Elizabeth Anderson: Hi, guys. Thanks so much for the question. I was looking on the medical environment, we have heard of higher sort of some outpatient utilization trends broadly in the market. How do we think about some of those trends continuing and sort of the ordering patterns between like procedures or some of your ambulatory surgical clients and then sort of the impact on their ordering as we move through the year?
Stanley Bergman: So Elizabeth, I think the shift from the acute care setting to the alternate care setting for procedures continues. I don’t think it was more profound this quarter than the past year or two. I don’t think there’s any shift — significant shift in either increase or decrease in procedures in any one or two procedures, maybe there are isolated procedures, I don’t know. But in general, the major procedures are consistent, at least from our point of view, from quarter-to-quarter. And it’s a growing area from our point of view, both in terms of some internal growth with existing surgery centers, ASCs and also we’re gaining new accounts in that area. So it’s pretty much consistent that procedures are moving from the acute care setting to the alternate care setting and are relatively stable within a particular center.
Elizabeth Anderson: Got it. And then maybe as a follow-up, as we sort of think through some of the cost cuts, etc., as your moving on, one of the things it seems like SG&A was a touch higher than at least we were modeling here in the quarter. And I just wanted to understand about the cadence as we think about the back half of the year and sort of any of the impact of some of the cost restructuring as you’ve — and how they materialize as we move across the quarters.
Ronald South: Yeah. Elizabeth, the SG&A, the whole kind of mix of the P&L of some of the businesses that we acquired last year are going to be a little different, right? With the higher gross margins, but then greater expenses as it might relate to R&D and other selling costs associated with some of those businesses. So that’s you’re seeing that show up in the consolidated P&L a little bit more. So some of the favorability we got on the gross margin side was the offset on the SG&A side. I think in terms of cadence, it’s going to be with these businesses having a greater importance in our P&L as we go forward, it could get a little lumpier, a little less predictive with the SG&A, but I would suspect that over time, it will be something fairly consistent with what we had in the first quarter as well.
Operator: And the next question comes from the line of Mike Petusky with Barrington Research. Please proceed with your question.
Mike Petusky: Good morning. So Stanley, I’m wondering, you’ve had PRISM for a few years and Shield I think for a couple of quarters. I’m just curious, home health, obviously, large end markets, presumably opportunities for above-average growth. I’m just curious. Is home health something that you now can sort of say, hey, we feel really good about this, we want to build this into something really big over time or is this a little bit different than you thought? And maybe you just sort of stick with the assets you have? Thanks.
Stanley Bergman: Thank you, Mark. Thanks for that question. Home Care Solutions continues to be a big area for us going forward. We continue to expect to grow organically, make some additional investments. Our business is approaching $350 million annually, $20 million a month or so. And we expect that to continue to grow nicely from an organic point of view, and we will add to that platform. At the moment, we are moving those businesses to a common platform so we can provide a national service with high customer service. We believe that the business complements our physician business very nicely, our ASC business, and we’re very, very optimistic about our Home Solutions business as well as our North American Rescue business, which provides first responder and military medical solutions, these two are areas that are doing quite well in our medical portfolio.
Mike Petusky: Okay. Great. And then just shifting to Dental. I guess one of the benefits of talking to anybody at Henry Schein or leadership at Henry Schein, there’s a lot of folks, including yourself, Stanley, that have been in the chair for a long time. You’ve seen different markets and different challenges and all the rest. And it just seems among investors right now, there’s just a lot of skepticism around Dental and concerns about persisting high interest rates and how that sort of flows into capital equipment decisions and concerns about pricing compression with maybe consumables, imaging products and other things. I’m just curious, when you sort of think about the Dental space in general right now and Schein’s position within it.
Do you think the skepticism is sort of appropriate given the givens or do you think it’s appropriate for others, but maybe not as much for Schein or can you just talk about historically the current challenges and how you see them, given your experience? Thanks.
Stanley Bergman: Yes. I think, it’s a very good question, too. The dental markets are relatively stable. If you look at the U.S. patient dental traffic in January and February was impacted by weather and some seasonal viruses, including the flu, but improved beginning in March and again an improvement continued through the quarter into April. I think there are seasonal issues we need to take into account, weather, but overall, the U.S. dental market is stable, maybe leaning towards some growth. I think the same would be the case globally, especially in those markets where you have government reimbursement. So it’s quite stable. It’s a good market. I think one has to be very careful reading the tea leaves when it’s some basis points down in one quarter, some basis points up in another quarter.
I think the underlying stability remains. Yes, there is a challenge with interest rates on high-cost procedures in one implant we spoke about $20,000, $30,000 procedures, interest rates impact that, but basic traffic is good. And I think these are solid markets. Change that have a little bit of an impact here in the U.S., but not materially. We’ll get out of that. Our customers have decent cash flow, maybe some of them had challenges of Change. We had to support them, arrange financing for them, extended some credit terms. But overall, I would say the market is stable. And on the equipment side, we are taking a bit of a cautious approach. In that, we’ve talked about modest overall equipment sales. But the basic traditional equipment is stable.
