It’s been 10 months since a major cyberattack occurred at Henry Schein Inc. The data breach reached the company’s core systems, including distribution and ecommerce.

Henry Schein’s recovery has been slow and continues to impact sales for the worldwide distributor of medical and dental supplies including vaccines, pharmaceuticals, financial services and equipment.

Henry Schein cyberattack’s impact

For its fiscal second quarter ended June 30, Henry Schein reported sales of $3.13 billion, an increase of just 1% from $3.10 billion in the Q2 2023. Net income for the quarter was $104 million, which compares with net income of $140 million in the prior year.

As a result of sluggish sales and the slower recovery from the cyberattack, the company is taking a restructuring charge and targeting $75 million to $100 million in annual savings.

“We are experiencing improving sales trends in our distribution businesses,” Henry Schein CEO Stanley Bergman told analysts on an earnings call. “However, the pace of recovery since the cyber incident last year has been slower than anticipated.”

Schein’s cash flow and payments

The biggest problem regarding recovery from the ransomware attack has been cash flow and payments.

“There is some impact on the cash collection of our customers because Change (claims processing system) did process the actual payment and we process through Change the claims processing,” he said. “We found an alternative source, but the actual check or electronic transfer to the customer, the funds, is still going through Change. Some dental practices are therefore facing cash flow challenges due to reimbursement delays. And we believe this continued to temporarily impact demand for certain software products, and we think a little bit also on the equipment side.”

The timeline for the ordeal extends back to Oct. 14, when Henry Schein Inc. reported a major hack into its core systems, including for distribution and ecommerce. Then, on Nov. 22, the company once again announced that its ecommerce systems were down because of ongoing problems related to the data breach.

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