Great. Thanks everyone for joining us. My name's Nathan Rich. I cover the dental space here for Goldman Sachs. Very happy to have Henry Schein with us, Ron South, SVP and CFO. Thanks a lot for your time, this morning. Appreciate you being here. You know, maybe starting with just some high-level questions on the dental end market. You know, you talked about, you know, a softer start to the year, then some improvement in the dental consumables, business in March and April. I guess could you maybe take us through kind of, you know, kind of how you what you feel like drove that improvement? You know, was it end market driven? Obviously, you're kind of coming kind of off of the cybersecurity incident and still seeing some sales recovery there. You know, how did you kind of see the first quarter play out?
As you think about the balance of the year, how do you kind of feel at a high level about the end market overall?
Certainly, yeah. You know, so the first quarter really kind of had a mixed bag effect, right? You had early in the quarter in January, we were still kind of coming off of, you know, from a specific company perspective, still kind of coming off some customer recovery process that we were going through, you know, following the cyber incident. But there was also kind of complicating factors in the early part of the quarter where, you know, there was some significant kind of adverse weather within the U.S. that could often kind of dampen demand for dental services as well as a higher than normal flu infection rate that we saw that will typically increase cancellations in dental offices.
So January started off pretty soft for us, quite frankly, and I think most of the industry saw it that way as well. We began to see that recovery in February. How much of that is coming off normalization of weather, normalization of flu infection rate versus ongoing cyber recovery? It gets kind of difficult to assess, but we were just happy to see some recovery in February, and that recovery sequentially continued into March. We saw some stabilization in April, and in the early part of May, that stabilization continued. But we still think there's opportunity for us as the year goes on, to continue to regain market share, and to also try to increase share of wallet, you know, with our existing distribution customers.
But right now, you know, the dental merchandise market is very much confined by what's happening in patient traffic, which is stable, but we need it to be, I think, you know, in order to see meaningful merchandise growth going forward.
So I guess, maybe just, on that point you just made, so stable patient traffic, thing you kind of talked about, like not there really not being much there from a, a pricing standpoint this year. Is that sort of like kind of March, April flattish from a dental consumables?
Yeah, that's probably fair. That would be a fair assessment. And it's also, you know, we believe our practices, our customers are very busy. And, you know, even anecdotally, when you talk to people, if they've had to cancel a dental appointment, it's often months before you can get back in to see your dentist. So, you know, the president of our North American distribution group was telling me he would assess that his estimate is about 90% of our customers are operating at capacity, which is, you know, a very good number. And there's probably about 50% of the general population out there that should be seeing a dentist that's not seeing a dentist.
So there's great opportunity for growth there, but if all your practices are operating at capacity, it kind of confines that opportunity for growth. So as we see, you know, more and more dental schools opening, which is a positive, we do think there's gonna be opportunity, in the next couple of years to see a little more market expansion on the dental side.
I wanna come back to that point 'cause I think it's an important one just in terms of, like, practice throughput, and what that can do for the long-term growth of the market. I guess, you know, as you think about kind of getting back to this, you know, growth in patient traffic and consumables volumes, there's a lot of focus right now on pressuring the consumer as sort of the reason why the industry's kind of growing below what its target rate has been. I guess, from your point of view, what do you think are the key variables? Is it, you know, jobs? Is it inflation continuing to come down? Is access to financing a hurdle right now for patients doing procedures? I just would love to get your perspective on that.
Yeah, you know, probably the one most important macro metric that we track is unemployment. And this is, it's a very U.S.-centric kind of comment, but within the U.S., looking at unemployment, because if people are remaining employed and we're at, I think we just now hit 4% was the last I heard, but still not a bad number, then they still have access to care. You know, our business is largely driven by ultimately the public's access to care. If they have access to dental care and they are generating that consistent churn of consumable merchandise in a practitioner's office, that's better for our business.
So, you know, a lot of people are getting their dental insurance through their employer, and as long as those unemployment rates are staying as low as they are, that's a good macro metric for us. You mentioned interest rates. We can address interest rates in a couple of different ways. Interest rates will impact some of the financing decisions that our customers might make on high-dollar equipment. What we can do, for example, with individual practitioners is that we will typically co-promote attractive financing rates to them with the manufacturer of the equipment. So if interest rates are ticking up higher than where our customers are happy with it, we can, for example, we recently did a 5.99% equipment financing promotion for customers, and we shared in that interest rate spread with the manufacturer.
