Henry Schein 2003 Annual Report Download - page 48

HENRY SCHEIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In thousands, except share and per share data)
Note 5–Goodwill and Other Intangibles, Net (Continued)
Trademarks and trade names and customer relationships were primarily related to acquisitions made during the year ended December
27, 2003. Trademarks and trade names are deemed indefinite-lived intangible assets and are not amortized. Customer relationships are
definite-lived intangible assets which are amortized on a straight-line basis over a weighted-average period of 5.3 years as of December
27, 2003.
Amortization of definite-lived intangible assets for the years ended December 27, 2003, December 28, 2002 and December 29, 2001
was $3.2 million, $1.1 million and $1.3 million. The annual amortization expense expected for the years 2004 through 2008 is $4.6 million,
$3.5 million, $2.6 million, $1.9 million and $1.4 million.
Note 6–Investments and Other
Investments and other consisted of the following:
December 27, December 28,
2003 2002
Long-term note receivables (1) $35,434 $39,566
Investments in long-term marketable securities 11,484 23,976
Deposit on long-term inventory purchase agreement 6,899 ––
Investment in unconsolidated affiliates 5,538 4,728
Non-current deferred income tax asset 4,200 ––
Other 8,687 9,373
$72,242 $77,643
(1) Long-term note receivables carry interest rates ranging from 2.6% to 12.0% and are due in varying installments through 2020. Long-
term note receivables include notes arising from the sale of certain businesses in prior years of approximately $19.7 million in 2003
and $22.5 million in 2002.
Note 7–Business Acquisitions and Divestiture
On January 8, 2004, we entered into agreements to purchase demedis GmbH ("demedis"), a leading full-service distributor of dental
consumables and equipment in Germany, Austria, and the Benelux countries, and Euro Dental Holding GmbH ("EDH"), which includes
KRUGG S.p.A., Italy's leading distributor of dental consumable products and DentalMV GmbH (otherwise know as Muller & Weygandt),
one of Europe's leading direct marketing distributors of dental consumable products. Thirty-five million euros of the purchase price of
approximately 255 million euros was paid on January 20, 2004. The remainder of the purchase price of approximately 220 million euros
is payable in cash and due at closing.
During the year ended December 27, 2003, we acquired eight healthcare distribution businesses, which were not considered material on
either an individual or aggregate basis. On May 28, 2003, we acquired all of the outstanding common stock of Hager Dental GmbH, a
dental distributor of consumable supplies and equipment located in Germany. On June 2, 2003, we acquired the assets of Colonial
Surgical Supply, Inc., a United States dental distributor of consumable supplies, primarily examination gloves. On November 17, 2003
we acquired Damer & Cartwright Pharmaceutical, Inc. and American Medical Services, Inc., specialty pharmaceutical distributors in the
United States.
The 2002 reported net sales were over $50.0 million for Hager Dental, over $40.0 million for Colonial Surgical and over $100.0 million for
Damer & Cartwright and American Medical Services. The acquisitions were accounted for under the purchase method of accounting and
have been included in our consolidated financial statements from their respective acquisition dates.
On August 29, 2003, we sold PMA Bode GmbH, an x-ray film distribution business located in Germany, which was a component of our
healthcare distribution business segment. PMA Bode generated annual net sales of approximately $31.0 million. The loss recorded on
the sale of PMA Bode was approximately $2.0 million (net of $54 tax benefit) and is presented separately as a loss on sale of discontinued
operation in our statements of income. Due to immateriality, we have not reflected the operating results of PMA Bode separately as a
discontinued operation for any of the periods presented.
46