HSIC - Earnings call transcript Q1 2022

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Operator

Good morning ladies and gentlemen. And welcome to the Henry Schein First Quarter 2022 Earnings Conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer and instructions will follow at that time. [Operator Instructions] I would now like to introduce your host for today's call. Vice Investor Schein Financial and Henry Officer. Project Stanley, President Relations, of Strategic Graham Graham. ahead go Please

Graham Stanley

[Indiscernible]

Operator

Excuse you Graham. from me, Can the sound louder? phone. far You speak a bit

Graham Stanley

GAAP business. and financial purposes non-GAAP include management found Our results be the remarks with measures between for which today's are of items a key our useful in measures allow financial the certain financial supplemental both These be in of business, which our results. of about Investor B investors We Information not and may solely information our periods, of press between Relations regarded performance available website, used as non-GAAP release, GAAP measures conference metrics GAAP where to provide for in Investor believe will is website. business transplant and vary comparative financial section our should and reflect the financial call of Exhibit supplemental corresponding Relations enable replacement operating can non-GAAP the informational comparison performance, non-GAAP and for greater independently section of presented the the by Reconciliations in measures.

have yourself call. Please within Q&A or questions of as a after hour is the to forward-looking May statements content to call the listeners revise information any circumstances this many base limit Schein reflect to as question or one the Xrd, date undertakes to live as possible to conference Henry that Lastly, time-sensitive and the for XXXX. date call. accurate this follow-up contains of this of only broadcast, we no allow of single events a during obligation the allotted [Indiscernible]

results. business Bergman. like over call with hope format with I'd We that, And of the performance you to financial our of the call to turn updated have by Stanley this find beneficial. Ron's We format review followed covering Stanley today's the

Stanley Bergman

joining for Thank much, morning, very Good Graham. us. Thank everyone. you you

Before like once of moment today's call, outstanding XX retired details would my we appreciation to of get again Paladino, after I Henry a who take years express to week service to Steven into Schein. the to last

For I'm joining and to investors succession working Graham call Steven that us the will his today's South. with Relations the continue full-year is Ronald guidance. discuss of details of first Investor plan and performance smooth transition on certain responsibility Ron to appreciate of quarter we excellent execution communications. build our financial as we'll and Ron our and and

of call. Ron sets our to on that out With XXXX the So discuss will moment. we as like off our strategic plan a to to XXXX I highlight financial that would in XXXX record execute the start is proposition. successfully start. At a results winning first-quarter that strong

delivering an experience differentiated winning us Our that customers and most on outcomes. their rely is for exceptional practices that solutions successful patient make improve proposition

growth. Our and with have for one the past, exceptional in for growth. that efficiency for for driving for stands and product for bold deepen drive, the offering. Schein stands experience, to L transformation to and plus one deliver with specialty, customers our businesses, building one discussed Distribution sales services D, customers Schein. the And our And is broaden our digital relationships service and -- offering entire Operational software, customer the stands high with The follows. is complementary priorities, B which increased we as Henry

very we society. the XXXX stakeholders, excited believe Aligning shareholders, Which Schein key To full of guidance investors, priorities the started context emphasize, of our good the which stability [Indiscernible] suppliers, XXXX and a our that very, we're GAAP year. projectory one. and reflecting executed $X.XX, affirming our be We Today plus about in beginning of at this members to very, year of of plan. $X.XX growth and to business. very the EPS customers, course, regard. strategic solid we're our our our on XXXX are So Team will in diluted

two So also let that on supply on many investors. me being Global That comment are chain. of topics the inflation and minds

continually inflation inflation product on it inflation on and -- monitoring of an journey varies extent And both product The that business. impact for the our offering. potential on estimate category are geography. by We to equipment. balance, impact by varies also merchandise it our price, We on

So far X%. been about has this year

probability but our X%. currently far which implementing it's additional so will been impact of in manufacturing are X%, partners increases, all Some obviously price about that

supply do generally have we wherever we to to to possible. able reduce increases been along seek pass our customers, While these increases

with Of typically explore are national Henry are Schein able pricing ultimate less products various, broad regard. alternative because offer brands, product given of products. of sources to in as Where of these that customers pressures, owned alternatives we to brands our aligned assortment brand selection we course, and expensive well customers our our wide wish as of corporate

for date of in at future due many book Schein order and the inflation Generally, Henry marketplace the by confirmation and believe important options equipment. times of generally delivery lead an price. an we liberty at provides in with a customers. and of our in to we options offer offering impact we differentiator extensive advanced manufacturers The our that's is equipment a our equipment our business orders extensive Our the delivering the is between deferred customers the uniquely that to on confirmed given to manufacturers for significantly

first quarter, on So not course, not of the much the some but in inflation side. equipment much

