Thank you very much.
Hi, Stanley. Thanks everyone for joining us. And Stanley, thanks for joining us remotely. We hope you're feeling well. We're very pleased to welcome Henry Schein, a leading distributor of products, technology and services to dental and medical practitioners. Stanley Bergman, as you can see, is joining us virtually today. He's chairman and CEO. We have Ron South on stage, SVP and CFO. Stanley, to start, I was thinking maybe keep it kind of open-ended and high level. You know, looking at the dental market, 2022 I think was a more challenging year for a lot of dental practices. You know, we've heard a variety of reasons for that. You know, patient traffic was soft. You know, they've dealt with staffing constraints and cost pressures.
I guess from your perspective, as we sit here kind of entering 2023, how do you kind of see the state of the market and the kind of key issues that are facing the industry?
Good afternoon or good morning, David. Nathan, thank you very much for accommodating me being at home. I just returned from Europe, and I just want to stay quarantined for a few days, but I'm fine. Overall, I think the market, it's a good question, by the way, is relatively stable. The demand for dental services remains quite strong, I think. There are some challenges. Flu has been quite a challenge across the board in North America, and I must say in Europe, other parts of the world. I think the staffing constraints, putting aside the flu issue, are starting to ease up a little bit. There are still some challenges. The high value procedures, there are a lot of questions on that. There is a little bit of trading down.
There's a little bit of shopping on products. Can you switch from one brand to another that's a lower price? I would say medium term-- short to medium term, the market is quite solid. Demand for equipment is still there. Digital equipment is, say, a little stronger. There's a lot of investing taking place in dental offices. Interest rates are a little bit higher than in the past, but much lower than they've been, say, 3 or 4 years ago.
I guess maybe just digging into the numbers a little bit, and Ron, if you wanna jump in. I guess in the U.S. last quarter, I think your claims data showed patient traffic was modestly down in the quarter. You know, it was a little bit softer. Your volumes, I think, outperformed that. I guess, you know, how does that play forward into 2023? Are we at a place where patient traffic is kind of adjusted for the macro reality that we're in? You know, pending any bigger picture change in the economy, you kind of feel pretty good about where we're at from, like, a traffic and demand standpoint.
Ron, please.
You want me to take that? Yeah, sure.
Sure, please.
You know, I think from a patient traffic standpoint, I think we're kind of at a. It's difficult to compare patient traffic now to patient traffic prior to the pandemic. I think that just, you know, the protocols in the dental office are a little different. I think the capacity is a little different. I think we're probably, you know, operating at what I would consider to be a normal level. You know, we can quibble if that is normal compared to prior to the pandemic, but I think it's really kind of normal operating process right now. Is there opportunity for a little more traffic to come in? Yes. That existed prior to the pandemic as well.
I think what becomes more important when monitoring patient traffic is more directionally and sequentially from quarter- to- quarter, from period to period, what trends are we seeing? I think it is fairly stable right now.
Got it. I think you've talked in the past about employment in the U.S. at least being the biggest driver of dental demand, just given how people get their dental coverage.
Yeah.
Do you kind of feel like that's the case going forward? You know, depending on how that plays out in 2023, that'll kind of inform which direction the market goes.
Yeah, that's right. I think, you know, in the U.S., most people get their, you know, their dental insurance through their employer. Unemployment rates are remaining, you know, fairly well. I think that, you know, that's a good indicator for us that people continue to have access to care, which is important for us.
Then, I wanted, Stanley, going back to that, you kind of referenced trading down in areas like oral surgery in the third quarter. Have you seen that kind of driven by the consumer of wanting cheaper procedures and figuring out, you know, how they might be able to save when they go to the dentist? Like, an example could be bridges instead of implants. I don't. You know, I'd be curious just to get your perspective on, do you see that picking up just given the macro environment that we're in?
