UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
(Mark One)
☒
QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the
quarterly
period ended
March 28, 2026
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT
OF 1934
For the transition period from ____________ to ____________
Commission File Number:
0-27078
HENRY SCHEIN, INC.
(Exact name of registrant as specified in its charter)
Delaware
11-3136595
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
incorporation or organization)
135 Duryea Road
Melville
,
New York
(Address of principal executive offices)
11747
(Zip Code)
(
631
)
843-5500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $.01 per share
HSIC
The
Nasdaq
Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports requiredto be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for suchshorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for thepast 90 days.
Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically everyInteractive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) duringthe preceding 12 months (or for such shorter period
that the registrant was required to submit such files).
Yes
☒
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company.See the definitions of “large accelerated filer,”“accelerated filer,”
“smaller reporting company,”and “emerging growth company”in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition periodfor
complying with any new or revised financial accounting standards providedpursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as definedin Rule 12b-2 of the Exchange Act).
Yes
☐
No
☒
As of April 27, 2026,
there were
113,916,757
shares of the registrant’s common stock outstanding.
HENRY SCHEIN, INC.
INDEX
Page
3
4
5
6
7
8
8
9
10
11
14
17
20
23
24
25
26
29
30
31
31
32
33
34
47
48
49
49
49
50
51
See accompanying notes.
3
PARTI. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
March 28,
December 27,
2026
2025
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
138
$
156
Accounts receivable, net of allowance for credit losses of $
96
and $
90
(1)
1,719
1,651
Inventories, net
2,014
2,002
Prepaid expenses and other
625
655
Total current assets
4,496
4,464
Property and equipment, net
618
621
Operating lease right-of-use assets
312
301
Goodwill
4,284
4,213
Other intangibles, net
1,007
1,018
Investments and other
587
598
Total assets
$
11,304
$
11,215
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
1,043
$
1,154
Bank credit lines
1,046
764
Current maturities of long-term debt
35
33
Operating lease liabilities
78
78
Accrued expenses:
Payroll and related
262
340
Taxes
192
179
Other
641
680
Total current liabilities
3,297
3,228
Long-term debt (1)
2,327
2,310
Deferred income taxes
158
146
Operating lease liabilities
263
251
Other liabilities
437
486
Total liabilities
6,482
6,421
Redeemable noncontrolling interests
903
895
Commitments and contingencies
(nil)
(nil)
Stockholders' equity:
Preferred stock, $
0.01
par value,
1,000,000
shares authorized,
none
outstanding
-
-
Common stock, $
0.01
par value,
480,000,000
shares authorized,
114,424,682
issued and outstanding on March 28, 2026 and
115,771,149
issued and outstanding on December 27, 2025
1
1
Additional paid-in capital
167
177
Retained earnings
3,287
3,293
Accumulated other comprehensive loss
(189)
(226)
Total Henry Schein, Inc. stockholders' equity
3,266
3,245
Noncontrolling interests
653
654
Total stockholders' equity
3,919
3,899
Total liabilities, redeemable noncontrollinginterests and stockholders' equity
$
11,304
$
11,215
(1)
Amounts presented include balances held by our consolidated variable interest entity (“VIE”).At March 28, 2026 and December
27, 2025, includes trade accounts receivable of $
442
million and $
491
million, respectively, and long-term debt of $
360
million and
$
390
million, respectively.
See
for further information.
See accompanying notes.
4
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED STATEMENTSOF INCOME
(in millions,except share and per share data)
(unaudited)
Three Months Ended
March 28,
March 29,
2026
2025
Net sales
$
3,368
$
3,168
Cost of sales
2,298
2,168
Gross profit
1,070
1,000
Operating expenses:
Selling, general and administrative
809
738
Depreciation and amortization
67
62
Restructuring and related costs
12
25
Operating income
182
175
Other income (expense):
Interest income
7
6
Interest expense
(39)
(35)
Other, net
-
(1)
Income before taxes, equity in earnings of affiliates and noncontrolling interests
150
145
Income taxes
(38)
(35)
Equity in earnings of affiliates, net of tax
-
3
Net income
112
113
Less: Net income attributable to noncontrolling interests
(5)
(3)
Net income attributable to Henry Schein, Inc.
$
107
$
110
Earnings per share attributable to Henry Schein, Inc.:
Basic
$
0.93
$
0.89
Diluted
$
0.92
$
0.88
Weighted-average commonshares outstanding:
Basic
114,939,640
123,776,073
Diluted
116,061,244
124,848,221
See accompanying notes.
5
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED STATEMENTSOF COMPREHENSIVE INCOME
(in millions)
(unaudited)
Three Months Ended
March 28,
March 29,
2026
2025
Net income
$
112
$
113
Other comprehensive income, net of tax:
Foreign currency translation gain
32
76
Unrealized gain (loss) from hedging activities
8
(5)
Other comprehensive income, net of tax
40
71
Comprehensive income
152
184
Comprehensive income attributable to noncontrolling interests:
Net income
(5)
(3)
Foreign currency translation gain
(3)
(9)
Comprehensive income attributable to noncontrolling interests
(8)
(12)
Comprehensive income attributable to Henry Schein, Inc.
$
144
$
172
See accompanying notes.
6
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED STATEMENTSOF CHANGES IN
STOCKHOLDERS’ EQUITY
(in millions, except share data)
(unaudited)
Accumulated
Common Stock
Additional
Other
Total
$0.01 Par Value
Paid-in
Retained
Comprehensive
Noncontrolling
Stockholders'
Shares
Amount
Capital
Earnings
Income (Loss)
Interests
Equity
Balance, December 27, 2025
115,771,149
$
1
$
177
$
3,293
$
(226)
$
654
$
3,899
Net income (excluding loss of $
1
attributable to Redeemable
noncontrolling interests)
-
-
-
107
-
6
113
Foreign currency translation gain (excluding gain of $
3
attributable to Redeemable noncontrolling interests)
-
-
-
-
29
-
29
Unrealized gain from hedging activities,
net of tax of $
3
-
-
-
-
8
-
8
Distributions from noncontrolling shareholders
-
-
-
-
-
(7)
(7)
Change in fair value of redeemable securities
-
-
(18)
-
-
-
(18)
Noncontrolling interests and adjustments related to
business acquisitions and contingent consideration
-
-
28
-
-
-
28
Repurchase and retirement of common stock
(1,609,986)
-
(13)
(113)
-
-
(126)
Stock issued upon exercise of stock options
16,570
-
1
-
-
-
1
Stock-based compensation expense
383,040
-
3
-
-
-
3
Shares withheld for payroll taxes
(132,834)
-
(11)
-
-
-
(11)
Settlement of stock-based compensation awards
(3,257)
-
-
-
-
-
-
Balance, March 28, 2026
114,424,682
$
1
$
167
$
3,287
$
(189)
$
653
$
3,919
Accumulated
Common Stock
Additional
Other
Total
$0.01 Par Value
Paid-in
Retained
Comprehensive
Noncontrolling
Stockholders'
Shares
Amount
Capital
Earnings
Income (Loss)
Interests
Equity
Balance, December 28, 2024
124,155,884
$
1
$
-
$
3,771
$
(379)
$
638
$
4,031
Net income (excluding loss of $
2
attributable to Redeemable
noncontrolling interests)
-
-
-
110
-
5
115
Foreign currency translation gain (excluding gain of $
8
attributable to Redeemable noncontrolling interests)
-
-
-
-
67
1
68
Unrealized loss from hedging activities,
net of tax benefit of $
1
-
-
-
-
(5)
-
(5)
Pension adjustment gain, net of tax of $
1
-
-
-
-
-
-
-
Change in fair value of redeemable securities
-
-
(28)
-
-
-
(28)
Noncontrolling interests and adjustments related to
business acquisitions and contingent consideration
-
-
(60)
-
-
-
(60)
Repurchase and retirement of common stock
(2,255,485)
-
(21)
(141)
-
-
(162)
Stock issued upon exercise of stock options
10,351
-
1
-
-
-
1
Stock-based compensation expense
520,385
-
5
-
-
-
5
Shares withheld for payroll taxes
(187,493)
-
(11)
-
-
-
(11)
Settlement of stock-based compensation awards
41
-
-
-
-
-
-
Transfer of charges in excess ofcapital
-
-
114
(114)
-
-
-
Balance, March 29, 2025
122,243,683
$
1
$
-
$
3,626
$
(317)
$
644
$
3,954
See accompanying notes.