the largely prices as addition, modestly. traditional for selling In equipment digital average decline, to impacts equipment continues products, somewhat inflation although

our business. supply the chain Now, turning on to pressure

stable, Here, fourth the similar pretty quarter. is to the relatively situation

which lead primarily we for are extended the equipment. products, continue experience to certain impacting times Of course,

a are outside manufacturing effected the every having so but we the received in significant ports China, and single not merchandise point-of-view with, operational The regions questions time on had products. our May lead deliveries. from supply impact in most course, particular are side, our as of far product us basically be the in consumable chain a not located partners the lot generally impacting of And On largely products. problems our have on side, fact recent category, are option a some are equipment of we've delays. that, we lockdowns

Now, of this ours slightly for goods. suppliers of finished be may specific different

is reflected which guidance. actively in our inflationary managing team matters, Our chain are financial supply these and

Turning Russia. now to has dental Ukraine. Henry presence Schein and the relatively customers either direct low or no really to Ukraine sales in

So se. the our conflict impacting per itself is business not directly

work impact consistent and Of persons support our refugees our course, suppliers, it from relief, and team displaced longstanding disaster continues to Ukraine. our commitment could humanitarian and to with in

of refugees of parts done, have with Syria, the course other example, elsewhere. from As we for East Middle and

of there -- these product through donations are partnership on supporting through support international in with for programs. local And relief that long working with clothing delivery underground other ground that managing relief with the in in money. donations, through our suppliers case, our several in a refugees the NGOs yes, relief programs, of And is humanitarian this healthcare support Poland. these yes, Our We're us to of worked teams and teams some we've are instances these provide with actively and products, time.

in Henry advancing goes for years. such as around We health Australia, affected world, many continuing natural many key to work Germany, health Schein's of component many, equity and in well. access care That advance Advancing as equity. has respects, a to disaster year by in care in to success also responding been primary those last are floods to to and, oral and the

now to with dental business. the review our recent business Starting Turning of distribution accomplishments.

the their And quarter COVID-XX dentists first driven rates. in the quarter business practices. continued by invest the to The of dental infection of equipment consumable sales, growth in recovered our during sales as in was well with strong decline half line global second merchandise

a we lower consumable were lower as sales patient bit Protective refer staffing February for March. closures a sales traffic as to in impacted of was but in by in are more traffic were of Let that In progressively call. me Ron I'll cancellations, This and peel primarily North the also to will a and by impacted onion America, Sales the PPE decline result given COVID-XX, merchandise the appointment COVID. of little stronger patient shortages, we of refer that Equipment, believe you. office and some for of the spread result January rest products Personal

has levels XXXX. early Although of December traffic now the we returned to patient believe

are globally, obviously, similar We but seeing trends

Operator

a shortly. just Apologize there in me, Operator. the resume and that be delay today's slight conference. will Excuse will Please conference hold

Unidentified Analyst

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Operator

Yes.

Unidentified Analyst

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Operator

Please proceed.

Stanley Bergman

the We Just where line had [Indiscernible] continue sorry. we me but let ended. on the disconnected,

trends of global shortages, result I the somewhat we and of traffic So strapping the region cancellation, some given depending covered traffic the it in appointment through. to went COVID, I world. I although December already, the spread XX primarily think office returned vary of now level, has believe closures and on decline The patient was think that the the patient are

lower sales. The primarily of has a a the glove quarter as glove result much products maybe about lower PPE longer, not volatile little market sales XX year, been for So quite longer, months. in were of a

to quarters exclude quite We That's expect XXXX. in the year. American a pricing will few an of since headwind increasing new the was by as good in was DSO stock gained This in sales the the solid. quarter local accounts. progressed. you quarter for merchandise, pricing last if growth peaked to glove softer North second consumable quarter, sales internal growth we Despite be PPE Nevertheless, products, currencies supported momentum

traditional both had digital quarter with business and Our North very American categories. equipment sales in dental strong good

particularly the digital at consistent equipment, equipment remains in order backlog quarter-end, the of Now, with at corner. restorative our book America in beginning restoration the strong North the

nice orders at new in rate. continue a So to very come

the a As due as equipment commented we in lead during inflation see for on to shipped not prices long quarter. early had from the equipment, quarter's for times lacked supplier largely orders significant in impact we call, did this sales

from DSOs. results equipment some large Our of our benefited sales to

who for a providing a the that expect believe up. demand gate today. that huge impact, see orders but coming go we Also, up pricing prices that from of out nevertheless, as [Indiscernible], like Not impact. of customers we some anticipation further the to we in would increases. believe point price in modestly huge go the and It's before I'll is not anticipation some get price further you. As increases to of elevated

make that, equipment for traditional said good of urgently, factors needs sure imaging. digital equipment and we these This the support second a the product just chain we'll We arising supply both will be well expect now experience Having quarters. delays supply orders. stride as continue lead the issues with longer technology. is to on -- build-outs and in imaging little digital not to available, office as that reservations, shortage taking delays digital traditional deliver equipment, component the it's from not a will for times anything sales we to continue is our next few We longer year port over of that through practitioner and half further course, if provide equipment the

