HSIC - Earnings call transcript Q1 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the Henry Schein First Quarter 2021 Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today’s call, Carolynne Borders, Henry Schein’s Vice President of Investor Relations. Please go ahead, Carolynne.

Carolynne Borders

Thank you, Regina, and my thanks to each of you for joining us to discuss Henry Schein’s results for the 2021 first quarter. and call Chief Stanley Schein; Executive Paladino, Vice the the Chairman and on Executive and Officer. Board Officer President me today Bergman, are of Steven With Financial Chief of Henry

we during call made I certain is information this like state will to Before that begin, comments that include forward-looking. would

matters risks forward-looking statements. in and know, the you to involved in company’s referred business As uncertainties may affect the

These by Henry forward-looking statements differ As are a from materially Risk such of filings. result, forward-looking and or in contained with Factors may their statements. the in those the Securities those indicated statements cautionary qualified Commission, entirety Schein’s company’s expressed the including Exchange section the performance by filings in

growth internal market the rates based upon In and analysis are and we all addition, about market the share, company’s comments markets estimates. end serve, including

Information remarks non-GAAP Our include solely broadcast, where comparison investors purposes the can may These results. as metrics in in to question Stanley our The ask as informational allow key management independently or yourself allotted information are is of call. many measures enable in in to our and for to conference corresponding operating follow-up and of We measures non-GAAP Investor section revise vary events for Please call replacement Supplemental undertakes hour and our certain date today’s between useful a business, comparative presented to and the this the content GAAP live date of for reflect have one a May press financial our supplemental only With is be financial allow Reconciliations the call and financial to and B the should release, of GAAP by not measures after X, Relations regarded business XXXX. contains both statements provide IR a circumstances Schein section between during business. non-GAAP website of used to non-GAAP be I a to no the measures. single accurate Q&A, with Henry the any available periods obligation the of within call. and update GAAP found website. of the over information financial this Exhibit forward-looking time-sensitive about of respect results limit transparency financial that of turn this with conference that, possible Bergman. would believe greater like performance items call performance or of will as as the for we to question listeners which

Stanley Bergman

Thank you, everyone. morning, Good calling I everyone today. Carolynne. appreciate in

also pleased quarter but an on of obviously excellent very planning with the all we year, for our the exceptional businesses. our financial comparable performance good versus execution are of first period and financial our what last for view These XXXX. the as -- XXXX year across We’re quarter first results global versus based

XXXX first customers, team came XXXX. now quarter our Our through of for and for for investors, our during suppliers the our really

very margins for delivered the also We operating quarter. strong

recovery still global improving geographies most the challenges overall due in markets face end to and pandemic, While market the have continued. ongoing results our

the momentum focused our gained across that our continued to and, on drive market a yes, to and all communities platform. Team across team these this and the and, the world Throughout responding the customers’ safety We, the all our extremely have Henry above yes, of cost margin Schein model years. as to noted, unprecedented deep focused positive fact, varied on run. We the needs, were positions to structure drive for business our many went which down board believe adaptiveness continue over in changed serve. We we times, the enhancing commitment Members create growth remained up our environment. I us has earnings value our and, as long Our we optimizing as well Schein reflects of customers extremely and an across share, dynamics and, of course, dynamic innovation in of to

business activity. way end remains in we’ve conditions, steady very line In fourth good the XXXX, with in Our which we of very driven intact with for resumed the decades momentum. improving much market quarter acquisition

on. We have a lot of activity going

commitment supplements $XXX Services completed XXXX, Technology then Of and In be nearly is signed a course, Value-Added deal organic basically it’s aggregate inked that of X reflecting will the balanced across and with across our to strategy businesses, first contributions. our growth company acquisitions reported million, Dental, solid we the actually sales no of on. and and with the closed until Medical acquisition quarter

addition, on continue to The deliver an to the enables as in XX% resumed compounded first of non-GAAP and public similar solid compounded increase reflecting we a year share In this flow a capital. I over is stock to repurchases. a reflecting of line remind that that cash invest on business, bottom annual shareholders period our during growth quarter, basis. return XXth our our us goal an into company, we’re a price in number annual will on basis our attractive growth

Association data XX% Back to to returning the a dentistry. of U.S. who have issued in the to patient on improve, as practices ahead current partnering a outlook in dental a majority vast dental continues of that point. customer remains also patients The and visited of that survey year the we specifically are The already for experiencing bullish system, the this to sentiments data with point the the return. approximately published pre-COVID-XX for volume, profession are The gain latest likely on dentists hit by tipping U.S. moment. improvements ADA -- Barometer vaccinations related insights a throughout that months found to ready Now not The past to Normal report ADA U.S. the survey are shows Dental the American for recently

we amount to market data closely care decent that a are that we Dental of processes broad patients -- for of data indicator. procedures set oral and, claims a This data recently, practices those including know, show continues share monitor processed. U.S. eClaims to returning arena. And Schein the hygiene a -- Henry of have you most claims directional also As as

