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Health care product distributor Henry Schein has redoubled its effort to provide in-kind donations and grants to disaster-stricken areas, as well as to work with NGOs to proactively supply vulnerable areas with medical and dental supplies—so supplies are there even if roads or airports become unusable. Its Global Product Donation Program has donated over $75 million in health care supplies to health centers and clinics since its 1998 inception. Henry Schein also provides $10,000 in cash grants and $25,000 in products through its Prepare to Care Program to each of five nonprofit partners committed to disaster-relief preparedness and immediate assistance in natural disaster-prone areas.

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CTW.1122.Henry Schein

As with many aspects of daily living, the standard dentist visit was not designed with much consideration for the needs of those with disabilities. For some, the experience may be physically inaccessible; for others, like those with developmental disabilities such as autism, the environment and experience—with its bright lights, buzzing noises, and close contact—can be terrifying and traumatic. Meanwhile, in part due to those challenges, people with disabilities suffer higher rates and more severe cases of periodontal disease, gum disease, and untreated cavities—all conditions that can lead to other health problems. Henry Schein, the dental and medical supply company, began work to address this disparity more than a decade ago, forging partnerships—like Project Accessible Oral Health—to increase training and adapt dental practices to better serve disabled people. The efforts have resulted in provision of specialized services to hundreds of thousands of children as well as a new dental school curriculum, developed with stakeholders like the American Dental Education Association.

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Founded by its namesake as a Queens, N.Y., pharmacy in 1932, the company is now one of the world's largest distributors of dental supplies and other medical goods, operating in more than 30 countries. An ever-present on Fortune's list of the <a href="https://fortune.com/worlds-most-admired-companies/">World's Most Admired Companies</a>, it is considered by many in its sector as a leader in social responsibility. With $10.1 billion in sales last year, Henry Schein moved up six spots on this year's Fortune 500 list.

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F500-2020_304_Henry-Schein

Long Island's largest public company by revenue, Melville, N.Y.-based Henry Schein globally distributes medical and dental supplies including vaccines, pharmaceuticals, financial services, and equipment. The company kicked off 2019 by spinning out its animal health unit in an attempt to focus on its core medical and dental businesses; it ended the year with the novel coronavirus pandemic eroding its business.

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19.CTW20.21.Henry-Schein

Five years ago, well before COVID-19 entered the lexicon, Henry Schein CEO Stan Bergman called on his peers at the World Economic Forum to think collectively about pandemic preparedness. It worried him that there was no organized emergency product list, and no directory of where to get such products when emergency struck. Soon after, Bergman’s dental and medical supply company became a founder and the private-sector lead of the Pandemic Supply Chain Network, a public-private partnership whose members include the World Health Organization, the World Bank, UPS, and more than five dozen health care manufacturers. 
 
The group created a platform to convene responders and exchange information. Says Bergman: “You can’t do it in the middle of a pandemic. You’ve got to exchange business cards well before.” The network functioned well in recent Ebola outbreaks, and in response to COVID-19, it has sourced more than $200 million worth of critical supplies, like masks, gowns, and swabs, so far.

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Henry Schein is a global health care services distributor of dental and medical supplies, business and supply-chain solutions, and tech-forward integrated care solutions. The nearly century-old company operates in over 30 countries and has developed more than 300,000 products, from diagnostics to surgical and orthopedics, including whitening strips, dental implants, patient communication services, and a dual-cuff blood pressure monitor. In early 2025 the company acquired Acentus, a national medical supplier of continuous glucose monitors, to expand its portfolio. Henry Schein has been named among the World’s Most Ethical Companies by Ethisphere for 13 consecutive years.

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Henry Schein (HSIC): Company Profile, Stock Price, News, Rankings

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Henry Schein

henry schein

Good morning, ladies and gentlemen. Welcome to Henry Schein's First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in listen only mode. Later, we'll conduct a question and answer session. Please press the star key followed by one on your touch tone phone if you'd like to ask a question at the end of the call.

If anyone should require operator assistance during the call, please press the star key followed by zero on your touch tone phone. As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Graham Stanley, Henry Vice President of Investor Relations and Strategic Financial Project Officer. Please go ahead, Graham.