So we will co-promote with that. The other way interest rates can influence the market a little bit gets to some of the high-dollar procedures that you referenced to. Things such as, for example, a full arch implant, can be very, very costly and is typically, or can be typically, financed by the patient. And if interest rates are a little higher, you can see some pullback in the demand for those procedures. Quite frankly, that's an area that we have, you know, it's a very small part of our implant business. Our implant business is focused more on the individual implant as opposed to the full arch implant. So that hasn't had, you know, I think has adverse an effect on us as perhaps others in the industry.
Got it. Okay. That makes sense. I guess, you know, maybe how would you characterize kind of demand in Europe, you know, and some of the other larger markets like that you're in, like Australia, relative to the U.S. at this point? I guess especially Germany 'cause it seems like there's been a lot of focus, that obviously being a key dental market and the weakness there.
Yeah, you know, Germany is one of the larger international markets for us. I would say kind of Germany has been. You see a little bit so depending on what part of the market you're talking about. But what we've seen in Germany is we're still doing well in implants there. We had kind of mid-single-digit growth with our implant business there, which we were quite pleased with. We felt that was an indication that we were getting market share. What we saw, like, in the standard business was, it's relatively flat, but we actually got a little bit of growth driven by equipment servicing, which is interesting because it's an area that we have emphasized a little more.
We're trying to market it a little more because we do see it as an area that our customers really kind of appreciate the service and they find value in the service. What we don't know is, is that growth driven by that marketing, or is that growth an indication of, you know, our customers holding onto their equipment a little bit longer? What's happening? You know, we'll know a little we'll be able to kind of see how that trends out over the next several quarters. So that's been good for us in Germany as well. There's other aspects of the business in Germany that are, I would say, a little more flat, but we haven't seen the same kind of headwinds perhaps as others who are more narrowly focused in that market, right?
Outside of Germany, you mentioned Australia, important in international market for us. Australia had some very good kind of post-pandemic incentives that the government put out there that have since expired. So that's creating a little bit of a headwind for us there. Also, a country like Australia, Spain is another where a high percentage of the population has a variable rate mortgage, and as interest rates go up, their mortgage payments go up. So it does kind of squeeze a little bit the disposable income, and you do see a little bit of impact of that in some markets, Australia probably being the most significant of that.
Okay. Wanted to go back to what you had just talked about, with equipment 'cause, you know, I think that's an area of the market where you've seen some pressure, kind of across the industry. And, you know, I think there seemed to be a fairly strong replacement cycle kind of right coming off of the pandemic. I guess, you know, to the point you made about this, the servicing plans, where do you kind of think we are in that, like, replacement cycle for the market? And, you know, do you think demand was pulled forward kind of coming off the post-pandemic and seeing the very strong recovery in the market?
And then I did wanna ask on the service plans in particular, 'cause I feel like many dental practices kind of outsourced out to a third party, you know, now that's maybe a service that you can provide for them. So maybe how you're going to market there and what's the margin implications as you grow that line of business?
So, you know, and we're really, when we're talking about equipment in this context, we're really talking about what I'll call standard equipment, meaning the, you know, the treatment center, the chair that the patient is in with the lights, etc., right? And yes, I do think there was some volatility, some what I'll call kind of positive volatility in standard equipment the last couple of years. Some of that was coming out of the pandemic. You had perhaps a little bit of pent-up demand associated with those who perhaps deferred some equipment purchases during, you know, in at the peak of the pandemic, say, in 2020. You also had a lot of end-market churn of customers or patients who changed business, and created opportunities for some practices to expand their practices. [audio distortion]
You also had some who saw, you know, who saw the pandemic as being something short-term. They were gonna take the lulls and opportunity to add a chair that was less disruptive to their practice. So we were getting double in multiple quarters over, say, in 2021, 2022, that began to level off a little bit in 2023. We do think that if we go back and kind of look at the 2019 level of standard equipment demand versus where we are now, it's a nice consistent CAGR. We're seeing it kind of level off a little bit now, but I think kind of going forward as we go forward what we should get back to something that would be more normal kind of in that mid-single-digit growth on standard equipment. In terms of where are we on the replacement cycle, kind of hard to say.
It is, you know, you have to look at kind of the individual practitioners versus the DSOs. A lot of DSOs out there, that equipment growth comes from de novo practices as they build out new practices. Some DSOs are focusing a little more on how do we optimize the capacity of our existing practices versus adding, continuing to add on de novos. So that, you know, that has dampened perhaps that standard equipment demand a little bit, but not a great deal.