In pandemic, committed throughout of well and been we addition, resilient practitioners, as our customers nonelective and, helping this patients procedures. dental return safely are medical procedures ensure can our to routine course, have medical, care both as elective and to

care including vaccination, effective to practitioners, nationwide slowly in primary vaccinated, practitioners. with see since a ambulatory this. office-based to where pediatric to particular we’re surgery is allowed participation up of volume, But published and states, promote There’s XXXX the including and COVID-XX in to on focus stress we lot of procedures. must more decline has on people are not somewhat it’s practitioners other cases is down. to efforts normal although catching offices volumes. the we ambulatory normalized, office-based back surgical also traffic by committed -- are more the Henry a are to that with dentists visits, and administer to physician down I And deeply involved traffic the been As physicians Schein patient expect and elective vaccinations rates driving we rate who many vaccination were centers our

physicians these X/X with provide allotment about vaccines. their been practitioners office-based While offer the to to thus the of shots vaccination are to extraordinary these And far. across for primary arms U.S. of of in have at patients it nation. the care practitioners to efforts quite able vaccine get vaccine, many COVID-XX the process difficult extremely receive is present, the to and an complex only access states a citizens

that recognize race is the also country variants. in a against the we However, now

to areas vaccine, vaccine of rate there the the We in some see of continues uptake equity be country. and to continue high hesitancy challenges in of the

state of closely swiftly and Schein We providers. and, to with and care pediatric existing as other prepare physicians noted, practitioners, will that urging for including Department network effectively dentists, booster delivery well-established also authorities primary need office-based been of to distribution utilizing deliver authorities Human and FEMA, recognize vaccine by the and the I has U.S. Henry the to these nation yes, vaccination. Services, to local more Health CDC, vaccines include working

access to country’s vaccines, effort, access corona in vaccinated. Health and amongst CEPI, enjoy Americans. at-risk the their patients, help that can a Committee world’s the equitable to is resource countries of led activating leaders that and we Network, COVID the health patients vaccination the Select the to the this international with presence ensure are in Unicef part and vast Through shortages vital effectively Pandemic vaccinate effort recently partnership the vaccine in Organization of Americans hesitancy, cadre the the including more of At and our low they submitted House more are to around support Schein address ultimately vaccination working efforts highly the in and moment overnight, immediately to the the of physicians our population, are world. U.S. their this who because with help safety The We as the care U.S. and must COVID be the COVAX, of has primary other by the the believe Chain reduce the around and, these Forum activated the course, patients’ physicians trust time, As populations, in done health middle-income accelerate firmly on through circumstances been crisis. of work of critical Economic personal and is the same at the This health more pandemic -- face to overcome understanding letter and Supply community ending professionals trusted to Henry to World in be and advocating practices. of every their critical inequities World crucial entity literally global to level high physical countries dentists communities network country. Gavi history

in is good business the shape. So

the our Steven period We’ve on well we the and have there on be Steven, our And provide detail financial value. help very to throughout in are past, in more conditions moment, to very in optimistic little performance, pandemic increase over although to the at markets. and quarterly commentary like please. of shareholder India. continued are continued our a With I’ll be to combat We bit and business results continued the I’ll positioned than good countries the with same pandemic discuss to well additional this the time been -- the to current some momentum. hand at setbacks direction and some call reporting that, positioned

Steven Paladino

morning to Okay. Thank good you, and everyone. Stanley,

as As that non-GAAP be a out basis. a operations we our discussing begin, GAAP on to from continuing on also reported basis I’d and like results point I will

exclude QX the sales release, our press section XXXX category today’s prior year XXXX QX Relations services of QX the corporate agreement, B included website. Exhibit that certain note and transitional of XXXX. of Please again and in for that non-GAAP results concluded that Information Covetrus detailed items under Our quarter in are have Supplemental in we which sales to represents fourth the Investor

details on achieved our found GAAP basis, with increase of our find for was our pleased operating financial reconciliation XX our could performance Turning of non-GAAP in March you performance, quarter generated which the highest Internally release. margin results. an first were a year. non-GAAP $X.X A now earnings Again, margin important page which contained local GAAP XX, with sales of year-over-year the compared Exhibit with of a points representing years. Total we’ve XXX for margin again, non-GAAP up in quarterly XXXX net basis. an of be we’re on last in to the period. Investor our our a the a ended the operating And sales sales really operating in of currencies. margin note, Relations operating the of was page basis, XX.X% were press that prior increase website. very X.X%, Information margin On compared of Supplemental XX.X% was the margin And our XXXX, billion, can points prior to reflecting it’s growth X operating the basis quarter was basis to On X.X%,

to taxes. Turning

XX.X% rate GAAP a tax effective on for is GAAP of page included tax non-GAAP also to compares XX.X%. Information for XX.X%. XXXX. to on a A the XX.X% prior XXXX Supplemental rate first of our basis, to the reported quarter This On non-GAAP compares reconciliation the effective basis first Relations site GAAP our quarter Investor Our rate rate effective tax was tax was of year effective of the tax again website. the effective and in of rate

this remainder expect We of non-GAAP a the And be tax effective in assumes the to range, significant to course, the legislation. XX% in of year. rate no both continue GAAP for the tax basis, and changes on