In digital bullish fact, bottom market remain the is especially on equipment we product offering. and line equipment the dental

intraoral continue to good digital in category, expect demonstrating including scanners. growth We the

of the to to Now, flow well, starting in last XD net printing, interest. of we're impact period with through digital the demand see as time, that be

month, to Last years the to including Las designed to lives office dentist look dental hygiene add continue to in the held a inaugural the we -- dental after for every its ten member confidence We for have path to This business we a customers. replaces hosted themselves. conference our was event the successful three-day thrive value office with we offer COVID educational from of in learning dentist prior front dentistry that innovative ways Vegas. clicks it of in

sales commissions solutions way And the various everyone from sea office. management which leading technology XX the [Indiscernible] credited led we conference. more in great to and got to a has clinical provide designed were feedback received positions our competency We XX the productivity events for care is as participating this by thrive digital at and bit and and able in positive of that So [Indiscernible] top us customers with educational the all from than quite programs to players courses in on a view team advising position our customers better [Indiscernible] most practices. on. as in our deeper staff, of The our provide practice help focus greater advance Henry the point opportunities strong select and to this Schein like Educational least over well. provide from customer ways, with connect

quarter. international sales international the international for to were now Our to the also [Indiscernible] strong Turning equipment quite DEMP

especially related COVID-XX in Our impact products similar by of Europe. America, trends PPE first internationally, by including pronounced the visits, as -XX That particularly the and to America, North international during half consumable more was sales And impacted the of as the patient said, COVID were lower compared sales. quarter. North decline

So let's and peel the to of parts expect restrictions Europe. paces quarter certain in progressed relaxed recover. and were to Europe, we traffic Patient COVID-XX as at bit more onion in a the markets up picked continue these very

market throughout in start It's in Value-Added consolidated They peak, Australian end part nice to during Europe, Global was the about the and had our expect growing first Services. the sales. growing similar impact guys about during small solid concept recover lockdowns the to quarter. also to of still size in help rate strong first Billion session intensified business should business. Specialties are We second This straighter about products the relative relatively. having quarter. Notes China Specialty you of first Technology quarter. towards in relative These not in the relative reached had or but COVID-XX quarter. our I sales business are little still of also Global quarter. Chinese remind Dental Schein businesses relatively our a AECOM, the Dental our business. and we Dental a the our in cut though, impact Pertaining Henry to it's China, material fiscal Balance it's

which products. surgery, for these be well implants oral this continues double-digit primarily by the Horizons, grew Implants markets consists sales restorations and In of ACE focused quite particular with by bone with Executing America, Specifically, strong. businesses of quarter. regeneration to North in dental

and primarily Dentist products in Our quite regeneration first brands Camlog Europe. the for quarter Germany, and also good had a Merck in Europe, in implants bone

all products DSO And large market. into success one had leveraging health our example very another Schein We the regeneration have good this the is ACE bold bone priorities. in selling strategic strategy of also

recently with launch, States. meeting Ace well-received United pro laser, in week's that our launch next business believe product of domestic Bone is value globally. compared within now are cleaning, aligner offering We disinfection, next We competing [Indiscernible] products. update debridement, Now, reveal priority software out in our as upstanding coupled been Meanwhile, completed launched we our software, our and successful products having also we a clear March, U.S. In with greater I solid. rolling endodontics the the to orthodontic which age line. off to businesses actually quite the is here at product for and do quite and the

there investors Overall, result customer that, being to and were upon the Because of our further of products Software great are features, solid treatment Dental Specialty during that advanced investments orthodontic I call. position provide a first sales built as ongoing planning happy R&D. in is away Obviously, meaningful, and strong commitment on questions If COVID. capacity offering the and to in tools. think full quarter. not are not at realization color our practices

recovery the offerings offers and contributor solutions, quarter, the largest sector by Schein generates within our driven patient demand be and One flexibility, primarily to scalable to cloud-based cloud-based for offices, engagement also [Indiscernible] value by solutions, Value-Added sales, technology North Technology product believe double-digits Service and is of broadest the dental both practice patient continues international. of dental and and America yes, to in and services that in traffic they related to increased which first Schein in also and Henry drive We services. efficiency, Henry solutions, cycle One Turning software by services, practice and revenue of during added too. management management our the one sales Growth