I don't think, Nathan, that it's a tsunami. There are bits and pieces here and there where we're seeing trading down. I would say dentists are shopping for price much more in terms of you're selling me a particular product today with a particular brand, is there an option? It's not sort of a wholesale movement towards where can I get my products at a much lower price. There is, I would say much more informed dental consumer today on the dental side and likewise on the customer side. Some markets is perhaps a little bit more on the higher end shopping by the patient. We've seen some of that in Germany, for example.
I don't think it's a significant issue in the U.S., but there is, I would say at the margin, much more awareness of price on the customer side, and it's more to do with value. If I spend $1, can I get more value? There is an awareness on the customer side of seeing whether they can get the service at a lower price. It may be to do with economy. It's obviously to do also with the internet today that results in the ability to get more transparency in value.
Makes sense. I guess on the topic of pricing, I guess, primarily in dental consumables, I know many manufacturers take price increases January 1st. Certainly not all. You know, some have kind of changed their cadence, and pulled forward some price increases. I wonder if you could maybe just give us a flavor for what you've seen manufacturers do generally, in terms of, like, level of price increase for 2023.
Yeah. I mean, I can't generalize. Not all out yet. I would say in the earlier part of 2022, manufacturers were increasing prices. I would say it was a unilateral situation. I think it's more tepid today. People are thinking, "Well, if I go too high on this particular product, is there another manufacturer that's maybe a second-tier manufacturer that will be prepared to offer the same product at a lower price?" I think these price increases are taking place, but nowhere near as one-sided as they were, say, a year ago. Here's the new price. Take it or leave it. It's much more tepid. I would say it's closer to the 2%-3% range than maybe the inflation rate.
Got it. It sounds like there is starting to be some resistance to the price increases that manufacturers have took from customers, and they're looking for alternatives, to trade down to.
I think that's a good statement. I think it's correct. There's very few products in dentistry where there's not an alternative and a high-quality alternative, including our own corporate brand. I would say customers are looking to make sure that they're getting value. It's just not an automatic reordering of a particular impression material simply because it's a brand. There's checking to make sure that that price is in line with what could be potentially bought from other manufacturers of a similar product. You know, I'm giving you an impressionist painting here. I'm not giving you a perfect architectural rendering because this is a marketplace where things are playing out. Clearly, manufacturers just can't provide a huge price increase and expect it to stick without looking around to ensure what the competitors are offering.
Are there certain categories where you're seeing this more in particular? I guess, like, does that play into some of the own brands and private label that you have?
Yeah. Well, we are, Mason, a national brand committed company, so 90% of our products are national brands. Obviously, when you look at pharma patented products, it's much higher. When you look at generics on the commodity side of products in general, it's much, the private brand is much greater. But I would say that in general, there is an opportunity for private brand, but there are also certain manufacturers, second tier perhaps even, maybe even some bigger brands that are prepared to be competitive. The marketplace is resetting a little bit here. Yes, there's an opportunity for our corporate brand, but there's also opportunity for national brand manufacturers, maybe some smaller ones, even one or two larger ones, that are looking at price to make sure that they're providing the value that customers appreciate.
I wanted to ask on Europe too, because I think the macro dynamics are a little bit different than in the U.S. I guess, you know, how has that translated into the demand environment for dental? Do you feel like Europe, just given the reimbursement structure, the insurance structure that exists in a lot of countries, has less sensitivity to the macro environment than in the U.S., or is that too kind of broad-based of a statement?
No, I think in general, you're correct. There's less elasticity, related to maybe the view of the economy in countries where there is more reimbursement, by governments. In countries where there's not such reimbursement, it's much more elastic relative to the view of the economy. There are countries in Europe where it's much better, and there are countries in Europe that are a challenge. I would say it's pretty stable. There are a few countries where actually things are not bad, like Brazil, for example. Then even I would say to some extent Japan, but that's a country also with heavy government reimbursement. Yes, you're correct. The government reimbursement does play a role in cushioning, any view, a negative view on the economy.
I would say again, as we said at the previous call, in our last investor call, things are pretty stable internationally, although, I think the U.S. is a little hotter. A little bit more buoyant.
