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]

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].

Group 1 - The analyst reiterated a Strong Buy rating on McKesson Corporation (NYSE: MCK) in March 2025, identifying it as a top investment idea for the year [1] - The company is believed to be largely immune to tariff impacts, suggesting resilience in its business model [1]

Financial Data and Key Metrics Changes - The company's revenue for Q1 2025 was $2.6 billion, up just under 1% as reported, but up 2.3% on a same-day basis compared to the prior year [16] - Adjusted net income for the quarter was $18 million or $0.23 per share, representing about 20% growth compared to $15 million or $0.19 per share last year [21] - Adjusted EBITDA grew 5% to $122 million versus $116 million reported during Q1 2024 [21] Business Line Data and Key Metrics Changes - Patient Direct revenue was $674 million, growing by 6% compared to Q1 2024, with a same-day growth of 7.3% [16] - The Products and Healthcare Services segment reported a decline of 0.8%, while on a same sales day basis, it grew 0.7% compared to the first quarter last year [18] - Operating income in the Patient Direct segment grew by 31%, contributing to a total operating income of $61 million, an improvement of about 7% versus Q1 2024 [20] Market Data and Key Metrics Changes - The company experienced continued growth in oxygen therapy, which began in Q4 2024, and expects growth throughout 2025 [17] - The Medical Distribution division saw good same-store sales, but lower glove prices and international sales offset this growth [18] Company Strategy and Development Direction - The company is actively engaged in discussions regarding the potential sale of its Products and Healthcare Services segment while continuing to run this segment with commitment [10] - Investments in revenue cycle management have led to record collection rates in Q1, with plans to extend these learnings to other divisions [9] - The company is implementing price increases in response to tariffs, effective in early June, while ensuring high-quality product delivery [13][14] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed guidance for the year, expecting improving results in each subsequent quarter, with at least 70% of earnings and cash flow generated in the second half of the year [24] - The company remains bullish on the outlook for earnings and cash flow for the remainder of 2025 [25] Other Important Information - The anticipated annual exposure of current tariffs on products is estimated to be in the range of $100 million to $150 million [13] - The company has opened new state-of-the-art distribution centers to enhance efficiency and service [11] Q&A Session Summary Question: Can you discuss the discussions with customers regarding tariffs? - Management indicated that they are working with customers to identify alternatives and have increased inventory to mitigate tariff impacts [26][29] Question: What is the impact of foreign exchange on the business? - Management noted that while there was volatility in the dollar, they are comfortable with the guidance for the rest of the year regarding FX [31][33] Question: What is the split of tariff exposure between segments? - The majority of tariff exposure is in the Products and Healthcare Services segment, with very little exposure in the Patient Direct segment [40] Question: How is the RoTEK acquisition being accounted for in guidance? - The debt from the RoTEK acquisition will not appear on the balance sheet until the deal closes, and guidance will be updated accordingly [47][49] Question: What is the expected free cash flow for the year? - Management confirmed that they still expect to generate good free cash flow and use it to pay down debt [52]

Financial Data and Key Metrics Changes - The company's revenue for Q1 2025 was $2.6 billion, up just under 1% as reported, but up 2.3% on a same-day basis compared to the prior year [15] - Adjusted net income for the quarter was $18 million or $0.23 per share, representing about 20% growth compared to $15 million or $0.19 per share last year [19] - Adjusted EBITDA grew 5% to $122 million versus $116 million reported during Q1 2024 [19] Business Line Data and Key Metrics Changes - Patient Direct segment revenue was $674 million, growing by 6% compared to Q1 2024, with a same-day growth of 7.3% [15] - The Products and Healthcare Services segment reported a decline of 0.8%, while on a same sales day basis, it grew 0.7% compared to the first quarter last year [16] - Operating income for the Patient Direct segment grew by 31%, resulting in a 173 basis point expansion [6] Market Data and Key Metrics Changes - The Medical Distribution division saw continued growth in same-store sales, but lower glove prices and international sales offset this growth [16] - The company experienced a significant increase in proprietary product sales running through its distribution channel, a key strategic initiative [16] Company Strategy and Development Direction - The company is actively engaged in discussions regarding the potential sale of its Products and Healthcare Services segment while continuing to run this segment with commitment [9] - Investments in revenue cycle management have led to record collection rates in Q1, with plans to extend these learnings to other divisions [8] - The company is implementing price increases in response to tariffs, effective in early June, while ensuring high-quality product delivery [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance and reaffirmed guidance for the year, expecting improving results in each subsequent quarter [22] - The anticipated annual exposure of current tariffs on products is estimated to be between $100 million to $150 million, primarily affecting the Products and Healthcare Services segment [12][27] - Management noted that the first quarter typically marks the payment of incentive compensation, impacting cash flow, but expects significant improvement in cash flow for the remainder of the year [20] Other Important Information - The company opened new state-of-the-art distribution centers in Morgantown, West Virginia, and Sioux Falls, South Dakota, to enhance its distribution network [10] - The company is awaiting a final decision from regulators regarding the planned acquisition of RoTEK, expecting to close in the first half of 2025 [8] Q&A Session Summary Question: Can you discuss the discussions with customers regarding tariffs? - Management indicated that the tariff exposure is estimated between $100 million to $150 million, primarily from China and Thailand, and emphasized the need to work collaboratively with customers to address pricing adjustments [27][28] Question: How should we think about the FX impact progressing through the year? - Management noted that while there was volatility in the dollar, particularly in March, the situation has calmed, and they are comfortable with the guidance for the rest of the year regarding FX [31][32] Question: What is the split between the tariff exposure in the PNHS and PD segments? - Management clarified that virtually all tariff exposure is in the Products and Healthcare Services segment, with minimal exposure in the Patient Direct segment [40] Question: How is the RoTEK financing accounted for in guidance? - Management explained that none of the debt will appear on the balance sheet until the deal closes, and they will update guidance accordingly [47] Question: What happens if customers refuse price increases due to tariffs? - Management stated that they cannot sell products at a loss and will work with customers to find alternative products that are lower in cost [61][64]