Thank you, operator, and thanks to each of you for joining us today to discuss Henry Schein's financial results for the first quarter of twenty twenty five. With me on today's call are Stanley Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein and Ron South, Senior Vice President and Chief Financial Officer. Before we begin, I'd like to state that certain comments made during this call will include information that's forward looking. Risks and uncertainties involved in the company's business may affect the matters referred to in forward looking statements, and the company's performance may materially differ from those expressed in or indicated by such statements. These forward looking statements are qualified in their entirety by the cautionary statements contained in Henry Schein's filings with the Securities and Exchange Commission and included in the Risk Factors section of those filings.

In addition, all comments about the markets we serve, including end market growth rates and market share are based upon the company's internal analysis and estimates. Today's remarks will include both GAAP and non GAAP financial results. We believe the non GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable the comparison of financial results between periods where certain items may vary independently of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. These non GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding GAAP measures. Reconciliations between GAAP and non GAAP measures are included in Exhibit B of today's press release and can be found in the Financials and Filings section of our Investor Relations website under the Supplemental Information heading and in our quarterly earnings presentation also posted on our Investor Relations website.

The content of this conference call contains time sensitive information that is accurate only as of the date of the live broadcast, 05/05/2025. Henry Schein undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances after the date of this call. Lastly, during today's Q and A session, please limit yourself to a single question and a follow-up. And with that, I'd like to turn the call over to Stanley Bergman.

Thank you, Graham. Good morning, everyone. Thank you for joining us. Let me begin by saying that we are pleased with our first quarter financial results as well as the momentum we are seeing heading into the second quarter and remain confident in the fundamentals of our business. After a rather slow January, which was a result of weather related events, February and March sales performance was good and within our full year guidance range.

As reported, sales growth was significantly impacted by the strong U. S. Dollar. And I would like to remind everyone that last year's U. S.

Equipment business was impacted by a deferral of sales from the fourth quarter of twenty twenty three into the first quarter of twenty twenty four, making for a difficult year over year comparison. Once we adjust for the effect of the strong dollar as well as PPE and COVID test kit sales, our sales growth was approximately 2% with sales growth accelerating throughout the quarter. We are advancing our Bold plus One strategic plan, which has been refreshed for 2025 to 2027 with a focused on growing the distribution business through increasing operational efficiency and enhancing customer experience, growing our Dental and Medical specialty businesses and corporate brand products and further developing our digital footprint and digital solutions. We do remain committed to our long term financial goal of high single digit to low double digit earnings growth by continuing to successfully execute against the strategy. Our last earnings call, during the call, we announced the establishment of two main Henry Schein business units, the Global Distribution and Value Added Service Group and the Global Technology Group, which is led by Andrea Albertini and the Global Specialty Products Group, which is led by Tom Popak.

This past quarter, we began to operate the company through these new business groups and are pleased with the leadership and the performance of both of these business groups. So here are some highlights from the first quarter with respect to advancing the Bold plus One strategy, continued to launch several new products and solutions in our Specialty Products and Technology businesses. We broadened our Home Solutions platform with the acquisition of Excentis, a U. S. National distributor of continuous glucose monitors to Vorum.

We expanded the sales of specialty products through our distribution businesses, those are the specialty products that are now being sold through the Henry Schein distribution sales organization. And we continue to implement restructuring initiatives to right size expenses in our distribution businesses, corporate functions and to consolidate manufacturing facilities. And yes, the global e commerce platform, GEP, in The U. K. And Ireland is now fully operational and we are on track to begin a phased launch in North America during the third quarter of this year.

After exceeding our strategic goal of achieving 40% of our operating income from high growth, high margin businesses in 2024, we expect operating income from high growth, high margin businesses to continue to grow steadily. We now expect these businesses to contribute over half of our total operating income by

our strategic planning cycle of 2027. These businesses include specialty products, value added services and technology. Additionally, operating income in excess of 10% of our total operating income is attributable to our Corporate Brand products. Turning now to a review of our key businesses. We'll start with the Global Distribution and Value Added Services Group.

During the quarter, we believe the Merchandising Equipment markets as well as The U. S. Medical market were overall stable and that we gained market share. Sales growth in our core Dental and Medical Distribution businesses did accelerate following a slow start in January, which as I noted was primarily the result of weather related events. And our growth in March was within our full year guidance range of 2% to 4%.