Great. Maybe if we could shift over to dental equipment. You know, sales have remained very strong for the last several quarters. You know, we kind of talked about some signs of caution in the dental industry, but overall stable demand. I guess, you know, can you kind of talk to us about why you feel like demand has remained so robust for equipment? It feels like it's both across the traditional side and the digital equipment side. You know, I'd just be curious to get your view on sort of, you know, the continued, like, willingness for, of dentists to invest in their practices, you know, even given, you know, some signs of caution in the broader macroeconomy.
I would say that to some extent, the consumer is expecting, in this post-COVID period, a sterile infection control practice. To some extent, there's some cosmetics involved. The practitioners want their practice to look good, modern. I think that's driving a lot of the sales of traditional equipment. Demand has been good. Manufacturers are not 100% fully shipping the orders that are placed, although it is easy. There is that desire on the traditional side to have a fresh-looking, modern practice, and that's causing investment in the traditional equipment. I might add, by the way, that on the traditional equipment, the non plug-and-play, where it has to be installed, there are still challenges on the construction side in satisfying the dentist the need for speed.
We're still having practices delayed in terms of construction completion. That's the traditional equipment. There's the imaging side. It's not a bad market, but pricing is challenged. There's a lot of capacity, and it's a digital product. As all digital products from the calculator on, there's pricing pressure. I think the unit demand is okay for the imaging, 2D, 3D, but pricing is a little bit depressed and is a challenge. There's the whole digital side. The digital prosthetic side. The scanners, the chairside mills, the 3D printing, the equivalent products in the dental lab. These markets are all good. There's a demand for them. There's a movement towards digitalization like there is in every other industry. Pricing is challenged.
There are several new players coming into these markets with great products. Non-traditional players, and they're competing very well. Some of the larger players have just not been able to match price and features of some of these new entrants. Of course, we carry all of these products. Also the pressure's being put on us to add more of these newer lines as well.
I guess, can you give us a sense of the magnitude of ASP declines that we've seen in imaging and the digital equipment categories that you referenced over the last several quarters?
I can't say I have a number, but, that's Ron South's department, but I'm not sure if it's such an easy number to give you.
Yeah. It's not, you know, completely easy to provide. I think, you know, probably the best example would be on some of the intraoral scanners.
Yeah.
You know, that was kind of the standard price on an intraoral scanner. Historically has been in that, you know, $20,000-$25,000 range. You're seeing entrants to the market now that are as low as $12,000. It's like any other technology. As it becomes more readily available for manufacturers and they find a more efficient way to make it, they're willing to come out with a lower price. As we see some of these, you know, and Stanley referred to them, you know, sort of, kind of new suppliers who are entering the market with this, it's, it's increasing demand for the product because it's a more attractive price point. But it is, you know, the total revenue being generated tends to be, you know, relatively flat.
We do see increased volumes on, like, sales of scanners and things like that.
From your standpoint, I guess, when it comes to sort of the ASP that you recognize, is that being driven by more dental practices are choosing these, like, lower price point scanners? It sounds like the capabilities between, you know, what you used to get with the top brands and what, you know, you get with some of the, you know, lower priced brands, those capabilities maybe have, you know, that gap has narrowed.
Yeah. Yeah. I think that's probably a fair statement. You know.
Okay.
I think that's, you know. Are they exact? I can't tell you that. I mean, that would be a good question for a dentist, right? I do think that, just based on what we're seeing, that if there were problems with these lower price, I think we wouldn't see as much demand for them, right?
Yeah.
For some of these lower price scanners. I do think we have a combination of practices who maybe had 1 scanner, and now with this more attractive price point, have decided, "I've got 4 chairs, I'm gonna get 3 more scanners. I'm just gonna have a scanner per chair now." I think you're seeing more of that, right?
Okay.
