Henry Schein 2009 Annual Report Download - page 33

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21
Our future success is substantially dependent upon our senior management.
Our future success is substantially dependent upon the efforts and abilities of members of our existing
senior management, particularly Stanley M. Bergman, Chairman and Chief Executive Officer, among others.
The loss of the services of Mr. Bergman could have a material adverse effect on our business. We have an
employment agreement with Mr. Bergman. We do not currently have “key man” life insurance policies on
any of our employees. Competition for senior management is intense, and we may not be successful in
attracting and retaining key personnel.
Increases in the cost of shipping or service issues with our third-party shippers could harm our business.
Shipping is a significant expense in the operation of our business. We ship almost all of our orders
through third-party delivery services, and typically bear the cost of shipment. Accordingly, any significant
increase in shipping rates could have an adverse effect on our operating results. Similarly, strikes or other
service interruptions by those shippers could cause our operating expenses to rise and adversely affect our
ability to deliver products on a timely basis.
We may not be able to respond to technological change effectively.
Traditional healthcare supply and distribution relationships are being challenged by electronic online
commerce solutions. Our distribution business is characterized by rapid technological developments and
intense competition. The continued advancement of online commerce will require us to cost-effectively adapt
to changing technologies, to enhance existing services and to develop and introduce a variety of new services
to address changing demands of consumers and our clients on a timely basis, particularly in response to
competitive offerings. Our inability to anticipate and effectively respond to changes on a timely basis could
have an adverse effect on our business.
The market price for our common stock may be highly volatile.
The market price for our common stock may be highly volatile. A variety of factors may have a
significant impact on the market price of our common stock, including:
• the publication of earnings estimates or other research reports and speculation in the press or investment
community;
• changes in our industry and competitors;
• our financial condition, results of operations and cash flows and prospects;
• stock repurchases;
• any future issuances of our common stock, which may include primary offerings for cash, stock splits,
issuances in connection with business acquisitions, restricted stock/units and the grant or exercise of stock
options from time to time;
• the dilutive impact of convertible debt on our earnings per share;
• general market and economic conditions; and
• any outbreak or escalation of hostilities in areas where we do business.
In addition, the Nasdaq Stock Market can experience extreme price and volume fluctuations that can be
unrelated or disproportionate to the operating performance of the companies listed on Nasdaq. Broad market
and industry factors may negatively affect the market price of our common stock, regardless of actual
operating performance. In the past, following periods of volatility in the market price of a company’s
securities, securities class action litigation has often been instituted against companies. This type of litigation,
if instituted, could result in substantial costs and a diversion of management’s attention and resources, which
would have an adverse effect on our business.