Henry Schein, Inc. (HSIC), based in Melville, New York, is a leading global provider of healthcare products and services for dental, medical, and veterinary professionals. Operating in over 33 countries, the company delivers more than 300,000 products through its automated distribution network. The company operates in two main divisions, Healthcare Distribution and Technology & Value-Added Services. With around 25,000 employees and over one million customers worldwide, Henry Schein continues to expand its ...

Group 1 - Henry Schein, Inc. is at a pivotal juncture with CEO Stanley Bergman's impending retirement and KKR's strategic entry, holding a 14.5% stake and two board seats [2] - The company is projected to achieve $12.7 billion in sales for 2024 and has an $8.5 billion market cap, operating through three main segments: Global Distribution & Value-Added Services, Global Technology, and Global Specialty Products [2] - HSIC has historically underperformed relative to peers due to margin pressures, supply chain disruptions, and rising SG&A and restructuring costs, with revenue growing at a 5% CAGR from 2020 to 2024 [3] Group 2 - KKR's involvement includes a $250 million strategic investment aimed at restructuring, consolidating headquarters, and enhancing e-commerce and SaaS growth, targeting $75–100 million in cost savings by 2025 [4] - The company is expected to transition into a growth-focused enterprise through high-margin SaaS adoption, operational improvements, and strategic asset rationalization, creating an attractive risk/reward setup for investors over the next 18 months [5] - Activist investor Ananym Capital has called for sharper cost control and divestment of non-core assets, which could unlock substantial shareholder value [3][6]

Company Overview - Cardinal Health, Inc. is a healthcare services and products company based in Dublin, Ohio, with a market cap of $35.4 billion, providing customized solutions across various healthcare sectors [1] - The company is classified as a "large-cap stock" due to its market cap exceeding $10 billion, highlighting its size and influence in the medical distribution industry [2] Performance Metrics - Cardinal Health's shares have declined 11.9% from its 52-week high of $168.44, reached on July 1, and have fallen 8.6% over the past three months, underperforming the S&P 500 Index, which rose by 9.5% in the same period [3] - Over the past 52 weeks, Cardinal Health's stock has increased by 31%, outperforming the S&P 500's 17.3% gain, and on a year-to-date basis, shares are up 25.5% compared to the S&P 500's 12.3% return [4] Recent Earnings - On August 12, Cardinal Health's shares dropped 7.2% following a mixed Q4 earnings report, where adjusted EPS was $2.08, a 13% increase from the previous year, surpassing consensus estimates of $2.03, but revenue of $60.2 billion fell slightly short of analyst expectations [5] Competitive Position - Cardinal Health has underperformed compared to its rival, McKesson Corporation, which saw a 33.4% rise over the past 52 weeks, although Cardinal Health has outpaced McKesson's 21.7% return on a year-to-date basis [6]

Core Insights - Cencora, Inc. is a significant player in the pharmaceutical distribution industry, with a market capitalization of $58.7 billion, providing a range of healthcare products and services [1][2] Company Overview - Cencora offers end-to-end pharmaceutical commercialization solutions, over-the-counter healthcare products, home healthcare supplies, and related services to healthcare providers [1] - The company is categorized as a large-cap stock due to its market cap exceeding $10 billion, highlighting its size and influence in the medical distribution sector [2] Financial Performance - In Q3, Cencora reported revenue of $80.7 billion, an increase of 8.7% year-over-year, and adjusted EPS rose by 19.8% to $4 [5] - The company has raised its fiscal 2025 adjusted EPS guidance to a range of $15.85 to $16 [5] Stock Performance - Cencora's stock has seen a year-to-date increase of 34.6% and a 27.3% rise over the past 52 weeks, outperforming the Health Care Select Sector SPDR Fund's marginal gains [4] - Despite a recent drop of 2.2% from its 52-week high of $309.35, the stock has gained 2.5% over the past three months, outperforming the XLV's 1% gain [3][4] Strategic Positioning - The company's strengths include its strategic positioning in the healthcare value chain, a diversified portfolio, and scale-driven bargaining power [2] - Cencora leverages technological capabilities in supply chain management and data analytics to achieve high operational efficiency, with fill rates exceeding 99% [2]

