Henry Schein, Inc.

Good morning, ladies and gentlemen, and welcome to Henry Schein's second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. Later, we'll conduct a question and answer session. Please press the star key followed by the one on your touchstone phone if you'd like to ask a question at the end of the call. If anyone should require assistance during the call, please press the star key followed by zero on your touchstone phone. As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Graham Stanley. Henry Schein, Vice President of Investor Relations and Strategic Financial Project Officer. Please go ahead, Graham.

Thank you, operator, and my thanks to each of you for joining us to discuss Henry Schein's financial results for the second quarter of 2026. With me on stage call are Fred Lowery, Chief Executive Officer, and Ron South, Senior Vice President and Chief Financial Officer. Before we begin, I'd like to state that certain comments made during this call will include information that is forward-looking. Risks and uncertainties involved in the company's business may affect the matters referred to in forward-looking statements, and the company's performance may materially differ from those expressed in or indicated by such statements. These forward-looking statements are qualified in their entirety by the cautionary statements contained in Henry Schein's filings with the Securities and Exchange Commission and included in the risk factors section of those filings. In addition, all comments about the markets we serve, including end market growth rates and market share, are based upon the company's internal analyses and estimates. Today's remarks will include both GAAP and non-GAAP financial results. We believe the non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business enable the comparison of financial results between periods where certain items may vary independently of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding GAAP measures. Reconciliations between GAAP and non-GAAP measures are included in Exhibit B of today's press release and can be found in the Financials and Filings section of our Investor Relations website under the Supplemental Information heading and also in our Quarterly Earnings presentation also posted on our Investor Relations website. The content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, August 4, 2026. Henry Schein undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Lastly, during today's Q&A session, please limit yourself to a single question so that we can accommodate questions for as many of you as possible. And with that, I'd like to turn the call over to Fred Lowery.