product which of pleased was job we solutions services offering, value-added software management primarily last this our as As acquired insurance with [Indiscernible] revenue expanding previously, job's is provides performance available got to which private commitment We're integration of within available another whereas the business example the eAssist Also practices, products business our analytic our our and year. quite business to [Indiscernible] to technology making for DSOs, reimbursements. cycle software

continued quarter in achieved So the - business, to The products, turning you up the customer strong. to double-digits physician and care year. sales declined was traffic also in that related we currency, now point-of-care further where accounts. for to medical were the compared Medical versus existing sales offices COVID-XX surgical Internal penetration our PPE were be particular exclude also Global Medical growth ultimate and excellent U.S. the into test up demand and as patient sites strong local laboratory equipment quite cases, quarter year. double-digits strong. Sales of COVID Sales non last ambulatory throughout prior in consistently products by while PPE was one centers our to of diagnostic first if

it end shortly future of declines during January, rest prices gloves year, The of side remain were forces the face As for the the I difficult demand, we of the very variance towards pricing extremely and expect new pre declined are predict to the quarter. the as of the above many COVID-XX other from earlier, increased we of U.S. with Sales the along paid -pandemic strong availability somewhat trading mentioned to hotels strong and of rapidly, further of levels. tests products in by in the throughout which these offsetting spreading for government

broad financial a there specifics quarter? now, Thank give the Ron, And for you go. So will you Ron, your overview, you. welcome to first that's on So first more call. the results

Ronald South

you, good. everyone. morning, Very And Thank good Stanley.

X.X%. were net ended first-quarter prior now results, record, year for And X.X% products, excluding growth the in up was the sales So Internally of of quarter March PPE period. currencies growth turning XX COVID were XXth $X.X compared to local to total currencies. our reflecting local billion financial XXXX related X.X% when and internal generated sales in sales

quarter combined volatility and A gloves for are products in supply from This chain COVID-XX prior Formerly in recently, these earlier with test for is margin Operating year market More QX disruptions. release was press increased declined. sales the related XX COVID-XX a XX a due as with and kits representing issued payroll the of margin to points in sales compared strong year-over-year year. prior of our operating our X.X%, Operating to contained compared of primarily When products results, entertainment. of contraction margin year products. due and was [Indiscernible] decreased decline higher XXXX result also returned GAAP specifically in Exhibit a have quarter expenses basis with prices to a travel to earnings high basis year. commissions margin. volatility prior most decrease year in this pricing of along to PPE mentioned operations and operating margin Detail due first was operating unusually prices last last sales operating of the the normal increases Since first PPE comparison The Non-GAAP year-over-year contraction of have today. performance in year points.

million one This $XXX $X.XX or prior or diluted of share. compares QX share. prior $XX.X effective a million tax Henry our of America was diluted billion local first million $XXX the X.X%, local increased diluted XX.X% income of Dental or of a especially with and period impacted XXXX internal share diluted income $X.XX rate share local Specialty difficult growth approximately were in local of sales with on per first currencies. quarter XX%. the million currencies. comp. effective an And sales currencies PPE in was XXXX diluted internally GAAP sales digital X.X% And sales Dental of and prior $XX.X XXXX internal first or the compares million and in year performance sales, period, as basis. against detail XX.X%. attributable internal XXXX, products. strong per $X.XX increased with the of dental in dental the traditional internal growth of of growth local internal of growth products. income America in currencies. tax local of This which net compared related for off in sales which internal EPS by in first QX Dental quarter, and sales taxes, a local when exceptionally sales impacted especially and January quarter also was sales rate was difficult we growth internal XXXX compared year Schein International PPE quarter excluding first COVID-XX when sales local a X.X% merchandise compared was products, GAAP of $X.XX merchandise related both consumable a sales Amortization same $X.XX. in pretax a with infections, for sales XXXX sales by a XXXX sales strong growth our X.X% quarter. for XX.X% per grew QX to Turning the or local first related an in year growth of an compared growth also the strong to when products International first an internal this equipment XX.X% the had $XXX non-GAAP in I'll consumable PPE same with compared against QX of driven in in net an comp, $X.X XX.X% comp, local even for equipment currencies per with approximately currencies year $X.XX for quarter intangible provide X.X% prior increased quarter was compared North million currencies year This local from in sales sales XX.X%. of we also growth Global internal acquired local QX consumable increased COVID-XX internal both Non-GAAP in quarter was in growth net excluding currencies the And internal Sales This Sales as growth of were of diluted dental is with growth compares with North by increase XX.X% assets International per and pretax the with difficult excluding local internal in currencies. comes X.X% local exceptionally sales growth strong with GAAP foreign with with had to This XXXX COVID is internal some and XX.X%. for sales first sales currencies period XXXX, exchange equipment, Global XX.X% in negatively and internal was X.X% X.X%. currencies was decreased XXXX now categories. Global X.X% in currencies currencies merchandise in in an local $XXX currencies February. increase COVID-XX performance with in the when X.X% in sales of XXXX equipment was dental quarter such quarter currencies. last currency sales on Dental was last share. X.X% dental results of year.

