Summary of Henry Schein Conference Call Company Overview - **Company**: Henry Schein - **Industry**: Medical Supplies and Devices - **Key Executives Present**: Stan Bergman (CEO), Ron South (CFO), Graham Stanley, Susan D'Onofrio (IR) Core Business Strategy - **BOLD Plus One Strategy**: - **B**: Build high growth, high margin businesses in specialty dental and medical products, targeting 50% of operating income from these by 2027 [4][5] - **O**: Optimize core distribution business for efficiency and customer satisfaction [5] - **L**: Leverage relationships with approximately 300 businesses to enhance sales across different product lines [6] - **D**: Digitalization of dentistry and medicine, including a new global e-commerce platform (GEP) [7][8] - **Plus One**: Advance relationships with suppliers, customers, and investors [9] Financial Performance - **Q1 Results**: Sales growth noted, with EPS growth excluding PPE impact [10][11] - **Earnings Growth Target**: High single digits to low double digits anticipated post-cyber incident recovery [11] Market Trends - **Dental Market**: Stable visit rates to dentists in the U.S., with a shift towards value in product selection [16][18] - **Equipment Stability**: Equipment sales stable, with some fluctuations; digital technology demand remains strong [18][21] - **International Markets**: Varying stability across Europe, with Brazil showing positive trends despite economic challenges [19][20] - **Software Demand**: Growth in software demand, transitioning to a SaaS model for recurring revenue [21][40] Long-term Financial Goals - **Earnings Growth**: Commitment to high single digit to low double digit growth, with 2026 guidance dependent on market momentum and restructuring initiatives [24][25] - **Cost Savings**: Expected $75 million to $100 million in cost savings from restructuring, leaning towards the higher end [25] Restructuring and Optimization - **Restructuring Focus**: Emphasis on optimizing endodontic business and leveraging synergies from acquisitions [28][29] - **Continuous Improvement**: Ongoing process to enhance efficiency and reduce costs, supported by KKR's investment [31] KKR Investment - **Strategic Partnership**: KKR holds approximately 15% stake, providing expertise in margin management and expense control [33][34] - **Negotiating Leverage**: KKR's portfolio may enhance negotiating power with suppliers [36] Capital Allocation Strategy - **M&A Activity**: Historical M&A spending of $300 million to $400 million annually, with a significant increase in 2023 [44] - **Share Repurchases**: $161 million in share repurchases in Q1, with a focus on maintaining a strong stock buyback strategy [46] Key Takeaways - **Misunderstood Aspects**: The effectiveness of the BOLD Plus strategy in driving growth and profitability through high-margin businesses and digital technology [48][49]

Company Overview - Henry Schein (HSIC) shares have increased by approximately 6.5% over the past month, outperforming the S&P 500 [1] - The most recent earnings report is crucial for understanding the catalysts affecting the stock [1] Earnings Estimates - Fresh estimates for Henry Schein have trended upward in the past month, indicating positive sentiment among analysts [2][4] - The stock has a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the upcoming months [4] VGM Scores - Henry Schein has a Growth Score of B and a Momentum Score of B, with an overall VGM Score of A, placing it in the top quintile for investment strategies [3] Industry Performance - Henry Schein is part of the Zacks Medical - Dental Supplies industry, where Becton Dickinson (BDX) has seen a 3.3% increase in the past month [5] - Becton Dickinson reported revenues of $5.27 billion for the last quarter, reflecting a year-over-year growth of 4.5% [5] - For the current quarter, Becton Dickinson is expected to report earnings of $3.45 per share, a decrease of 1.4% from the previous year [6]

