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]

1 Cautionary Note Regarding Forward-Looking Statements and Use of Non-GAAP Financial Information Q1 2025 Earnings Conference Call 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. Financial Results & Outlook All forward-lo ...

2025 Outlook - The company projects revenue between $10.85 billion and $11.15 billion [7] - The company anticipates a gross margin between 20.75% and 21.25% [7] - Interest expense is estimated to be between $138 million and $142 million [7] - Gross capital expenditures are projected to be between $250 million and $270 million [7] - The adjusted effective tax rate is expected to be between 29.0% and 30.0% [7] - Diluted weighted average shares outstanding are estimated to be approximately 80 million [7] - Adjusted EBITDA is projected to be between $560 million and $590 million [7] - Adjusted EPS is expected to be between $1.60 and $1.85 [7] Assumptions and Caveats - The outlook excludes any potential impacts from the Rotech acquisition, the potential sale of the Products & Healthcare Services segment, and any future share repurchase activity [7] - The company is unable to forecast the most directly comparable GAAP measures without unreasonable effort due to unpredictable elements such as restructuring and acquisition charges [9] - Commodity prices are assumed to be stable, and foreign currency rates are as of December 31, 2024 [7]