U. S. Dental merchandise sales grew low single digits with excluding sales of PPE. Product pricing was overall in line with last year and our sales growth therefore reflected volume growth. We also recently implemented a new commission plan that we expect will drive sales and profitability growth.

The U. S. Dental equipment sales growth was impacted by a deferral of sales from the fourth quarter of twenty twenty three into the first quarter of twenty twenty four. So moving from the fourth quarter of twenty twenty three into the first quarter of twenty twenty four, making for a difficult year over year comparison. We do see consistent demand for both traditional and digital equipment as practitioners continue to invest in their practices.

We are also seeing the number of new practice build outs increasing. Our U. S. Medical business growth sales growth was solid for the quarter, reflecting increased patient traffic to physician offices for respiratory illness, a strong performance by our Home Solutions business and some acquisition growth. International Dental merchandise sales were strong in Canada, Central Europe and Brazil, offset by some softness in France.

Similar to the rest of the company, sales accelerated throughout the quarter. I would like to stress that when reviewing our international sales that investors take into account the swings in foreign exchange. International Dental Equipment sales grew well in Canada and across most of Europe. The focus on new product launches at this year's IDS International Dental Show in Cologne included three d printers and intraoral scanners to help improve dental office workflows and we expect our sales to benefit in future quarters from orders taken at the show. Again, foreign exchange did impact our sales results in U.

S. Dollars. On the Value Added Services sales side, the sales decreased in the quarter one as a result of lower sales in our Practice Transitions business. Sales in this business can fluctuate from quarter to quarter. However, there is a strong pipeline of active transactions that we expect to close throughout the remainder of the year.

Now on the Global Specialty Products side, the Global Specialty Products Group includes, of course, implants and biomaterials as well as endodontics, orthodontics and orthopedic products. Sales in the first quarter reflected continued growth in implanted biomaterials and some acquisition growth. Sales of implants grew mid single digits in constant currency, again big swings in foreign exchange here, with strong sales growth in the DACH region as well as in Latin America, driven by both our premium brand, BioHorizons Camalog as well as our SIN value brand. We estimate that The U. S.

Domestic market for dental implants was slightly down in the quarter. Our U. S. Sales were in line with market growth and reflect continued rollout of the BioRyzen Static Pro Conical implant and SmartShape Healer Abutment as well as growing sales of the SIN implants in The United States. Overall, in the markets we serve, we believe we continue to gain market share this quarter, and that's for implants and biomaterials.

We continue to launch new internally developed products in our Endodontics business and are pleased with our underlying growth. While orthodontics remains a small component of our specialty business, Product sales were down year over year as we continue working to restructure this business. Finally, our Orthopedic Products generated solid first quarter sales growth in high single digits. Let me conclude my prepared remarks with a discussion on the Global Technology Group. We had rather strong growth in practice management systems, including Dentrix, Ascent and Bentalli cloud based solutions as well as in revenue cycle management products.

These were partially offset by lower sales of certain legacy products that we are sunsetting. The consolidation of these products is having a short term impact on this segment's sales growth, but has enabled us to reduce operating costs and achieve strong operating income growth, while positioning the software portfolio for better customer experience going forward. Practice management software growth was driven by a 20% increase in cloud based customers and we now have 9,500 customers subscribed to Dentrix Ascend and Dentale and are making good progress in advancing these cloud based systems into DSOs. We also continue to enhance the functionality of our practice management software with a new dental imaging subscription plan that automatically attaches images directly to insurance claims for faster payments. Yes, so here are some comments on the tariffs.

Let me conclude my remarks with these comments. Several years ago, we began diversifying and moving the sourcing of corporate brand products to what we anticipated to be lower tariff countries. In addition, most of our specialty products are manufactured in their local markets. We have been working closely with our suppliers and customers to address the impact of current tariffs. For our more price sensitive customers, we'll continue to offer Corporate Brand alternatives.

We believe our current and future actions with our suppliers and customers will be effective at mitigating this year's impact on our financial results from the current tariff situations. We are monitoring the situation carefully as of course, we cannot predict when tariffs will change again. Of course, tariff changes are have been quite volatile and nor can we comment or anticipate if they will have a significant impact on the macroeconomic conditions. So let me now turn the call over to Ram to review our first quarter financial results and discuss our 2025 financial guidance. Ron, please.