Summary of Henry Schein (HSIC) 2025 Conference Call Company Overview - **Company**: Henry Schein, Inc. (HSIC) - **Date of Conference**: May 29, 2025 - **Key Speakers**: Ron South (CFO), Andrea Albertini (CEO, Global Distribution and Technology), Tom Popack (CEO, Henry Schein Products Groups) Key Industry Insights - **Market Recovery**: After a slow January attributed to weather, there was a notable recovery in February and March, with positive trends observed in both dental and medical sectors [2][5][7] - **Regulatory Uncertainty**: The introduction of tariffs and regulatory changes has created uncertainty in the market, affecting customer navigation and supplier dynamics [4] - **Dental and Medical Stability**: The dental market remains stable, while the medical sector saw an uptick due to a late flu season, leading to increased sales of diagnostic kits [5] Core Business Initiatives - **Specialty Products Sales**: The distribution sales force is now selling specialty products, particularly in the endodontic business, which has shown strong market share and momentum [9][10][13] - **Implant Market Growth**: The company is experiencing mid to high single-digit growth in the implant market in Europe, while the U.S. market remains relatively flat due to macroeconomic conditions [20][22] - **Global E-commerce Platform**: A new e-commerce platform was launched in the UK and Ireland, with plans for a broader rollout in the U.S. and Canada in 2026. This initiative aims to enhance customer experience and operational efficiency [25][31] Financial Performance and Projections - **Long-term Growth Goals**: The company aims for 8% to 11% EPS growth, contingent on achieving 6% to 8% top-line growth, which is currently challenged by lower market growth rates in core dental and medical sectors [34][35] - **Restructuring Savings**: A restructuring plan initiated last year is expected to yield annual savings of $75 million to $100 million, contributing positively to the cost base by the end of 2025 [37] - **Technology Segment Growth**: The technology segment is expected to return to high single-digit growth, driven by the transition from on-premise to SaaS models, despite current low single-digit growth rates [44][46] Market Challenges and Opportunities - **DSO Relationships**: The company emphasizes the importance of strategic partnerships with Dental Service Organizations (DSOs) to drive profitability rather than engaging in price competition [56][58] - **Medical Segment Growth**: The medical business is projected to achieve a CAGR of 4% to 7%, with home solutions contributing significantly to this growth [61][62] - **KKR Involvement**: KKR's investment is expected to enhance operational efficiency and revenue enhancement initiatives, although it is still in the early stages of collaboration [63][64] Additional Insights - **Equipment Orders**: There is optimism regarding equipment orders, although macroeconomic concerns may lead to delays in installations and revenue recognition [40][41] - **Customer Experience Focus**: The company is working on improving customer experience through loyalty programs and targeted promotions, particularly for online shoppers [30][28] This summary encapsulates the key points discussed during the Henry Schein conference call, highlighting the company's performance, strategic initiatives, and market outlook.

Core Insights - The article discusses the recent earnings call for Henry Schein, Inc (NASDAQ: HSIC), a healthcare distribution company, highlighting the author's perspective on investment strategies and market conditions [1]. Company Overview - Henry Schein, Inc is positioned in the healthcare distribution sector, focusing on building financial assets for investors nearing retirement [1]. Investment Strategies - The author emphasizes the importance of having both long-term and short-term trading strategies, aiming for proper execution of trading plans and achieving absolute investing results [1]. Market Conditions - The article reflects an interest in utilizing inverse ETFs to capitalize on market declines, indicating a proactive approach to market volatility [1].

Summary of Henry Schein (HSIC) 2025 Conference Call Industry Overview - The discussion primarily revolves around the dental and medical supply industry, focusing on trends in dental demand and the company's performance in these sectors [3][4][5][6][36]. Key Points on Dental Market Trends - **January Softness**: January was noted as a soft month for dental demand, attributed to weather impacts and other market conditions [4][5]. - **Improvement in Demand**: February and March showed improvement in patient traffic, with April continuing this positive trend [5][6]. - **Demand vs. Supply**: There is a noted demand for dental services in the U.S. that exceeds supply, leading to an increase in dental office build-outs [6][7][10]. - **De Novo Build-Outs**: The rate of new dental office openings is higher than in previous years, driven by larger Dental Service Organizations (DSOs) recognizing the demand-supply gap [7][10][11]. - **Retirement of Dentists**: An increase in dentist retirements during the pandemic has contributed to the supply shortage [12][13]. Financial Guidance and Performance - **2025 Guidance**: The company maintained its revenue growth guidance of 2% to 4%, primarily driven by internal growth, despite foreign exchange headwinds [14][15][16]. - **Cost Management**: The company aims to achieve $75 million to $100 million in cost savings through restructuring initiatives [23][24]. Product and Service Innovations - **New Product Launches**: The company is focusing on new products like the TAPR Pro conical implant and technology products from Henry Schein One, which enhance customer engagement [19][20]. - **Home Solutions Growth**: The home solutions segment is growing at a high single-digit rate, with a significant acquisition (Ascentis) contributing to this growth [37][38]. Market Dynamics in Implants - **Implant Market Trends**: The U.S. implant market is relatively flat, with growth shifting towards value implants as general practitioners increasingly perform straightforward procedures [28][29][30]. - **Market Share Gains**: The company has gained market share in Europe, particularly in the premium implant segment [26][27]. Integration of Medical and Dental Services - **Shared Infrastructure**: Henry Schein has integrated its medical and dental businesses, sharing distribution centers and management teams, with about 25% to 30% common SKUs [40][41][42]. - **Crossover Services**: There is an increasing trend of community health centers offering both medical and dental services, enhancing cross-selling opportunities [43][44]. Strategic Partnerships and Future Outlook - **Collaboration with KKR**: The partnership with KKR is expected to enhance operational efficiency and provide insights into cross-selling opportunities [45][46][48]. - **Technology Adoption**: The company is focusing on increasing the adoption of its cloud-based systems (Dentrix Ascend) among its customer base, currently at about 10% penetration [49][50]. Conclusion - The company expresses optimism about the future, driven by increased dental office build-outs, strategic partnerships, and a focus on innovative products and services [52][53].