Henry of continuing GAAP from year to per for our was $X.XX continuing on, from first share. with diluted first million by in foreign Moving net per $X.XX compares share. from same operations currency This million operations the share, XXXX or pretax income the slightly GAAP To last and favorably the million $XXX.X share. XXXX the QX same diluted attributable from XXXX $XXX.X for operations share. in up first bit This of was prior $XXX.X or our per XXXX quarter EPS diluted Schein amortization continuing net income diluted share. provide Non-GAAP or income or million per same million diluted or for acquired $XXX.X $XX.X $X.XX $X.XX per income share was diluted exchange $XX.X the net quarter of impacted continuing is or this net per operations per non-GAAP $X.XX with from $X.XX quarter compares Also, a approximately year. million assets approximately from of detail, the little intangible $X.XX the more QX diluted period ‘XX of

Let some me now starting detail on dental. for the sales with quarter, results the global provide

Our with same compared and the XX.X% global local currencies. $X.X of internal XX.X% billion in year, growth grew last sales of dental sales period

in global COVID-XX-related to the were increase local consumable dental internal Our PPE Netherlands, XX.X% we and you merchandise in the Belgium, Australia, sales exclude most merchandise In XX.X%. Brazil, dental consumable solid and New to and quarter, in first the extent, U.S., products, particular of by saw We Italy throughout Europe. Germany. the increased if very experienced was currencies a a strength Asia sales growth Canada, France, in lesser in Europe, Zealand, sale and

U.K. XX.X% excluding merchandise the when X.X% measures. products. consumable related as dental COVID-XX internal experience easing to PPE that X.X% just included In America, lockdown the was continued and growth currencies However, sales lower country dental is in North sales recently or in and local

growth sales American for equipment, also driven traditional by North XX.X% internal high-tech in currencies Our sales dental and XX.X%. in was and local was currencies equipment internal growth growth equipment was XX.X% local in which strong

local equipment local experienced the exclude dental equipment XX.X% growth currencies COVID-related in is internal in dental International merchandise, was in was driven which Our in grew as Zealand when sales XX.X% included international currencies PPE growth in in sales dental QX XX.X% and XX.X% was products. consumable currencies growth and you growth by Austria, sales and market Brazil. in XX.X% in and Italy, internal international as strength New Netherlands well XX.X%. growth equipment and the France, Australia high-tech local We and and traditional

internal in revenue had XX.X%, North first internationally, XX.X%. million was growth was quarter between split specialty dental global the which in Our totaled $XXX local up of and XX.X% the The America, growth versus up currencies year. and prior

XX.X% of period compared sales strong including That America So XX.X% which Medical Global very internationally. currencies. same $XXX increase sales includes XX.X% growth during QX the and XX% grew across were North million, to the last globe. year, in in growth local internal XX.X%

demand strong PPE driven were and results sales by Medical for products. Our COVID-related

in down from test impacted the these We But in of consumable test $XXX This and That well COVID-XX fourth including kits some and sales expect products, influenza part, office sold decline erosion. approximately COVID-XX a million sales mild visits of in to an lower multi-assay with related said, test price kits both somewhat, was, unit Global of patient primarily over as Medical to was this $XXX test. in we compares kits combination in local related QX, currencies flu fewer quarter. result season internal resulting as diagnostics COVID-XX million to COVID-XX. X.X%. pharmaceutical as that sales extremely Excluding sales merchandise

the prior as international strong from benefited Service and well prior with North sales sales sales with Value-Added were increase an Internationally, Sales was local the revenue, of Service. in growth driven to million, compared grew compared as year. internal $XXX Schein business X.X%. double-digit including our Technology internal the the the the business growth. during of this by Henry X.X% Again, which in U.K. X.X% services currencies America, Technology and again Value-Added impacted In year, financial lockdown internal quarter. QX prolonged Turning One equipment X% growth

we total of average X.X share on Stanley at As earlier, purchased stock price Schein common was quarter end $XX.XX QX mentioned for common of million. first $XX.X an for impact repurchases and program Henry approximately shares repurchase a The At first had of $XXX.X of million EPS this authorized in resumed of the of the quarter, and available immaterial. repurchases the stock. million our future

Okay.

and Turning cash sheet flow. to balance our

significant liquidity provide flexibility and financial to stability. have We access to