7
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED STATEMENTSOF CASH FLOWS
(in millions)
(unaudited)
Three Months Ended
March 28,
March 29,
2026
2025
Cash flows from operating activities:
Net income
$
112
$
113
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization
81
73
Impairment charge on intangible assets
-
1
Non-cash restructuring and related charges
2
1
Stock-based compensation expense
3
5
Provision for losses on trade and other accounts receivable
6
2
Provision for (benefit from) deferred income taxes
2
(7)
Equity in earnings of affiliates
-
(3)
Distributions from equity affiliates
3
2
Changes in unrecognized tax benefits
(1)
2
Other
(27)
(27)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable
(69)
(74)
Inventories
8
(14)
Other current assets
6
75
Accounts payable and accrued expenses
(223)
(112)
Net cash provided by (used in) operating activities
(97)
37
Cash flows from investing activities:
Purchases of property and equipment
(25)
(31)
Payments related to equity investments and business acquisitions,
net of cash acquired
(24)
(51)
Proceeds from loan to affiliate
1
-
Capitalized software costs
(14)
(12)
Other
(1)
(5)
Net cash used in investing activities
(63)
(99)
Cash flows from financing activities:
Net change in bank credit lines
283
215
Proceeds from issuance of long-term debt
57
150
Principal payments for long-term debt
(39)
(15)
Proceeds from issuance of stock upon exercise of stock options
1
1
Payments for repurchases and retirement of common stock
(125)
(161)
Payments for taxes related to shares withheld for employee taxes
(9)
(12)
Distributions to noncontrolling shareholders
(16)
(4)
Payments for contingent consideration
-
(12)
Acquisitions of noncontrolling interests in subsidiaries
(32)
(73)
Net cash provided by financing activities
120
89
Effect of exchange rate changes on cash and cash equivalents
22
(22)
Net change in cash and cash equivalents
(18)
5
Cash and cash equivalents, beginning of period
156
122
Cash and cash equivalents, end of period
$
138
$
127
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
8
Note 1 – Basis of Presentation
Our condensed consolidated financial statements include the accounts of HenrySchein, Inc. and all of our
controlled subsidiaries and VIE (“we,” “us” and “our”).All intercompany accounts and transactions are eliminated
in consolidation.Investments in unconsolidated affiliates for which we have the ability to influencethe operating
or financial decisions are accounted for under the equity method.
Our accompanying unaudited condensed consolidated financial statementshave been prepared in accordance with
accounting principles generally accepted in the United States(“U.S. GAAP”) for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.Accordingly, they do not include all of the
information and footnote disclosures required by U.S. GAAP for completefinancial statements.
The unaudited condensed consolidated financial statements shouldbe read in conjunction with the audited
consolidated financial statements and notes to the consolidated financialstatements contained in our Annual Report
on Form 10-K for the year ended December 27, 2025 and with the informationcontained in our other publicly-
available filings with the Securities and Exchange Commission.The condensed consolidated financial statements
reflect all adjustments considered necessary for a fair presentation ofthe consolidated results of operations and
financial position for the interim periods presented.All such adjustments are of a normal recurring nature.
The preparation of consolidated financial statements in conformity withaccounting principles generally accepted in
the United States requires us to make estimates and assumptions thataffect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported
amounts of revenues and expenses during the reporting period.Actual results could differ from those estimates.
The results of operations for the three months ended March 28, 2026 arenot necessarily indicative of the results to
be expected for any other interim period or for the year ending December 26, 2026.
Our condensed consolidated financial statements reflect estimates andassumptions made by us that affect, among
other things, our goodwill, long-lived asset and definite-lived intangibleasset valuation; inventory valuation; equity
investment valuation; assessment of the annual effective tax rate; valuation ofdeferred income taxes and income
tax contingencies; the allowance for credit losses; fair value of contingentconsideration; hedging activity; supplier
rebates; measurement of compensation cost for certain share-basedperformance awards and cash bonus plans; and
pension plan assumptions.
The primary beneficiary of a VIE is required to consolidate the assets andliabilities of the VIE.We are deemed to
be the primary beneficiary of the VIE when we have the power to direct activitiesthat most significantly affect its
economic performance and have the obligation to absorb the majority ofits losses or the right to receive benefits
that could potentially be significant to the VIE.In determining whether we are the primary beneficiary, we
consider factors such as ownership interest, debt investments, managementrepresentation, authority to control
decisions, and contractual and substantive participating rights of each party.For this VIE, related to our U.S. trade
accounts receivable securitization as discussed in
,
the trade accounts receivable transferred to the
VIE are pledged as collateral to the related debt.The VIE’s creditors have recourse to us for losses on these trade
accounts receivable.At March 28, 2026 and December 27, 2025, certain trade accountsreceivable that can only be
used to settle obligations of this VIE were $
442
million and $
491
million, respectively, and the liabilities of this
VIE where the creditors have recourse to us were $
360
million and $
390
million, respectively.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
9
Note 2 – Significant Accounting Policies,Accounting Pronouncements Recently Adopted and RecentlyIssued
Accounting Pronouncements
Significant Accounting Policies
There have been no material changes in our significant accounting policies duringthe three months ended March
28, 2026, as compared to the significant accounting policies described in Item8 of our Annual Report on Form 10-
K for the year ended December 27, 2025.
Accounting Pronouncements Recently Adopted
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2025-05, “
Financial Instruments - Credit Losses (Subtopic 326): Measurement of Credit Losses for Accounts
Receivable and Contract Assets,
” which introduces a practical expedient permitting an entityto assume that
conditions at the balance sheet date remain unchanged throughout theremaining life of the asset when estimating
expected credit losses on current accounts receivable and current contractassets under Topic 606 -
Revenue from
Contracts with Customers
.We adopted this ASU during fiscal year 2026 and elected to apply the practical
expedient.The adoption did not have a material impact on our consolidated financialstatements.
Recently Issued Accounting Pronouncements
In December 2025, the FASB issued ASU 2025-11, “
Interim Reporting (Topic 270): Narrow-Scope
Improvements
,” which is intended to improve navigability of the guidance in Topic 270, Interim Reporting, and
clarify when it applies.The ASU also addresses the form and content of such financialstatements and interim
disclosure requirements, and establishes a principle under which an entitymust disclose events since the end of the
last annual reporting period that have a material impact on the entity.This ASU is effective for annual reporting
periods beginning after December 15, 2027, and interim reporting periodswithin those annual reporting periods,
with early adoption permitted.We are currently evaluating the impact that ASU 2025-11 will have on our
consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-10, “
Government Grants (Topic 832) - Accounting for Government
Grants Received by Business Entities,
” which establishes guidance on the recognition, measurement, and
presentation of government grants received by business entities.This ASU is effective for annual reporting periods
beginning after December 15, 2028, and interim reporting periods withinthose annual reporting periods, with early
adoption permitted.We are currently evaluating the impact that ASU 2025-10 will have on our consolidated
financial statements and related disclosures.
