 18, 1995 among the Company, the Mark Family Partnership and others 10.48 Group Purchasing Program Agreement dated March 31, 1994, as amended June 26, 1995, by and between AMA Resources, Inc. and the Company 10.49 Hospital Supply Purchase Agreement dated as of November 10, 1994 between Veterinary Centers of America, Inc. and the Company 10.50 Award of Contract to the Company dated April 14, 1995 by Department of the Army 10.51 Sales Agent Agreement dated March 1, 1995 by and between Merck & Co., Inc. and the Company 10.52 Supply Agreement dated March 20, 1991 10.53 Shareholders' Agreement dated March 20, 1991 10.54 Non-Negotiable Promissory Note dated March 20, 1991 from the Company to N-Tech 10.55 Guaranty dated March 20, 1991 by the Company and others in favor of N-Tech, Inc. 10.56 Demand Debenture dated December 20, 1988 from one of the Company's 50% owned companies to Canadian Imperial Bank of Commerce 10.57 Pledge Agreement dated December 20, 1988 of one of the Company's 50% owned companies to Canadian Imperial Bank of Commerce 10.58 Shareholders' Agreement dated as of December 1, 1990 by and among the shareholders of Henry Schein Espana, S.A. 10.59 Shareholders' Agreement dated as of April 1, 1991 between the shareholders of Schein-Dentina, B.V. (English translation) 10.60 Put and Call Option Agreement dated August 29, 1991 between Schein International (Europe) Inc. and the shareholders of Henry Schein U.K. Holdings Limited 10.61 Deed of Guarantee dated August 29, 1991 between Henry Schein, Inc. and the shareholders of Henry Schein U.K. Holdings Limited 10.62 Stock Purchase Agreement dated November 1, 1992 among SSN Healthcare Supply, Inc., the Company, Tri-State Medical Supply, Inc. and a shareholder 10.63 Stock Purchase and Shareholders' Agreement dated March 19, 1993 by and among S.A. Hospithera and Henry Schein Europe, Inc. Exhibit No. |
10.74 Unanimous Shareholders Agreement dated August 4, 1994 among Henry Schein Canada Inc., the Company, 972704 Ontario Inc. and its shareholders, and Consolidated Dental Ltd. 10.75 Share Purchase Agreement dated June 27, 1994 by and between the shareholders of Henry Schein France S.A. 10.76 Shareholders Agreement dated January 1, 1995 among SSN Healthcare Supply, Inc., South Jersey Medical Supply Co., Inc., South Jersey Surgical Supply Co., Inc., and its shareholders 10.77 Shareholders Agreement dated as of January 24, 1995 by and among the shareholders of Dentisoft, Inc. 10.78 Purchase Agreement dated as of June 14, 1995 among The Veratex Corporation, the Company and HSI Michigan Corp. 10.79 Form of Henry Schein, Inc. Non-Employee Director Stock Option Plan +** 10.80 Supply Agreement made as of July 7, 1995 between Tidi Products, Inc. and the Company 10.81 Agreement Subject to Conditions Precedent dated July 21, 1995 between Henry Schein Europe Inc., Henry Schein France S.A., Gerard Ifker, Didier Cochet, Frederic Ladet, Jean-Hugues Lelievre and Christophe Morales (English Translation) 10.82 Put and Call Option Agreement dated June 9, 1995 between William Roger Killiner and Henry Schein U.K. Holdings Limited 10.83 Put and Call Option Agreement dated June 9, 1995 between Anthony Alan Anderson and Henry Schein U.K. Holdings Limited. |
At the effective time of the City First Merger, (1) each share of City First’s Class A Common Stock, par value $0.50 per share, and Class B Common Stock, par value $0.50 per share, issued and outstanding immediately prior to the Effective Time (other than any shares owned by City First or the Company and any Dissenting Shares (as defined in the Merger Agreement)) will be converted into 13.626 validly issued, fully paid and nonassessable shares, respectively, of the voting common stock of the Company, par value $0.01 per share, which will be renamed Class A Common Stock, and a new class of non-voting common stock of the Company, par value $0.01 per share, which will be named Class B Common Stock, and (2) each share of Fixed Rate Cumulative Redeemable Perpetual Preferred Stock, Series B, par value $0.50 per share, of City First (“City First Preferred Stock”) issued and outstanding immediately prior to the effective time of the City First Merger will be converted into one validly issued, fully paid and non-assessable share of a new series of preferred stock of the Company, which new series will be designated as the Company’s Fixed Rate Cumulative Redeemable Perpetual Preferred Stock, Series A, with such rights, preferences, privileges and voting powers, and limitations and restrictions thereof, which taken as a whole, are not materially less favorable to the holders of City First Preferred Stock than the rights, preferences, privileges and voting powers, and limitations and restrictions thereof of City First Preferred Stock. |
