Henry Schein Inc (HSIC) Reports Q4 and Full-Year 2023 Results; Provides 2024 Financial Outlook
Net Sales: Q4 net sales decreased by 10.5% to $3.0 billion; Full-year net sales decreased by 2.4% to $12.3 billion.
GAAP Net Income: Q4 GAAP net income was $18 million ($0.13 per diluted share); Full-year GAAP net income was $416 million ($3.16 per diluted share).
Non-GAAP Adjustments: Q4 non-GAAP net income was $86 million ($0.66 per diluted share); Full-year non-GAAP net income was $593 million ($4.50 per diluted share).
2024 Financial Guidance: Non-GAAP diluted EPS expected to be $5.00 to $5.16; Adjusted EBITDA growth projected to be over 15%.
Cybersecurity Incident Impact: Estimated impact of $0.70 to $0.75 per diluted share on both GAAP and non-GAAP net income.
Capital Deployment: $287 million invested in acquisitions during Q4; approximately 692,000 shares repurchased.
On February 27, 2024, Henry Schein Inc (NASDAQ:HSIC) released its 8-K filing, detailing its financial results for the fourth quarter and full year ended December 30, 2023. The company, a leading provider of healthcare products and services, reported a decrease in net sales for both the quarter and the year, attributing part of the decline to a cybersecurity incident that occurred in the previous year.
Henry Schein Inc operates in two segments: healthcare distribution, which includes dental and medical products, and technology & value-added services, offering software and other services to healthcare practitioners. The majority of the company's revenue stems from the healthcare distribution segment.
Financial Performance and Challenges
The company's fourth-quarter GAAP diluted EPS was $0.13, while non-GAAP diluted EPS was $0.66, reflecting acquisition-related expenses and adjustments, and an estimated impact from the cybersecurity incident. The full-year 2023 GAAP net income was $416 million, or $3.16 per diluted share, and non-GAAP net income was $593 million, or $4.50 per diluted share. The cybersecurity incident had a significant negative impact, estimated at $0.70 to $0.75 per diluted share.
Despite these challenges, Henry Schein Inc's performance is critical as it demonstrates the company's resilience and ability to navigate through adverse events. The company's ability to recover from the cybersecurity incident and continue investing in strategic acquisitions is indicative of its strong market position and operational capabilities.
Financial Achievements
Henry Schein Inc's financial achievements include a solid recovery from the cybersecurity incident and strong growth in its Technology and Value-Added Services businesses. The company's guidance for 2024 reflects confidence in its market stability and strategic plan execution, with an expected non-GAAP diluted EPS growth of 11% to 15% and an Adjusted EBITDA growth of over 15%.
This guidance is significant as it signals to investors the company's expected trajectory and the potential for continued growth in high-margin products and services. The company's strategic investments and share repurchases also underscore its commitment to enhancing shareholder value.
Key Financial Metrics
Important metrics from the financial statements include a total net sales decrease of 10.5% for the quarter and 2.4% for the year, with the cybersecurity incident contributing to a significant portion of the sales reduction. The company's balance sheet shows a strong cash position with $171 million in cash and cash equivalents at the end of 2023, up from $117 million the previous year. The company's capital deployment strategy included $287 million in acquisitions and $50 million in share repurchases during the fourth quarter.
These metrics are crucial as they provide insights into the company's operational efficiency, liquidity, and strategic priorities. The increase in cash and cash equivalents suggests a solid liquidity position, while the investments in acquisitions and share repurchases reflect a balanced approach to growth and shareholder returns.
Analysis and Outlook
Henry Schein Inc's performance in 2023, though impacted by external challenges, shows a company poised for growth. The introduction of 2024 financial guidance with expected growth in non-GAAP diluted EPS and Adjusted EBITDA indicates a positive outlook for the company. The focus on high-growth, high-margin areas and the ongoing execution of the BOLD+1 Strategic Plan are expected to drive future performance.
Investors and stakeholders can anticipate Henry Schein Inc's continued market leadership and operational success as it navigates through the residual impact of the cybersecurity incident and leverages its strategic investments.
For a more detailed analysis and to stay updated on Henry Schein Inc's financial journey, visit GuruFocus.com for comprehensive reports and investment insights.
Explore the complete 8-K earnings release (here) from Henry Schein Inc for further details.
This article first appeared on GuruFocus.