In November 2025, the FASB issued ASU 2025-09, “
Derivatives and Hedging (Topic 815): Hedge Accounting
Improvements,
” which is intended to more closely align financial reporting withthe economics of entities’ risk
management activities, including expanded eligibility of forecastedtransactions, additional flexibility in measuring
hedge effectiveness, and clarifications related to hedging non-financial items.This ASU is effective for annual
reporting periods beginning after December 15, 2026, and interim reportingperiods within those annual reporting
periods, with early adoption permitted, and should be applied prospectively.We are currently evaluating the
impact that ASU 2025-09 will have on our consolidated financial statementsand related disclosures.
In September 2025, the FASB issued ASU 2025-06, “
Intangibles - Goodwill and Other - Internal-Use Software
(Subtopic 350-40): Targeted Improvementsto the Accounting for Internal-Use Software
,” which removes all
references to software development project stages.The ASU requires entities to begin capitalizing software costs
when management authorizes and commits to funding the software project,and it is probable that the project will
be completed and the software will be used for its intended purpose.This ASU is effective for annual reporting
periods beginning after December 15, 2027, and interim reporting periodswithin those annual reporting periods,
with early adoption permitted.Upon adoption, the guidance can be applied prospectively, retrospectively, or with a
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
10
modified transition approach.We are currently evaluating the impact that ASU 2025-06 will have on our
consolidated financial statements.
Note 3 – Net Sales from Contracts with Customers
Net sales are recognized in accordance with policies disclosed in Item8 of our Annual Report on Form 10-K for
the year ended December 27, 2025.
Disaggregation of Net Sales
The following table disaggregates our net sales by reportable segment:
Three Months Ended
March 28,
March 29,
2026
2025
Net Sales:
Global Distribution and Value-Added Services
Global Dental merchandise
$
1,292
$
1,185
Global Dental equipment
417
384
Global Value-added services
57
52
Global Dental
1,766
1,621
Global Medical
1,073
1,055
Total Global Distributionand Value-Added Services
2,839
2,676
Global Specialty Products
397
367
Global Technology
173
162
Eliminations
(41)
(37)
Total
$
3,368
$
3,168
Contract Liabilities
The following table presents our contract liabilities:
As of
March 28,
December 27,
March 29,
December 28,
Description
2026
2025
2025
2024
Current contract liabilities
$
84
$
81
$
85
$
81
Non-current contract liabilities
9
9
7
8
Total contractliabilities
$
93
$
90
$
92
$
89
During the three months ended March 28, 2026, we recognized $
35
million in net sales that had been previously
deferred at December 27, 2025.During the three months ended March 29, 2025, we recognized $
34
million in net
sales that were previously deferred at December 28, 2024.Current contract liabilities are included in accrued
expenses: other and the non-current contract liabilities are included in otherliabilities within our condensed
consolidated balance sheets.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
11
Note 4
–
Segment Data
We conduct our business through
three
reportable segments: (i) Global Distribution and Value-Added Services; (ii)
Global Specialty Products; and (iii) Global Technology.
We aggregate operating segments into these reportable segments based on economic similarities, the nature of their
products, customer base and methods of distribution.
Global Distribution and Value-Added Services includes distribution to the global dental and medical markets of
national brand and corporate brand merchandise, as well as equipment and relatedtechnical services.This segment
also includes value-added services such as financial services, continuingeducation services, consulting and other
services.This segment also markets and sells under our own corporate branda portfolio of cost-effective, high-
quality consumable merchandise.Global Specialty Products includes manufacturing, marketingand sales of dental
implant and biomaterial products; and endodontic, orthodontic and orthopedicproducts and other health care-
related products and services.Global Technology includes development and distribution of practice management
software, e-services and other products, which are distributed to healthcare providers.
Our organizational structure also includes Corporate, which consists primarily ofincome and expenses associated
with support functions and projects.
Our chief operating decision maker (“CODM”) is our Chief ExecutiveOfficer (“CEO”).Our CODM uses adjusted
operating income as the profitability metric for purposes of making decisionsabout allocation of resources to each
segment and assessing performance of each segment.Adjusted operating income provides a measure of our
underlying segment results that is in line with our approach to risk and performancemanagement.We define
adjusted operating income as operating income adjusted to exclude(a) direct cybersecurity costs and related
insurance recovery proceeds, (b) amortization of acquisition intangibles,(c) organizational restructuring and related
expenses, (d) impairment of intangible assets, (e) changes in fair value ofcontingent consideration, (f) litigation
settlements, and (g) costs associated with shareholder advisorymatters and select implementation related value
creation consulting costs.These adjustments are either: (i) non-cash or non-recurring in nature; (ii) notallocable or
controlled by the segment; or (iii) not tied to the operational performanceof the segment.Assets by segment are
not a measure used to assess the performance of the Company by CODM andthus are not reported in our
disclosures.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
12
Segment adjusted operating income is presented in the followingtable to reconcile to operating income as
presented on the condensed consolidated statement of operations.The reconciliation from operating income to
income before taxes and equity in earnings of affiliates is presented on our condensed consolidatedstatements of
income.
Three Months Ended
March 28,
March 29,
2026
2025
Gross Sales:
Global Distribution and Value-Added Services
(1)
$
2,839
$
2,676
Global Specialty Products
(2)
397
367
Global Technology
(3)
173
162
Total Gross Sales
3,409
3,205
Less: Eliminations:
Global Distribution and Value-Added Services
(3)
(4)
Global Specialty Products
(38)
(33)
Global Technology
-
-
Total Eliminations
(41)
(37)
Net Sales:
Global Distribution and Value-Added Services
2,836
2,672
Global Specialty Products
359
334
Global Technology
173
162
Total Net Sales
3,368
3,168
Segment Cost of Sales:
(4)
Global Distribution and Value-Added Services
2,107
1,995
Global Specialty Products
177
161
Global Technology
54
52
Segment Operating Expenses:
(5)
Global Distribution and Value-Added Services
549
514
Global Specialty Products
162
150
Global Technology
73
68
Operating Income:
Global Distribution and Value-Added Services
183
167
Global Specialty Products
58
56
Global Technology
46
42
Total Segment Operating Income
287
265
Corporate, net
(34)
(35)
Adjustments
(6)
(71)
(55)
Total Operating Income
$
182
$
175
Three Months Ended
March 28,
March 29,
2026
2025
Depreciation and Amortization:
Global Distribution and Value-Added Services
$
7
$
6
Global Specialty Products
9
8
Global Technology
10
8
Total Segment Depreciation and Amortization
26
22
Corporate
10
8
Acquisition intangible amortization within adjustments
(6)
45
43
Total Depreciation and Amortization
$
81
$
73
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
13
(1)
Global Distribution and Value-Added Services: Includes distribution of infection-control products, handpieces, preventatives,
impression materials, composites, anesthetics, teeth, gypsum, acrylics, articulators, abrasives, personal protective equipment
(“PPE”) products,branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, dental chairs, delivery units
and lights, digital dental laboratories, X-ray supplies and equipment, high-tech and digital restoration equipment, equipment repair
services, financial services on a non-recourse basis, continuing education services for practitioners, consulting and other services.
This segment also markets and sells under our own corporate brand a portfolio of cost-effective, high-quality consumable
merchandise.
(2)
Global Specialty Products: Includes manufacturing, marketing and sales of dental implant and biomaterial products; and
endodontic, orthodontic and orthopedic products and other health care-related products and services.
(3)
Global Technology: Includes development and distribution of practice management software, e-services and other products, which
are distributed to health care providers.
(4)
Cost of goods sold in our Global Distribution and Value-Added Services segment and our Global Specialty Products segment
includes product cost and inbound and outbound freight charges.Cost of goods sold in our Global Technology segment consists
primarily of software development and third-party provider costs, including technology use and hosting fees.
(5)
Significant segment operating expenses for our reportable segments and Corporate include primarily compensation costs, and to a
lesser extent, rent, depreciation and maintenance costs related to operating our facilities.
(6)
Adjustments represent items excluded from segment operating income to enable comparison of financial results between periods.