So, you know, where are we in the replacement cycle is very hard to say, but this goes back to if we can continue to get more dentists into the market 'cause I do think the demand for dentistry services exceeds the existing supply, that would prompt greater, you know, greater investment going forward in standard equipment as well 'cause it's functional. It's just something if you're gonna have more patients, you need more chairs. And so I just think that, you know, it just will follow that trend. On the service side, it is an area that we are starting to market more and more.
We've developed a product that is much like an Uber style of app that our customers can use that can pull a technician in quite quickly, especially in the larger metropolitan areas. We can typically have a service rep in a practice in 2 hours or less, which is important to our customers. If that chair is empty, you're not getting revenue from that chair. And so if we can get a service rep in quickly, not even it's a good margin, but it's also it builds customer strength, right? It makes it stickier 'cause the customer feels like you've given them good service. So it is an area of importance and one that we are starting to invest in a little more.
Like I said, in these types of tools that can make it more efficient, can we increase the number of visits that a technician can do in a day? That all just, you know, kind of falls out to the bottom line if we can.
In terms of, you know, [audio distortion] service demand? I feel like one of the other things that the last couple of years is you may be seeing a bit of a pullback in terms of practice formation. Do you see that changing at any point, you know, in the next couple of years? Is that a fair characterization?
When you say practice formation, it's in terms of de novo?
Yeah, right.
Yeah. Well, I think this goes back to are there enough dentists, right? And as you get more and more dentists coming out of dental school, you know, a lot of dentists coming out of dental school these days will actually go to work for DSO. They're coming out with a fair amount of debt, and they don't really have perhaps the funding to invest in it in their own practice. So I think that will prompt, you know, perhaps a little more growth out of the DSOs and de novo practices. But, like I said, we believe the demand is there for the supply of dental services to grow. And if that's the case, then that provides opportunity, you know, across the board, whether it be merchandise or equipment.
You know, Stanley's talked a lot about the need for digital transformation and that sort of being, you know, one of the areas that you're focused on helping dental practices. I would imagine that could potentially help from a capacity standpoint too if you improve practice workflow. I guess, can you maybe just talk, talk about sort of what the specific solutions are there? And 'cause I feel like it's something that we've heard about for a long period of time. I guess, you know, maybe how that is sort of implemented in practice in a clinic would be kind of helpful context.
Yeah, very much so. So, you know, we have a digital clinical workflow product called Nemotec that allows you know, we kind of call it three-click dentistry, right? And it allows a practitioner who has an intraoral scanner to take a scan of a patient with, you know, with one click, update the patient records, and then be able to send that image directly to their 3D printer or their chairside mill or to a lab, and then also process a much more accurate claim with the insurance company along the way. And it really increases the efficiency of the practice. It starts with that scanner though. We've talked a lot about some of the disruption in scanner pricing the last, you know, year or so. That has stabilized.
But it really has to start with that scanner. It's an area that we're really, we really think that as scanners have become more affordable to practices, we're seeing probably about a 50% penetration rate, which sounds low, but there are a lot of practices out there that still rely on impression material. If they don't have a scanner, none of the other things can happen, right? You're not gonna buy a 3D printer without a scanner. So what we do expect to see is greater growth in this digitalization because it does provide an opportunity for the practice to see more patients in a day.
It can actually increase their number of, in addition to increasing the number of patients, they can increase the revenue per patient with, with this type of procedure and this type of efficiency and ultimately reduce their costs in terms of the accuracy of the claims that are going to the insurance companies and having to kind of reprocess claims. All of that, you know, are right now existing pain points for our customers, for the practices that we think can be addressed through digitalization.
And on the high-tech equipment piece, if, you know, kind of the scanner being the cornerstone, I feel like you've seen good growth, good volume growth there.
Yes.
ASP starting to stabilize. Does that sort of mean that the high-tech piece of the equipment portfolio kind of gets back to growth this year?
That's our expectation. You know, in our first quarter earnings release, we did say that we expect modest equipment growth this year, but that would be driven by relatively flat standard equipment growth. So those chairs, units, and lights, but with some modest growth in kind of more CAD/CAM style equipment, that being scanners, 3D printers, chairside mills. Imaging is still seeing some, you know, some headwinds on pricing.
Yeah.
But right now, we think that the CAD/CAM piece can more than offset that headwind on the imaging side.
Okay. Yeah, I was gonna ask about the digital imaging 'cause it seems like that's been particularly negative just to, like, probably towards the top of the, you know, high-ticket.
Yes.
