Henry Schein 2013 Annual Report Download - page 51

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42
E-Commerce
Electronic commerce solutions have become an integral part of traditional health care supply and distribution
relationships. Our distribution business is characterized by rapid technological developments and intense
competition. The continuing advancement of online commerce requires us to cost-effectively adapt to changing
technologies, to enhance existing services and to develop and introduce a variety of new services to address the
changing demands of consumers and our customers on a timely basis, particularly in response to competitive
offerings.
Through our proprietary, technologically based suite of products, we offer customers a variety of competitive
alternatives. We believe that our tradition of reliable service, our name recognition and large customer base built
on solid customer relationships, position us well to participate in this significant aspect of the distribution business.
We continue to explore ways and means to improve and expand our Internet presence and capabilities, including
our online commerce offerings and our use of various social media outlets.
Results of Operations
The following tables summarize the significant components of our operating results and cash flows for each of
the three years ended December 28, 2013, December 29, 2012 and December 31, 2011 (in thousands):
Years Ended
December 28, December 29, December 31,
2013 2012 2011
Operating results:
N
et sales .................................................................................................
.
$ 9,560,647 $ 8,939,967 $ 8,530,242
Cost of sales ...........................................................................................
.
6,904,633 6,432,454 6,112,187
Gross profit ........................................................................................
.
2,656,014 2,507,513 2,418,055
Operating expenses:
Selling, general and administrative ....................................................
.
1,978,960 1,873,360 1,835,906
Restructuring costs .............................................................................
.
- 15,192 -
Operating income ..........................................................................
.
$ 677,054 $ 618,961 $ 582,149
Other expense, net ..................................................................................
.
$ (12,360) $ (14,773) $ (12,842)
N
et income .............................................................................................
.
471,462 423,388 404,656
N
et income attributable to Henry Schein, Inc. .......................................
.
431,554 388,076 367,661
Years Ended
December 28, December 29, December 31,
2013 2012 2011
Cash flows:
N
et cash provided by operating activities ..............................................
.
$ 664,175 $ 408,099 $ 554,625
N
et cash used in investing activities .......................................................
.
(266,605) (269,604) (193,222)
N
et cash used in financing activities ......................................................
.
(335,974) (170,601) (357,214)
Plans of Restructuring
During the year ended December 29, 2012, we incurred restructuring costs of approximately $15.2 million
(approximately $10.5 million after taxes) consisting of employee severance pay and benefits related to the
elimination of approximately 200 positions; facility closing costs, representing primarily lease terminations and
asset write-off costs; and outside professional and consulting fees directly related to the restructuring plan. This
restructuring program is complete and we do not expect any additional costs from this program.