Thank you, Graham. Good morning, everyone, and thank you for joining us. I'm very excited to share our results with you today, so let's dive right in. We delivered strong sales performance and margin improvement in the second quarter, driven by sustained momentum across our businesses and solid operational execution by the team. Internal local currency sales growth accelerated compared to the first quarter. This acceleration, combined with the strong gross margins and the early benefits from value creation initiatives, drove strong earnings growth. Our first half performance and the sustained momentum have positioned us to raise our full year 2026 guidance. Ron will provide more details later in the call. Before we get into more detail on the quarter, I want to share some feedback from various stakeholders I've met in my first months here at Henry Schein and also some of my thoughts on why I'm confident in our opportunities ahead to accelerate growth. Our customers value the range of products and the integrated technology solutions we offer to support the growing complexity of operating a healthcare practice. And they see Henry Schein as a reliable business partner due to our consistent execution, our product quality, and our responsiveness. Our supplier partners also recognize our deep customer relationships, and they want to do more business with us. And our growth helps ensure we remain their partner of choice. In addition to customers and suppliers, I spent a lot of time talking with employees and shareholders who are optimistic about our plans to improve, including making decisions faster, simplifying how we operate, and executing more consistently for the benefit of our customers. Henry Schein has great assets and capabilities, and our customer reach is really unmatched. What's exciting is that after my first few months at the company, I have an increased conviction that there's significant opportunity to improve our revenue growth and improve our profitability and ultimately become the platform to help healthcare practitioners operate a better practice. So as we sharpen our focus, our priorities ahead are accelerating growth, simplifying our business, driving operational rigor and further deepening our customer relationships, all of which we believe will create sustainable shareholder value. With respect to accelerating growth, we're already pursuing several key initiatives to do more for our customers, and these initiatives are beginning to pay off. For example, we're advancing our Henry Schein 1 technology platforms including AI-enabled solutions to improve workflows and collections, enhance practice performance, and strengthen patient engagement. This functionality is embedded in our Dentrix Ascend, and our data shows that customers who convert to Dentrix Ascend are seeing a clear improvement in their profitability. June was a record month for the number of new Dentrix Ascend customers, growing both our customer base and Capturing Sheriff Wallet. While our average monthly revenue per customer for Henry Schein 1 is approximately $500, our average monthly revenue for Dentrix Ascend customers is approximately $800. And it's growing as customers recognize the value of the new integrated capabilities and upgrade the higher levels of functionality. We're also accelerating our sales in our own brand products, including our corporate brands, by leveraging our one-shine approach and aligning our go-to-market strategies across the business. For example, in endodontics, our Edge brand, which we started distributing through our U.S. dental distribution business last year, has very strong sales growth. We also have a leading position in the fast-growing DSO segment of the market, which is driven especially by the middle market segment. As these DSOs continue to consolidate the dental market, this structural advantage should allow us to outgrow the broader dental market. And finally, we've expanded our medical business to attractive high-growth areas, including our home solutions business, which grew sales in the high single digits last quarter. To simplify our business, we're taking an integrated versus a decentralized approach across several areas. For example, we are implementing shared service back office functions globally and centralizing our indirect procurement. We also need to make it easier for us to work with each other as well as for our customers to work with us. So we're eliminating internal silos, and aligning individual incentives with broader company-wide goals. We're also evaluating our portfolio with a focus on businesses that drive higher growth and higher returns. Finally, we're driving operational rigor by delivering what we expect to be at least $200 million in operating income improvements from value creation initiatives over the next few years. but this is not just about the 200 million. It's about creating a high performance culture of accountability and continuous improvement while also increasing customer satisfaction. Complementing these efforts is a deliberate approach to capital deployment to ensure that resources are allocated to maximize long-term value. Across all of these efforts, a relentless focus on customer success will guide how we prioritize and how we execute. By helping customers operate more efficiently, making better decisions, and deliver better care, we can strengthen our relationships and further enhance our competitive position. As a result, we expect to accelerate growth and expand our market share, deliver stronger financial performance, and create durable shareholder value. With disciplined execution and working smarter as one team, we expect to deliver a better customer experience and a more profitable business. Now let's turn to the second quarter results. Our markets remain stable and durable and have good underlying fundamentals and a long runway for growth. We're not seeing a significant impact on patient volumes resulting from higher oil prices, and we believe the markets that we serve are resilient to economic pressure. Our dental merchandise business was strong globally, and we made further gains in market share in the quarter. Our U.S. dental merchandise sales performance continued to outpace the market, led by our corporate brands and by our exclusive products, such as Curadon. With our unique product offering, along with new sales reps, we are expanding our share of wallet and converting occasional buyers to actively engage customers. Merchandise sales growth also accelerated internationally with markets like Canada standing out. In Canada, we continue to take market share. Our advantage in Canada goes well beyond our portfolio breadth, though. It's also our best-in-class technology service, our ability to attract top talent, and the depth of our customer relationships that really differentiates us there. The U.S. dental equipment sales remain on pace for the quarter, given the tough comparable from U.S. dental school orders in the second quarter of last year. We continue to drive sales growth from our exclusive supplier sponsor promotions, and our backlog remains healthy, and we expect U.S. equipment growth for the rest of the year. International equipment growth was broad-based and continues to be good. The non-acute care U.S. medical market remains solid, and our government-related and home solutions businesses continue to grow well. Despite lower demand for point-of-care diagnostic tests, our medical business saw good underlying growth. Our specialty product sales were also solid in the quarter. Overall implant growth in Europe was high single digits, with premium implants led by our CAMLOG Brand, which is the market leader in Central Europe, and Value Implants led by our Biotech Dental and Medentus brands. We achieved more modest growth in the U.S. where our Paper Pro conical implant drove positive results, as well as our SIN360, which was recently launched in the U.S. Finally, sales growth in endodontic products was also good in aggregate across all of our businesses. Our global technology business, Enemy Shine One, delivered another quarter of strong growth with sustained momentum in cloud-based software and technology solutions. Almost 13,000 customers now subscribe to our Dentris Ascend and Dentally cloud-based platforms. And we're seeing more customers move toward our higher featured packages, which is increasing our monthly revenue per customer. Additionally, approximately 90% of Henry Schein 1's revenue is recurring. This creates a highly predictable business model. By leveraging the data from our market-leading practice management system, we are now broadly embedding AI tools in our software from which our customers are recognizing meaningful benefits. The recent launch of our next-generation AI clinical workflow has been met with strong market reception, reinforcing and Rishon's position at the forefront of the industry's AI transformation. Some examples include our voice-enabled clinical note documentation, our patient insurance eligibility analysis, claims and collection management, as well as clinical diagnosis and treatment analysis. These new capabilities help to drive productivity for private practice, for group practices and for DSOs. As dental practice labor costs continue to rise, our customers are looking to Henry Schein to help them operate more efficiently. These technology solutions uniquely position us to address this growing need. You know, a few weeks ago, I spent some time with our Henry Schein One team in Utah, and while I'm excited about the capabilities that we've recently launched, I'm even more confident in the opportunities that are ahead. Henry Schein's vision includes expanding AI deeper into the clinical and operational workflows through additional capabilities. So I'll make one quick announcement. Coming soon is the launch of an MCP layer that enables practices to query their own data with AI applications and agents. This allows them to identify revenue opportunities as well as to drive further operational efficiencies in a targeted manner. Now, I'll highlight the progress that we've made advancing our strategic plan during the quarter. Our overall margins expanded, partially driven by our high growth, high margin businesses, which now represent almost 50% of total operating income. We remain on track to exceed our goal of over 50% by the end of our strategic planning cycle in 2027. Additionally, our own brands, including our corporate brands, continue to grow well at almost twice the rate of other merchandise sales. Our value creation plans remain a top focus for our team, and we are on track to achieve our goals. I'd like to go a click deeper and share some of the key initiatives supporting these value creation plans. We've selected our global outsourcing provider to support finance and customer service and have begun implementing phase one within our U.S. businesses. We expect to see initial benefits from labor cost efficiencies starting in the third quarter, and we expect this project alone to deliver more than half of the G&A savings in our $200 million goal. We've set up a procurement office to identify preferred suppliers and consolidate indirect spend across our businesses. This is already yielding results for us. And third, we've started to use our sales data to identify margin opportunities, enabling more dynamic and disciplined pricing, which is helping us expand our gross profits. As we look towards next year, we're planning to implement several new initiatives including broadening the scope of our outsourcing initiative, expanding our AI capabilities to drive productivity, and implementing new supply chain software to improve efficiencies, reduce inventory, and streamline our purchasing processes. Each of these products should contribute to additional savings and help us progress for our goal of double digit earnings growth next year. I'm encouraged that our momentum continued in the second quarter and I'm incredibly excited as we transform into the value creation platform for our customers. With that, I'll now turn to Ron to review in more detail our second quarter results and our full year 2026 guidance. Ron?