The company distributes more than 100 thousand branded health care products and Henry Schein private brand products, primarily to office-based dental, animal health and medical practitioners.
|Most recent||Growth rate (CAGR)|
|1 year||5 years||10 years|
|Book value of equity per share||$19.19||6.7%||5.6%||7.5%|
|BV including aggregate dividends||6.7%||5.6%||7.5%|
|1 year||5 years||10 years|
|Most recent||Growth rate (CAGR)|
|1 year||5 years||10 years|
|1 year||5 years||10 years|
A company creates wealth for its long-term shareholders in 2 main ways - through dividend payments and through the accumulation of retained earnings. This graph shows the accumulation of per-share equity of long-term shareholders (green bars), which consists of the retained earnings plus all capital invested in the company, and the cumulative dividends the company has paid over time per share of its stock (blue bars).
In the words of Warren Buffett: "We're looking for... businesses earning good returns on equity while employing little or no debt."
Return on equity is a key metric of financial performance, indicating a company's ability to generate earnings using shareholder capital. Over time, ROE is one of the major determinants of the rate at which a company creates shareholder wealth. The average ROE for large U.S. companies is 12%, and many investors use it as a threshold for attractive investments.
Companies can boost ROE by increasing leverage, which reduces the safety of the investment. Therefore, it is useful to look at the return on assets (ROA), which measures a company's earning power regardless of its capital structure. A widening gap between ROE and ROA may be a warning sign that should be thoroughly investigated.
Earnings per share is a popular metric used to value a company (using P/E ratio); growth in EPS is often used to judge company growth potential. However, many investors believe that EPS is an inferior metric to ROE, because it ignores the amount of capital the company used to generate earnings.
Free cash flow shows how much cash a company generates from operations, above and beyond what is required to maintain or expand its productive assets. This cash can be returned to investors, or spent by management on growing the company or paying back its debts.
Balance sheets of many companies contain intangible assets such as goodwill, trademarks, patents, etc. Many investors consider intangibles more difficult to value than physical assets. If intangible assets had been valued incorrectly, they must be impaired, resulting in a loss charged against shareholder equity. This chart demonstrates the potential loss to shareholder equity from such impairments.
Companies often use debt financing to increase their return on equity. However, as the amount of debt financing increases relative to the amount of equity financing, the company becomes more sensitive to down turns and other negative events. As a result, many investors use the ratio of debt to equity as a measure of a company's financial risk, and avoid companies that have this ratio above 1.
This chart shows shareholder equity as a percentage of total assets, allowing investors to judge the overall leverage. Companies with a higher proportion of equity can be viewed as safer investments. This metric is particularly important for highly leveraged institutions, such as banks, where it must be at least 4% according to government regulations.
The ratio of current assets to current liabilities is known as the current ratio. This metric is a quick measure of the company's ability to pay its short-term obligations. A current ratio below 1 is a warning sign that should be investigated, especially for companies that cannot count on adequate cash flow from operations.
This chart shows the cumulative dilution of investor ownership in a company over time. Dilution reduces an investor's participation in the future earnings. Dilution increases when a company issues new shares, and decreases when a company buys its shares back. Many investors avoid companies with large chronic dilution.
analysis provides insight into factors affecting the Return On Equity of a company.
The DuPont equation decomposes ROE as follows:
ROE = (Net margin) * (Asset turnover) * (Asset to equity ratio)
Net margin indicates operating efficiency, Asset turnover measures the total asset use efficiency, and the Asset to equity ratio is a measure of financial leverage.
The dividend payout ratio tells investors what percentage of earnings a company returns to shareholders, and what percentage it retains and reinvests. This ratio represents a major capital allocation decision by the company, and can be used to judge management rationality. Rational management should pay out all earnings that cannot be productively reinvested. Therefore, a low dividend payout ratio for a profitable company with a low growth potential may be a warning sign.
Many investors use the P/B ratio as a quick way of judging company valuation. Value investors - followers of Graham and Dodd - specifically seek out companies with low P/B ratios. However, investors should be careful not to make investment decisions on this metric alone, without considering a company's earning and growth potential, since a low P/B ratio can be a sign of a bleak future for the business.
P/E ratio is a popular way of making a quick judgment of a company valuation. Value investors - followers of Graham and Dodd - often seek solid companies with low P/E ratios as investment opportunities. However, P/E ratio represents an oversimplified approach to business valuation, and can often lead to incorrect investment decisions.
On June 21, 1996, the Company sold 3,734,375 shares and certain of its stockholders sold 2,812,000 shares of Common Stock of the Company in a public offering at $35.00 per share, netting proceeds to the Company, after underwriting discounts and expenses, of approximately $124,070. Proceeds from the Offering were used to (i) repay $34,600 outstanding under the Company's revolving credit agreement, and (ii) repay a $2.4 million note payable incurred in connection with a 1995 acquisition; the remaining proceeds will be used for general corporate purposes, including financing possible acquisitions.
