Henry Schein, Inc. (NASDAQ:HSIC) Q2 2020 Earnings Conference Call - Final Transcript

Aug 04, 2020 • 10:00 am ET


Henry Schein, Inc. (NASDAQ:HSIC) Q2 2020 Earnings Conference Call - Final Transcript


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Stanley Bergman

these trends, in particular, because a number of U.S. states and a certain number of international geographies are experiencing an uptick in diagnosed COVID-19 cases. While this is leading to stricter social distancing requirements set in certain places, we have not at this point seen dental and medical practices closing in any meaningful way despite the recent rise in cases. Of course, we will continue to monitor any potential impact to healthcare services in those regions, and we are prepared to implement additional cost saving measures as warranted. But at this point, practices seem to be opening. Those that have opened seem to be staying opened, and there's a gradual increase in more practices opening.

One of the critical issues we've faced when COVID-19 emerged was demand for personal protective equipment, that's the PPE. We are pleased to report that we made solid strides on procuring PPE during the past three months, including expansion of sourcing in critical product categories, the addition of high quality substitute products that are regulatory compliant and adapting our transportation model to shorten lead times in product delivery from factories.

As a result, we have significantly expanded our PPE supply chain capabilities and availability of product. Our team around the globe has worked diligently to position Henry Schein through this crisis so that we emerge as a stronger company. We are of course still in the midst of the pandemic. However, we believe we are successfully navigating the daily rapid changing challenges. We are well positioned -- and are well positioned, we believe, for the future.

As we look to the future, together with the entire Henry Schein Board of Directors, I have the utmost confidence in Henry Schein's business strategy, in our leadership team, and indeed, all of Team Schein. Once again, I offer my sincere thanks to Team Schein across the globe for the team's unwavering commitment to our customers, extraordinary work effort during this time and for the sacrifices the team has made for the benefit of Henry Schein's long-term business, which we believe is on a solid footing, and as a company, we've done a very, very good job, we believe, in satisfying our customers' needs.

At this time, I'll hand the call over to Steven to discuss our financial performance, and then I'll provide some additional commentary on our view of current business conditions. Steven?

Steven Paladino

Okay. Thank you, Stanley, and good morning to all. As we begin, I'd like to point out that I will be discussing our results from continuing operations as reported on a GAAP basis and also on a non-GAAP basis. Our Q2 2020 and Q2 2019 non-GAAP results exclude certain items that are detailed in Exhibit B of today's press release and in the Supplemental Information Section of our Investor Relations website.

Please note that we have again included a corporate sales category for Q2 that represents sales to Covetrus under the transitional services agreement. As Stanley mentioned, our 2020 second quarter results were impacted by