Core Insights - Henry Schein Inc. reported mixed financial results for the first quarter, with adjusted EPS of $1.15, a 4.5% increase year over year, surpassing the consensus estimate of $1.11. However, sales of $3.17 billion fell short of the consensus of $3.23 billion [1] - The company affirmed its 2025 adjusted EPS guidance of $4.80-$4.94, slightly above the consensus of $4.86, and anticipates sales growth of approximately 2%-4% over 2024, projecting sales between $12.43 billion and $13.18 billion, compared to a consensus of $13 billion [2] - Henry Schein expects its 2025 adjusted EBITDA to grow in the mid-single digits compared to 2024, with guidance assuming stable foreign currency exchange rates and no new tariffs [3] Analyst Ratings - Barrington Research analyst Michael Petusky maintained an Outperform rating on Henry Schein but reduced the price target from $90 to $86 [8] - Wells Fargo analyst Vik Chopra also maintained an Equal-Weight rating while lowering the price target from $80 to $75 [8]

Core Insights - Henry Schein reported $3.17 billion in revenue for Q1 2025, a slight year-over-year decline of 0.1% [1] - The EPS for the quarter was $1.15, up from $1.10 a year ago, indicating a positive trend in earnings [1] - The revenue fell short of the Zacks Consensus Estimate of $3.23 billion by 1.84%, while the EPS exceeded the consensus estimate of $1.11 by 3.60% [1] Revenue Performance - Geographic Revenue from International Dental Equipment was $197 million, below the average estimate of $209.20 million [4] - U.S. Distribution Revenue for Dental Equipment was $187 million, significantly lower than the estimated $232.79 million, reflecting a 25.4% decline year-over-year [4] - International Dental Merchandise revenue was $594 million, also below the estimate of $608.26 million [4] - U.S. Distribution Medical revenue was $1.03 billion, slightly above the estimate of $1.01 billion, showing a year-over-year increase of 1.6% [4] - International Dental revenue was $798 million, under the estimate of $824.47 million, with a year-over-year decline of 1.6% [4] - U.S. Distribution Dental Merchandise revenue was $591 million, exceeding the estimate of $569.68 million [4] - Global Specialty Products net sales were $367 million, slightly above the average estimate of $364.59 million [4] Stock Performance - Henry Schein's shares returned -0.3% over the past month, contrasting with the Zacks S&P 500 composite's +0.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Henry Schein, Inc. (HSIC) reported adjusted earnings per share (EPS) of $1.15 for Q1 2025, reflecting a 4.5% increase year-over-year and exceeding the Zacks Consensus Estimate by 3.6% [1][12] Financial Performance - The company recorded a GAAP EPS of 88 cents, up from 72 cents in the same quarter last year [2] - Q1 revenues were $3.17 billion, a slight decline of 0.1% year-over-year, and fell short of the Zacks Consensus Estimate by 1.8% [3] - Constant currency total net sales increased by 1.4%, while excluding PPE and COVID-19 test kits, sales growth was 2% year-over-year [3] Segment Analysis - Global Distribution and Value-Added Services segment sales decreased by 0.7% to $2.68 billion, with a 0.8% increase in constant currencies [4] - Global Dental Distribution merchandise sales rose by 0.4% in constant currencies, while equipment sales fell by 2.4% due to sales deferrals [5] - Global Medical Distribution sales increased by 3% in constant currencies, driven by higher patient traffic and growth from acquisitions [5] - Global Specialty Products segment sales totaled $367 million, up 2% on a reported basis [6] - Global Technology segment sales reached $162 million, reflecting a 2.9% increase on a reported basis [7] Margin and Liquidity - Gross profit for the quarter was $1.00 billion, a 1.2% decrease year-over-year, with gross margin contracting to 31.6% [8] - SG&A expenses decreased by 6.7% to $738 million, while adjusted operating profit rose by 18.6% to $262 million [8] - The company ended Q1 2025 with cash and cash equivalents of $127 million, up from $122 million at the end of Q4 2024 [9] Share Repurchase and Guidance - HSIC repurchased approximately 2.3 million shares at an average price of $71.58, totaling around $161 million, with $718 million available for future repurchases [10] - The company maintained its adjusted EPS forecast for 2025 in the range of $4.80-$4.94, indicating 1-4% growth from 2024 [11] Strategic Outlook - HSIC is advancing its BOLD+1 Strategic Plan for 2025 to 2027, focusing on operational efficiency, enhancing customer experience, and expanding its digital solutions [13]