Financial Data and Key Metrics Changes - The company reported a revenue of $3,600,000,000, an increase of 8.3% compared to the previous year [12][9] - Underlying EBITDA reached $95,200,000, up $2,800,000 or about 3% year-on-year [13][12] - Net profit after tax was $31,200,000, with a statutory result of $20,600,000 [9][10] - Free operating cash flow was negative at $11,000,000, significantly impacted by receivables from a group of pharmacies [19][20] Business Line Data and Key Metrics Changes - Revenue from Australia and New Zealand grew to $3,500,000,000, an increase of 8% [21] - Gross margin in Australia and New Zealand was $277,900,000, up 5% [21] - The Asian market saw revenue increase from $84,200,000 to $101,000,000, a growth of 20% [23] Market Data and Key Metrics Changes - Strong growth was noted in Thailand's aesthetics division, contributing to the overall revenue increase in Asia [24] - The imaging business performed solidly despite some market headwinds [24] - Modest growth was observed in the Philippines due to declining contracts [24] Company Strategy and Development Direction - The company aims to continue its growth strategy in Asia following the merger with Paragon Care Group [2][4] - Focus on operational efficiencies and integration of businesses onto a single platform [26][29] - Emphasis on organic growth through investments in sales teams and new business opportunities in dental, robotics, and aesthetics [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving $12,000,000 in synergies for FY '26, building on the $5,000,000 achieved in FY '25 [26][30] - The competitive landscape in retail pharmacy is evolving, with expectations for continued growth despite challenges [34][35] - Future profitability is expected to improve as synergies are realized and new opportunities are explored [30] Other Important Information - The company completed a refinancing with Scott Pak, increasing local borrowing capacity and reducing interest costs [19][20] - The acquisition of AHP Dental is expected to provide a step into the dental market, with an anticipated EBITDA contribution of around $1,000,000 for FY '26 [46][45] Q&A Session Summary Question: Outlook on revenue and profit for next year - Management indicated that revenue growth would be positive but not necessarily at the same rate as FY '25, suggesting single mid-digit growth rates [33] Question: Competitive landscape in retail pharmacy - Management noted the difficulty in predicting the competitive landscape due to market evolution, particularly following significant mergers [34] Question: Clarification on integration costs in EBITDA - Integration costs were clarified to be excluded from the underlying EBITDA figure [36][37] Question: M&A pipeline and net debt to EBITDA ratio - Management expressed willingness to increase net debt to pursue opportunities, particularly in Asia [38] Question: Details on synergies and cost savings from refinancing - Management confirmed that the $2,000,000 cost saving from refinancing is separate from the $12,000,000 synergy target for FY '26 [43][44] Question: Profitability of recent acquisitions - The AHP Dental acquisition is expected to contribute modestly to EBITDA but offers growth potential in the dental market [46] Question: Focus on growth opportunities in Asia - Management confirmed ongoing efforts to explore acquisitions in Asia that align with current operations [49] Question: Future financing arrangements with Scott Pak - Management indicated a commitment to maintaining the lowest possible cost of funds and flexibility in financing arrangements [57][58]

