Henry Schein 2012 Annual Report Download - page 61
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Butler Animal Health Supply
Effective December 31, 2009, BAHS, a majority-owned subsidiary whose financial information is consolidated
with ours, had incurred approximately $320.0 million of debt (of which $37.5 million, which is eliminated in our
consolidated financial statements, was provided by Henry Schein, Inc.) in connection with our acquisition of a
majority interest in BAHS.
On May 27, 2011, BAHS refinanced the terms and amount of its debt in an aggregate principal amount of
$366.0 million (of which $55.0 million, which is eliminated in our consolidated financial statements, was provided
by Henry Schein, Inc.). The refinanced debt consists of the following three components:
Term Loan A Term Loan B Revolver
Original amount of debt (includes $55.0 million of debt
provided by Henry Schein, Inc.) .....................................
.
$ 100,000 $ 216,000 $ 50,000
N
umber of remaining quarterly installments ........................
.
8 12
Quarterly payments from:
December 31, 2012 through June 30, 2013 .....................
.
$ 4,931
September 30, 2013 through June 30, 2014 ....................
.
8,766
July 1, 2014 through September 30, 2014 .......................
.
2,739
December 31, 2012 through September 30, 2015 ...........
.
$ 4,239
Final installment due on December 31, 2014 .......................
.
65,196
Final installment due on December 31, 2015 .......................
.
135,287
Balance outstanding as of December 29, 2012 ....................
.
81,632 138,807 -
Interest rate on debt ..............................................................
.
LIBOR plus a
margin of 2.50%
LIBOR plus
a
margin of 3.25%
LIBOR plus
a
margin of 2.50%
Interest rate on debt - LIBOR floor ......................................
.
1.25 %
During 2011 and 2012, BAHS made prepayments on Term Loans A and B, which resulted in a reduction to the
future quarterly and final installment amounts due. Future prepayments by BAHS, if any, will result in reductions
to remaining quarterly and final installment amounts due.
The outstanding balance of $220.4 million (net of unamortized debt discount and excluding amounts owed to
Henry Schein, Inc.) is reflected in our consolidated balance sheet as of December 29, 2012.
The debt agreement provides, among other things, that BAHS maintain certain interest coverage and maximum
leverage ratios, and contains restrictions relating to subsidiary indebtedness, capital expenditures, liens, affiliate
transactions, disposal of assets and certain changes in ownership. In addition, the debt agreement contains
provisions which, under certain circumstances, require BAHS to make prepayments based on excess cash flows of
BAHS as defined in the debt agreement.
During 2013, we intend to refinance the debt of approximately $220 million related to the Butler Schein
Animal Health transaction. The refinancing is expected to reduce interest expense and to be accretive to earnings
per share by $0.02 to $0.03 on an annualized basis. We expect the refinancing to occur at the end of the first
quarter of 2013. As part of that refinancing, we expect to incur a one-time, non-cash charge of approximately $0.04
to $0.05 per diluted share.
Stock repurchases
From June 21, 2004 through December 29, 2012, we repurchased $799.9 million, or 13,756,063 shares, under
our common stock repurchase programs. On April 18, 2012 and November 12, 2012, our Board of Directors
authorized an additional $200.0 million and $300.0 million, respectively, for additional repurchases of our common
stock, $300.1 million of which is available as of December 29, 2012 for future common stock share repurchases.