Date: March 31, 2021 Robert C. Davidson, Jr. Director /s/ Jack T. Thompson Date: March 31, 2021 Jack T. Thompson Director /s/ Daniel A. Medina Date: March 31, 2021 Daniel A. Medina Director /s/ Dutch C. Ross III Date: March 31, 2021 Dutch C. Ross III Director /s/ Erin Selleck Date: March 31, 2021 Erin Selleck Director BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Index to Consolidated Financial Statements Years ended December 31, 2020 and 2019 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Broadway Financial Corporation Opinion on the Financial Statements We have audited the accompanying consolidated statements of financial condition of Broadway Financial Corporation and Subsidiary (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations and comprehensive income, changes in stockholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). |
At the effective time of the City First Merger, (1) each share of City First’s Class A Common Stock, par value $0.50 per share, and Class B Common Stock, par value $0.50 per share, issued and outstanding immediately prior to the Effective Time (other than any shares owned by City First or the Company and any Dissenting Shares (as defined in the Merger Agreement)) will be converted into 13.626 validly issued, fully paid and nonassessable shares, respectively, of the voting common stock of the Company, par value $0.01 per share, which will be renamed Class A Common Stock, and a new class of non-voting common stock of the Company, par value $0.01 per share, which will be named Class B Common Stock, and (2) each share of Fixed Rate Cumulative Redeemable Perpetual Preferred Stock, Series B, par value $0.50 per share, of City First (“City First Preferred Stock”) issued and outstanding immediately prior to the effective time of the City First Merger will be converted into one validly issued, fully paid and non-assessable share of a new series of preferred stock of the Company, which new series will be designated as the Company’s Fixed Rate Cumulative Redeemable Perpetual Preferred Stock, Series A, with such rights, preferences, privileges and voting powers, and limitations and restrictions thereof, which taken as a whole, are not materially less favorable to the holders of City First Preferred Stock than the rights, preferences, privileges and voting powers, and limitations and restrictions thereof of City First Preferred Stock. |
(b)List of Exhibits Exhibit Number* 3.1 Certificate of Incorporation of Registrant and all amendments thereto (Exhibit 3.1 to Form 10-Q filed by Registrant on November 13, 2014) 3.2 Bylaws of Registrant (Exhibit 3.2 to Form 10-K filed by Registrant on March 28, 2016) 3.3 Certificate of Designations for the Series B Junior Participating Preferred Stock (Exhibit 3.1 to Form 8-K filed by Registrant on September 10, 2019) 4.1 Description of Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 4.2 Rights Agreement between Broadway Financial Corporation and Computershare Trust Company, N.A., as rights agent (Exhibit 4.1 to Form 8-K filed by Registrant on September 10, 2019) 10.1** Broadway Federal Bank Employee Stock Ownership Plan (Exhibit 10.1 to Form 10-K filed by Registrant on March 28, 2016) 10.2** Amended and Restated Broadway Financial Corporation 2008 Long Term Incentive Plan (Exhibit 10.3 to Form 10-Q filed by Registrant on August 12, 2016) 10.3** Amended Form of Stock Option Agreement for stock options granted pursuant to Amended and Restated Broadway Financial Corporation 2008 Long-Term Incentive Plan (Exhibit 10.1 to Form 10-Q filed by Registrant on August 12, 2016) 10.5** Broadway Financial Corporation 2018 Long-Term Incentive Plan (Exhibit 10.5 to Form 10-K filed by Registrant on March 29, 2019) 10.6** Form of Award Agreement for grants of restricted stock pursuant to Broadway Financial Corporation 2018 Long-Term Incentive Plan (Exhibit 10.6 to Form 10-K filed by Registrant on March 29, 2019) 10.7** Employment Agreement, dated as of March 22, 2017, for Wayne-Kent A. Bradshaw (Exhibit 10.7 to Form 10-K filed by Registrant on March 29, 2019) 10.10** Award Agreement, dated as of February 27, 2019 for grant of restricted stock to Wayne-Kent A. Bradshaw pursuant to Broadway Financial Corporation 2018 Long-Term Incentive Plan (Exhibit 10.10 to Form 10-K filed by Registrant on March 29, 2019) 10.11** Employment Agreement, dated as of May 1, 2017, for Brenda J. Battey (Exhibit 10.11 to Form 10-K filed by Registrant on March 29, 2019) 10.12** Employment Agreement, dated as of May 1, 2017, for Norman Bellefeuille (Exhibit 10.12 to Form 10-K filed by Registrant on March 29, 2019) 10.13** Employment Agreement, dated as of May 1, 2017, for Ruth McCloud (Exhibit 10.13 to Form 10-K filed by Registrant on March 29, 2019) Exhibit Number* 10.14** Broadway Federal Bank Incentive Compensation Plan (Exhibit 10.14 to Form 10-K filed by Registrant on March 29, 2019) 10.16 Stock Purchase Agreement, dated as of December 21, 2016, entered between First Republic Bank and Registrant (Exhibit 10.8 to Form 10-K filed by Registrant on March 27, 2017) 10.20 ESOP Loan Agreement and ESOP Pledge Agreement, each dated as of December 19, 2016, entered into between Registrant and Miguel Paredes, as trustee for the Broadway Federal Bank, f.s.b., Employee Stock Ownership Plan Trust, and related Promissory Note, dated as of December 19, 2016 (Exhibit 10.12 to Form 10-K filed by Registrant on March 27, 2017) 21.1 List of Subsidiaries (Exhibit 21.1 to Registration Statement on Form S-1 filed by Registrant on November 20, 2013) 23.1 Consent of Moss Adams LLP 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. |