The following table presents a breakdown of such adjustments:
Three Months Ended
March 28,
March 29,
2026
2025
Adjustments:
Restructuring and related costs
$
(12)
$
(25)
Acquisition intangible amortization
(45)
(43)
Cyber incident-insurance proceeds, net of third-party advisory expenses
-
20
Change in contingent consideration
(1)
2
Impairment of intangible assets
-
(1)
Costs associated with shareholder advisory matters and select implementation related value
creation consulting costs
(13)
(8)
Total adjustments
$
(71)
$
(55)
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
14
Note 5
–
Business Acquisitions
Our acquisition strategy is focused on investments in companies, includinghigh growth high margin businesses
aligned with our BOLD+1 strategy, that add new customers and sales teams, increase our geographic footprint
(whether entering a new country, such as emerging markets, or building scale where we have already invested in
businesses), and finally, those that enable us to access new products and technologies.
2026 Acquisitions
During the three months ended March 28, 2026, we acquired companieswithin the Global Distribution and Value-
Added Services and Global Specialty Products segments.Our acquired ownership interest in these companies
range from
90
% to
100
%.
The following table aggregates the preliminary estimated fair value, as ofthe date of the acquisition, of
consideration paid and net assets acquired for acquisitions during the threemonths ended March 28, 2026:
Preliminary
Allocation as of
March 28, 2026
Acquisition consideration:
Cash
$
26
Deferred consideration
5
Common (or preferred) equity instruments
23
Fair value of previously held equity method investments
32
Redeemable noncontrolling interests
7
Total consideration
$
93
Identifiable assets acquired and liabilities assumed:
Current assets
$
13
Intangible assets
33
Other noncurrent assets
4
Current liabilities
(18)
Deferred income taxes
(6)
Other noncurrent liabilities
(1)
Total identifiablenet assets
25
Goodwill
68
Total net assets acquired
$
93
The accounting for acquisitions in the three months ended March 28, 2026has not been completed in several areas,
including, but not limited to, pending assessment of certain assets,primarily including identifiable intangibles, and
certain liabilities, primarily including deferred income taxes.
Goodwill is a result of the synergies and cross-selling opportunities that these acquisitionsare expected to provide
for us, as well as the expected growth potential.The majority of the acquired goodwill is not deductiblefor tax
purposes.
The following table summarizes the intangible assets acquired during thethree months ended March 28, 2026:
Weighted Average
2026
Useful Lives (in years)
Customer relationships and lists
$
29
9
Trademarks / Tradenames
4
5
Total
$
33
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
15
During the three months ended March 28, 2026,in connection with an acquisition of a controlling interest of an
affiliate, we recognized a gain of approximately $
11
million related to the remeasurement to fair value of our
previously held equity investment.Such gain was calculated using a discounted cash flow model based onLevel 3
inputs, as defined in
,
which was recorded in
selling, general and administrative
in the condensed consolidated statements of income.
The impact of these acquisitions, individually and in the aggregate, wasnot considered material to our condensed
consolidated financial statements.
Pro forma financial information since the acquisition date has not been presentedbecause the impact of these
acquisitions was immaterial to our condensed consolidatedfinancial statements.
2025 Acquisitions
During the year ended December 27, 2025, we acquired companies withinthe Global Distribution and Value-
Added Services,Global Specialty Products and Global Technology segments.Our acquired ownership interest in
these companies range from
60
% to
100
%.
The following table aggregates the preliminary estimated fair value, as ofthe date of the acquisition, of
consideration paid and net assets acquired for acquisitions during the year endedDecember 27, 2025:
Preliminary
Allocation as of
March 28, 2026
Acquisition consideration:
Cash
$
194
Deferred consideration
3
Estimated fair value of contingent consideration payable
19
Fair value of previously held equity method investments
89
Redeemable noncontrolling interest
85
Total consideration
$
390
Identifiable assets acquired and liabilities assumed:
Current assets
$
61
Intangible assets
146
Other noncurrent assets
45
Current liabilities
(27)
Long-term debt
(2)
Deferred income taxes
(23)
Other noncurrent liabilities
(7)
Total identifiablenet assets
193
Goodwill
197
Total net assets acquired
$
390
The accounting for certain acquisitions in the year ended December 27,2025 has not been completed in several
areas, including, but not limited to, pending assessment of certainassets, primarily including identifiable
intangibles, and certain liabilities, primarily including deferred incometaxes.Measurement period adjustments
recorded through March 28, 2026 were immaterial and primarily related to certainintangible assets.
Goodwill is a result of the synergies and cross-selling opportunities that these acquisitionsare expected to provide
for us, as well as the expected growth potential.The majority of the acquired goodwill is not deductiblefor tax
purposes.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
16
The following table summarizes the intangible assets acquired during the yearended December 27, 2025:
Weighted Average
2025
Useful Lives (in years)
Customer relationships and lists
$
91
11
Trademarks / Tradenames
35
7
Product development
18
10
Non-compete agreements
2
5
Total
$
146
Pro forma financial information for our 2025 acquisitions has not beenpresented because the impact of these
acquisitions was immaterial to our condensed consolidatedfinancial statements.
Acquisition Costs
During the three months ended March 28, 2026 and March 29, 2025, we incurred$
2
million and $
2
million in
acquisition costs, respectively.These costs are included in selling, general and administrativein our condensed
consolidated statements of income.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
17
Note 6 – Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset orpaid to transfer a liability in an orderly
transaction between market participants at the measurement date.The fair value hierarchy distinguishes between
(1) market participant assumptions developed based on market data obtainedfrom independent sources (observable
inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best
information available in the circumstances (unobservable inputs).
The fair value hierarchy consists of three broad levels, which gives thehighest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (Level 1) and the lowest priorityto unobservable inputs (Level 3).
The three levels of the fair value hierarchy are described as follows:
•Level 1— Unadjusted quoted prices in active markets for identical assetsor liabilities that are accessible at the
measurement date.
•Level 2— Inputs other than quoted prices included within Level 1 that areobservable for the asset or liability,
either directly or indirectly.Level 2 inputs include: quoted prices for similar assets or liabilitiesin active markets;
quoted prices for identical or similar assets or liabilities in marketsthat are not active; inputs other than quoted
prices that are observable for the asset or liability; and inputs that arederived principally from or corroborated by
observable market data by correlation or other means.
•Level 3— Inputs that are unobservable for the asset or liability.
The following section describes the fair values of our financial instrumentsand the methodologies that we used to
measure their fair values.
Investments and notes receivable
There are no quoted market prices available for investments in unconsolidatedaffiliates and notes receivable.
Certain of our notes receivable contain variable interest rates.We believe the carrying amounts of the notes
receivable are a reasonable estimate of fair value based on the interest ratesin the applicable markets.Our notes
receivable fair value is based on Level 3 inputs within the fair valuehierarchy.
Debt
The fair value of our debt (including bank credit lines, current maturitiesof long-term debt and long-term debt) is
based on Level 3 inputs within the fair value hierarchy, and as of March 28, 2026 and December 27, 2025 was
estimated at $
3,408
million and $
3,107
million, respectively.Factors that we considered when estimating the fair
value of our debt include market conditions, such as interest rates and creditspreads.
Derivative contracts
Derivative contracts are valued using quoted market prices andsignificant other observable inputs.Our derivative
instruments primarily include foreign currency forward contracts, interestrate swaps and total return swaps.
The fair values for the majority of our foreign currency derivative contractsare obtained by comparing our contract
rate to a published forward price of the underlying market rates, whichare based on market rates for comparable
transactions that are classified within Level 2 of the fair value hierarchy.
The fair value of the interest rate swap, which is classified within Level 2of the fair value hierarchy, is determined
by comparing our contract rate to a forward market rate as of thevaluation date.