Thank you, Stanley, and good morning, everyone. As usual, today I will review the financial highlights for the quarter and would like to remind investors that on our Investor Relations website, we have also included a financial presentation containing additional detailed financial information. Starting with our first quarter sales results, I will provide details on total growth as well as constant currency sales growth compared with the prior year. Global sales were $3,200,000,000 with sales down 0.1% compared with the first quarter of twenty twenty four. Sales growth reflected a 1.5% decrease attributable to foreign currency exchange and a 1.2% growth from acquisitions.

As Stanley mentioned, excluding the impact of PPE and COVID test kits, constant currency sales growth was 2%. Our GAAP operating margin for the first quarter of twenty twenty five was 5.53%, an 81 basis point improvement compared with the prior year GAAP operating margin. On a non GAAP basis, operating margin for the first quarter was 7.25%, a 14 basis point improvement compared with the prior year non GAAP operating margin, driven by lower operating expenses resulting from restructuring program. First quarter twenty twenty five GAAP net income was $110,000,000 or $0.88 per diluted share. This compares with prior year GAAP net income of $93,000,000 or $0.72 per diluted share.

First quarter twenty twenty five non GAAP net income was $143,000,000 or $1.15 per diluted share. This compares with prior year non GAAP net income of $143,000,000 or $1.1 per diluted share. Adjusted EBITDA for the first quarter of twenty twenty five was $259,000,000 compared with first quarter twenty twenty four adjusted EBITDA of $255,000,000 Turning to our sales results. The components of sales growth for the first quarter are included in Exhibit A to this morning's earnings release. So I will provide the primary highlights of the main sales drivers for each reporting segment, starting with our Global Distribution and Value Added Services Group.

The Global Distribution and Value Added Services Group benefited from acquisition growth of 0.9%, mainly from the acquisition of Ascentis, our most recent acquisition in the home solutions space. Constant currency sales, including acquisition growth, grew by 1.5% after excluding PPE and COVID test kits. U. S. Dental merchandise sales grew 0.7% when excluding PPE products and U.

S. Dental equipment sales declined 8.9%. Our sales growth was impacted by a deferral of approximately $20,000,000 in equipment sales from the fourth quarter of twenty twenty three into the first quarter of twenty twenty four, making for a difficult year over year comparison. Adjusting for this, U. S.

Dental equipment sales growth was flat versus the prior year. Regarding U. S. Medical distribution, after excluding sales of PPE products and COVID test kits, sales grew by 4.7%. Our Home Solutions business had another strong quarter with total sales growth of 23%, including 9% internal growth.

International Dental Merchandise constant currency sales grew 1.1%. PPE products did not have a meaningful impact on our international Dental Merchandise sales growth. International Dental Equipment constant currency sales grew 4.3% driven by strong growth in Canada and solid growth across Central Europe. Finally, Global Value Added Services sales growth was impacted by the timing of transactions within our practice transitions business. Turning to the Global Specialty Products Group, constant currency sales growth was 4.3% benefiting from acquisition growth of 4% primarily attributable to TriMed, the orthopedics products business we acquired last year.

Beginning in the second quarter, this business will be part of internal sales as our TriMed acquisition annualized in April. In addition, our implant and biomaterial business experienced good growth in the first quarter, especially in the DACH region of Europe where sales increased high single digits. The Global Specialty Products Group also includes the endodontic business, which had slightly negative growth this quarter as a result of a supply chain issue with our EDGE ProLaser product, which has now been resolved, as well as the orthodontic business, which has negative sales growth and as I mentioned last quarter is being reorganized to support future profitable growth. Regarding the Global Technology Group, while total sales growth was 2.9%, operating income grew 24% versus the prior year reflecting strong expense management. Restructuring expenses in the first quarter were $25,000,000 or zero one four dollars per diluted share.

These expenses mainly related to severance benefits. We now believe we will achieve annual run rate savings at the high end of our $75,000,000 to $100,000,000 goal by the end of twenty twenty five. Our first quarter GAAP results include $20,000,000 in pre tax proceeds as part of our cyber insurance claim, which are excluded from our non GAAP results. We have now received all of the proceeds from this claim, which totaled approximately $60,000,000 over the course of 2024 and the first quarter of this year. Regarding share repurchases, we repurchased approximately 2,300,000.0 shares of common stock during the first quarter an average price of $71.58 per share for a total of $161,000,000 At quarter end, we had approximately $718,000,000 authorized and available for future stock repurchases.