Financial Data and Key Metrics Changes - The company reported a revenue of $3,600,000,000, reflecting an 8.3% increase compared to the previous year [12][8] - Underlying EBITDA was $95,200,000, up $2,800,000 or about 3% year-on-year, driven by a $25,000,000 increase in gross margin dollars [12][13] - Net profit after tax was $31,200,000, with statutory results showing a net profit of $20,600,000 [8][12] Business Line Data and Key Metrics Changes - Revenue from Australia and New Zealand grew to $3,500,000,000, an increase of 8%, with gross margin rising to $277,900,000, up 5% [21] - The Asian market saw revenue increase from $84,200,000 to $101,000,000, a growth of 20%, with gross margin up by 30% to $46,100,000 [23][24] - Clinical manufacturing signed its first contract manufacturing agreement, indicating growth potential in that segment [22] Market Data and Key Metrics Changes - The Australian pharmacy market experienced solid growth, while hospital pharmacy remained flat [21] - The Asian market, particularly Thailand, showed exceptional growth in aesthetics, contributing significantly to revenue increases [24] - Challenges were noted in Korea due to a doctors' strike, and modest growth was observed in the Philippines due to declining contracts [25] Company Strategy and Development Direction - The company aims to continue its three-two-one strategy, focusing on integrating its businesses and expanding in Asia [27] - There is a strong emphasis on organic growth through investments in sales teams and new business opportunities in dental, robotics, and aesthetics [27][28] - The company is committed to operational efficiencies and simplifying its business structure while exploring merger and acquisition opportunities, particularly in Asia [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving $12,000,000 in synergies for FY '26, building on the $5,000,000 achieved in FY '25 [14][26] - The outlook for revenue and profit growth remains positive, with expectations for improved profitability as synergies are realized [29] - Management highlighted a focus on the competitive landscape in retail pharmacy and the need to adapt to market changes [33] Other Important Information - The company completed a refinancing with Scott Pak, resulting in a $400,000,000 financial covenant-free facility, which is expected to save $2,000,000 in interest annually [18][19] - The company is working towards achieving ISO certifications and GMP accreditation for its facilities [26] Q&A Session Summary Question: Outlook on revenue and profit for next year - Management indicated that revenue growth would be positive but not necessarily at the same rate as FY '25, suggesting single mid-digit growth rates [32] Question: Competitive landscape in retail pharmacy - Management noted that the competitive landscape has evolved, particularly due to recent mergers, and they hope to continue benefiting from trends in the market [33] Question: Clarification on integration costs in EBITDA - Integration costs were clarified to be excluded from the underlying EBITDA, allowing for a clearer view of operational performance [36] Question: M&A pipeline and net debt to EBITDA ratio - Management expressed willingness to increase net debt to pursue opportunities, particularly in Asia, while remaining focused on outcomes [37] Question: Details on recent acquisitions - The AHP Dental acquisition is expected to provide growth opportunities, although it may not contribute significantly to EBITDA initially [46][47] Question: Focus on growth opportunities in Asia - Management confirmed a strong focus on growth opportunities in Asia, with plans to update stakeholders before the AGM [50] Question: Future financing arrangements with Scott Pak - Management confirmed a commitment to maintaining low costs of funds and flexibility in financing arrangements, with a minimum term of two years for the current facility [57]