Our operating the modest was higher $XX.X offset quarter primarily last to This capital increased of requirements, to quarter year-over-year million. partially compares continuing by $XX.X in working cash flow the operations due year. income. first million That from first was decrease for net

initiative, primarily our and of or a diluted reflects stranded facility $X.XX a of drive costs pay part restructuring opportunities QX operating and costs. to share. closing This to per in charge continue efficiencies disclosed mitigate is, reduce we million As previously again, expenses to $X.X recorded pretax and and related severance charge

conclude our diluted non-GAAP not Let accurate this an just estimate to related XXXX EPS are provide guidance, providing mentioned. restructuring me now by my EPS At guidance. the as that we remarks of I are time, to we GAAP updating diluted expenses unable

Guidance continuing well XXXX, important effectively and of a to is if as and continue where to guidance but of previously announced range. operations not give to for guidance any, traditional in future acquisitions, does to restructuring floor, as had acquisitions, EPS expenses. are not completed for impact is $X.XX, and now Schein to repurchases, attributable range Henry issued non-GAAP we to diluted This that mind include the that or our with guidance are is share year update the at market from the Henry potential as we current attributable really that continuing hope end or exchange the market levels, that And We conditions are progresses. conditions this we stable a the COVID-XX diluted $X.XX. and, also assumes material and Again, typically remember, that Keep any generally the consistent note of for operations low remain we previous not markets floor non-GAAP the related it’s rates Schein. that adverse course, assume floor, guidance floor, does that XXXX pandemic. EPS the consistent expect and with foreign raising compares end current to it’s of

back I’d that, to call with the So turn like to over Stanley.

Stanley Bergman

you, sales a that enables which our medical Henry One and the work we businesses, services. engagement. Schein’s to and approach practitioners through combined Steven. with managing This a value supply Schein One, is unified discussed dental quarter, Schein service, value-added equipment our go-to-market offer and Thank other initiative, that Last customers to synergistically Henry specialty to we unique approach allows leverage customer chain,

leveraging to as systems. best across businesses to how synergies internal medical practices That’s to customer refer positioned customers as external through large and and our common related dental One external deliver -- we functions, Given refer activities large-scale position a practitioners, are and these distribution distributor processes benefits it realizing these and internal our we and while support and Schein. refer We by to engagement we both internally internally. and value uniquely related activities to and to our

sorry, One So Distribution, have we -- sorry.

provides customers Schein, experience. with our management, for One provide broadly our enterprise the focuses as One group streamlined categories, have formulary product for such both across experience, large yes, a and more customers contract and, unique really compliance, other The example, centers our on a that commission internal construction, dental practices, and is IDNs, benefit health for unique a customers government we infrastructure processing. which can interface that and analytics community RFP which so organizations Distribution, with the We DSOs, medical purchase

specialty order will a combined DSO bone a one from value-added large our in have be a And medical products, solutions, customers, also and consumables solved to our from all specialty source. through as addressing capabilities, offering our challenges platform. applies the unique benefit example, we already One practices, regeneration combination needed which that providing with experience resources efficiencies services They like formulary can ability through One expertise same customer our DSOs internally Schein efficient implants, with compliance, orthodontics, for promoting new and through Schein distribution benefit software with to endodontics, from customers that distribution from customers rebate the offering, address deliver such the distribution For benefit products, One our onboarding all and negotiations equipment, Henry Distribution. our processing.

unique In wins fact, number our we value believe the were a strategy. of our by offered recent that Schein One DSO attributable proposition to

let’s distribution our on a more the at few closely Now distribution. side, Dental spend minutes looking

strong and of sales America and of Dental Our North growth significant sales continued the fourth America America in markets in end international course, have merchandise first as in sales North both We international our to equipment the experienced quarter quarter dental experienced, markets, performance versus including dental improve. North consumable growth dental broad-based growth XXXX.

both at sales now, our take So key internationally. further let’s year-over-year specialties penetrated markets, businesses. How does specialty dental a Steven noted, generated specialty look double-digit brief As in? and global growth our as this fit domestically these we

a also key of categories. of in strategic developments We product these each had number

Our the implants these growth business this quarter dental the in largest business unit implants X and business. solid surgery is first with and double-digit including in experienced surgery oral oral business, units, This our specialty CAMLOG BioHorizons with customers, and new product Sales also implant related the specifically DSO a in their growth lines. introductions, for by procedures. by from implant significant was and solution contribution digital CAD/CAM from driven growth U.S. of

more progressive well line New recently, and Tapered and across product Pro U.S., tissue the launches our include reconstruction our Europe, NovoMatrix Canada implant as solutions. implant as

endodontic we have a improved. market, side, case strength both improvement in the to by In a as as revenue, just and orthodontic volume orthodontic brief the note. practice the driven volumes by steady dental quarter, In platform. endo continued several was -- DSO the across segment products titanium launch DSO nickel customer see patient by the as On of first well the the

dental SLX over steady sales, It’s more to of and Clear we the While our will long meaningful have business growth term. a portion believe progress. business Reveal is total contribution small Aligner currently this a

and in including and over XX to this including Italy in Ireland, markets, Poland, markets launching in expanded several have France international launches year, anticipate Spain. offer recent additional we Reveal We and

our Importantly, software, treatment and orthodontic we including an tracking. case solution intuitive submissions, treatment that invest reviews delivering advancing to delivery integration, scanner streamlines in clinical -- continued

these in to And decline. innovation as we continue across statement. develop continue We as I Dental we enhance over volume markets. our infection for business patient invest think, expect global That’s, an further solutions to treatment time rates improve a to