Turning to our cash flow. We generated operating cash flow of $37,000,000 in the first quarter of twenty twenty five. The first quarter typically has a lower cash flow quarters in the year and we still expect operating cash flow to exceed net income for the full year. Let me conclude my remarks with a discussion of financial guidance. At this time, we are not able to provide without unreasonable effort an estimate of restructuring costs associated with the restructuring plan for 2025.

Therefore, we are not providing GAAP guidance. Our 2025 guidance is for continuing for current continuing operations as well as acquisitions that have closed and does not include the impact of restructuring and integration expenses and other items detailed in our press release. Regarding tariffs, as Stanley said, we believe our current and future actions with our suppliers and customers will be effective at mitigating this year's impact on our financial results from the current tariff situation. We have the widest selection of alternative products, including corporate brand products. Given the ongoing uncertainty, we continue to monitor the tariff situation closely and we will provide updates to our guidance as appropriate.

So today, we are maintaining our 2025 financial guidance. As a reminder, our 2025 guidance is as follows. We expect non GAAP diluted EPS attributable to Henry Schein, Inc. To be in the range of $4.8 to $4.94 and that it is expected to be more heavily weighted to the second half of the year. 2025 adjusted EBITDA is expected to grow in the mid single digits versus 2024 adjusted EBITDA of $1,100,000,000 20 20 5 total sales growth is expected to be 2% to 4% over 2024.

Our 2025 guidance also assumes an estimated non GAAP effective tax rate of 25% and that foreign currency exchange rates remain generally consistent with current levels. With that, I'll now turn the call back to Stanley.

Thank you, Ron. Operator, do we have some questions?

Thank you. We'll now be conducting a question and answer If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys.

One moment please while we poll for questions. Thank you. And our first question is from the line of Jon Block with Stifel. Please proceed with your questions.

start at a high level. Can you talk about the dollar? I'm just guessing it's a decent tailwind to the initial reported revenue guidance of 2% to 4% year over year. Is there a figure or metric to provide? And then similarly, how do we think about that when it flows down to the bottom line?

I'm guessing somewhat accretive there, but any specifics would be appreciated. And then I'll just ask a follow-up.

Well, for the first quarter, John, we did have a headwind versus prior year of about 1.5% from foreign exchange. What we've seen happen in the rate since then would suggest that we should be fairly neutral versus prior year, more or less. As you can appreciate, very difficult to project the foreign exchange rates right now. So our sales guidance takes that into consideration at this point in time. So we're not expecting any further significant variance and impact on growth going forward when looking at foreign exchange rates versus last year.

But we did have a significant headwind in the first quarter, primarily driven by the euro. Our biggest exposure foreign exchange wise is to the euro and primarily driven by the euro.

Okay. I mean, guess just a follow-up sort of clarity question there. I get 1Q, but obviously the dollar weakened meaningfully in March. And most companies with 35%, forty %, forty five % international sales are saying that it was aided their reported revenue guidance by 100 to 200 bps when we think about full year. So I'm sorry, was sort of asking more, when we think about the original guidance you gave of 2% to 4%, is there a way to quantify dollar on top and bottom line?

And I don't know if there's follow-up, but color there, but just to pivot, Stanley, the second question, would love more color on sort of the environment you called out. I know you said February and March improved, maybe that wasn't surprising, but the ongoing momentum that you cited in the PR implies April, and that would be call it despite liberation day volatility that we've seen in the markets and what that may or may not mean for dental. So we just love any clarity or color you're able to provide on what you're currently seeing and most specifically to April. Thanks guys.

So I think that's again a very good question. I can address what we're seeing now. Of course, we can't address future sentiment, what the consumer is going to be thinking going forward. But April was again a pretty decent month. Overall, we believe traffic for our Dental distribution businesses continues to be stable globally.

In The U. S. Specifically, general merchandise seems stable. We didn't see much price adjustments this year at the beginning of the year. I'm sure they'll start coming through, of course, because it's ARRIS.

And we saw some modest growth in volume. Our medical sales reflect increased patient traffic to reflected increase in traffic to patient offices for respiratory illness. So if you look at the dental and medical markets in The U. S, they're pretty stable right now. We just had our Thrive customer meeting, it was well attended.