This internal quarter, products. growth of was strong Included category, prior Services of implants regeneration in our million, management and the In an Value-Added our growth which Technology, growth during North Dentrix oral to Ascend. local practice business, in and consists local This $XXX XX.X% surgery growth in sales driven and growth XX.X% of the sales by a year. services and value-added currency. internal increase America, bone technology was compared XX.X% strong was currencies. in

and Neurology to also Our Services, a internal favorable prior in Internationally, compared from growth. when to beginning solid XX.X% in by benefited comparison strong year increased was year. the sales a local revenue management the performance UK, which just growth exhibited business revenue the lockdown Value-Added was with This prior cycle the ease. currencies driven

compares growth local sales and in and quarter XX.X% Specialty million sales technology COVID-XX and test of sales sales kits including the growth QX approximately XXXX internal test with flu achieved year. COVID for $XXX in our $X.X and $XXX approximately XX.X% volatility point-of-care internal test kits the grew period multi-assay we with X.X%. total of during remainder same by value-added currencies with And Medical is currencies of QX, kits. the in products, line XX.X% was this year. QX growth services our of total kits together growth for in XXXX, with of forward sales local in businesses, billion and expect test Global in diagnostics. growth combination with During sales the in This in led our test growth double-digit We compared of Dental goal first other of in million kits the sold XXXX, COVID-XX continued

Global in Excluding local increased QX sales sales COVID-XX Medical products, of and with PPE compared related XX.X% currencies of XXXX. internal

the being that We May quarter, during in shares put in any additional repurchase the during result place did repurchases. We tomorrow, has because not any a repurchased did we XX-b, plan X-X share affected first Xth. quarter. Schein an not as stock Regarding that shares Henry intend plan of of to had

Schein of disciplined end share for quarter, balanced strategic organic the million Henry As allocation and $XXX repurchases. of to growth future program strategy, authorized which pillar a and capital had acquisitions. first ongoing the of includes support This remains investment available our also core

continued to cash sheet of the Turning for businesses and flow balance from of compared flow, cash providing stability. benefit our liquidity to have $XX financial the quarter million we to Operating $XX and million significant XXXX our quarter year. flexibility first for first of last

$X.XX. affirming to to non-GAAP EPS $X.XX with I our of of by our EPS that of noting GAAP diluted guidance EPS XXXX $X.XX growth X% our XXXX guidance. growth compared X% X% $X.XX of remarks to will to and reflecting to diluted full-year financial my compared XXXX XXXX we diluted are GAAP Turning conclude XX% range of

XXXX This X%. over sales sales foreign change COVID-XX versus expected communicated reflects test XXXX of X% in sales exchange kits. rates primarily to to X% previously X% our of full-year expect approximately and the of We latest a growth decrease growth

to earlier, predict. the test future mentioned difficult kits Stanley demand is for As

communicated. we trends, previously to XX% of XX% as estimate decline COVID-XX opposed lower we recent kits given had now the to be to sales XX% However, than XXXX, test

basis margin XX margin XXXX XX to points XXXX Non-GAAP points to the continue GAAP XXXX expansion points operating basis over of points operating full-year We operating and the over basis basis expect XX to margins. XX expansion of

not remain previously or that repurchases, current also as completed well rates the or future of remain will markets With include generally and will currency future assumes exchange if Our share guidance as is for expenses, announced acquisitions Guidance any. restructuring does acquisitions potential consistent with foreign impact are changes now that, will levels. And call That market to I and stable Stanley. COVID-XX. turn consistent market back current with conditions. current the associated there with adverse end material if no

Stanley Bergman

Thank you beginning call remarks. and part our his There very We're with got call problem sort was broadcast the unfortunate Graham introductory disconnected. to intervention Ron, made not our much, Operator versus participants. the of of a

remarks fully picked and up. Ron's think my I are Graham.

You a may Thank want to repeat remarks, Graham. maybe you. please,

Graham Stanley

Stan. that's Sure. just include made during forward-looking. comments call state you, that will to I information Thank like certain this

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

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

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

So Thank back I everybody I'll the of statements the heard think call cause at rest hand the the you, that, beginning. to Stanley with Stanley.

Stanley Bergman

Thank questions, the refer please line questions. Thank you. for you open very much, Graham. the Operator,

Operator

You're we Instructions] stand Q&A welcome. compile while [Operator the by Please list.