Equipment pieces of equipment a practice can buy. What's the within, like, I guess, high-tech, what's the relative mix between, like, CAD/CAM and imaging?
within high-tech, I mean, I would say it's probably roughly half and half. I mean, that's.
Okay.
That's a rough number for us. It could differ from other companies, but I think for us, it's right. And equipment in general, our standard equipment has typically been about two-thirds of our equipment revenue.
Right.
Tech being about a third. And then within that third, it could be roughly half and half.
I wanted to spend some time on the specialty businesses 'cause that I think, particularly, implants, is really for the company and an area where you guys have done incredibly well. You know, I think that investors are having a tough time kind of thinking through the dynamics of the, you know, the implant space. And I guess specifically, you have, you know, a tough end market like we've talked about, especially towards the higher end of the implant procedures that are done. You have a lot of manufacturers, you know, making it a focus to re-accelerate growth of their implant businesses. I guess kind of at a high level, how you see this playing out. It seems like, you know, in that type of environment, it could put pressure on pricing, which probably plays right into your portfolio and where it's positioned.
I'd just be curious to kind of get your perspective on how you think the dynamics of this market are gonna.
No, it's, you know, I think, and especially in terms of North America, where we have kind of positioned ourselves historically has been with a what we would consider to have kind of a premium implant product, but at a sub-premium price. So we've been able to be fairly price competitive in that premium market. If other premium players are bringing their price down, you know, we haven't seen them bring their price down to our price, right?
Right.
You know, so we still feel like we are price competitive there, and it's allowed us to protect market share. Where we have had kind of a bit of a gap in North America was on the value implant side, where, you know, we think there's actually potential for very good growth on value implants. The acquisition we did last year of S.I.N. in Brazil gave us access to a value implant that was already S.I.N. had this implant. They weren't selling it yet in the U.S. at any kind of level of scale 'cause they didn't really have the infrastructure for it yet. But we were able to, you know, to fold it into our product portfolio at BioHorizons, and now we are selling S.I.N.'s value implant in the U.S.
That's an important product for our DSO customers whose GPs would like to do their own implants as opposed to referring it. Typically, if they're doing that, they're going to take on the more basic procedures, in which case they can work with a value implant. So that's, we feel like we have a, you know, good demand for that. Equally, there's another product that we are awaiting FDA approval. We should have it very soon, that will allow us to sell a more deeper connection bone implant, that really represents about, you know, 50% of the market out there that we were not able to sell into.
We have, again, it's our DSO customers and other customers have expressed an interest in this product, and we think that will help us on the back half of the year in terms of our revenue growth there. So we, you know, the implant business in North America with these changes, with the S.I.N. value implant, with the FDA approval of the more deeper connection bone implant, has really allowed us to broaden the product portfolio and, I think, set us up for good growth going forward there.
That's the first bone-level implant you're gonna be able to sell?
We have a bone-level implant in the U.S., but this is a much deeper one. It's a con not to get into the to the.
Right.
It's a what they call a deep connection conical tapered implant. So, it's very similar to the technology we use for our implant, the Camlog sells in Europe. So it's a proven technology. It just didn't have FDA approval in the U.S. It's not the exact product that we're doing in Europe, but it's very similar. It's based on the same technology.
You face a big competitor in, in that space. I mean, is this the strategy the same, sort of you want to bring that premium-type product at a value price?
Yeah, value. I don't know if I would call it a value price as much as I would call it a sub-premium price.
Sub-premium price. Okay. Fair.
Yes.
And then on the S.I.N., in the value space, you know, how do you feel like you can differentiate yourself? 'Cause I think the, the sub-premium pricing on a premium-type product, that is a real compelling value proposition. Value space, you know, I feel like is there the same type of opportunity to kind of price at a discount versus, you know, the other options that are on the market currently?
Yeah, very much so. And I think that it is, like I said before, it is an area that our DSO customers have been asking us about. How do we get, you know, a value implant from you? And, you know, now we've been able to address that with them. You know, one of the advantages DSOs have perhaps is their access to education. They will sponsor a lot of, you know, kind of broadly based, education programs. So it gives their GPs the opportunity to learn, you know, implant procedures, get certified on implant procedures. But they're typically gonna at least start, if not just stay with the more straightforward procedures that they can do with a value implant. More complicated procedures will likely still get referenced to an oral surgeon.
You know, they don't need a premium implant system to do the, you know, to do the type of procedure that they would like to do. So the value implant, you know, is attractive to them.