Core Insights - Henry Schein reported $3.24 billion in revenue for the quarter ended June 2025, a year-over-year increase of 3.3% [1] - The EPS for the same period was $1.10, down from $1.23 a year ago, indicating a decline in earnings [1] - The reported revenue exceeded the Zacks Consensus Estimate of $3.22 billion by 0.6%, while the EPS fell short of the consensus estimate of $1.18 by 6.78% [1] Revenue Breakdown - International Distribution and Value-Added Services - Dental generated $843 million, surpassing the average estimate of $812.72 million, reflecting a 6% year-over-year increase [4] - International Distribution and Value-Added Services - Medical reported $28 million, slightly above the average estimate of $26.36 million, with no year-over-year change [4] - U.S. Distribution and Value-Added Services totaled $1.86 billion, matching analyst estimates but showing an 11.4% decline compared to the previous year [4] - U.S. Distribution and Value-Added Services - Dental Merchandise recorded $602 million, exceeding the average estimate of $595.03 million, but down 29.1% year-over-year [4] - Global Specialty Products net sales were $386 million, slightly above the estimate of $382.44 million [4] - Global Technology net sales were $167 million, compared to the estimate of $161.25 million, reflecting a 22% year-over-year decline [4] - Global Distribution and Value-Added Services net sales reached $2.73 billion, exceeding the estimate of $2.71 billion, but down 6.5% year-over-year [4] - Global Distribution and Value-Added Services - Global Dental reported $1.72 billion, surpassing the estimate of $1.67 billion, with a 10.9% year-over-year decline [4] - Global Distribution and Value-Added Services - Global Medical generated $1.02 billion, slightly below the estimate of $1.03 billion, with a 1.8% year-over-year increase [4] - International Distribution and Value-Added Services totaled $871 million, exceeding the estimate of $839.08 million [4] - Global Distribution and Value-Added Services - Global Dental - Global Equipment reported $439 million, above the estimate of $424.06 million, with a minor 0.2% year-over-year decline [4] Stock Performance - Henry Schein's shares have returned -4.7% over the past month, contrasting with the Zacks S&P 500 composite's +1% 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 Insights - Henry Schein, Inc. (HSIC) reported second-quarter 2025 adjusted earnings per share (EPS) of $1.10, a decrease of 10.6% year-over-year, and missed the Zacks Consensus Estimate by 6.8% [1][9] - The company achieved net sales of $3.24 billion, reflecting a year-over-year increase of 3.2%, and exceeded the Zacks Consensus Estimate by 0.6% [2][9] Revenue Breakdown - Global Distribution and Value-Added Services segment sales rose 2.9% year-over-year to $2.73 billion, surpassing the forecast of $2.66 billion [3] - Global Dental Distribution merchandise sales fell 0.4% in constant currencies, while equipment sales increased by 1.6% [4] - Global Medical Distribution sales jumped 6% in constant currencies, driven by increased patient traffic and growth from acquisitions [4] - Global Specialty Products sales totaled $386 million, up 4.2% year-over-year, reflecting growth in implant and biomaterial sales [6] - Global Technology segment sales reached $167 million, a 7.4% increase, led by strong growth in practice management systems [7] Margin Performance - Gross profit for the quarter was $1.02 billion, a 0.2% decrease year-over-year, with gross margin contracting by 110 basis points to 31.4% due to a 5% rise in the cost of sales [8][9] - SG&A expenses declined by 0.4% to $778 million, while adjusted operating profit increased by 0.4% year-over-year to $238 million [10] Liquidity and Share Repurchase - At the end of Q2 2025, the company had cash and cash equivalents of $145 million, up from $127 million at the end of Q1 [11] - Cumulative net cash provided by operating activities was $157 million, down from $493 million year-over-year, with nearly 3.7 million shares repurchased at an average price of $70.88 per share [12] Guidance - The company maintained its adjusted EPS forecast for 2025 in the range of $4.80-$4.94, indicating 1-4% growth from 2024 [13] - Projected revenue growth for 2025 remains unchanged at nearly 2-4% compared to the previous year [13] Strategic Outlook - The company is advancing its BOLD+1 Strategic Plan for 2025 to 2027, focusing on operational efficiency, enhancing customer experience, and growing its digital footprint [15]

Financial Performance - Q2 2025 - Total sales increased by 3.3% to $3.24 billion[18, 54], with constant currency growth of 2.7%[15, 19, 22] - Non-GAAP diluted EPS was $1.10, a decrease of 10.6% compared to $1.23 in Q2 2024[15, 18, 54] - Adjusted EBITDA was $256 million, a decrease of 4.8% compared to $268 million in Q2 2024[15, 18, 57] - Global Distribution and Value-Added Services Group sales grew by 2.4% in constant currency[15, 22] - Global Specialty Products Group sales grew by 3.3%[15, 22] - Global Technology Group sales grew by 6.6%[15, 22] Segment Performance - U S dental merchandise sales decreased 1.2%[22] - International dental merchandise constant currency sales grew 0.5%[22] - U S Medical sales grew 6.3% including acquisitions[22] Guidance and Strategy - The company maintains 2025 non-GAAP diluted EPS guidance of $4.80 to $4.94[12, 46, 48] - 2025 Adjusted EBITDA is expected to grow in the mid-single digits versus 2024 Adjusted EBITDA of $1.1 billion[46] - Total sales growth for 2025 is projected to be between 2% and 4%[12, 48]

Company Overview - Cardinal Health is a global healthcare services and products distributor, serving hospitals, healthcare providers, pharmacies, and manufacturers [11] - The company operates under three segments: Pharmaceutical and Specialty Solutions, Global Medical Products and Distribution (GMPD), and Other [11] Investment Insights - Cardinal Health has a Zacks Rank of 3 (Hold) and a VGM Score of B, indicating a moderate investment outlook [11] - The company has a Momentum Style Score of B, with shares increasing by 5.6% over the past four weeks [12] - Eight analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate rising by $0.18 to $8.12 per share [12] - Cardinal Health has an average earnings surprise of 10.3%, suggesting potential for positive performance [12]