I would say there were more practices than in the past with fewer attendance per practice, which means dentists are watching the expenses. But the mood was pretty good and the sales were okay. I attended a DSO leading DSO meeting on Saturday and the mood was okay. We are seeing on the equipment side some build outs, new practices build outs, existing practices build outs. So I would say there's strong evidence that the market in The U.

S. Is stable. Likewise in Canada, of course when you go into Europe it's very much dependent on the market per se. Australia was a little bit cautionary given the election period but overall Brazil is stable. And so I think overall the mood is okay but this could change in a moment's notice if the macro environments change.

So I can give you more specifics if anyone has a request on the implant side, but that's sort of the general mood.

Our next question is from the line of Jason Bednar with Piper Sandler. Please proceed with your questions.

Thanks, and good morning, everyone. Maybe I'll start with a quick follow-up, maybe to Jon Block's question. Ron, are there any adjustments to the inputs into your guidance that are you're making today even though the output isn't changing? And then I want to clarify on the tariff comments today. Think you said you're confident in mitigating this year's impact.

Is that an acknowledgment that there will be direct impacts on your business from tariffs? Or is the mitigation comment more related to how you expect to navigate price adjustments from suppliers?

I'll start with the first part of your question. So I mean regarding our guidance, I'm assuming Jason that you're referencing sales guidance and then from that the other outputs whether it be EPS, EBITDA, etcetera. But our sales guidance assume most of our sales growth is expected to be internally generated. With exchange rates where they are right now and taking into consideration the first quarter headwinds we had, we now expect foreign exchange to be largely neutral to the balance of the year. And so that's the 2% to 4% that we are expecting.

Acquisition growth is expected to provide less than one point of growth for us this year. So our sales growth is largely internally generated. With reference to the tariffs, when we say mitigate, we're really talking about mitigating financial impact. So we've walked through several different scenarios internally in terms of what could happen from a tariff perspective. But we as Stanley mentioned before, we began diversifying and moving the sourcing of corporate brand products to lower tariff countries.

We're in a unique situation where we are the importer of record for some products, for those products that we manufacture, for some products that we are selling under our private label, our corporate brands. But then we also buy a lot of as you're aware, buy a lot of products from third parties where we're not the importer of record. So we have plans in place and we're working very closely with our suppliers as well as with our customers to come up with various means of mitigating any kind of impact from the tariffs. And we believe based on what we know today that, we can mitigate those effects. Now what we have to kind of wait and see is what kind of potential price increases will we get from our branded suppliers.

I think they've even indicated in some public remarks that they're doing their best to not pass along those price increases. So the answer to your question is our by maintaining our guidance, what we're saying is that we believe there could be some effect of this, but we can mitigate the ultimate financial effect of it.

All right. That's very helpful. And then for a follow-up, Stanley, you've seen a lot of different macro situations in your career, odd fluctuations in the economy and or the dental market. How does tariff uncertainty from the past couple of months stack up? And even if you're not seeing foot traffic changes in the office, I think a lot of us are anticipating that maybe that happens at some point.

But right now, consumers don't seem to be changing. But what about dentists' behavior? Because dentists oftentimes are consumers themselves, and we've seen the ADA data around dentists' sentiment tick lower here alongside broader consumer sentiment in The U. S. I guess how are you thinking about dentists behavior in this market?

Jason, as I indicated earlier on, at the moment we don't see a huge negative impact, in fact we don't see much at all. Our bookings on equipment are pretty steady, actually a little bit robust I would say and in line with the kind of backlogs that we saw pre COVID. So I would say it's relatively stable. Dentists are investing in their practices. There's obviously quite a large investment on the digital side but traditional equipment is pretty steady and we're seeing new practices open and the DSOs that are well financed are expanding with the De Novo site.

So at the moment it's pretty stable. I would say it's a little bit better, I can't give you specific data, but it feels a little bit better than the general consumer sentiment. And the medical business is quite good. We did have periods where the early part of the year, the respiratory sensitive part of the year were challenged but this year was from a sales point of view a bit better. So this all leads us to conclude that the markets that we serve are stable.

As I mentioned, actually what I just the color I just gave relates mostly to The U. S. But as I mentioned earlier on, when you go outside of The U. S. It's very country dependent.