I wanted to ask you about DSOs because that's kind of been a core of your distribution business for a long period of time. You've talked about, you know, I think I've made several references here about kind of selling more specialty products into DSOs. Have you seen sort of consolidation in sort of the vendors that they wanna work with, in terms of the scope of products that they're buying? Then can you also touch on the technology side as well? Have you been able to kind of sell in the Henry Schein One solution set to those customers?
Yeah, I don't know if I would call it consolidation of vendors with our DSOs as much as, you know, I'll, I'll call it some people don't like the word formulary when it comes to this thing this type of thing, but it's really kind of what formulary do they wanna have? I think one of our customers likes to call it the marketplace 'cause their 'cause their practices don't like the idea of being restricted to a formulary. But it is a, we, we do try to keep them to that. Our supplier partners are, are welcome to participate in that. If, if it's a price competitive situation, it's up to us to negotiate a chargeback from that, you know, from our supplier partner.
A lot of our DSO customers are interested in private label from us as well, if it helps, you know, helps us get to pricing that they find more, you know, more attractive. So, you know, so that becomes part of it. The technology piece, very important part of it. A lot of, you know, many of our DSO customers want their practices to be on a common platform. And so we do, you know, for a lot of our larger DSO customers, we, you know, set up a conversion. You can't convert everybody on the same day, obviously. But as they acquire practices and build out practices, we have a, you know, a schedule of getting them onto, primarily on Dentrix Ascend. You know, most new customers are going on to Ascend, which is the cloud-based practice management system.
And so we do have, you know, we schedule them out and get them onto Ascend. What that allows us to do as well, our DSO customers also like some of the business analytic tools that come with the Henry Schein One can offer because it does give them the opportunity to get kind of a snapshot of the financial metrics of all their practices and identify the outliers, both negative and positive, that they can develop some best practices in terms of the profitability and what can they apply, you know, across all their practices.
I guess one of the other kind of long-term opportunities was, you know, the tech business has a pretty broad suite of solutions. I think kind of the upselling beyond just kind of the core Ascend product is, you know, potential for multiples of additional kind of spend from a certain.
Yes.
From a customer relative to that baseline. I guess maybe where are you in progress with that and, and sort of just the strategy of you around trying to drive that sell-in since that seems like a big incremental revenue opportunity?
Yeah, no, that share of wallet opportunity is very important for us because, from a practice management perspective, especially in the U.S., we're already at about a 50% market share. So the market share expansion opportunity is more limited. But what you can do is you can take a look at the suite of services that those customers are buying. And, you know, if a customer were to purchase everything available to them, they'd be spending about $1,500 a month with us. I think average customer is spending about $500 a month with us. So there's that opportunity. So we've been really focusing on that share of wallet, whether it be patient experience, electronic claims. And the latest, you know, that is gaining some traction is Detect AI.
Detect AI helps the practitioner with their diagnosis of cavities, specifically caries, which are kind of pre-cavities, and that may not be necessarily visible to the naked eye. And so it does give them that opportunity to sit down with the patient, show them where they should be anticipating an issue, and then, is there a way to treat that in a way that's gonna be much more palatable to the patient as opposed to having to have a cavity filled. And that's really gaining a lot of traction as well. So that's where we see the opportunity there is how do we continue to improve that share of wallet.
I feel like, you know, what we've talked about with the, the specialty businesses and, and with tech, you know, it seems to be having an impact on gross margin. It's kind of been one of the, you know, areas that have, you know, recently kind of consistently exceeded expectations. I guess can you maybe talk about just like, I guess one at a high level, are we at this point where, you know, you guys have been talking for several years about getting, you know, the growth of these higher margin businesses driving gross margin and offsetting pressure in the core distribution business? And then, you know, over the balance of this year and into 2025, maybe how you, you know, we should be thinking about modeling gross margin.
Certainly. So, you know, I think as we mentioned in the Q1 release, we do see the gross margin for Q1 being relatively representative of what we expect the gross margin to be going forward for the year. It could get some pluses or minuses coming out of that depending on what happens with some of the products. If in fact we get, you know, greater growth, for example, in distribution than we expect right now, that might put a little bit of pressure on the gross margin, but that likely will help us on gross profit dollars. So that's not a problem I'm gonna, you know, dodge from, correct?
Right.
But yeah, I mean, as we see the growth of our high what we term our high growth, high margin businesses exceed that of the distribution business, it's gonna continue to, you know, provide a little more profitability, a little better leverage in the P&L. I think, you know, one of the internal measures and something we've talked about externally as well, and one of our internal goals was by the end of this year, we wanted our specialty businesses, so that being implants, endodontic products, and orthodontic products, all of which we self-manufacture.