It's also, you know, I always remind people, dentistry is a competitive business and intraoral scanners are much more pleasant experience for the patient than if you're using impression material or something like that. I think that the dentist wants to remain competitive. He wants to retain his patient, and that type of investment helps him retain that patient.
Makes sense.
I think that Mark Nathan, it's very important what Ron said. I think we're at a point now where the DI, the scanner is becoming more or less standard of use. There's still half the market that really doesn't have anything or the latest, so there's a big demand for this. I also wanna emphasize that these newer players are coming in because some of the traditional players have not kept up with the technology, have had a couple of challenges in bringing their products to market. Some marketing practices that have not really worked because management instability, and these new players are taking advantage of it, and they're making it very easy for us to connect them to the dentist, because the value is there. Again, it goes back to the opening discussion.
We're in a value world. The dentists are, of course, happy to invest in their practice. It's very exciting from our point of view, but they wanna know that they're getting good value and that the product is the best for the price.
It sounds like with intraoral scanners specifically, there's still a big penetration opportunity, and that's been a big driver of the digital equipment. I guess, are there other product cycles? 'Cause I feel like a cycle like this where, you know, every office or every chair needs a intraoral scanner, that doesn't come along very frequently in dental. Are there other innovations that you guys are watching where you think could kind of become more standard within the dental practice?
Stanley?
There's 3D printing that is obviously important. The area for us that is important is the whole clinical workflow. This is a unique opportunity. There are pieces of the clinical workflow that have been out for a while, but bringing that all together and connecting it to the practice management system and electronic medical record is really a once in a lifetime opportunity. I'm sure you noticed that we made an investment in a company in France, implant and aligner field. That company has very good market share in implants. Some say the number one in France. They have a good aligner system. Many say it's one of the better ones. We believe our aligner system is also very good.
What they bring to us is software and the ability to provide connectivity in an open architecture way for all the various clinical applications that will make it easier for the practitioner to operate from an efficiency point of view and from a clinical care point of view. I would argue that that is one of our biggest opportunities. We haven't had one of these opportunities from a Henry Schein point of view in dentistry in a while.
Great. one last one on equipment, and then I wanted to move on to the specialty business. I guess how should we think about... the last couple of quarters, your equipment backlog has continued to grow. You've talked about there still being some construction delays. I guess on the flip side, have you seen any changes in practice formation or the rate of consolidation, just given the kind of environment we're in, you know, the rate environment that could potentially be a leading indicator for, you know, what you might see on the kind of traditional or core equipment side of the business?
I think the consolidation continues, but I would say that the mid-sized practices are consolidating quite rapidly. You know, there's not much room for the solo practice today. When I say solo, 1 to 3, 4 practitioners, half dozen or so operatories. Those are consolidating. Many are consolidating with other practices where there's actually a practitioner in charge, CEO, whatever you wanna call it, COO or something. That's growing. I would say on the very large DSO side, there is some inflation pressure and desire to watch management, watch expenses by management. There is a lot of capital available right now, to continue to consolidate.
I would say these mid-sized practices seem to be doing a little better, and the smaller ones are just exiting and not leaving, but are exiting to either a mid-sized player or selling to one of the big rooms.
Great. I wanted to start on implants when thinking about your dental specialty portfolio. You've grown into quite an impressive business, I think about 10% market share globally, really growing the Camlog and BioHorizons brands. I guess, can you maybe talk about where you've seen the biggest traction in the market and where you think market share can grow when we look out 3 or 5 years in terms of what the next opportunities are to continue to penetrate that market?
Well, we wanna continue to grow in our specialty businesses. We're very pleased with the performance of our implant and bone regeneration. In other words, the whole oral surgery arena, including the products around the implant and the biological bone regeneration products. That's a very, very important market for us. We expect to invest in that field, both in terms of development software, but also inorganic. No guarantees until the deals are done, but this is an area of focus for us. You've seen what we're doing, which is the deal just announced in France, and we're hopeful to continue to advance our oral surgery business. As it relates to endodontic products, I think we have a very good top-of-the-line brand, and we have very good position in the more generic.
