Henry Schein 2012 Annual Report Download - page 58
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Liquidity and Capital Resources
Our principal capital requirements include funding of acquisitions, purchases of additional noncontrolling
interests, repayments of debt principal, the funding of working capital needs, purchases of securities and fixed
assets and repurchases of common stock. Working capital requirements generally result from increased sales,
special inventory forward buy-in opportunities and payment terms for receivables and payables. Historically, sales
have tended to be stronger during the third and fourth quarters and special inventory forward buy-in opportunities
have been most prevalent just before the end of the year, causing our working capital requirements to have been
higher from the end of the third quarter to the end of the first quarter of the following year.
We finance our business primarily through cash generated from our operations, revolving credit facilities and
debt placements. Our ability to generate sufficient cash flows from operations is dependent on the continued
demand of our customers for our products and services, and access to products and services from our suppliers.
Our business requires a substantial investment in working capital, which is susceptible to fluctuations during
the year as a result of inventory purchase patterns and seasonal demands. Inventory purchase activity is a function
of sales activity, special inventory forward buy-in opportunities and our desired level of inventory. We anticipate
future increases in our working capital requirements.
We finance our business to provide adequate funding for at least 12 months. Funding requirements are based
on forecasted profitability and working capital needs, which, on occasion, may change. Consequently, we may
change our funding structure to reflect any new requirements.
We believe that our cash and cash equivalents, our ability to access private debt markets and public equity
markets, and our available funds under existing credit facilities provide us with sufficient liquidity to meet our
currently foreseeable short-term and long-term capital needs. We have no off-balance sheet arrangements.
Net cash provided by operating activities was $408.1 million for the year ended December 29, 2012, compared
to $554.6 million for the comparable prior year period. The net change of $146.5 million was primarily attributable
to inventory buy-ins during the fourth quarter of 2012 in advance of potential price increases related to the medical
device excise tax.
Net cash used in investing activities was $269.6 million for the year ended December 29, 2012, compared to
$193.2 million for the comparable prior year period. The net change of $76.4 million was primarily due to
increases in payments for equity investments and business acquisitions.
Net cash used in financing activities was $170.6 million for the year ended December 29, 2012, compared to
$357.2 million for the comparable prior year period. The net change of $186.6 million was primarily due to
increased net proceeds from issuance of debt and decreased acquisitions of noncontrolling interests in subsidiaries,
partially offset by increased repurchases of common stock.
We expect to invest approximately $60 million to $65 million during 2013 in capital projects to modernize and
expand our facilities and computer systems and to integrate certain operations into our existing structure.
The following table summarizes selected measures of liquidity and capital resources (in thousands):
December 29, December 31,
2012 2011
Cash and cash equivalents ..................................................................................................
.
$ 122,080 $ 147,284
Available-for-sale securities - long-term ............................................................................
.
2,816 11,329
Working capital ..................................................................................................................
.
1,231,668 1,000,868
Debt:
Bank credit lines ............................................................................................................
.
$ 27,166 $ 55,014
Current maturities of long-term debt .............................................................................
.
17,992 22,819
Long-term debt ..............................................................................................................
.
488,121 363,524
Total debt ..................................................................................................................
.
$ 533,279 $ 441,357
Our cash and cash equivalents consist of bank balances and investments in money market funds representing
overnight investments with a high degree of liquidity.