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EPS from continuing operations increases 14% to a record $0.81
Company affirms 2009 guidance

MELVILLE, N.Y.– Henry Schein, Inc. (NASDAQ: HSIC), the largest provider of healthcare products and services to office-based practitioners, today reported financial results for the quarter ended June 27, 2009.
Net sales for the second quarter of 2009 were $1.6 billion, a decrease of 1.8% compared with the second quarter of 2008. This consists of a 7.1% decline related to foreign currency exchange, offset by a 5.3% growth in local currencies (see Exhibit A for details of sales growth).

Income from continuing operations attributable to Henry Schein, Inc. for the second quarter of 2009 was $73.5 million, or $0.81 per diluted share, an increase of 13.1% and 14.1%, respectively, compared with the second quarter of 2008. Income from continuing operations for the second quarter of 2008 has been restated for the adoption of FASB Staff Position APB 14-1, which decreased diluted EPS by approximately $0.01.

“We are pleased to report growth in diluted EPS from continuing operations of 14% and operating margin expansion of 65 basis points,” said Stanley M. Bergman, Chairman and Chief Executive Officer of Henry Schein. “Our financial results for the quarter demonstrate a commitment to efficient operations and prudent cash management. The markets Henry Schein serves were largely as we expected them to be during the second quarter.”
Dental Group sales of $626 million declined 5.1%, consisting of a 1.5% decline related to foreign currency exchange and a 3.6% decline in local currencies. The 3.6% decline in local currencies included 1.3% growth in Dental consumable merchandise sales and a 17.5% decline in Dental equipment sales and service revenues.
“Dental consumable merchandise sales figures suggest stabilization in the market and dentists continue to be cautious when committing to purchasing equipment,” commented Mr. Bergman.

Medical Group sales of $351 million increased 8.0%, and were positively impacted by strong sales of consumable products, as well as by sales of products related to the H1N1 virus.

International Group sales of $592 million declined 3.8%, consisting of a 17.2% decline related to foreign currency exchange and 13.4% growth in local currencies. International sales growth in local currencies included particular strength in the Company’s dental equipment and veterinary businesses.

Technology and Value-Added Services Group sales of $43 million increased 3.5% during the quarter, consisting of a 3.8% decline related to foreign currency exchange and a 7.3% growth in local currencies.

Year-to-Date Results
For the first half of 2009, net sales of $3.1 billion represent a decrease of 2.0% compared with the first half of 2008. This decrease includes a 7.4% decline related to foreign currency exchange offset by 5.4% growth in local currencies.

Income from continuing operations attributable to Henry Schein, Inc. for the first half of 2009 was $128.3 million, or $1.43 per diluted share. These results include first quarter 2009 restructuring costs of $4.0 million (or $0.03 per diluted share, after-tax) related to the completion of the expense reduction program announced in November 2008. Excluding the impact of these restructuring costs, income from continuing operations attributable to Henry Schein, Inc. for the first half of 2009 was $131.1 million, or $1.46 per diluted share, an increase of 12.5% and 15.9%, respectively, compared with the first half of 2008 (see Exhibit B for reconciliation of GAAP net income and EPS to non-GAAP adjusted net income and EPS). Income from continuing operations for the first half of 2008 has been restated for the adoption of FASB Staff Position APB 14-1, which decreased diluted EPS by approximately $0.02.
2009 EPS Guidance

Henry Schein today affirmed 2009 financial guidance, as follows:
• 2009 diluted EPS attributable to Henry Schein, Inc. is expected to be $3.11 to $3.26, representing growth of 7% to 12% compared with restated 2008 results of $2.92, excluding charges related to the Lehman Brothers bankruptcy as well as restructuring costs. The 2009 guidance also excludes restructuring costs.
• Guidance for 2009 diluted EPS attributable to Henry Schein, Inc. is for current continuing operations including completed or previously announced acquisitions, and does not include the impact of potential future acquisitions, if any.

Second Quarter Conference Call
The Company will hold a conference call to discuss second quarter financial results today, beginning at 10:00 a.m. Eastern time. Individual investors are invited to listen to the conference call over the Internet through Henry Schein’s Web site at www.henryschein.com. In addition, a replay will be available beginning shortly after the call has ended.

About Henry Schein
Henry Schein, a Fortune 500® company and a member of the NASDAQ 100® Index, is recognized for its excellent customer service and highly competitive prices. The Company’s four business groups – Dental, Medical, International and Technology – serve more than 575,000 customers worldwide, including dental practitioners and laboratories, physician practices and animal health clinics, as well as government and other institutions. The Company operates through a centralized and automated distribution network, which provides customers in more than 200 countries with a comprehensive selection of more than 90,000 national and Henry Schein private-brand products in stock, as well as more than 100,000 additional products available as special-order items. Henry Schein also provides exclusive, innovative technology offerings for dental, medical and veterinary professionals, including value-added practice management software and electronic health record solutions.

Headquartered in Melville, N.Y., Henry Schein employs over 12,500 people and has operations or affiliates in 23 countries. The Company’s net sales reached a record $6.4 billion in 2008. For more information, visit the Henry Schein Web site at www.henryschein.com.

In accordance with the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995, we provide the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied herein. All forward-looking statements made by us are subject to risks and uncertainties and are not guarantees of future performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These statements are identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate” or other comparable terms. A full discussion of our operations and financial condition, including factors that may affect our business and future prospects, is contained in documents we have filed with the SEC and will be contained in all subsequent periodic filings we make with the SEC. These documents identify in detail important risk factors that could cause our actual performance to differ materially from current expectations.

Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: decreased customer demand and changes in vendor credit terms; disruptions in financial markets; general economic conditions; competitive factors; changes in the healthcare industry; changes in regulatory requirements that affect us; risks associated with our international operations; fluctuations in quarterly earnings; our dependence on third parties for the manufacture and supply of our products; transitional challenges associated with acquisitions, including the failure to achieve anticipated synergies; financial risks associated with acquisitions; regulatory and litigation risks; the dependence on our continued product development, technical support and successful marketing in the technology segment; our dependence upon sales personnel and key customers; our dependence on our senior management; possible increases in the cost of shipping our products or other service issues with our third-party shippers; risks from rapid technological change; risks from potential increases in variable interest rates; possible volatility of the market price of our common stock; certain provisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation that affect us. The order in which these factors appear should not be construed to indicate their relative importance or priority.

We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control or predict. Accordingly, any forward-looking statements contained herein should not be relied upon as a prediction of actual results. We undertake no duty and have no obligation to update forward-looking statements.