Although these are great products, they sell at a lower price, and both are doing quite well, and we're growing. The orthodontic area, we have a very small market share. We continue to expect to grow the traditional wires and brackets business. We have some unique products, but it's relatively small. We will continue in an orderly way to grow our aligner business. We have some nice DSOs that are working with us, a good software, but we have great incremental software coming through this deal that we hope to close in, by February in France. The specialty area is an area that we wish to grow internally and through acquisition growth. We have the capital, we have the strategy, we have the know-how, and we have the context in the marketplace to do that.
Maybe moving over to the medical segment. You know, there's been a lot of variability in the growth rates in that segment, obviously, with COVID and the changes in PPE. I guess it's a business that, you know, we thought of as growing kind of high single-digits organically as market share has consolidated and, you know, care has moved to more ambulatory settings. I guess, kind of, can you maybe frame sort of where you feel like volumes stand today for the core business, maybe relative to pre-pandemic, if that's the right way to look at it? Do you still feel confident in the opportunity that you can kind of resume kind of that high single-digit organic growth as those kind of more structural or macro trends in that space continue to play out?
Yeah. Ron can give you specifics on the math, but generally speaking, this is a growth area for Henry Schein. It has been for a long time. We are moving with the flow of healthcare, which is from the acute care setting to the ASC, to the physician office, and to the home. These are all areas where we're doing quite well and are investing and will invest from an inorganic point of view. Trend is good. I think you have to strip out the whole PPE and testing. It was great business, generated some good cash flow, but we've given information all along, excluding those, the PPE and the tests. Take that out, and it's still a very, very good business. Ron should cover perhaps some of the math. We feel this will continue to grow for us.
We're just going with the flow of where healthcare is taking place.
Yeah. You know, just to add to that, I think that, you know, we're very pleased with, you know, the performance of the medical business this year. I think when you kind of subtract the noise from PPE and the volatility in COVID test kits and take a look at that business, it grew in double digits, both in the first two quarters, and it was just a tick below double digits in the third quarter. You know, it's like Stanley said, you know, we follow the patient. We're seeing more and more procedures being done in that ASC environment. I think our team has done a very good job of just delivering, you know, to that customer.
As demand increases in that customer, we're getting deeper penetration with our IDNs, but we're also getting expansion into some of the independent physicians as well. The team has really executed well on the medical side. In terms of, you know, growth going forward, I would love it if they could continue to do double-digit growth. I think that, you know, might be asking a little too much over a long term, but I do think they can continue in that, you know, something in the mid to high single digits is a fair expectation.
Can you remind us how flu impacts this segment of the business? There's obviously been a lot of focus on the flu cases this year, as well as, you know, the recent spike in COVID cases, how that kind of plays through into the medical segment.
Yeah. I always kind of think of the, you know, the effect of flu on our medical business. There's really kind of three different areas you have to look at. One is on flu vaccines, which typically we will sell our flu vaccines primarily in the third quarter. We'll do some spot market sales in the fourth quarter as well. The sale of flu diagnostic kits. I think an interesting dynamic there is that, you know, at least anecdotally, what we're hearing is that more and more people may be going to the physician when they don't feel well as opposed to prior to the pandemic. That is increasing the demand for flu diagnostic kits.
I mean, the CDC data was pretty clear that we've all seen throughout December there was a pretty big spike in the flu. That did, you know, that typically will increase demand for those flu diagnostic kits. That increased traffic kind of goes to the third bucket that I wanna talk about with flu, and that is just the general consumption of merchandise that then occurs when you have that increased traffic going to the physician. It's just gonna be that many more cotton balls and gloves and everything else that they go through, right? A, you know, a heavy flu season does create a higher demand for not, you know, not just diagnostic kits, but also, you know, a consumable merchandise for us as well.
Just kind of maybe related to that point, you know, can you talk about what you're seeing recently with PPE prices and COVID test prices, and how investors should think about that potentially impacting 2023 as those maybe continue to come down?