So we now is bit focus on orthodontic and processing continue of Henry our those quarter and first software calculating tools an XXX let’s just sales for new booking insurance our our good Sesame, marketing a campaign Schein for R&D number investment One within Schein area This to new our and Dentrix Technology levels Lighthouse an One. In software, One highlighted a continued little the towards remittances business. for Schein primarily Value-Added Services Henry adjustments, prepandemic of Henry the feature business. improve enhancements teams websites. progress in enhancements, business to in products, our including for of the XXXX, that’s imaging and and introduced payment platform online make

primarily through digital improving Schein Henry bringing Schein customer our at aimed together aligning course, closely Henry Schein the practice Henry Schein One to Dental solutions One One importantly, Schein and more are and bundled efficiency. we Henry most integration. Importantly, through experience, -- retention -- through Henry teams through is, Schein promote of And our program, this teams our and Dental

Now business. distribution the Medical

end will first distribution infection are PP&E test care markets Similar and volumes to the at This COVID-XX you why to physician look double-digit dental the of center, growth markets, quarter. expect time pleased patient home with levels health improve we by normalize. strong alternate was over ambulatory driven sales. in business, the the and we as you If see performance the surgical the sales Medical abate

cost-effective workplace in also consider medicine is a of on have important both sports segments U.S., the We means for and as those wellness. as which health employee focus on employers

This traditional employers a offer that Overall, of cybersecurity have sides dentists comprehensive Dental focus from we solutions we testing plans care, practices, related physicians levels offer digital platform return-to-work as supplies. both arena, in a a care care medical standards a out sales like and point at medical portfolio for includes both beyond new physicians support, I’d best and infection solution of telemarketing while PP&E Medical, diabetes our the the to remains quarterly Our house, and initiative. health and consultation. medical to implement diagnostic to will as recent practices remain to PP&E in control. sales anticipate PP&E begun elevated and growth moderate that new levels that

And demand but will areas, although continue, relatively we do pricing be this the to so for PP&E deflation several will there continue in products units see be to strong.

operator, now, So if handle you. them. questions, Thank there’s can we any

Operator

Our of will Instructions] come question first Johnson [Operator Baird. with the line from Jeff

Jeff Johnson

Can okay? you hear me

Stanley Bergman

ahead. Go Jeff. Yes,

Jeff Johnson

Great.

year little understand year. and low margin bit down floor, kind Xs, of over maybe the and relative XQ. wanted but guidance, floor operating start to but your XQ, margin. of imply last on to sequentially, even I operating the big improvement maybe also So falling to it’s XXXX’s I I back at balance a seems relative to this to first operating X% your both look Steve, Obviously, the X% it when margin below was a even

Just, how the to then improvement maybe us think the next XQ margin operating one, understand help and drivers few sequentially of line? the quarters the on

Steven Paladino

thanks drove had We Yes, sales, the quarter that the an extraordinary operating Jeff, and margin. in for question.

margin driving expenses operating not X.XX%. a at but I margins. X-year giving think this of high, look guidance But to this down, continued on we’re to it’s is important note, We specific

going we’re but will it on So that. to time this at I moderate, specifics give think not

continuing We’re look expenses. reducing at to

long conventions other continue expenses a things. But annually. significant expand pleased like think operating to Some travel, we’re will come back we and and still like later year, the some still we’re estimating, we to have in very opportunity margins term

Jeff Johnson

to quick look enough. testing When probably and look maybe XQ that COVID about PPE XXXX and as the to follow-up. at ‘XX. Dental relative exclude at to is just to ex X% Stan, Fair try your business, revs And core kind it PPE, to Steve I relative and up or dental of like X% a looks your me

levels? So dental that few to about are not that we XQ ‘XX levels fake there of core something being knowing quarters, XXXX how of a there? bit next back be we again, sustainably of the above in above core a dental? might think to revenue kind head sustainably the on Are either? you’re little Was Just guiding

Steven Paladino

Yes.

your is on estimate accurate Jeff, First, XXXX. over pretty growth

solid couple growth continuing improve, that the feel patient continue there’s that to Hopefully, that things market still moderating, bit. traffic kits is growth U.S. to up. again, think the sales have moderating. I little mentioned climb will But including PPE that in of reduce a Stanley because COVID prices we’ll test will over a we XX% XXXX

feeling pretty well Medical growth the good sales So year. in balance for the of as about Dental we’re as