We comes Johnson have question Baird. our Jeff line first from from the of

open. Your Please line ahead. go is

Jeff Johnson

guys. you, Thank

business. be currency acquisitions you in big thinking just a do revenue organic just a dental Just dental on of area lot we I'll could queue. guidance and any lot us in the impact how X% obviously that I give trends a April update at area, the to to Thanks, tends that on you're back in look growth just just given two think be should from standpoint and general year. this get X% Stanley, and the give of quick a And very maybe Schein. about your then a then ones Ron, specialty for you you you It organic us for maybe guys. consistent medical? Could is maybe seeing us metric growth, growth

Stanley Bergman

you, growth with I strong thank John. sales internal Thank Equipment you. remained double-digit in Drip, sales mean, numbers. April

expect indicated, the equipment we of at list moment, remain for we strong As the this sales balance year.

is merchandise, effect. therefore, of good, had quite PPE an good. grabs excluding Now, currencies. America to PPE in encouraged gloves. of has year The we're sales by April. in North pretty growth the the Overall, sales XPP&E prior How particularly with the while sales clubs price brushing Therefore, a internal lower lower than due about in growth general and bit the local line

you okay, take out the PPE if pretty it's So is good.

that America. North international Now, -- was so about

having markets full at back quite in. quite because in our a the the last major for We'll impact in Also, we're European components. of the international Australia back and If growth peak loans. most this reached of are towards the particular point view, in of quarter experienced while. they're again. an of from we've Again, quarter, we're you markets But end swing Australia bit in now business the nice a that is a PPE look continue in encouraged

impacted been good, Brazil continues in reason, at the be whatever to have in first be and For April. to strong seem all to quarter very continues doesn't

total quite seen now Shanghai. of because could a we've think of parts [Indiscernible] from bit Now, country, other course, of of other the I But disruption or the particularly in lockdown. you tell even as new Beijing

America. primarily in our Our April. here in China billion-dollar sales are impacted so And North medical, of context or very relatively please remember, is Having the that, results immaterial XX.X China similar said in on business.

- not to continue that's businesses COVID, the very non excluding good and medical have products, Our growth, PP&E. diagnostics -related COVID non -- very,

-- you on you will provide what coming in certain in accounts color the up with took Ron, the So guidance? for

Ronald South

So about guidance sales Jeff, acquisitions our X.X of that you components the and and week recall, if for year. point the this XXrd included X% X% a to original was

to price with internal that be increased increases So growth, X% it volumes. from or left the us of about X% whether

test kits, of as lower sales also guidance expecting XX% we headwinds. XX% lower we're year off those trends what down seeing for is extra in and were growth last we of XX% our think sales a original I the to FX combination There that X% in floor. really and taking COVID the point versus we're of be X% than the the said, to taking

something kind internal and I of say, for we're still do can number don't now the this number, be internal closer that math that X.X% say X.X% that's or for the of acceptably. X% aiming in know. terms You Hopefully year. to to that

Jeff Johnson

you. Thank does. It

Operator

next Our from Piper the comes Jason Sandler. from question line Bednar of

Your line Please is open. ahead. go

Jason Bednar

there. questions. from my on us, actually come their taking morning. good back first A Thanks just for top wanted the guide line couple point Hey, to

looks Just is kits. XXX guide, basis basis the year, of points coming it that bottom end [Indiscernible] to COVID so that reported the confirm, test now points of like to for XX coming lower,

guys that just through glove just whether that good should the within confirm as to it's here are think mechanics. out there or we, bad that of other is else any Just be that pricing guess [Indiscernible]. considering, or we that's I we guidance guys balance anything those -- playing of revenue as some

Stanley Bergman

were the I'd [Indiscernible] reasonable. say There's really But the FX your -- that components. are those estimate And items COVID on are that's to offsetting not the kits really pretty test

Jason Bednar

Perfect. All how thinking And Okay. just first out. quarter then through played the right.

you significantly Your in better it in back earnings how came were February. than communicated

guide lower dime. line in on a think core expense recovery you've medical, to by was like quicker Can basis. over beat in the you dental in Where about the year-over-year talk outperformance street earnings you better came -- a Was top and versus the and the for trends it original expectations? where be control? I a slightly got

I that your So from come outperformance in where did guess eyes?