Yeah. You know, what we saw in 2022 was a kind of an ongoing decline in PPE prices that was pretty steep. We expect that decline to continue into 2023. When we provide 2023 guidance next month, we'll provide some information around what we expect PPE revenues to be relative to 2022. We do expect that there will, you know. When we talk about PPE, it's principally gloves, right? At 75%-80% of our PPE revenues are in gloves. As the pricing on gloves continues to decline, we're gonna see a little bit of pressure on our PPE revenues. COVID test kits is more of a volatility of demand issue right now more than anything else.
That could impact pricing on COVID test kits a little bit. We could see that ASP come down a little, depending on how that demand plays out over the course of 2023.
Okay. I guess, kind of at a high level as we think about, like, the drivers for 2023, it sounds like the kind of underlying demand in both of the core businesses remains pretty robust. You know, you might have some PPE or COVID headwinds, FX maybe a little bit of a headwind as well. At a high level, you know, maybe how would you characterize the drivers? The other question I kind of wanted to ask related to that is, you know, I think you guys have been very vocal about being able to expand margins for the overall business. You have, you know, growth in, you know, higher margins, specialty and tech areas as drivers of that.
You know, Should we think of those kind of two separately, whereas regardless of kind of where revenue shakes out within a range, you can still get the margin expansion in the business because of those drivers? Sorry, there's a lot in that question.
Well, you know, when we provide guidance next month, we will address our expectations around margins. I do think that, you know, there's a lot of different dynamics that can impact the margin. Obviously, that product mix. How well can we protect some of the gross margins on PPE as those glove costs continue to come down? What kind of market growth are we gonna see in some of the specialty areas which provide us with very good margins? There's a lot of different things in play there. Additionally, you know, we're gonna remain invested in the business.
We're gonna remain backing things like our global e-commerce platform, which we're excited that we're gonna have kind of the beta launch of that in the UK kinda late Q1, early Q2, and then again later in the year in 2023. These are things we're committed to, we're committed to making those investments. We're gonna maintain a long-term view throughout 2023 on those types of investments and making sure that if there's a little bit of volatility that comes from a decrease in procedures on some of the specialty side, we're gonna weather through this, these declining, you know, glove prices. We're gonna maintain that long-term view, and ultimately, we think we in the long term will continue to grow margins.
Got it. I wanted to also touch on M&A. You know, you've been very successful at finding bolt-ons of either, you know, new products, services, or geographies. You announced one this morning. You know, I guess, Will that continue to be the playbook from an M&A standpoint? You know, just given the kind of strength of the balance sheet, would you be open, and are there deals that you feel like are a little bit larger that, you kind of feel like could, you know, be a little bit more meaningful in the near term?
You know, I think on M&A, we've always said M&A for us is really what's the opportunity that's there. We've always talked about M&A. We tend to make $300 million-$400 million of investments a year, but that doesn't mean once we hit 400, we turn off the spigot for the balance of the year. If an opportunity is there, and we think it's incremental to the business, it brings value to the shareholders, then we'll continue to make that investment. I think you look at 2021, we did $570 million of M&A that year. We're at about somewhere between a 0.7-0.8 in terms of, you know, a debt-to-EBITDA ratio, so we do have plenty of headroom.
If an opportunity comes for a larger transaction, I think we can, you know, we have the opportunity to do that without, you know, really over-leveraging the balance sheet related to that. Again, it depends on the opportunity that presents itself.
Are there certain areas of focus from an M&A standpoint where, you know, you kinda feel like there is the most white space?
I think there's really kind of two ways we look at it. You know, our high growth, high margin businesses, such as the biotech deal that we've signed, not yet closed, provides us with, you know, I think a lot of bang for our buck. We get that, you know, you get the accelerated growth, you get that better margin going forward. I also love a deal like when we did Midway, where we can leverage our existing infrastructure and kind of fold that business in, expand our customer base, you know, increase our geographic presence in the Midwest. That was a very good deal for us as well. It can be either one. It can really be either way.