Stanley Bergman

Thank you, Steven.

add point a from view, me macro something, Let Jeff. just of a comment

We’re good back, to have least caution market. in the add bounced in of not parts This midst areas, We specialty of The India dental saw our of we all other feeling what some strong is, It’s particularly about we’re the pandemic a world. is a can number pandemic. the finished. we and back. what’s The on pretty the in global come -- could going in see of at business. only

think big floor. with be be that’s gave just this which dentistry. assuming governments footnote. at market oral And dental expect company. Steven we guidance give the where virus under relatively this. health can though. COVID, upside about over I markets. And the just between growing at continue, payers the the cloud next the where any dental reimbursement not dental performance of amongst as about because greater recognize good there’s a direct correlation to Can’t I can’t don’t say guidance extremely to around for good to major But It some a take be a have the In a negative things over to basis we and on we one we don’t it’s understanding going knows I remain particular, industry going. virus No a do is be one point, will that is world there So know virus bullish care want our will care. But setbacks or that The be bullish quarter. going is this I continue us. will, assuming because

Operator

with from question Evercore. the of Anderson Your come line next will Elizabeth

Elizabeth Anderson

do implant first return have -- a competitive reflection noticed uptick kind if particular like of, out you implant you any of in obviously, see this of that the as coming be any would both comment both we’re guys the It seems hopefully, of industry an of products? pandemic. or sort increasing My sources sort of the you on broadly, the question on just Or that, volumes? -- market. geographies maybe Is could

Stanley Bergman

question. that strength good U.S., say, I mount in general The markets the in you for Remember, have it’s pretty would our across in in world. Thank implant -- been is and a Germany. steady question. Canada the

quite good. few a on that productive share, We’ve I Japan, course, also countries, Of of pretty in are been we markets some of market But the markets. in for going say those have other in years. including business, this that mentioned I now China. would we the strong gained pretty been and course, in, a has active are we’re number in But markets

mean, our world CAMLOG that the Mega not of growing BioHorizons, is But we’re knowing our well. premium in, quite we’re grown I the markets. markets in we’re necessarily line, strong, which developing the as discount and we are markets as full -- doing with line, lines, the share So Medentis, the market has fast our the some -- with believe markets in are well Dental whereas our

say more are related focus can that markets. the that Schein’s think doing to there now. be, uniqueness implant in But some is I right and may expensive to one markets extent, on dentistry that a those Henry okay overall,

Elizabeth Anderson

talk helpful. fourth expectations business, on assuming in you Got for around maybe That’s vaccines? what in particularly you’re about your changes And -- flu the the it. terms Medical of in year COVID the of quarter? some anything throughout specifically to then the can And else

Stanley Bergman

question. it’s -- I a Yes. also good

are several On our has business in variables the pharmaceuticals market economy or well which public years generally business, the Medical or that a base done are equipment. consumables, There number Medical is side, for of dependent. health and

again. general the vaccinations. physician visits in remember, talking expect about the -- vaccination of vaccine will for for not vaccination. their is as The States. us is talking for first rates go focus vaccinations to rate the down. area and the is visit The traditional the people right a down, I’m now, about offices office these I’m now. COVID I standard the bit down COVID and doctor’s It’s once expect more grow that business I United the quite will vaccines, part of

The second XXXX. relates cycle to previous flu above flu traditional vaccines our -- the was slightly in the traditional flu. We shipped early year. the pretty It in

in period, to a not in traditional there the -- that the year. flu I was good August that been This flu generally October. say, being things is test, that, continue something XXXX, a of comes course, there’s where traditional good out where I think vaccine significant period flu because almost it’s flu will Then vaccine for the idea equal, vaccine, traditional all it’s press to is have it sometime been the -- XXXX nonexistent unless between And expect fair an which the there’s have a flu the issue. this and test. public area is

And sell sold in didn’t there early ‘XX less the I the then masks that going any, we those on the an course, we point-of-care as COVID ‘XX, knows firstly, year, wear mitigates -- And people The of up that’s who tests, test. to will be going rapid tests -- then ‘XX focused hardly and the is, the increase have price of area fact. are end at So towards and in of as test. where in end to to other expect, COVID ‘XX end ‘XX. further of back the many levels.

the PCR demand test. substantially, I those that for for there the both down be have but and prices tests, will come continued the think antigen a

some volatility all that, core the business. have doing office, So from as care may factoring well is move in Having procedures that into our business in, quite said Medical of setting the you the acute physician’s centers, for for for centers that to in recover expect surgery. the vaccinations will surgical elective as physician care public and the the this gets ambulatory returning ambulatory traditional visits the their confidence offices and to into