Plus, if you take our Henry Schein One, our technology products, and other value-added services products that we provide to our customers, if you took that portfolio of business, which right now consists of something a little north of 15% of our revenues, our goal was by the end of this year that 15%-16% of revenues would actually constitute at least 40% of our operating income. We actually hit that goal in Q1 when it was nearly 41%. So while it's a small part of the top line for us, it's a much bigger piece of the operating income pie for us. If you take that number and kind of tag on some of the private label we're doing in distribution, that is another about 10% of our operating income.
If you add that in, that means roughly 50% of our operating income is being generated by brands that we wholly control, whether it be through the self-manufactured specialty products, through the technology products, the value-added services, or the private label. So that'll obviously never get to 100, but we do think we can continue to get some growth on that going forward as well.
Yeah, so 50% of operating income from those products that you kind of manufacture.
That we, brands that we own, you know, so we're not reliant on a third-party partner on those brands.
We've also gotten some questions around SG&A and just how to think about that. I think it's been maybe especially challenging this year just with all the acquisitions that you did last year. Any kind of guidance on how investors should think about modeling SG&A over the balance of the year?
No, I mean, I acknowledge it is challenging. You know, we did $1 billion in acquisitions last year. The SG&A profile of the business is different than what it was, say, five years ago.
Yeah.
We have more and more businesses that are self-manufacturing product, which means while we get that manufacturer's margin, we also have higher R&D expenses, for example. As we continue to push for more growth in Henry Schein One, we're gonna incur more software development costs on the SG&A side. So the SG&A used to be relatively predictable. It's a little less predictable than it was, I think, at least from an external view as people look at it, than it was, say, 5, 6 years ago. But there are areas, you know, we've had some programs in place to reduce our occupancy costs. We've had some programs in place to, kind of, you know, corral in headcount a little bit. We had a voluntary retirement program a couple of years ago.
These are all things that we have helped with SG&A, but we're constantly having to look at, you know, given the transactions we're doing, you're constantly kind of going back and looking for redundancies, opportunities for integration. What can we do to reduce that cost base? We'll continue to do so.
I guess, maybe what's sort of the nearish kind of 1- to 2-year kind of view on M&A? 'Cause you're obviously digesting a lot of deals that you've recently done. Should we, I guess, expect a bit of a slower pace over the next couple of years while that happens? Or, you know, how do you feel sort of just about the pipeline of opportunities that you're looking at?
Certainly. Certainly. So yeah, you know, we did do approximately $1 billion in acquisitions last year, which is by far the most we've ever done.
Right.
You know, we had room on the balance sheet to do that. We had been, you know, our, our leverage ratio was about a 0.7, more or less. It's now closer to a 1.7. But so it's still a reasonable leverage. And part of this was we wanted to keep the balance sheet clean so that if a year came along like we had last year where we saw some great opportunities that really fit into the execution of our strategic plan, we'd be able to do it. So that was, you know, an exciting year for us. I don't expect to do $1 billion this year. I don't think we have the management capacity to do $1 billion of acquisitions this year, let alone put that much more pressure on the balance sheet. I'd rather not do that.
So it's important that we integrate the businesses that we acquired last year, and really execute on that integration and drive, you know, all the initiatives we have to accelerate the growth in those particular companies. An area that we are taking a look at this year that we have where we see some opportunities would be more along investing, increasing our investment in businesses which we already control. If you look at our first quarter statement of cash flows, it'll indicate that we spent, you know, $20 million in acquisitions. I'm using round numbers, right? That's in the investing section. You look down to the financing section, you'll see that we spent $90 million in shares that we acquired of minority interest in businesses that we already control.
This is a good year for us to execute on this type of strategy 'cause what it allows us to do is, for example, one of the transactions we did in the first quarter where we bought out a minority partner was in our endodontic business. And it now allows us it's we can more easily sell some of those endodontic products using our U.S. dental sales team. We don't have a minority partner who we have to kind of work out that profit sharing with, etc., right? And we're taking a look at other businesses around the world, where we can do something similar. So it's you don't have to really do a lot of due diligence. You already have control of the business, and it increases your leverage opportunity going forward.
This is kind of the right year for us to be looking at those opportunities.
Interesting. Great. Well, with that, we're out of time. So, Ron, thanks very much. Appreciate your time this morning.
Very good. Thank you.