The fair value of total return swaps is determined by valuing the underlyingexchange traded funds of the swap
using market-on-close pricing by industry providers as of the valuationdate that are classified within Level 2 of the
fair value hierarchy.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
18
Redeemable noncontrolling interests
The values for redeemable noncontrolling interests are based on recenttransactions and/or implied multiples of
earnings that are classified within Level 3 of the fair value hierarchy.
See
for additional information.
Intangible Assets
Assets measured on a non-recurring basis at fair value include intangibles.Inputs for measuring intangibles are
classified as Level 3 within the fair value hierarchy.
Defined Benefit Plans
Assets of our defined benefit plans are measured on a recurring basisand are classified as Level 1 within the fair
value hierarchy.
Contingent Consideration
We estimate the fair value of contingent consideration payments as part of the acquisition price and record the
estimated fair value of contingent consideration as a liability on ourcondensed consolidated balance sheets.For
transactions accounted for as business combinations, subsequent changesin the estimated fair value of contingent
consideration payments are included in selling, general and administrativeexpenses in our condensed consolidated
statements of income
(see
.
For transactions involving changes in our ownership in
consolidated subsidiaries without a change in our control, subsequentchanges in the estimated fair value of
contingent consideration payments are recognized in additional paid-incapital in our condensed consolidated
balance sheets.We measure contingent consideration at the fair value on a recurring basis using significant
unobservable inputs classified as Level 3 of the fair value hierarchy.We use various valuation techniques,
including the Monte Carlo simulation and probability-weighted scenarios,to determine the fair value of the
contingent consideration liabilities on the acquisition date and at eachreporting period.Our fair value
measurement inputs include expected operating performance, discountand risk-free rates, and credit spread.
Contingent consideration is remeasured to fair value at each reportingperiod.During the three months ended
March 28, 2026,we updated the fair value of contingent considerationin connection with 2025 and 2023 business
acquisitions, which resulted in expense of $
2
million and income of $
1
million, respectively.During the three
months ended March 29, 2025,we updated the fair value of contingent consideration in connectionwith a 2023
business acquisition, which resulted in income of $
2
million.These changes were recorded in selling, general and
administrative in the condensed consolidated statements of income.During the three months ended March 28,
2026 and March 29, 2025, we also updated the fair value of contingentconsideration related to changes in
ownership in our consolidated subsidiaries.These changes were recorded within additional paid-in capital inthe
condensed consolidated balance sheets.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
19
The components of the change in the fair value of contingent considerationfor the three months ended March 28,
2026 and March 29, 2025 are presented in the following table:
Three Months Ended
March 28,
March 29,
2026
2025
Balance, beginning of period
$
97
$
30
Increase in contingent consideration due to business acquisitions and acquisitions of
noncontrolling interests in subsidiaries
-
93
Decrease in contingent consideration due to payments
-
(12)
Change in fair value of contingent consideration in connection with business acquisitions
1
(2)
Change in fair value of contingent consideration in connection with changes in ownership in
consolidated subsidiaries
(34)
3
Balance, end of period
$
64
$
112
The following table presents our assets and liabilities that are measured andrecognized at fair value on a recurring
basis classified under the appropriate level of the fair value hierarchy as ofMarch 28, 2026 and December 27,
2025:
March 28, 2026
Level 1
Level 2
Level 3
Total
Assets:
Derivative contracts designated as hedges
$
-
$
1
$
-
$
1
Derivative contracts undesignated
-
1
-
1
Total assets
$
-
$
2
$
-
$
2
Liabilities:
Derivative contracts designated as hedges
$
-
$
11
$
-
$
11
Derivative contracts undesignated
-
1
-
1
Total returnswap
-
9
-
9
Contingent consideration
-
-
64
64
Total liabilities
$
-
$
21
$
64
$
85
Redeemable noncontrolling interests
$
-
$
-
$
903
$
903
December 27, 2025
Level 1
Level 2
Level 3
Total
Assets:
Derivative contracts designated as hedges
$
-
$
1
$
-
$
1
Derivative contracts undesignated
-
1
-
1
Total returnswap
-
1
-
1
Total assets
$
-
$
3
$
-
$
3
Liabilities:
Derivative contracts designated as hedges
$
-
$
23
$
-
$
23
Derivative contracts undesignated
-
2
-
2
Contingent consideration
-
-
97
97
Total liabilities
$
-
$
25
$
97
$
122
Redeemable noncontrolling interests
$
-
$
-
$
895
$
895
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
20
Note 7 – Debt
Bank Credit Lines
Bank credit lines consisted of the following:
March 28,
December 27,
2026
2025
Revolving credit agreement
$
400
$
100
Other short-term bank credit lines
646
664
Total
$
1,046
$
764
Revolving Credit Agreement
On
August 20, 2021
, we entered into a $
1.0
billion revolving credit agreement (the “Revolving Credit Agreement”)
which was amended and restated on
July 11, 2023
to extend the maturity date to
July 11, 2028
and update the
interest rate provisions to reflect the current market approach for amulticurrency facility.On June 6, 2025, we
amended and restated the Revolving Credit Agreement to, among otherthings, modify certain financial definitions
and covenants.The interest rate on this revolving credit facility is based on Term Secured Overnight Financing
Rate (“
Term SOFR
”) plus a spread based on our leverage ratio at the endof each financial reporting quarter.As of
March 28, 2026 the interest rate on this revolving credit facility was
3.67
% plus
1.08
%, for a combined rate of
4.75
%.As of December 27, 2025, the interest rate on this revolving creditfacility was
3.78
% plus
1.08
%, for a
combined rate of
4.86
%.
The Revolving Credit Agreement requires, among other things, that wemaintain certain maximum leverage ratios.
Additionally, the Revolving Credit Agreement contains customary representations, warranties and affirmative
covenants as well as customary negative covenants, subject to negotiatedexceptions, on liens, indebtedness,
significant corporate changes (including mergers), dispositions and certain restrictiveagreements.As of March 28,
2026 and December 27, 2025, we had $
400
million and $
100
million in borrowings, respectively, under this
revolving credit facility.During the three months ended March 28, 2026, the averageoutstanding balance under
the Revolving Credit Agreement was approximately $
327
million.As of March 28, 2026 and December 27, 2025,
there were $
10
million and $
10
million of letters of credit, respectively, provided to third parties under the
Revolving Credit Agreement.
Other Short-Term Bank CreditLines
As of March 28, 2026 and December 27, 2025,we had various other short-term bank credit lines available,in
various currencies, with a maximum borrowing capacity of $
782
million and $
787
million, respectively.As of
March 28, 2026 and December 27, 2025, $
646
million and $
664
million, respectively, were outstanding.During
the three months ended March 28, 2026, the average outstanding balancesunder our various other short-term bank
credit lines was approximately $
677
million.As of March 28, 2026 and December 27, 2025, borrowings under
other short-term bank credit lines had weighted average interest ratesof
4.54
% and
4.68
%, respectively.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
21
Long-term debt
Long-term debt consisted of the following:
March 28,
December 27,
2026
2025
Private placement facilities
$
1,199
$
1,149
Term loan
749
749
U.S. trade accounts receivable securitization
360
390
Variouscollateralized and uncollateralized loans payable with interest,
in varying installments through 2031 at interest rates
from
0.00
% to
6.25
% at March 28, 2026 and
from
0.00
% to
6.75
% at December 27, 2025
48
48
Finance lease obligations
6
7
Total
2,362
2,343
Less current maturities
(35)
(33)
Total long-term debt
$
2,327
$
2,310
Private Placement Facilities
Our private placement facilities provided by
four
insurance companies have a total facility amount of $
1.5
billion,
and are available on an uncommitted basis at fixed rate economic termsto be agreed upon at the time of issuance,
from time to time through
December 19, 2028
.The facilities allow us to issue senior promissory notes to the
lenders at a fixed rate based on an agreed upon spread over applicable treasurynotes at the time of issuance.The
term of each possible issuance will be selected by us and can range from
five
to
15 years
(with an average life no
longer than
12 years
).The proceeds of any issuances under the facilities will be used forgeneral corporate
purposes, including working capital and capital expenditures, to refinanceexisting indebtedness, and/or to fund
potential acquisitions.On December 19, 2025, we amended and restated our private placementfacilities to, among
other things, (i) extend the scheduled facility termination dates to December19, 2028 and (ii) modify certain
financial definitions and covenants.The agreements provide, among other things, that wemaintain certain
maximum leverage ratios, and contain restrictions relating to subsidiaryindebtedness, liens, affiliate transactions,
disposal of assets and certain changes in ownership.These facilities contain make-whole provisions in the event
that we pay off the facilities prior to the applicable due dates.