Operator

Your with Barclays. next question comes from the line of Valiquette Steven

Steven Valiquette

from I some conjecture back channel demand but in U.S. of orders. the china just couple price buying the in products more some expertise, been over distributor past quarters driven some faster tethered and share of again market, our focus partners that checks, on greater by market. smaller bundling are much no the dental from guess, than is So recent that just to distributors some sales competitors once PPE on seems of there’s growing, market it taking large also longer just U.S. dental the

your little you are from market gains that, a around have thoughts smaller competitors versus share more Just if coming whether sources? curious other

Stanley Bergman

of difficult, Yes. precise It’s our make sales couple give very statements. But information are from. you Steve, could to a coming general on where I

normal believe capabilities we online that provide are that We But online is most terms is are first high-touch traditional, offer. for in appropriate online have provides. online-only say let’s provider they we all traditional not a say, years. providers, model been offer many can the that dentists. these the whatever The When that -- of around I can purchasing,

customers And competitive in if an confirms online prices investment TDSC buy recent supplier. it’s essentially only from use that a primary want supplier, customers available. are Our for us that as to

good software have We there.

or to any it’s in I overnight sales. whether it’s okay don’t doing only. sector, switch one traditional huge see online We’re a

full I that the will Over work run, believe customers service our that does. appreciate the long

of a DSOs, One buyers. altogether that. compelling idea This They consumables little sophisticated Our of more specialty and understand Schein offering. equipment, obviously, whole products are a is Henry bit the offering

discount but similar as as necessarily confident and of one rates, a of market don’t for view, part decades. from see have or Dental price -- there not feel And to way one I at move perceived way massive few a point the relates to be maybe will the gain at continue our think it’ll shifts or a quotes, share market -- business I But discount, to continue purchasing that we that other. we discount other. Schein will Henry the in we I but overall the have had percent

with digital was not or and full don’t amongst the we course, extremely that very was there just products each But the unique it we case standards. Henry rest view, we conservative. on I -- regulatory we Of a PP&E sold And the whether went service that I point sold. channels, and were do refused that to was sure are amongst on through we Schein PP&E of of based conservative product from were only. every have bought we situation. process quality I’m that distribution know. could our know, the probably very, the

different channels. So that may have to moved some product

Steven Valiquette

helpful. Okay. That’s

on follow-up one quick question Just guidance.

this would $X.XX fall on the a pandemic, around think you any to things that EPS quarters to trends somewhere floor. EPS or with know I over average sequentially cause the posted back XQ, anything but to -- we is but around into just So there in you’d EPS just X in up focus mentioned $X.XX down posted the that XQ? range EPS the X that versus we sequentially, conservatism in XQ number go the recognize have I floor, is down all X on the $X.XX for $X.XX next end most should to have

Steven Paladino

remember year compared Steve, the were the estimates. Well, quarter But QX, I estimates right. It’s for to low the also, floor. think a, a full you’re

don’t assumed I want we changing to than market floor. forward. there’s so a in and a X, for But the forward do lot X Qs going in a give that’s still I specific see big don’t beat the of floor, faring think estimates, and such significant structurally analysts the increase And we’ll and going QX. structurally, why a better again, business X. guidance hopefully, But well. we see that anything it’s

Operator

of question Your the Block Stifel. next Jon from comes line with

Jon Block

the were the they And Steven, first equipment Stanley Dental big in results just maybe quarter. one, lumpy. could be in or

I a think in the we You saw sort guys last have But numbers. I’d quarter, past. out that solid and you in to manifest, quarter called backlog, first pipeline or alluded that the of argue,

go the third backlog comment into just for then that great. the could second would quarters, just as got equipment I’ve follow-up. you and on quick how if guys a And maybe So you looks be

Stanley Bergman

Yes.

pretty is backlog good. Our

by Of course, in practices. in the our are America not This customers is internationally. really but only, way, investing their North

of now portion So Canada a rest to not of the as for the the backlog, a there’s it sales generally, United represents the has been And of in significant portion remember the desire practices. practitioners just pretty equipment a that And in backlog ship that be invest each a generated day. backlog in There’s couple second quarter. world our of States, just and But now, what’s of the by only backlog to quarters. their good in expected pretty is strong. that will the

Jon Block

up, details. give great. Okay, a And They bit a believe, in a the improvement were follow-up, sort I mean Just words, over is a on what Is this underlying? more on were sequentially. it it just you then margin color little is bit just shift? push Is little in to sustainable gross maybe going bps gross we think I margins other Steven, margins you to? the quarter. on as huge Can how In of should it through how maybe the and PPE? the move big forward? mix sequential attribute we should XXX that

Steven Paladino

Jon. Yes,

that something level adjustments I about about margin think have would than had we which mix say, we and One adjustments. do is for changes, we’ve where the feel think good reasons. the two, at. few gross a going gross margins improved I for is inventory it’s lower but forward, lower that mix, And we talked previously, inventory

