Henry Schein(US:HSIC)2022-05-03 19:28Financial Data and Key Metrics Changes - Total net sales for Q1 2022 were $3.2 billion, reflecting an 8.7% growth compared to the prior year period [38] - GAAP net income for Q1 2022 was $181 million, or $1.30 per diluted share, compared to $166 million or $1.16 per diluted share in Q1 2021 [40] - Operating margin for Q1 2022 was 7.7%, a decrease of 17 basis points compared to the prior year [39] Business Line Data and Key Metrics Changes - Global Dental sales were $1.8 billion, an increase of 2.2% compared to the same period last year, with internal sales growth of 3.5% in local currencies [41] - Global Medical sales grew 18.3% to $1.2 billion, driven by growth in COVID test kits and other point-of-care diagnostics [45] - Technology and Value-Added Services sales increased by 23.4% to $179 million, with internal growth of 11.1% in local currencies [44] Market Data and Key Metrics Changes - North America dental internal sales growth in local currencies was 4.8%, driven by strong performance in equipment, which grew 13.2% [42] - International dental internal sales growth in local currencies was 1.8%, impacted by lower PPE and COVID-19 related product sales [43] - International medical sales were strong, particularly in the UK, benefiting from favorable comparisons to the prior year [44] Company Strategy and Development Direction - The company is executing a strategic plan from 2022 to 2024, focusing on building complementary software and services businesses, enhancing customer experience, and driving digital transformation [8][9] - The company aims to affirm its full-year 2022 GAAP diluted EPS guidance of $4.75 to $4.91, reflecting solid growth and stability [9] Management's Comments on Operating Environment and Future Outlook - Management is monitoring inflation's impact on business, estimating a 3% price inflation on product offerings so far this year [10] - The company has not seen significant supply chain impacts from recent lockdowns in China, as most manufacturing partners are located outside affected regions [14] - Management remains bullish on the equipment market, particularly in digital dental equipment, and expects continued strong demand [28][29] Other Important Information - The company did not repurchase any shares during Q1 2022 but has $200 million authorized for future share repurchases [46] - Operating cash flow for Q1 2022 was $93 million, compared to $63 million for the same period last year [47] Q&A Session Summary Question: Update on April trends in specialty dental, general dental, and medical - Equipment sales remained strong in April with double-digit internal sales growth, while PPE sales were lower due to reduced glove prices [56] Question: Guidance on organic growth considering acquisitions and currency impacts - The internal growth is now expected to be closer to 3.5% to 5.5% due to trends in COVID test kit sales and foreign exchange headwinds [59] Question: Insights on dental equipment business and supply issues - Demand for dental equipment remains strong, but supply challenges persist, particularly for traditional equipment due to supplier exits [81] Question: Seasonality of earnings and future expectations - Earnings may be choppier than historically due to various market dynamics, including COVID test kit pricing and PPE demand [84] Question: Trends in implant sales in the U.S. and internationally - The company is seeing strong demand for implants, with expectations for continued growth into Q2 [88]