The whole digital world is growing. And I think in the long run, it’s a medium term, equipment is even a good area, too. So we’re quite positive about dentistry and remain that way. And if you add to that, the medical business, where procedures are continuing to move from the acute care setting into the ultimate care setting. And there’s no material movement in terms of reducing the number of procedures in any one particular area. I think generally, the businesses we’re in are positive. We are working on recovery of our cyber business that related primarily to these episodic customers and have made quite a bit of progress in that area, too. So we’re quite optimistic about the future.
Operator: And the next question comes from the line of Justin Lin with William Blair. Please proceed with your question.
Justin Lin: Hi. Good morning. Thanks for taking my questions. Sort of a similar question to what sort of came up earlier, but slightly different. Your Technology segment organic growth, I think, came in lower than the Street, but the reported number was relatively in line. Did the Street just kind of mismodel that or was kind of the acquisition contribution, particularly from North America, was that above your own expectations as well?
Ronald South: Yeah. Justin, the — that segment includes other value-added services businesses, some of which we have acquired in the last year. So that showed up in the acquisition growth from those value-added services businesses who did have very good quarters. They did have very good quarters. And while they exceeded our expectations, we expect them to continue to provide — contribute good profits going forward.
Justin Lin: Okay. Got it. And I guess more of a high-level question here. You obviously made a number of acquisitions. Anything you would call out. Surprising whether positive or negative relative to your expectations over the past few quarters?
Ronald South: We’ve been happy with all of them, some do better than others in the early stages. We are busy integrating our large implant acquisitions we did last year, Biotech, which has now annualized. That will show up as internal growth beginning in the second quarter. We’re also integrating S.I.N, the Implant manufacturer in Brazil. That will annualize 1st of July. So the second quarter will be the last quarter that shows up as acquisition growth. So the back half of the year, we’ll be reporting those numbers as part of our internal growth with the contributions we get from those two businesses. Very happy with what we’re seeing on the — in the Home Solutions business. There was an earlier question there. Do we see that as an area for growth going forward?
I think the answer is definitely yes. So we’re very pleased with the — how we’ve been able to capitalize with the acquisition of Shield that we did last year as well as Mini Pharmacy. And then also on the value-added services side, this is becoming a more and more important part of our approach to our customers in terms of helping them run more profitable practices, including when they want to exit their practices and large practice sales has been a very successful acquisition for us as well. So I think when you go down the list, and I hate to keep listening them because you don’t want to leave somebody out, but they have all done, we’ve been very happy with these acquisitions and the returns they’re providing us so far.
Operator: We have time for one last question coming from the line of Kevin Caliendo with UBS. Please proceed with your question.
Kevin Caliendo: Thanks. Thanks for squeezing me in. I appreciate it. A lot of comments around April and the back half of the year and new product launches and like there’s so many moving parts with M&A and the like. Ron, maybe can you just give us an update on cadence of what you expect revenue growth and earnings to be? Is 2Q trending as you thought? Just trying to understand because there are so many moving parts, is this going to be a typical seasonality in terms of revenue growth, EBIT growth and especially EPS growth?
Ronald South: Yeah. So as we’ve said before in the prepared remarks, Kevin, that we do expect sales growth to be more significant in the back half of the year than what we see in the first half of the year. And some of that is recovery from cyber. Some of that, too, is the launches of some of the new products we’re anticipating on the implant side that we talked about as well in the prepared remarks, in addition to some new technology products we have that we’re launching as well. So those are all going to contribute. Our expectation is they will contribute to greater growth in the back half of the year. And like I said before, some of this comes from ongoing recovery from cyber. We saw encouraging recovery over the course of Q1, good momentum into Q2, but there’s still some work to be done there.
So we will — but we’re confident that as the year goes on. We’ll be able to continue to gain some market share on the distribution side as well. So I think that from both a sales and an earnings perspective, my expectation is we’ll see better growth in Q3, Q4 than what we had in Q2.
Kevin Caliendo: Okay. That’s helpful. And if I can just do a quick follow-up on the implant, the new products. What does this do to your portfolio of products? Is it improving what you had, sort of — I’ve always envisioned that you’re sort of between value and premium. Are you expanding the sort of offering that you have or improving what you have or are you changing the positioning of any way, shape or form of your implant portfolio with the new product launches?
Stanley Bergman: In the U.S., we’re expanding and we’re going into about half the market that we do not cover today. We’re waiting for finalization of the approval. We expect that in the second half of the year. In international, I think our value proposition is expanding with the Easy 2.0. Easy 1.0 was good, but there were a couple of features that we’re missing. We’ve added that to it, and it’s been well received already in Germany where we launched it in this quarter. So on the one hand, we’re entering into a part of the market that we really are not in, in the United States. And at the same time, we’re providing better value products in Europe. So generally, I would say it’s an expansion of the product offering plus better pricing, better value in Europe.