The components of our private placement facility borrowings as ofMarch 28, 2026, which have a weighted average
interest rate of
3.99
%, are presented in the following table:
Amount of
Date of
Borrowing
Borrowing
Borrowing
Outstanding
Rate
Due Date
June 16, 2017
$
100
3.42
%
June 16, 2027
September 15, 2017
100
3.52
September 15, 2029
January 2, 2018
100
3.32
January 2, 2028
September 2, 2020
100
2.35
September 2, 2030
June 2, 2021
100
2.48
June 2, 2031
June 2, 2021
100
2.58
June 2, 2033
May 4, 2023
75
4.79
May 4, 2028
May 4, 2023
75
4.84
May 4, 2030
May 4, 2023
75
4.96
May 4, 2033
May 4, 2023
150
4.94
May 4, 2033
December 15, 2025
100
5.23
December 15, 2032
December 15, 2025
75
5.28
December 15, 2032
February 24, 2026
50
5.40
February 24, 2034
Less: Deferred debt issuance costs
(1)
Total
$
1,199
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
22
The components of our private placement facility borrowings as of December27, 2025, which have a weighted
average interest rate of
3.93
%, are presented in the following table:
Amount of
Date of
Borrowing
Borrowing
Borrowing
Outstanding
Rate
Due Date
June 16, 2017
$
100
3.42
%
June 16, 2027
September 15, 2017
100
3.52
September 15, 2029
January 2, 2018
100
3.32
January 2, 2028
September 2, 2020
100
2.35
September 2, 2030
June 2, 2021
100
2.48
June 2, 2031
June 2, 2021
100
2.58
June 2, 2033
May 4, 2023
75
4.79
May 4, 2028
May 4, 2023
75
4.84
May 4, 2030
May 4, 2023
75
4.96
May 4, 2033
May 4, 2023
150
4.94
May 4, 2033
December 15, 2025
100
5.23
December 15, 2032
December 15, 2025
75
5.28
December 15, 2032
Less: Deferred debt issuance costs
(1)
Total
$
1,149
Term Loan
On July 11, 2023, we entered into a
three-year
$
750
million term loan credit agreement (the “Term Credit
Agreement”), which was originally scheduled to mature on
July 11, 2026
.On June 6, 2025, this agreement was
amended and restated to, among other things, (i) extend the maturity dateto
June 6, 2030
, and (ii) modify certain
financial definitions and covenants.The interest rate on this term loan is based on the
Term SOFR
plus a spread
based on our leverage ratio at the end of each financial reporting quarter.Beginning in June 2026 and continuing
through June 2027, we are required to make quarterly payments of $
5
million.In September 2027, the quarterly
payment amount increases to $
9
million, continuing through June 2030 with the remaining balance due June6,
2030.As of March 28, 2026, the borrowings outstanding under thisterm loan were $
749
million.At March 28,
2026, the interest rate under the Term Credit Agreement was
3.67
% plus
1.25
%, for a combined rate of
4.92
%.As
of December 27, 2025, the borrowings outstanding under this termloan were $
749
million.At December 27, 2025,
the interest rate under the Term Credit Agreement was
3.76
% plus
1.25
%, for a combined rate of
5.01
%.After
renewing the Term Credit Agreement in June of 2025, our hedged portion of the Term Credit Agreement is now
approximately
89
% of the notional total.As of March 28, 2026, the effective fixed rate was
5.69
% and the floating
rate was
4.92
%, resulting in a weighted average rate of
5.60
%.As of December 27, 2025, the effective fixed rate
was
5.69
% and the floating rate was
5.01
%, resulting in a weighted average rate of
5.62
%.The Term Credit
Agreement requires, among other things, that we maintain certain maximumleverage ratios.Additionally, the
Term Credit Agreement contains customary representations, warranties and affirmative covenants as well as
customary negative covenants, subject to negotiated exceptions, onliens, indebtedness, significant corporate
changes (including mergers), dispositions and certain restrictive agreements.
U.S. Trade Accounts Receivable Securitization
We have a facility agreement based on our U.S. trade accounts receivable that is structured as an asset-backed
securitization program with pricing committed for up to
three years
.On December 6, 2024, we extended the
expiration date of this facility agreement to
December 6, 2027
.This facility agreement has a purchase limit of $
450
million with
two
banks as agents.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
23
As of March 28, 2026 and December 27, 2025, the borrowings outstandingunder this securitization facility were
$
360
million and $
390
million, respectively.At March 28, 2026, the interest rate on borrowings underthis facility
was based on the
asset-backed commercial paper rate
of
3.88
% plus
0.75
%, for a combined rate of
4.63
%.At
December 27, 2025, the interest rate on borrowings under this facility wasbased on the asset-backed commercial
paper rate of
4.06
% plus
0.75
%, for a combined rate of
4.81
%.
If our accounts receivable collection pattern changes due to customerseither paying late or not making payments,
our ability to borrow under this facility may be reduced.We are required to pay a commitment fee of
30
to
35
basis
points depending upon program utilization.
Note 8 – Income Taxes
For the three months ended March 28, 2026, our effective tax rate was
25.5
%, compared to
24.9
% for the prior year
period.The difference between our effective and federal statutory tax rates primarily relates to state andforeign
income taxes and interest expense.
The total amount of unrecognized tax benefits, which are included in“other liabilities” within our condensed
consolidated balance sheets, as of March 28, 2026 and December 27, 2025was $
111
million and $
112
million,
respectively, of which $
103
million and $
104
million, respectively, would affect the effective tax rate if recognized.
All tax returns audited by the IRS are officially closed through 2021.The tax years subject to examination by the
IRS include years 2022 and forward.In addition, limited positions reported in the 2017 tax year are subjectto IRS
examination.
The amount of tax interest expense included as a component of the provisionfor taxes was $
0
million and $
1
million during the three months ended March 28, 2026 and March29, 2025,respectively.The total amount of
accrued interest is included in other liabilities within our condensedconsolidated balance sheets, and was $
22
million as of March 28, 2026 and December 27, 2025.The amount of penalties accrued for during the periods
presented was not material to our condensed consolidated financial statements.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
24
Note 9 – Plan of Restructuring and Related Costs
On August 6, 2024, we committed to a restructuring plan (the “2024Plan”) to integrate our acquisitions, right-size
operations and further increase efficiencies.We currently expect this plan to be completed by the end of 2027.
During the three months ended March 28, 2026 and March 29, 2025, we recordedrestructuring and related charges
associated with the 2024 Plan of $
12
million and $
25
million, respectively.The restructuring and related costs for
these periods primarily related to severance and employee-related costs,costs to exit facilities and other exit costs.
We expect to record restructuring and related charges associated with the 2024 Plan through the end of 2027;
however, an estimate of the amount of these charges for 2026 through 2027 has not yet been determined.
During the quarter ended March 28, 2026, in connection with the2024 Plan, we recorded a loss of $
2
million
related to the disposal of businesses in the Global Specialty Products segment.This amount is included in the $
12
million of restructuring and related charges discussed above.