Ronald South

In think kits year full taking down kits the to sales. and think while that in test don't quite expect a I a quarter do well didn't on I the areas. COVID test the the a of COVID couple $XXX we quarter, with in test million first we're kits,

call, of on think on I there. The business. the we on the much And dental did then the happy said really than our remain on the gross In feeling as bullish course margins fairly better expected. had equipment. And we still equipment. we of of came pressure what equipment originally with in good also, some we're we spite margins the in gloves, we're

the gloves, sales in I we for did not There's place I that in margins all the but areas, a in we other as we on other quarter. when in out did think the few that quarter. on non-PPE rate, So a would but just things that I effective well between tax helped dental, think good guide those experienced acknowledge things well, to first well us good us combined,

Jeff Johnson

Ron. All right, Thanks, very helpful.

Operator

next Lin, from comes of William the Our Blair. line question Justin from

ahead. open. Please go is line Your

Justin Lin

for questions. Thank taking my you Hi. Good morning.

you can outlook think you all, for from of and or First talk a XXXX about elevated beyond? the visit Do are your dental spending decline already? growth levels seeing spending can per you market persist XXXX

Stanley Bergman

a to taking point-of-view, strong, COVID -impacted dentist into visit generally account think locations. I

we're dentist, in specialty the remained we what from higher end positive sleep visits of strong products quite. we're at territory I end, some high procedures posts. from generally, in at we can with tell, where December think moment, were quite to the The XXX’X the strong more respect

and started You to business point March April okay. pretty better know have of we from looking getting a variant now, February, where never is have did bad this Right impact. though an January view, going

I think leading [Indiscernible] pasture. to stable

Jason Bednar

declining -- reveal end it. are Got of a small last visibility line week, your was part companies these And the just and a it's -- especially Thank you. the any know your some consumer line on seeing, big sentiment still, that maybe clear regarding of around I surprise I business? but wondering, your

Graham Stanley

I relatively business would by reveal and taken DSOs not our a [Indiscernible] of growth new of some is accounts, particularly is much sales line think the don't I small are have that indication. impacted on an line.

But small were visits our to bullish reveal Suffices first to small general. part first we said relatively down. procedures it's back very sure line. business right quite quarter, It the the to in say, party in market. market the remain compared for an I'm or business, of elective a you came that, Having give obviously, the again. Although we're of not indication the

Jason Bednar

very Okay. That's much. fair. Thank you

Graham Stanley

from the comes of Anderson next Elizabeth Evercore Our line from question ISI.

open. ahead. Please go is line Your

Elizabeth Anderson

the on additional broadly helpful. peers? super was be if wins there clients? provide details expanding question. some you Was account that of the into products share can Hi, of could penetration. your American versus guys. that you Thanks Was detail range provide so I North wondering much gain medical additional Any for certain would

Stanley Bergman

With part mostly in a physician part with or focuses owned by is independent IDNs. of the it on business medical Our practices of a large medical fact, the or our group offices. ultimate areas, key are

have on ambulatory also the That's not businesses centers that drugstore. in we on the centers. that smaller surgical acute serve businesses -- way, such the renal government. obviously nor centers. as not We a and long-term that the have businesses us do have as and area, cancer care care provide focus we on treatment focus And And focus we

been net the And business. share our really area, we gaining have a that's for So market decade.

say not all but would acquisition to products, part entered and that to continues good all magnified including I in numbers homecare contributed I this we as very tests small sometimes sometimes business if share. space spot you market internal that growth. execution. performance. to gain contribute. that Obviously But But the expand sure particular reduce growth way Just underlying market share. we described, point the the and our the essentially the We within would and I gain PPE would at the should do some better continue to I'm say, we way that. add new miss that

So just market business share. is overall, gaining the

Elizabeth Anderson

out place? guys increase help the versus maybe Got can you plans that have cutting some into about wages you type one [Indiscernible] you cadence in going the called cost the labor and it. spend rest Ron, as That's very helpful. put think that we And us the impacts forward the you cost takes of through of of think some as other the for year, the for of of opex ongoing

Ronald South

cadence into goes into one, and is right. salary company talk taken with expansion. expansion like when so as expense, We're inflation, people costs an will payroll Yeah. operating we increase plant normal of our That everybody wage dealing about margin expenses see for in the our And consideration we is going operating increases effect the forward.

Stanley Bergman

Unfortunately, that we a Utilities. in We've straight the space, to as requirements. Generally, putting with surcharge. this shifted the had a increased average deal done customers costs. past

Elizabeth Anderson

Got it.

Okay, thanks.