/s/ Wayne-Kent A. Bradshaw Wayne-Kent A. Bradshaw Chief Executive Officer and President (Principal Executive Officer) Date: March 27, 2020 /s/ Brenda J. Battey Brenda J. Battey Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Date: March 27, 2020 /s/ Virgil P. Roberts Virgil P. Roberts Chairman of the Board Date: March 27, 2020 /s/ Robert C. Davidson, Jr. Robert C. Davidson, Jr. Director Date: March 27, 2020 /s/ Jack T. Thompson Jack T. Thompson Director Date: March 27, 2020 /s/ Daniel A. Medina Daniel A. Medina Director Date: March 27, 2020 /s/ Dutch C. Ross III Dutch C. Ross III Director Date: March 27, 2020 /s/ Erin Selleck Erin Selleck Director Date: March 27, 2020 BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Index to Consolidated Financial Statements Years ended December 31, 2019 and 2018 Report of Independent Registered Public Accounting Firm Consolidated Statements of Financial Condition Consolidated Statements of Operations and Comprehensive Income Consolidated Statements of Changes in Stockholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors Broadway Financial Corporation Opinion on the Financial Statements We have audited the accompanying consolidated statements of financial condition of Broadway Financial Corporation and Subsidiary (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of operations and comprehensive (loss) income, changes in stockholders' equity, and cash flows for the years then ended, and the related notes (collectively referred to as the "consolidated financial statements"). |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Notes to Consolidated Financial Statements (continued) December 31, 2019 and 2018 Note 4 - Loans Receivable Held for Investment Loans receivable held for investment were as follows as of the periods indicated: The following tables present the activity in the allowance for loan losses by loan type for the periods indicated: BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Notes to Consolidated Financial Statements (continued) December 31, 2019 and 2018 The following tables present the balance in the allowance for loan losses and the recorded investment (unpaid contractual principal balance less charge-offs, less interest applied to principal, plus unamortized deferred costs and premiums) by loan type and based on impairment method as of and for the periods indicated: BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Notes to Consolidated Financial Statements (continued) December 31, 2019 and 2018 The following table presents information related to loans individually evaluated for impairment by loan type as of the periods indicated: The recorded investment in loans excludes accrued interest receivable due to immateriality. |
Additional information regarding our operating leases is summarized below for the periods indicated dollars in thousands): The future minimum payments for operating leases with remaining terms of one year or more as of December 31, 2019 were as follows (in thousands): Year ended December 31, 2020 $ Year ended December 31, 2021 Total Future Minimum Lease Payments Amounts Representing Interest (15 ) Present Value of Net Future Minimum Lease Payments $ BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Notes to Consolidated Financial Statements (continued) December 31, 2019 and 2018 Note 7 - Fair Value The Company used the following methods and significant assumptions to estimate fair value: The fair values of securities available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). |
(b)List of Exhibits Exhibit Number* 3.1 Certificate of Incorporation of Registrant and all amendments thereto (Exhibit 3.1 to Form 10-Q filed by Registrant on November 13, 2014) 3.2 Bylaws of Registrant (Exhibit 3.2 to Form 10-K filed by Registrant on March 28, 2016) Exhibit Number* 10.1** Broadway Federal Bank Employee Stock Ownership Plan (Exhibit 10.1 to Form 10-K filed by Registrant on March 28, 2016) 10.2** Amended and Restated Broadway Financial Corporation 2008 Long Term Incentive Plan (Exhibit 10.3 to Form 10-Q filed by Registrant on August 12, 2016) 10.3** Amended Form of Stock Option Agreement for stock options granted pursuant to Amended and Restated Broadway Financial Corporation 2008 Long-Term Incentive Plan (Exhibit 10.1 to Form 10-Q filed by Registrant on August 12, 2016) 10.4** Award Agreement, dated March 30, 2016, for restricted stock granted to Wayne-Kent A. Bradshaw pursuant to Broadway Financial Corporation 2008 Long-Term Incentive Plan (Exhibit 10.2 to Form 10-Q filed by Registrant on August 12, 2016) 10.5** Broadway Financial Corporation 2018 Long-Term Incentive Plan. |
