Henry Schein 2008 Annual Report Download - page 6

y any measure, 2008 was a challenging year for corporations
around the world, particularly those operating in the United
States. Henry Schein was not immune to these challenges,
although our Company fared better than most. Healthcare is
historically more resistant to macroeconomic challenges.
Henry Schein is strategically and geographically diversified,
operationally efficient and customer focused, making us more
resilient to these turbulent times. Our financial results for 2008
clearly illustrate this fact.
2008 Financial Results
Our 2008 record net sales of $6.4 billion represent an increase
of 8.3% compared with 2007. This increase includes 7.5%
local currency growth (1.3% internally generated and 6.2% from
acquisitions) and 0.8% related to foreign currency exchange.
Excluding sales of certain lower-margin pharmaceutical products
that we discontinued selling in 2008, internal net sales growth
in local currencies was 3.6%.
Our income from continuing operations for 2008 was
$251.0 million, or $2.75 per diluted share. Excluding certain
one-time charges1, income from continuing operations for 2008
was $270.0 million, or $2.96 per diluted share, reflecting growth
of 14.4% and 14.3%, respectively, compared with 2007.
Our operating margin excluding certain one-time charges for
2008 was 6.9%, an increase of 35 basis points, which is in line
with our stated Company goal for annual operating margin
expansion. We also generated record operating cash flow of
$384.6 million for the year.
Growth during 2008 continued to be enhanced by strategic
acquisitions, which included:
• Minerva Dental, a full-service dental distributor in the
U.K., which strengthens our presence in the U.K. dental
equipment market;
• Noviko, the leading distributor of animal health supplies
in the Czech Republic, the addition of which we believe
makes Henry Schein the largest Pan-European animal
health distributor;
• DNA Anthos Impianti, which adds national equipment sales
and service capabilities to Henry Schein’s offering in Italy;
• Medka, a full-service provider of medical consumables,
equipment and technical services in Germany, which
complements our current German operations;
• ABC Group of Companies, a Hong Kong-based dental
equipment and merchandise distributor that extends our
presence in the growing Chinese dental market;
• Sirona Ibérica, a distribution subsidiary of Sirona Dental
Systems, which enhances our offering of capital equipment
and technology-driven products in Spain; and
• Ortho Organizers, a California-based orthodontics
manufacturer and distributor.
4
T O O UR S TOCKHOLDERS
“Healthcare is
historically
more resistant to
macroeconomic
challenges.”
B
1
Third quarter 2008 charge related to the Lehman Brothers
bankruptcy ($0.03 per diluted share after tax) and fourth quarter
2008 restructuring costs ($0.18 per diluted share after tax).