Henry Schein 2014 Annual Report Download - page 41

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Our expansion through acquisitions and joint ventures involves risks.
We have expanded our domestic and international markets in part through acquisitions and joint ventures, and
we expect to continue to make acquisitions and enter into joint ventures in the future. Such transactions involve
numerous risks, including possible adverse effects on our operating results or the market price of our common
stock. Some of our acquisitions and future acquisitions may also give rise to an obligation by us to make
contingent payments or to satisfy certain repurchase obligations, which payments could have an adverse effect on
our results of operations. In addition, integrating acquired businesses and joint ventures:
• may result in a loss of customers or product lines of the acquired businesses or joint ventures;
• requires significant management attention;
• may place significant demands on our operations, information systems and financial resources; and
• results in additional acquisition and integration expenses.
There can be no assurance that our future acquisitions or joint ventures will be successful. Our ability to
continue to successfully effect acquisitions and joint ventures will depend upon the following:
• the availability of suitable acquisition or joint venture candidates at acceptable prices;
• our ability to consummate such transactions, which could potentially be prohibited due to U.S. or
foreign antitrust regulations;
• the availability of financing on acceptable terms, in the case of non-stock transactions; and
• the liquidity of our investments and our ability to raise capital could be affected by the financial credit
markets.
Our acquisitions may not result in the benefits and revenue growth we expect.
We are in the process of integrating companies that we acquired and including the operations, services,
products and personnel of each company within our management policies, procedures and strategies. We cannot be
sure that we will achieve the benefits of revenue growth that we expect from these acquisitions or that we will not
incur unforeseen additional costs or expenses in connection with these acquisitions. To effectively manage our
expected future growth, we must continue to successfully manage our integration of these companies and continue
to improve our operational systems, internal procedures, working capital management, and financial and
operational controls. If we fail in any of these areas, our business could be adversely affected.
We face inherent risk of exposure to product liability and other claims in the event that the use of the products
we sell results in injury.
Our business involves a risk of product liability and other claims in the ordinary course of business, and from
time to time we are named as a defendant in cases as a result of our distribution of products. Additionally, we own
interests in companies that manufacture certain dental products. As a result, we are subject to the potential risk of
product liability or other claims relating to the manufacture and distribution of products by those entities.
Additionally, as our private-label business continues to grow, purchasers of such products may increasingly seek
recourse directly from us, rather than the ultimate product manufacturer, for product-related claims. Another
potential risk we face in the distribution of our products is liability resulting from counterfeit or tainted products
infiltrating the supply chain. In addition, some of the products that we transport and sell are considered hazardous
materials. The improper handling of such materials or accidents involving the transportation of such materials
could subject us to liability. We have various insurance policies, including product liability insurance, covering
risks and in amounts that we consider adequate. In many cases in which we have been sued in connection with
products manufactured by others, the manufacturer of the product provides us with indemnification. There can be
no assurance that the insurance coverage we maintain is sufficient or will be available in adequate amounts or at a
reasonable cost, or that indemnification agreements will provide us with adequate protection. A successful claim
brought against us in excess of available insurance or not covered by indemnification agreements, or any claim that
results in significant adverse publicity against us, could have an adverse effect on our business and our reputation.