Henry Schein 2003 Annual Report Download - page 25

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Income Taxes
For the year ended December 27, 2003, our effective tax rate was 37.4% compared to 37.2% for the prior year period. The difference
between our effective tax rates and the federal statutory rates for both periods primarily relates to state income taxes.
Loss on Sale of Discontinued Operation
During the year ended December 27, 2003, we recognized a $2.0 million loss, net of tax, on the sale of a discontinued operation (See
Note 7 to our consolidated financial statements).
Net Income
Net income increased $19.5 million or 16.5% to $137.5 million for the year ended December 27, 2003 compared to the prior year period.
A real estate transaction gain of $454 thousand and a loss on sale of a discontinued operation of $2.0 million are included in 2003 net
income. A real estate transaction gain of $890 thousand and a restructuring accrual reversal of $734 thousand are included in 2002 net
income. The effect that such transactions had on diluted earnings per share was $(0.03) in 2003 and $0.04 in 2002.
2002 Compared to 2001
Net Sales
Net sales for 2002 and 2001 were as follows (in thousands):
% of % of
2002 Total 2001 Total
Healthcare distribution (1):
Dental (2) $1,227,273 43.4% $1,121,394 43.8%
Medical (3) 1,093,956 38.7% 982,569 38.4%
International (4) 437,046 15.5% 398,071 15.6%
Total healthcare distribution 2,758,275 97.6% 2,502,034 97.8%
Technology (5) 66,726 2.4% 56,209 2.2%
Total $2,825,001 100.0% $2,558,243 100.0%
(1) Consists of consumable products, small equipment, laboratory products, large dental equipment, branded and generic
pharmaceuticals, surgical products, diagnostic tests, infection control products and vitamins.
(2) Consists of products sold in the United States and Canada.
(3) Consists of products sold in the United States’ Medical and Veterinary markets.
(4) Consists of products sold in the Dental, Medical and Veterinary markets, primarily in Europe.
(5) Consists of practice management software and other value-added products and services, which are sold primarily to healthcare
professionals in the United States and Canada.
For the year ended December 28, 2002, our net sales increased $266.8 million or 10.4% from the comparable prior year period. Of the
increase in total net sales, $256.3 million or 96.1% resulted from a 10.2% increase in our healthcare distribution business. Of this increase,
$105.9 million resulted from a 9.4% increase in our dental business, $111.4 million resulted from an 11.3% increase in our medical
business and $39.0 million resulted from a 9.8% increase in our international business. The remaining increase in net sales of $10.5 million
resulted from an 18.7% increase in our technology business.
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