10.15 Securities Purchase Agreement, dated as of December 21, 2016, entered into among United States Treasury Department, Registrant, First Republic Bank and Broadway Federal Bank, f.s.b., Employee Stock Ownership Plan (Exhibit 10.7 to Form 10-K filed by Registrant on March 27, 2017) 10.16 Stock Purchase Agreement, dated as of December 21, 2016, entered into between First Republic Bank and Registrant (Exhibit 10.8 to Form 10-K filed by Registrant on March 27, 2017) 10.17 Exchange Agreement, dated as December 21, 2016, entered into between CJA Private Financial Restructuring Master Fund I L.P. and Registrant (Exhibit 10.9 to Form 10-K filed by Registrant on March 27, 2017) 10.18 Stock Purchase Agreement, dated as of December 21, 2016, entered into between Bank of Hope and Registrant (Exhibit 10.10 to Form 10-K filed by Registrant on March 27, 2017) 10.19 Stock Purchase and Exchange Agreement, dated as of December 21, 2016, entered into between National Community Investment Fund and Registrant (Exhibit 10.11 to Form 10-K filed by Registrant on March 27, 2017) 10.20 ESOP Loan Agreement and ESOP Pledge Agreement, each dated as of December 19, 2016, entered into between Registrant and Nicholas L. Saakvitne, as trustee for the Broadway Federal Bank, f.s.b., Employee Stock Ownership Plan Trust, and related Promissory Note, dated as of December 19, 2016 (Exhibit 10.12 to Form 10-K filed by Registrant on March 27, 2017) Exhibit Number* 21.1 List of Subsidiaries (Exhibit 21.1 to Registration Statement on Form S-1 filed by Registrant on November 20, 2013) 23.1 Consent of Moss Adams LLP 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. |
/s/ Wayne-Kent A. Bradshaw Wayne-Kent A. Bradshaw Chief Executive Officer and President (Principal Executive Officer) Date: March 29, 2019 /s/ Brenda J. Battey Brenda J. Battey Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Date: March 29, 2019 /s/ Virgil P. Roberts Virgil P. Roberts Chairman of the Board Date: March 29, 2019 /s/ Robert C. Davidson, Jr. Robert C. Davidson, Jr. Director Date: March 29, 2019 /s/ Jack T. Thompson Jack T. Thompson Director Date: March 29, 2019 /s/ Daniel A. Medina Daniel A. Medina Director Date: March 29, 2019 /s/ Dutch C. Ross III Dutch C. Ross III Director Date: March 29, 2019 /s/ Erin Selleck Erin Selleck Director Date: March 29, 2019 BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Index to Consolidated Financial Statements Years ended December 31, 2018 and 2017 Report of Independent Registered Public Accounting Firm Consolidated Statements of Financial Condition Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Changes in Stockholders' Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Broadway Financial Corporation Opinion on the Financial Statements We have audited the accompanying consolidated statements of financial condition of Broadway Financial Corporation and Subsidiary (the "Company") as of December 31, 2018 and 2017, the related consolidated statements of income and comprehensive income, changes in stockholders' equity and cash flows for the years then ended, and the related notes (collectively referred to as the "consolidated financial statements"). |
Note 4 - Loans Receivable Held for Investment Loans receivable held for investment were as follows as of the periods indicated: BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Notes to Consolidated Financial Statements (continued) December 31, 2018 and 2017 The following tables present the activity in the allowance for loan losses by loan type for the periods indicated: BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Notes to Consolidated Financial Statements (continued) December 31, 2018 and 2017 The following tables present the balance in the allowance for loan losses and the recorded investment (unpaid contractual principal balance less charge-offs, less interest applied to principal, plus unamortized deferred costs and premiums) by loan type and based on impairment method as of and for the periods indicated: BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Notes to Consolidated Financial Statements (continued) December 31, 2018 and 2017 The following table presents information related to loans individually evaluated for impairment by loan type as of the periods indicated: The recorded investment in loans excludes accrued interest receivable due to immateriality. |
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