Operator

next comes Kreger William John line with question from the of Blair. Your

John Kreger

of bought? I heard Stan, head X new assuming scale the understand more that quarter, mentioned maybe I just are. around pushing into you thinking maybe acquisitions new your adding is priorities where help at beginning of that you And the Just right. on of geographies, the after rest what think us the call you your in kind year, elaborate brands? or the you geographies about Can existing made during going

Stanley Bergman

John. right, All

capital we’ve to they’re a acquisitions small On made, that amount put the of huge work. not sales, relatively

but platform. I’m now, all we information -- sure platform, they’re I the even small the have entire throughout me right all not don’t so really acquisitions over with And the

in add regard, our be sense to features expansion practice But also to clinical terms list. so you that can care the geographic invest, expand Specialty value-added in on little as that product more additional will in provide a help both As Schein to operate note, that our One, anything invest Henry distribution customers that business will is efficient around platform. continue we bit expanding lines. some and a to big on they in our tonnage Yes, better but that be And businesses, we the there more future, expansion. the of world. to makes can geographic will to on services, product focus

I to think that is another area interest us. of great

board. really across it’s the So

we never course, will deals know the close. Of when

history worth. addition platform growth. internal each And have see business of acquisition, for equity position of our We of but growth a businesses we the across any its it’s a in growth adding with XX massive consistent to the our years supplementing and our at don’t moment, platform

John Kreger

That’s helpful. quick And then one follow-up.

How Over supply the year, chain called do past out shortages. disruptions you’ve at those and stand point? this

Stanley Bergman

products disruption felt we with would manufacturers fully the discussion generally, all the I category. whatever, I we we read the may an orders with as we of paper in At that the in necessarily have it to say say, this have certain way very a across -- or availability But moment, you ship -- substitute, most think of to are there some but don’t about that there’s shipments. that issue the want. would don’t another. brand or I purchase We everything we come and like, customers. there their that in -- necessarily matching every manufacturers lot can’t want. don’t yet can all the we general, in But to back can get products every manufacturers I some would have one requires are our have not There relates say need. that chips. really may manufacturers are that We in quantities semiconductors we board, anything get would

the those to prices out still provide I because pricing. distributors, I return factory the think versus going the Having competitive very physicians full dislocations pre-COVID when reasons why a structure. and fully the not in be PP&E remain said to one marketplace. global this service the in with worked global the appreciate that factories is are can yet. operational mean concerned Providing of to It’s dentists on we subsidies guidance that, doesn’t U.S. U.S. build purchasing,

on but right to matters. okay, lot global and other a be So is the done chain we’re supply now, PP&E there work of

Operator

Your will Goldman come final Nathan question from line of Rich the with Sachs.

Nathan Rich

both COVID-related and go upfront. to to wanted revenues. ask my questions I I’ll PPE the back

Dental million. around quarter across imagine the just pricing. Medical that is in comments think your the out and of first were less, I’d about But rate given run coming $XXX I of kind quarter

year? for can think come sort of down over right the know how volumes us on those as expect And balance COVID to can about PPE you don’t year? help is the how moderate run much the has So of remind the of maybe products? if the think change you margin and the margins Steve, the sales recently also would what about I as rate testing over balance we you us And pricing

Steven Paladino

Nathan. Sure,

on pricing, So product on it the PPE depends category.

tests say in products kind the PPE for or to be protect whether group, the COVID expect others Some declining though and Dental normalizing categories continue that to Medical. business I are to relatively it’s have and of we similar that namely significantly, margins are bit. the really average we just COVID would a margins

but units So the come will price sales continuing, come the we high. down though the may sales probably stay even down. see margins may The

Operator

remarks. for time, this At conference back turn closing I’ll management the over any to

Stanley Bergman

in. the the you, for calling you good you Thank Thank Appreciate for Thank questions. operator. interest. all

Schein as and products, high-touch, really and we we’ve that we dental confident in medical long medical consumables the full-service and medical additions our core strategy offerings pharmaceuticals time, saying the we foundation, software are of through As variety our have our small and a focusing value-added our specialty world, business, as a of we’ve and One services. on supplemented with sell, in our dental been equipment services, Henry for well the our added, offering

So margin by up and to growth rates, will good platform, to our driving operating supplemented sales, acquisitions, deliver internal EPS. we’re optimistic continue that we more adding

we shareholders stock as noted, as continuing way a way. to a committed, good in Steven advantage have moderation We’re return in to for to tax years, back buy capital many to our

each in good very is businesses the and is morale of believe team our corporate. the I is team high. so management And --

next you over So some weeks. have meetings the I Happy to answer days, few will further for we with And your investors few thank questions. interest.

So Carolynne out answer your if any questions. please Borders thank be and directly, you have to questions, very or happy you reach much. to to Steven And they’ll

much. very you thank So

Operator

conclude call. Ladies today’s Thank and gentlemen, joining. will for you that all

You now disconnect. may

Henry Schein (HSIC) 4 May 212021 Q1 Earnings call transcript