Restructuring and related costs recorded for the three months endedMarch 28, 2026 and March 29, 2025 in
connection with the 2024Plan consisted of the following:
Three Months Ended March 28, 2026
Global Distribution
and Value-Added
Services
Global
Specialty
Products
Global
Technology
Corporate
Total
Severance and employee-related costs
$
4
$
1
$
2
$
-
$
7
Impairment and accelerated depreciation and amortization
of right-of-use lease assets and other long-lived assets
-
1
-
-
1
Exit and other related costs
1
1
-
-
2
Loss on disposal of a business
-
2
-
-
2
Restructuring and related costs
$
5
$
5
$
2
$
-
$
12
Three Months Ended March 29, 2025
Global Distribution
and Value-Added
Services
Global
Specialty
Products
Global
Technology
Corporate
Total
Severance and employee-related costs
$
10
$
5
$
1
$
6
$
22
Impairment and accelerated depreciation and amortization
of right-of-use lease assets and other long-lived assets
1
-
-
-
1
Exit and other related costs
1
-
1
-
2
Restructuring and related costs
$
12
$
5
$
2
$
6
$
25
The following table summarizes the activity related to the liabilities associatedwith our restructuring initiativesfor
the three months ended March 28, 2026.The remaining accrued balance of restructuring and related costsas of
March 28, 2026, which primarily relates to severance and employee-related costs,is included in accrued expenses:
other within our condensed consolidated balance sheets.Liabilities related to exited leased facilities are recorded
within our current and non-current operating lease liabilities within our condensedconsolidated balance sheets.
Total
Balance, December 27, 2025
$
49
Restructuring and related costs
12
Non-cash impairment, accelerated depreciation and amortization
(1)
Non-cash impairment on disposal of a business
(1)
Cash payments and other adjustments
(25)
Balance, March 28, 2026
$
34
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
25
Note 10 – Legal Proceedings
Henry Schein, Inc. was named as a defendant in multiple opioid relatedlawsuits (one or more of Henry Schein,
Inc.’s subsidiaries was also named as a defendant in a number of those cases).Generally, the lawsuits allege that
the manufacturers of prescription opioid drugs engaged in a falseadvertising campaign to expand the market for
such drugs and their own market share and that the entities in the supplychain (including Henry Schein, Inc. and its
subsidiaries) reaped financial rewards by refusing or otherwise failing tomonitor appropriately and restrict the
improper distribution of those drugs.The last remaining actions which were consolidated withinthe MultiDistrict
Litigation (“MDL”) proceeding In Re National Prescription Opiate Litigation(MDL No. 2804; Case No. 17-md-
2804) have been settled for immaterial amounts and have been dismissed.
From time to time, we may become a party to other legal proceedings,including, without limitation, product
liability claims, employment matters, commercial disputes, governmentalinquiries and investigations (which may
in some cases involve our entering into settlement arrangements or consentdecrees), and other matters arising out
of the ordinary course of our business.While the results of any legal proceeding cannot be predicted with certainty,
in our opinion none of these other pending matters are currentlyanticipated to have a material adverse effect on our
consolidated financial position, liquidity or results of operations.
As of March 28, 2026,we had accrued our best estimate of potential losses relatingto claims that were probable to
result in liability and for which we were able to reasonably estimate aloss.This accrued amount, as well as related
expenses, was not material to our financial position, results of operationsor cash flows.Our method for
determining estimated losses considers currently availablefacts, presently enacted laws and regulations and other
factors, including probable recoveries from third parties.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
26
Note 11 – Stock-Based Compensation
Plan Administration and Award Types
Stock-based awards are granted to certain employees under the 2024 StockIncentive Plan and to our non-employee
directors under the 2023 Non-Employee Director Stock Incentive Plan (collectively, the “Plans”), which are
administered by the Compensation Committee of the Board of Directors.
●
Non-Employee Directors:
Receive awards exclusively in the form of time-based restricted stock units
(“RSUs”) with
12
-month cliff vesting.An RSU entitles the holder to receive
one
share of Company
common stock upon vesting.
●
Employees:
Historically, awards were granted in varying forms, including RSUs, performance-based
restricted stock units (“PSUs”) and non-qualified stock options.Beginning in the 2023 plan year, employee
awards consist of:
o
RSUs:
Vestbased on the recipient’s continued service over time.
o
PSUs:
A PSU entitles the holder to receive
one
share of Company common stock upon vesting,
contingent on the achievement of specified performance targets and the recipient’s continued
service.The number of shares that ultimately vest and are received bythe recipient may range
above or below the target award based on the Company’s performance against pre-determined
specified targets over the applicable performance period, as determined by the Compensation
Committee.
o
Non-Qualified Stock Options (granted solely to our CEO in 2026):
Non-qualified stock options
(“Stock Options”) are awards that allow the recipient to purchaseshares of our common stock after
vesting at a fixed price set at the time of grant.Stock Options are issued at an exercise price equal
to our closing stock price on the date of grant and have a contractualterm of
ten years
from the
grant date, subject to earlier expiration upon certain termination events andaccelerated vesting
upon certain events.
Allocation and Vesting Schedules
The following table summarizesthe allocation and vesting structure for our annual long-term incentive(“LTI”)
equity awards to employee groups during the 2025 and 2026 plan years,and for our CEO’s 2026 sign-on equity
award:
Employee Group
Plan Year
Award Allocation
Vesting Structure
CEO
2026
25
%
RSU (time)
4
-year graded
(
25
%/year)
25
%
PSU (performance)
3
-year cliff
50
%
Stock Options
4
-year graded
(
25
%/year)
2026 (Sign-On)
100
%
RSU (time)
3
-year graded
(
33
-1/3%/year)
2025
35
%
RSU (time)
4
-year cliff
65
%
PSU (performance)
3
-year cliff
Executive Management Committee
2026
50
%
RSU (time)
4
-year graded
(
25
%/year)
50
%
PSU (performance)
3
-year cliff
2025
50
%
RSU (time)
4
-year cliff
50
%
PSU (performance)
3
-year cliff
Vice Presidents
2026
80
%
RSU (time)
4
-year graded
(
25
%/year)
20
%
PSU (performance)
3
-year cliff
2025
80
%
RSU (time)
50
% at 3rd year /
50
% at 4th year
20
%
PSU (performance)
3
-year cliff
Director Level
2026
100
%
RSU (time)
4
-year graded
(
25
%/year)
2025
100
%
RSU (time)
50
% at 3rd year /
50
% at 4th year
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
27
Accounting Policy Change
Effective in the first quarter of 2026, we updated our accounting policy for recognizingstock-based compensation
expense for awards with service conditions only, transitioning from the graded-vesting method to the straight-line
method.We adopted this change as we believe the straight-line method is the predominant practice in our industry.
The effect of this change in accounting policy and its impact on our consolidatedfinancial statements was
immaterial for retrospective application.
Valuationand Performance Measurements
●
RSUs and PSUs: For RSUs and PSUs, fair value is estimated based on theclosing stock price on the grant
date.For PSUs, the number of shares that ultimately vest and are received bythe recipient and related
compensation cost recognized as an expense may range above or belowthe target based on the Company’s
performance against pre-determined specified targets over the applicable performanceperiod, as
determined by the Compensation Committee.
●
Stock Options: Compensation expense is recognized on a straight-linebasis, and grant-date fair value is
estimated using the Black-Scholes valuation model.
Performance Adjustments
The equity awards under the Plans are subject to certain pre-determinedadjustments to the performance
measurements to the extent that related activities were not contemplatedin the original goals.With respect to PSUs
granted under the 2024 Stock Incentive Plan, for the 2025, and 2026 PSUs,these adjustments may include, but are
not limited to:
●
Impact of acquisitions, divestitures, and new business ventures.
