Henry Schein 2009 Annual Report Download - page 30

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18
We experience fluctuations in quarterly earnings. As a result, we may fail to meet or exceed the
expectations of securities analysts and investors, which could cause our stock price to decline.
Our business is subject to seasonal and other quarterly fluctuations. Net sales and operating profits
generally have been higher in the third and fourth quarters due to the timing of sales of seasonal products
(including influenza vaccine, equipment and software products), purchasing patterns of office-based
healthcare practitioners and year-end promotions. Net sales and operating profits generally have been lower
in the first quarter, primarily due to increased sales in the prior two quarters. While recent history has resulted
in flat to declining sales, we expect our historical seasonality of sales to continue in the foreseeable future.
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.
Any change in one or more of these or other factors could cause our annual or quarterly operating results
to fluctuate. If our operating results do not meet market expectations, our stock price may decline.
Because substantially all of the products that we distribute are not manufactured by us, we are dependent
upon third parties for the manufacture and supply of substantially all of our products.
We obtain substantially all of our products from third-party suppliers. Generally, we do not have long-
term contracts with our suppliers committing them to supply products to us. Therefore, suppliers may not
provide the products we need in the quantities we request. Because we generally do not control the actual
production of the products we sell, we may be subject to delays caused by interruption in production based on
conditions outside of our control. In the event that any of our third-party suppliers were to become unable or
unwilling to continue to provide the products in required volumes, we would need to identify and obtain