Henry Schein, Inc. (Nasdaq: HSIC) announced today (Aug 3, 1998) that it has entered into a definitive agreement to acquire Meer Dental Supply Company, a leading full-service dental distributor serving over 40,000 dentists, dental laboratories and institutions in the United States. Meer Dental, with over $180 million in 1997 sales, will merge its operations with Sullivan-Schein Dental(TM), a division of Henry Schein, Inc., the world's largest healthcare supplier to office-based practitioners. Henry Schein will issue approximately three million shares of its common stock to acquire Meer Dental in a transaction that will be treated as a pooling of interests. The waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act has expired and the merger is expected to close within two weeks -- subject to standard closing conditions. The acquisition is expected to be accretive to the Company's 1999 earnings. However, until integration of Meer is completed in mid-1999, the transaction is expected to be slightly dilutive. In addition, the Company anticipates a non-recurring charge related to this transaction. Headquartered in Canton, Michigan, Meer Dental was founded in 1920 and employs approximately 675 people, including over 200 field sales representatives. The Company distributes over 50,000 products, including dental supplies, dental equipment, and related services, and operates 39 sales offices throughout the United States.
On December 28, 1998 and on December 31, 1998, the Company acquired (a) the Heiland Holding, GmbH, (the "Heiland Group") a leading direct marketer of healthcare supplies, headquartered in Hamburg, Germany for approximately $84,000 [K], and (b) General Injectibles and Vaccines, Inc. ("GIV"), a leading independent direct marketer of vaccines and other injectibles to office based practitioners in the United States for approximately $53,500, both of which will be accounted for under the purchase method of accounting. In 1998, Heiland and GIV had net sales of approximately $130,000 and $120,000, respectively.
On June 18, 2004, we acquired all of the outstanding equity shares of Demedis GmbH (excluding its Austrian operations), which we believe is a leading full-service distributor of dental consumables and equipment in Germany, Austria, and the Benelux countries; and Euro Dental Holding GmbH, which included KRUGG S.p.A., which we believe is Italys leading distributor of dental consumable products, and DentalMV GmbH (otherwise known as Muller & Weygandt, or "M&W"). We refer to these entities collectively as the "Demedis Group." As part of our agreement with the German regulatory authorities, we agreed to divest M&W shortly after the consummation of the acquisition, effected through exercising a put option back to the previous owners. On July 16, 2004, this divestiture was completed for EUR 50.0 million (or $62.2 million), including the assumption of debt of approximately EUR 27.5 million (or $34.2 million), resulting in a reduction of the purchase price for the Demedis Group. The purchase price was approximately EUR 255 million, which includes the assumption and repayment of bank debt and excludes transaction costs, and was determined by arm's length negotiations. The purchase price of EUR 255 million does not include proceeds from the divestiture of Muller & Weygandt. Henry Schein financed the acquisition with cash on hand, borrowings under its existing revolving credit facility and the proceeds of a bridge loan in the amount of $150 million provided by JPMorgan Chase and Lehman Brothers, Inc.
Effective December 31, 2009, we acquired a majority interest in Butler Animal Health Supply, LLC ("BAHS"), a distributor of companion animal health supplies to veterinarians. BAHS further complements our domestic and international animal health operations and accordingly has been included in our Animal health business unit, which is reported as part of Healthcare distribution. We and certain of our subsidiaries contributed certain assets and liabilities with a net book value of approximately $86.0 million related to our United States animal health business to BAHS and paid approximately $42.0 million in cash to acquire 50.1% of the equity interests in Butler Animal Health Holding Company LLC (Butler Holding) indirectly through W.A. Butler Company, a holding company that is partially owned b y Oak Hill Capital Partners (OHCP). As part of a recapitalization at closing, BAHS combined with our animal health business to form Butler Schein Animal Health (BSAH), while incurring approximately $127.0 million in incremental debt used primarily to finance BSAH stock redemptions. As a result, BSAH had $320.0 million of debt at closing, $37.5 million of which was provided by Henry Schein, Inc. and is eliminated in the accompanying consolidated financial statements. Total consideration for the acquisition of BAHS, including $96.1 million of value for noncontrolling interests, was $351.1 million.
On December 30, 2013, we completed the acquisition of approximately 60% of the equity interest in BioHorizons, Inc., a U.S. based manufacturer of advanced dental implants with annual revenues of approximately $115 million. Prior to completion of the acquisition, we funded BioHorizons, Inc. $145 million, which was recorded as a long-term loan included in Investments and Other within our consolidated balance sheet at December 28, 2013. This long-term loan was subsequently recorded as an intercompany loan upon completion of the acquisition and has been eliminated from our consolidated balance sheet as of March 29, 2014.
On January 6, 2014, we announced that we would acquire 100% ownership of five businesses in three European countries from Arseus NV. The businesses combine for annual sales of approximately $97 million and include a dental practice management software company in France and distributors of dental products in France, the Netherlands and Belgium. This transaction was completed on February 3, 2014.