Henry Schein, Inc. Q4 FY2025 earnings call

Stanley Bergman welcomed Fred Lowry. Fourth quarter sales reflect continuing momentum. 2025 non-GAAP operating income from high-growth, high-margin businesses approaching 50% of total operating income. Implementation underway across multiple value creation projects. Global e-commerce platform henryschein.com rollout progress. Launched innovative solutions like Novartis' Curaden product and partnership with Amazon Web Services. Survey of U.S. dental market indicated practices' focus on driving revenue growth and improving operational efficiency. Global Distribution and Value Added Services Group had solid sales results. Global Specialty Products Group sales continued to benefit from strong performance in implants and biomaterials. Global Technology Group performance driven by core practice management solutions and enhanced functionality.

Global Distribution and Value Added Services Group: Global sales grew by 7%. U.S. dental merchandise sales grew 3.6%, U.S. dental equipment sales grew 10.6%, U.S. medical distribution sales grew 4.9%, International dental merchandise sales grew 9.2%, International dental equipment sales grew 13.9%, Global Value Added Services sales grew 9.6%. Global Specialty Products Group: Sales grew 14.6%, or 11.1% in constant currency. Implant and biomaterial business had solid growth. Global Technology Group: Total sales growth of 8.4%, or 7.6% in constant currency. U.S. sales driven by practice management software, international sales by Dentally cloud-based practice management software.

2026 sales growth expected to be 3% to 5% over 2025. Non-GAAP diluted EPS attributable to Henry Schein, Inc. expected to be in the range of $5.23 to $5.37, reflecting growth of 5% to 8% compared to 2025. Guidance assumes stable dental and medical end markets, generally consistent foreign currency exchange rates, and ability to mitigate tariffs. Earnings growth expected to be more heavily weighted towards the second half of the year. 2026 adjusted EBITDA expected to grow in the mid-single digits versus 2025 adjusted EBITDA of $1.1 billion.

Q: On guidance and operating income improvement plan, A: Ronald South discussed that initiatives are in early stages and earnings growth weighted to back half, $125 million run rate impact in 2027 yet to be determined.

Q: On strong growth in Specialty, A: Ronald South and Stanley Bergman talked about mix shift towards certain brands, stable pricing in some markets, and market momentum.

Q: On durability of dental market performance, A: Stanley Bergman said markets stable to leaning positively, dentists feeling good about practices, sales organization able to explain investment benefits.

Q: On cadence of value creation initiatives, A: Ronald South said full year net benefit expected with lumpiness in quarters.

Q: On remeasurement gain and equipment, A: Ronald South talked about range of remeasurement gain outcomes and Stanley Bergman discussed equipment backlog and momentum.

Q: On sustainability of implant performance, A: Stanley Bergman and Ronald South talked about market stability, product offerings, and new product introductions.

Q: On repo and gross margin, A: Ronald South said guidance assumes stable stock count, private label growing faster with margin expansion.

Q: On medical volumes and tariffs, A: Stanley Bergman talked about medical procedure volumes impact and tariff mitigation through alternative sourcing