Henry Schein 2003 Annual Report Download - page 20

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Note Regarding Forward-Looking Statements
Except for historical information contained herein, the statements in this report (including without limitation, statements indicating that we
“expect”, “estimate”, “anticipate”, or “believe” and all other statements concerning future financial results, product or service offerings or
other events that have not yet occurred) are forward-looking statements that are made pursuant to the safe harbor provisions of applicable
securities legislation and regulations. Forward-looking statements involve known and unknown factors, risks and uncertainties which may
cause our actual results in future periods to differ materially from those expressed in any forward-looking statements. Those factors, risks
and uncertainties include, but are not limited to, the factors described under "Risk Factors" discussed later in this Annual Report.
Executive-Level Overview
We are the largest distributor of healthcare products and services primarily to office-based healthcare practitioners in the combined North
American and European markets with operations in the United States, Canada, the United Kingdom, the Netherlands, Belgium, Germany,
France, Austria, Spain, Ireland, Portugal, Australia and New Zealand.
Our reportable segments are strategic business units that offer different products and services to the same customer base. We conduct
our business through two segments: healthcare distribution and technology.
Our healthcare distribution segment, which is comprised of our dental, medical (including veterinary) and international business groups,
distributes healthcare products (primarily consumable) and services primarily to office-based healthcare practitioners and professionals
in the United States, Canada and international markets. Products, which are similar for each business group, are maintained and
distributed from strategically located distribution centers.
Our technology segment consists primarily of our practice management software business and certain other value-added products and
services that are distributed primarily to healthcare professionals in the United States and Canada. Most of the technology business,
including members of its management, was acquired as a unit.
The following table summarizes the significant components of our operating results and cash flows for each of the three years ended
December 27, 2003 (in thousands):
Years ended
December 27, December 28, December 29,
2003 2002 2001
Operating Results:
Net sales $3,353,805)$2,825,001)$2,558,243)
Cost of sales 2,426,611)2,030,097)1,858,919)
Gross profit 927,194)794,904)699,324)
Operating expenses:
Selling, general and administrative 693,475) 598,635) 551,574)
Merger, integration and restructuring credits –– (734) ––
Operating income $ 233,719) $ 197,003)$ 147,750)
Other expense, net $ (7,943) $ (6,574) $ (7,399)
Net income from continuing operations 139,522)117,987)87,373)
Loss on sale of discontinued operation, net of tax (2,012) ––)––)
Net income 137,510)117,987)87,373)
Cash Flows:
Net cash provided by operating
activities from continuing operations $ 128,843)$ 134,669)$ 190,911)
Net cash used in investing activities 118,122)142,758)55,070)
Net cash (used in) provided by financing activities (48,375) 18,683)371)
18