On August 6, 2024, Henry Schein Inc (HSIC, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Henry Schein Inc is a solutions company for healthcare professionals, providing products and services primarily to office-based dental and medical practitioners. The company operates in two segments: healthcare distribution and technology & value-added services.
Performance Overview
Henry Schein Inc reported total net sales of $3.1 billion for Q2 2024, reflecting a 1.1% increase compared to the same period in 2023. However, internal sales decreased by 2.4%, impacted by lower sales of personal protective equipment (PPE) and the slower-than-expected recovery from a cyber incident in late 2023. The company’s GAAP diluted EPS was $0.80, while non-GAAP diluted EPS stood at $1.23, both missing the analyst estimate of $1.25.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Net Sales | $3.1 billion | $3.1 billion |
| GAAP Net Income | $104 million | $140 million |
| Non-GAAP Net Income | $158 million | $173 million |
| Operating Cash Flow | $296 million | $274 million |
| Adjusted EBITDA | $268 million | $279 million |
Challenges and Strategic Initiatives
The company faced challenges due to the slower recovery from the cyber incident and a challenging economic environment in certain markets. To address these issues, Henry Schein Inc announced a new restructuring plan targeting $75 million to $100 million in annual run-rate savings. Additionally, the company increased its share repurchase authorization by $500 million.
Updated Financial Guidance
Henry Schein Inc updated its full-year 2024 financial guidance, now expecting non-GAAP diluted EPS to be in the range of $4.70 to $4.82, down from the previous guidance of $5.00 to $5.16. The company also revised its total sales growth expectation to approximately 4% to 6%, compared to the prior guidance of 8% to 10%.
"We delivered solid second quarter financial results, including strong operating cash flow, that reflected stable end markets. Gross margin continued to increase, driven by our strategies to expand our high-growth, high-margin products and services and by the successful performance of our recent acquisitions," said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein.
Income Statement Highlights
For the second quarter of 2024, Henry Schein Inc reported a GAAP net income of $104 million, or $0.80 per diluted share, compared to $140 million, or $1.06 per diluted share, in the second quarter of 2023. Non-GAAP net income was $158 million, or $1.23 per diluted share, compared to $173 million, or $1.31 per diluted share, in the same period last year.
Balance Sheet and Cash Flow
As of June 29, 2024, Henry Schein Inc reported total assets of $10.25 billion, with cash and cash equivalents of $138 million. The company generated an operating cash flow of $296 million for the second quarter, up $22 million compared to the same period in 2023. The company’s long-term debt stood at $1.89 billion.
Conclusion
Henry Schein Inc's Q2 2024 financial results reflect both achievements and challenges. While the company saw a slight increase in total net sales and strong operating cash flow, it faced headwinds from the slower recovery post-cyber incident and economic challenges in certain markets. The updated financial guidance and restructuring plan indicate the company's proactive approach to navigating these challenges and driving long-term growth.
Explore the complete 8-K earnings release (here) from Henry Schein Inc for further details.