It can go to that high growth, high margin investment, or if it's an efficient opportunity to leverage our existing infrastructure with a deal such as Midway, we'll do that as well.
Okay. One segment we didn't touch on yet was the tech segment. Henry Schein One in particular. You know, I think you guys have talked about, you know, kind of average spend per practice being, like, $300 a month. Opportunities significantly higher than that. Some of your top practices spend kind of magnitudes more. I guess, you know, what type of services is kind of the biggest opportunities so like for to grow penetration, as we think about trying to move sort of the average practice up that curve?
Stanley, you or me on that one? I don't care.
Yeah. I'll give you the broad concept, and please, Ron, fill in. The broad concept is we are moving more of our software to the cloud. Dentrix Ascend in the U.S. is quite successful with small practices and with some very large DSOs. We have Dentally internationally, which is doing very well in certain markets. We are moving products to the cloud, the SaaS model. It depresses short-term earnings, but long-term, the profits go up. The second is, for those practices that have our practice management software, we wanna sell them all the various features that can enhance the efficiency of the practice or better clinical care, and that is revenue cycle management, website management, cybersecurity.
There's a long list going all the way to patient financing and discount dental plans. There's ways in which we can expand it, selling it feature by feature or bundling, and bundling with other products that Henry Schein sells. The opportunity for Henry Schein One, of course, is quite extensive. We also, of course, have businesses that service dental schools in the military, in the healthcare system, et cetera. The big two things are cloud and incremental products and features. Ron, don't know if you have anything.
Yeah, I think that, you know, especially on the, on the incremental features to existing customers, I mean, I've always been of the opinion it's easier to sell something to an existing customer than it is to try to go out and convince someone to buy something for the first time. I think that there's really a lot of customers who might be using our practice management software, but they're not using the patient relationship tools that we can, that we can offer them. How do we, how do we increase that penetration? That's, that's gonna be a priority going forward. Also, as Stanley mentioned, our investment in Dentrix Ascend, which is our cloud-based practice management system, is very important, and the DSOs really like that.
The DSOs see it as an opportunity for them to kinda get all of their practices on a similar platform, easily accessible, very secure. So it is a, you know, a very good tool for them, to use, and it's something that we're seeing that the, is an attractive proposition to the DSOs.
Maybe just, lastly, in the couple minutes we have left, you announced an Analyst Day for the end of February. You know, Henry Schein doesn't do many of these. I think this is the first formal one in close to a decade. Could you maybe just talk about, you know, we should expect to hear from the company at that meeting?
Me, Stanley?
Ron, please.
Certainly.
No, Ron.
I think we have a couple of different objectives with the Investor Day. One of them is, you know, this company was built under Stanley's leadership, starting off as a distribution company, you know. To oversimplify it, that is you put things in boxes, and you ship it to people. I think that what it has evolved into is really a, you know, a high value add partner to our customers.
What we wanna be sure we can communicate that better, that we can kinda show investors that this is not a sleepy distribution business that is simply making sure you get your cotton balls on time, but also we can bring a lot of value in terms of the specialty products we have, the software we can offer you, and what's the, you know, the future of dentistry, you know. We talk a lot about digital dentistry, and we're gonna be able to provide some demos and do some things associated with that.
I think the other thing it does is that we've got, you know, you know, Stanley's put together a very, very strong management team, and we don't get a chance to get them out in front of investors and in front of prospective investors very frequently. We really wanna make sure that we give them an opportunity to kinda talk about what the business. Just give people a little greater visibility into the depth of the management team as well.
Great. Well, thank you both for your time today. We really appreciate you.
Thank you.
Stanley, thank you for joining us virtually. Insightful as always. Ron, thanks for joining us here.
Absolutely.
All right.
Thank you, Nathan. Thanks for the interest in our sector of healthcare. Thank you.
Great. Thanks, everyone. Have a good day.
Thank you. Very good. Appreciate it.