Henry Schein 2009 Annual Report Download - page 45

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33
Results of Operations
The following table summarizes the significant components of our operating results and cash flows for
each of the three years ended December 26, 2009, December 27, 2008 and December 29, 2007 (in thousands):
December 26, December 27, December 29,
2009 2008 (1) (2) 2007 (1) (2)
Operating Results:
Net sales ....................................................................................................... 6,538,336$ 6,380,413$ 5,889,884$
Cost of sales ................................................................................................. 4,621,516 4,506,118 4,183,792
Gross profit .............................................................................................. 1,916,820 1,874,295 1,706,092
Operating expenses:
Selling, general and administrative ......................................................... 1,449,715 1,431,769 1,319,153
Restructuring costs ................................................................................... 3,020 23,240 -
Operating income ............................................................................... 464,085$ 419,286$ 386,939$
Other expense, net ......................................................................................... (11,365)$ (23,837)$ (8,430)$
Income from continuing operations ............................................................... 330,442 269,276 249,880
Income from continuing operations attributable
to Henry Schein, Inc. ................................................................................ 308,551 247,347 232,529
Years ended
December 26, December 27, December 29,
2009 2008 (2) 2007 (2)
Cash Flows:
Net cash provided by operating activities ..................................................... 396,890$ 384,782$ 270,344$
Net cash used in investing activities ............................................................. (97,448) (168,010) (235,292)
Net cash used in financing activities ............................................................. (197,675) (87,970) (38,008)
Years ended
(1) Adjusted to reflect the effects of discontinued operations.
(2) Adjusted to reflect the effects of the adoption of provisions contained within ASC Topic 470-20, “Debt with Conversion and
Other Options.”
Plans of Restructuring
On November 5, 2008, we announced certain actions to reduce operating costs, which included the
elimination of 430 positions from our operations and the closing of several smaller facilities. During the
years ended December 26, 2009 and December 27, 2008, we recorded one-time restructuring costs of
approximately $3.0 million (approximately $2.1 million after taxes) and $23.2 million (approximately $16.0
million after taxes), respectively. The costs associated with the restructuring are included in a separate line
item, “Restructuring costs,” within our consolidated statements of income. The majority of these costs have
been paid as of December 26, 2009. Annual pretax cost savings from this initiative are expected to be
between $24.0 million and $27.0 million.
In addition, during the first quarter of 2010, we expect to complete an additional restructuring in order to
further reduce operating expenses. This restructuring includes headcount reductions, as well as the closing of
facilities. The restructure is primarily concentrated in our European operations and is part of our overall plan
to increase international operating margins. These restructuring costs are expected to be in the $10 million to
$12 million range ($7 million to $9 million after taxes) and are expected to be reported in the first quarter of
2010. However, timing of certain actions may cause some restructuring costs to be reported later.