And I would say the majority of the countries that we serve, it's okay. From a tariff point of view specifically as it relates to specialty products most of the products that we sell are locally made so there's no real tariff impact. I think on the implant side The US market is a bit weaker than maybe a year or so ago. But that's been made up by in our case strong sales in Europe particularly Germany. We do not sell much in terms of specialty products in Asia, we do in Japan but not in China.

So those big variables that we see maybe some of the other implant companies as it relates to Asia is not a factor at Henry Schein. But I would say we started out the prepared remarks with stability and I think my sense is that's still the case. Of course no one knows where the broader economy will head but right now it seems okay.

Our next question comes from the line of Jeff Johnson with Baird. Please proceed with your question.

Thank you. Good morning, Just maybe a modeling question, Ron, for you, if I could. You talked about the high end of that 75,000,000 to $100,000,000 in cost takeout now that you expect to hit for the year which is an encouraging number to hear. What were you at run rate wise coming out of 1Q just as I think about how to layer in maybe that 90,000,000 to 100,000,000 in savings over the next three quarters? What's already been included in the 1Q number?

Ladies and gentlemen, please stand by. We're experiencing technical difficulties. We'll resume momentarily. Gentlemen, you may resume.

Gentlemen, we, we you may continue with your call. We're on a different line.

Hey, guys. Did you hear my question, or did I I stun you into silence?

You stun us into silence, not just the deadline went down in effect.

Yes. We're stand by, ladies and gentlemen. We're working. We'll be resuming momentarily. Ladies and gentlemen, thank you for holding.

but you're working on the backup now, so we can hear you.

So I don't know if you heard my question or not, but I was basically just asking a simple question of how much of that $100,000,000 in cost savings that you now expect to see in the P and L this year within in the first quarter? And how should we think about it run rating for the rest of this year? Does it kind of build throughout the year? Thank you.

Yes, Jeff. So the $100,000,000 in savings that we're referring to would be kind of on an annualized run rate basis. So there won't be a full $100,000,000 of savings in the 2025 results. But we had achieved kind of coming into the year, we had we were in a about a $60,000,000 run rate as we came into the year. So if you just take that piece of it and divide it out by the four quarters, you can get some feel for what the first quarter benefit may have been.

And then of course, on top of that, we continue to take measures and taking certain initiating certain cost saving opportunities over the course of the year as well.

Yes, understood. All right. Thank you. And then just we saw the eight ks on Friday. It looks like Max has now joined the Board.

I don't think I've seen if Dan has yet joined the Board. Just one, can you confirm that? Maybe I missed an eight ks somewhere there. And two, just any updated thoughts on kind of maybe strategies the Board might take the company direction wise as the new Board members join and any kind of updated thoughts there? Thank you.

So Jeff, that is correct. Max joined the board on Friday. Dan will join the board when we get final approval in Europe for the KKR's investment. As it relates to KKR's role, of course we've said this in the past KKR recognizes that Finneushein is well managed, has a great opportunity recognizing the challenges we had with the pandemic, the cyber incident, some of the macro issues that we experienced. There are many opportunities that we are examining in general.

KKR is working with us supporting our opportunities to create value for shareholders and in particular the Bold plus one strategy and some related activities around that. We are working with their internal group create on the initiatives we believe will create additional profitability sustainable profitability for the company and we'll be able to provide further information in the quarters ahead. But overall the level of collaboration, the ideas that are emerging mostly to support our Bold plus One strategy have been very, positive. So it's been a good partnership, but of course Max is just joining the board now and Dan hopefully in the next few weeks.

Thank you. The next question is from the line of Mike Pelletzewski with Barrington Research. Please proceed with your question.

Hi, good morning. I just want to ask a question around the internal growth in Home Solutions. Nine percent seems kind of strong. And I was just curious, I mean, is that mostly getting deeper with existing accounts? Are there new account growth there?

And also I was just curious what the actual revenues were if you would be willing to share that? Thanks.

I didn't catch the last part of your question, but our momentum in the home solutions business has been very good. We're expanding our footprint, we're adding more referral sources and managing reimbursement quite well. We have a very good team and this is an area of growth that we expect to continue into the future. So we're very pleased with our home solutions business. It's a natural fit with the Henry Schein core physician referral business.

And so I didn't catch the last part of your

Henry Schein (HSIC) Q1 2025 Earnings Call Transcript

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