Financial Data and Key Metrics Changes - Global sales for the first quarter of 2025 were $3.2 billion, down 0.1% compared to the first quarter of 2024, with a 1.5% decrease attributed to foreign currency exchange and a 1.2% growth from acquisitions [27][28] - GAAP operating margin improved by 81 basis points to 5.53%, while non-GAAP operating margin increased by 14 basis points to 7.25% [28] - GAAP net income for the first quarter was $110 million or $0.88 per diluted share, compared to $93 million or $0.72 per diluted share in the prior year [28] - Non-GAAP net income was $143 million or $1.15 per diluted share, compared to $143 million or $1.10 per diluted share in the prior year [29] Business Line Data and Key Metrics Changes - U.S. Dental merchandise sales grew low single digits, while U.S. Dental equipment sales declined by 8.9% due to a deferral of approximately $20 million in sales from Q4 2023 to Q1 2024 [30][31] - U.S. Medical distribution sales grew by 4.7% after excluding PPE products and COVID test kits, with Home Solutions business experiencing a total sales growth of 23% [32] - Global Specialty Products Group saw constant currency sales growth of 4.3%, benefiting from acquisition growth primarily from TriMed [33] Market Data and Key Metrics Changes - International Dental merchandise constant currency sales grew by 1.1%, while international Dental equipment constant currency sales grew by 4.3%, driven by strong growth in Canada and Central Europe [32][33] - The U.S. implant market was slightly down in Q1 2025, with strong sales growth in the DACH region and Latin America [20][21] Company Strategy and Development Direction - The company is advancing its Bold Plus One strategic plan, focusing on growing the distribution business, enhancing customer experience, and developing digital solutions [10][11] - The establishment of two main business units: Global Distribution and Value Added Service Group, and Global Technology Group, is aimed at improving operational efficiency [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the business, noting good sales performance in February and March following a slow January due to weather-related events [8][10] - The company expects to achieve high single-digit to low double-digit earnings growth by executing its strategic plan [10] Other Important Information - The company repurchased approximately 2.3 million shares of common stock during the first quarter at an average price of $71.58 per share, totaling $161 million [35] - The company is maintaining its 2025 financial guidance, expecting non-GAAP diluted EPS to be in the range of $4.80 to $4.94 [38] Q&A Session All Questions and Answers Question: Can you talk about the dollar's impact on revenue guidance? - The company experienced a headwind of about 1.5% from foreign exchange in Q1, but expects foreign exchange to be largely neutral for the remainder of the year [44][45] Question: Can you provide clarity on the operating environment and April's performance? - April was a decent month, with stable traffic for Dental distribution businesses and increased patient traffic for medical sales [47][50] Question: Are there any adjustments to your guidance inputs? - The sales guidance remains consistent, with most growth expected to be internally generated [55] Question: Can you comment on the tariff impacts? - The company is confident in mitigating the financial impact of tariffs through various strategies, including sourcing from lower tariff countries [56][58] Question: How is the dental capital equipment environment? - There has been healthy demand for equipment orders, with no significant adverse reactions noted [108] Question: What is the current sentiment among DSOs? - DSOs are stable to leaning positively, with many adjusting to higher interest rates and continuing to invest in expansion [115]

Group 1: Earnings Performance - Henry Schein reported quarterly earnings of $1.15 per share, exceeding the Zacks Consensus Estimate of $1.11 per share, and showing an increase from $1.10 per share a year ago, representing an earnings surprise of 3.60% [1] - The company posted revenues of $3.17 billion for the quarter ended March 2025, which missed the Zacks Consensus Estimate by 1.84%, remaining unchanged from year-ago revenues [2] Group 2: Stock Performance and Outlook - Henry Schein shares have declined approximately 5.6% since the beginning of the year, compared to a decline of 3.3% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $1.18 on revenues of $3.22 billion, and for the current fiscal year, it is $4.82 on revenues of $12.99 billion [7] Group 3: Industry Context - The Medical - Dental Supplies industry, to which Henry Schein belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]