Operator

from of Nathan from line Rich Goldman comes Sachs. question the Next

ahead. Your line Please. is open. Go

Nathan Rich

I like demand and dental a you've guess, It standpoint just questions. seeing, side doesn't I'll in but then of of And revenue revenue for earnings what you're had practices? Hi. lead maybe able supply different seeing still the Good Can little both morning. them a equipment, terms to like been delays you for upfront. from follow-up year, ask a the times and historically. equipment first like where the for changed sound least through maybe seen quick through those just seasonality the about has on you at the is CapEx of and Ron. how talk just bit the second Thanks this you issues, it the the a year. also seems year you're half this from of business, it you've looks on than dental for kind to work continue longer expect quarter strong outlook

issues guess go-forward resolve. equipment the the these I of It so normalizes And go-forward. run will half year the of means should of about one to the half longer-term we back towards to rate on back Thank the of you. will kind some PPE helpful the closer for earnings what get what supply of color just as your be, business year be the think

Stanley Bergman

questions. good very Two Yeah.

traditional the COVID. the of the of for part practices all, First went back digital, demand actually dental equipment, and since after quite we time both early been around has strong, --

up still chairs, very to grow, ones, challenge, we demand a this that the on equipment We business. business So as to a we from at post said demand smaller the pretty because supply Having reduce third time traditional provide bit We when customer the lines, were for status well. units, other our continues or of it's of it. a moment I will but significantly urgency that, demand of increased. And capacity certainly any that third chairs, the quarter, equipment had four that There's The is plus is lines quarter traditional imbalance. of side the particular can increases, equipment, guess of two customer an challenge traditional big and quarter business. XXXX. the Demand with -- closed and second of had the part And needs down see the on It's and supplier moment. view one the there. has been units, big exit other don't keeping three have the suppliers major markets. of

growing grow. to Digital rapidly. continues is demand side, dentistry digital the On

chips, in They had a there of a challenged extent number fall challenges. doing backlog to And others. though, continue having [Indiscernible] related buildup challenges we is providing suppliers satisfying us demand thoughts, suppliers with is to another have -- to to than sell regard, lot and it's We providing with the products. demand, some the some one the that all in in

market a same satisfying is investing the the the There add are medical is side. practices all so purchase I on dentists is is So orders. the And is about the demand might good problem, stable.

it's generally quite good investing and So a very the and support globally have in a answer. say is strong. domestic, a selection will very we are question manufacturer both in good and your practices practitioners And question equivalent seasonality, regarding it's business difficult in good dental, medical, on question I to

were whether somewhat kind a kit, the lot think for The Historically, right. of incentive, out are I there demand predicting some think test went they seasonal are we days into purchasing equipment PPE. and trends, different of of has pandemic in they to but some were quarter You're our the that they as coming seasonal sales nuanced, covid many are so And -- there there's difficult be equipment, for trends were business PPE, of tax fourth the dynamic that pandemic now. changed. are and that -- factors, pricing increased has I

than little choppier now. been driven they think a in And our earnings historically. probably admittedly by which are that's dynamics sales just I going our it's to be we're markets really have right operating -- the the of

Nathan Rich

Thanks very much.

Operator

one the Suisse. last coming from time Credit question We for have Mike from Miksic line of

ahead. Your line is open. go Please

Justin Wang

the very provide much expectations April, your question. on for Thank you've trends Thank Mike. could carry QX. for as implant seen as any in were if stepping in We the OUS as well Wang Justin is for This U.S. well into much. Hello. as you color you you and wondering these how so

Stanley Bergman

implant quite trends be strong. continue to This

the doing well. end As I of Hyatt noted, quite seems be industry to

market. a America markets Germany, particularly those growing Europe and in In markets at markets have close not world strengths of global pin, as the the we of Asian we're presence we're but in North strong some Asia, U.S. faster in a is in. rate The the with Our in On than large are and course a markets. developing basis,

these. a doing we're for think pay I

and view, will point good, a a imagine introductions point our of and in gain We have market we the Russia are faster products share number that and those we implants Eastern market in I Europe. to generally in quite Thank course that the continued a of with bone continue you. from markets share to sales liked China because Overall, of important areas, global growing setback moving. market's very other with that to are and be from think markets we're specialty are are and regeneration really gaining of view, not other there

end the we Unfortunately, -- have So to call.

you Thank we the feedback we We minutes more you, appreciate was release, little interruption. this our format. the from And are input It press have We beyond or but investors. the under changed control. but a very for much the would it's will over, hopefully everyone interest. any if bit have investor our needs, format on few satisfied concise, on

XXXX about As to remain business. We're tell, quite bullish XXXX we the you can happy strategic We're progress. with making our plan. very good

to future team And and the interest to have generally company. We summer. feel reach conferences past people -- month at XXX to as to public your increase Thank next for to or you. done look behind strategy consistently a Ron Graham + people an a speaking forward free seeing value shareholder plan. outstanding at will the and ahead. have both think the we've out And and great management as the +X for quarters you Thank our nice

Operator

conference call. today's concludes you Thank this And participating. for

a great You may disconnect. Have day. now

Henry Schein (HSIC) 3 May 222022 Q1 Earnings call transcript