Cyberattacks Sink Henry Schein’s Profit
Dental and medical equipment giant Henry Schein faces ongoing challenges after suffering multiple cyberattacks last year, leading to a significant drop in revenue and profit forecasts.
Krishna Murthy August 9, 2024 Cybersecurity News, Firewall Daily, Hacker News
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Prominent dental and medical equipment provider Henry Schein has lowered its annual profit and growth forecast, owing to a series of cyberattacks last year.
Reuters reported that the company’s shares (HSIC) were down 7.3% to $64.50 in premarket trading. The report added that Henry Schein had taken some of its systems offline, notified authorities and engaged experts after the cybersecurity breach disrupted its manufacturing and distribution businesses.
Details of 2023 Henry Schein Cyberattacks
Henry Schein initially fell victim a ransomware attack on October 14, 2023, which impacted certain portions of their manufacturing and distribution businesses. The cyber assailants struck again on November 14, causing over $150 million in losses, according to the threat actor.
Notably, the ALPHV/BlackCat group claimed to have re-encrypted Henry Schein twice, with a forewarning of a third attack. However, a few days later, BlackCat removed Henry Schein from its leak website, which indicated that the company could have paid a ransom, though there was no official statement regarding this.
The hacker collective posted new updates regarding the Henry Schein data breach in December once again on their dark web channel. The same month, the firm reported to Maine’s attorney general that the data breach affected more than 29,000 peoples’ personal information.
Impact of Cyberattacks on Henry Schein
The incident had a residual impact on the company’s financial performance this year. According to the Reuters report, the company’s second-quarter revenue came down to $3.14 billion, below analysts’ estimates of $3.27 billion, according to LSEG data.
“We are experiencing improving sales trends in our distribution businesses, however, the pace of recovery in these businesses since the cyber incident late last year has been slower than anticipated,” CEO Stanley Bergman said.
Henry Schein cut its annual profit forecast to between $4.70 and $4.82 per share from its prior view of $5 to $5.16 per share. Analysts were expecting a profit of $5.06.
The company said it now expects full-year sales to increase 4% to 6%, compared with its previous forecast of 8% to 10% growth.
Sales at Henry Schein’s dental unit fell 1.7% to $1.92 billion in the second quarter, below estimates of $1.99 billion.
Sales at its medical segment also dropped 5% to $998 million, missing estimates of $1.07 billion.
On an adjusted basis, Henry Schein earned $1.23 per share in the second quarter, compared with estimates of $1.22.
The company, which supplies products such as dental implants and personal protective equipment, announced a restructuring plan on Tuesday to save between $75 million and $100 million annually.
Henry Schein expects to record charges in the second half of 2024 and in 2025, details of which were not disclosed, mainly due to severance and facility-related costs.
