Henry Schein 2009 Annual Report Download - page 7

5
HENRY SCHEIN ANNUAL REPORT
Our medical sales growth reflects strong
sales of consumable products and
products related to the treatment and
prevention of the H1N1 virus. In the
fourth quarter of 2009, our International
Group’s sales were the largest of our
four business groups for the first time
ever (see sidebar article on page 4),
and we had double-digit growth in our
International dental, medical and animal
health businesses. We also saw
continued strong growth in electronic
services and solid sales of international
products in our Technology and
Value-Added Services Group.
In 2009 we took advantage of new
opportunities to expand and evolve.
One of the most significant events
announced in November was the
creation of Butler Schein Animal Health,
a transaction that was completed in
early fiscal 2010 (see sidebar article
below). Butler Schein Animal Health
began operations with the largest
veterinary sales and distribution footprint
in the United States with revenues for
the last 12 months of approximately
$850 million, an increase of $620 million
from our existing sales levels. With the
addition of Butler Schein Animal Health,
on a worldwide basis our veterinary sales
will represent approximately $1.4 billion
in annual sales.
Other recent important mergers and
acquisitions include the leading
distributor of animal health supplies in
the Czech Republic; a national dental
equipment sales and service distributor
in Italy; a full-service provider of medical
consumables, equipment and technical
services in Germany; and a U.S.
orthodontics manufacturer and
distributor. While Butler Schein Animal
Health adds about $600 million in
annualized net sales, smaller acquisitions
represent approximately $120 million in
annualized net sales. Additionally, there
are many opportunities for further
expansion as approximately 40-45%
of the global markets we serve are
currently represented by smaller
independent distributors.
In 2009 we continued our strategy of
offering exclusive and non-exclusive
products to our customers. An example
of this is our relationship with Allscripts
for their Professional Electronic Health
Record, which became the foundation
for Henry Schein’s ConnectHealth
SM
initiative (see sidebar article on page 6).
To take advantage of emerging new
market opportunities, we created our
Global Health Care Specialties Group.
This important new group – which
includes our Dental Specialties,
Exclusive Brands, and Handpiece Repair
businesses – reflects the strong
entrepreneurial spirit that has driven our
Company since we were founded, and
will be instrumental as we help drive the
success of our customers’ practices
around the world.
Butler Schein Animal Health,
the largest veterinary sales
and distribution company
in the United States with
revenues of approximately
$850 million for the past
12 months ($620 million
incremental to Henry Schein),
was announced on
January 4, 2010 through
the combination of Butler
Animal Health Supply and
Henry Schein’s U.S.
companion animal health
business. Butler Schein
Animal Health builds upon the
outstanding reputation and
strong customer focus that
are the long-standing hall-
marks of these organizations.
Approximately 900 Butler
Schein Animal Health team
members – including
approximately 300 field
sales representatives and
approximately 200 telesales
and customer support
representatives – serve
companion animal health
customers in all 50 states.
Among the many benefits the
new company provides to our
customers are the broadest
selection of products and
value-added services in the
industry, and the efficiency
and convenience of ordering
from one primary supplier.
Butler Schein Animal Health
also provides manufacturers
with unmatched marketplace
reach and insight. Among
Butler Schein Animal Health’s
supplier partners are Novartis,
Bayer, Lilly, Sumitomo, Fort
Dodge, Virbac and Schering
(previously only sold by
Henry Schein), as well as
Merial products (previously
only sold by Butler Animal
Health Supply).
Butler Schein Animal Health
complements Henry Schein’s
domestic operations as well
as Henry Schein Animal
Health International’s platform
in Europe. Henry Schein
owns a majority interest in
Butler Schein Animal Health,
with the remainder held by
the previous owners of
Butler Animal Health Supply.
Butler Schein Animal Health