●
Changes in the fair value of contingent consideration and remeasurementgains related to acquisitions.
●
Certain capital transactions, including share repurchases.
●
Impact of differences in budgeted average outstanding shares (other than those resultingfrom capital
transactions referred to above).
●
Restructuring and related costs.
●
Amortization expense recorded for acquisition-related intangible assets.
●
Certain litigation settlements or payments.
●
Changes in accounting principles or in applicable laws or regulations.
●
Changes in income tax rates in certain markets.
●
Foreign exchange fluctuations.
●
Intangible impairment charges.
●
Costs related to shareholder advisory matters (for 2025 and 2026 PSUgrants only).
●
Implementation-related value creation consulting costs (for 2026 PSUgrants only).
Our condensed consolidated statements of income reflect pre-tax share-based compensationexpense of $
3
million
and $
5
million for the three months ended March 28, 2026 and March 29, 2025, respectively.
Total unrecognized compensation cost related to unvested awards as of March 28, 2026 was $
119
million, which is
expected to be recognized over a weighted-average period of approximately
3.0
years.
Our condensed consolidated statements of cash flows present ourstock-based compensation expense as a
reconciling adjustment between net income and net cash provided by operatingactivities for all periods presented.
There were no cash benefits associated with tax deductions in excess ofrecognized compensation for the three
months ended March 28, 2026 and March 29, 2025.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
28
The following weighted-average assumptions were used in determiningthe most recent fair values of stock options
using the Black-Scholes valuation model:
2026
Expected dividend yield
0.0
%
Expected stock price volatility
29.00
%
Risk-free interest rate
3.82
%
Expected life of options (years)
6.00
We have not declared cash dividends on our stock in the past and we do not anticipate declaring cash dividends in
the foreseeable future.The expected stock price volatility is based on implied volatilitiesfrom traded options on
our stock, historical volatility of our stock and other factors.The risk-free interest rate is based on the U.S.
Treasury yield curve in effect at the time of grant that most closely aligns to the expected life of options.The
six
-
year expected life of the options was determined using the simplifiedmethod for estimating the expected term as
permitted under Staff Accounting Bulletin Topic 14.
The following table summarizes the stock option activity for the threemonths ended March 28, 2026:
Stock Options
Weighted Average
Aggregate
Weighted Average
Remaining Contractual
Intrinsic
Shares
Exercise Price
Life (in years)
Value
Outstanding at beginning of period
922,715
$
72.26
Granted
177,116
77.60
Exercised
(16,420)
64.17
Forfeited
(1,350)
85.51
Outstanding at end of period
1,082,061
$
73.24
6.1
$
5
Options exercisable at end of period
904,945
$
72.38
The following tables summarize the activity of our unvested RSUs and PSUs forthe three months ended March 28,
2026:
RSUs (Time-Based)
PSUs (Performance-Based)
Weighted Average
Weighted Average
Grant Date Fair
Grant Date Fair
Shares/Units
Value Per Share
Shares/Units
Value Per Share
Outstanding at beginning of period
1,606,542
$
75.69
387,960
$
75.89
Granted
646,793
77.78
227,501
74.25
Performance adjustment
n/a
n/a
300,049
74.97
Vested
(302,090)
84.05
(80,950)
81.54
Forfeited
(43,957)
76.07
(295,611)
77.00
Outstanding at end of period
1,907,288
$
75.06
538,949
$
74.88
The fair value of vested RSUs and PSUs was $
25
million and $
7
million, respectively, for the three months ended
March 28, 2026; and $
33
million and $
1
million, respectively, for the three months ended March 29, 2025.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
29
Note 12 – Redeemable Noncontrolling Interests
Some minority stockholders in certain of our subsidiaries have the right,at certain times, to require us to acquire
their ownership interest in those entities at fair value.Accounting Standards Codification Topic 480-10 is
applicable for noncontrolling interests where we are or may be requiredto purchase all or a portion of the
outstanding interest in a consolidated subsidiary from the noncontrollinginterest holder under the terms of a put
option contained in contractual agreements.The components of the change in the redeemable noncontrolling
interests for the three months ended March 28, 2026 and March 29, 2025are presented in the following table:
March 28,
March 29,
2026
2025
Balance, beginning of period
$
895
$
806
Decrease in redeemable noncontrolling interests due to acquisitions of noncontrolling
interests in subsidiaries
(32)
(73)
Increase in redeemable noncontrolling interests due to business acquisitions
29
-
Net loss attributable to redeemable noncontrolling interests
(1)
(2)
Distributions declared
(9)
(2)
Effect of foreign currency translation gain attributable to redeemable noncontrolling
interests
3
8
Change in fair value of redeemable securities
18
28
Balance, end of period
$
903
$
765
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
30
Note 13 – Comprehensive Income
Comprehensive income includes certain gains and losses that, under U.S.GAAP,are excluded from net income and
are recorded directly to stockholders’ equity.
The following table summarizes our Accumulated other comprehensive loss, net ofapplicable taxes as of:
March 28,
December 27,
2026
2025
Attributable to redeemable noncontrolling interests:
Foreign currency translation adjustment
$
(23)
$
(26)
Attributable to noncontrolling interests:
Foreign currency translation adjustment
$
1
$
1
Attributable to Henry Schein, Inc.:
Foreign currency translation adjustment
$
(167)
$
(196)
Unrealized loss from hedging activities
(16)
(24)
Pension adjustment loss
(6)
(6)
Accumulated other comprehensive loss
$
(189)
$
(226)
Total Accumulatedother comprehensive loss
$
(211)
$
(251)
The following table summarizes the components of comprehensive income, netof applicable taxes as follows:
Three Months Ended
March 28,
March 29,
2026
2025
Net income
$
112
$
113
Foreign currency translation gain
32
76
Tax effect
-
-
Foreign currency translation gain
32
76
Unrealized gain (loss) from hedging activities
11
(6)
Tax effect
(3)
1
Unrealized gain (loss) from hedging activities
8
(5)
Pension adjustment gain
-
1
Tax effect
-
(1)
Pension adjustment gain
-
-
Comprehensive income
$
152
$
184
Our financial statements are denominated in U.S. Dollars.Fluctuations in the value of foreign currencies as
compared to the U.S. Dollar may have a significant impact on ourcomprehensive income.The foreign currency
translation gain (loss) during the three months ended March 28, 2026 andthree months ended March 29, 2025 was
primarily due to changes in foreign currency exchange rates of the BrazilianReal, Euro, British Pound, and Israel
Shekel.
The hedging gain (loss) during the three months ended March 28, 2026 andMarch 29, 2025 was attributable to a
net investment hedge.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
31
The following table summarizes our total comprehensive income, net ofapplicable taxes as follows:
Three Months Ended
March 28,
March 29,
2026
2025
Comprehensive income attributable to
Henry Schein, Inc.
$
144
$
172
Comprehensive income attributable to
noncontrolling interests
6
6
Comprehensive income attributable to
Redeemable noncontrolling interests
2
6
Comprehensive income
$
152
$
184
Note 14
–
Earnings Per Share
Basic earnings per share is computed by dividing net income attributableto Henry Schein, Inc. by the weighted-
average number of common shares outstanding for the period.Our diluted earnings per share is computed similarly
to basic earnings per share, except that it reflects the effect of common shares issuablefor unvested RSUs and upon
exercise of stock options using the treasury stock method in periodsin which they have a dilutive effect.
A reconciliation of shares used in calculating earnings per basic anddiluted share follows:
Three Months Ended
March 28,
March 29,
2026
2025
Basic
114,939,640
123,776,073
Effect of dilutive securities:
Stock options and restricted stock units
1,121,604
1,072,148
Diluted
116,061,244
124,848,221
The number of antidilutive securities that were excluded from the calculationof diluted weighted average common
shares outstanding are as follows:
Three Months Ended
March 28,
March 29,
2026
2025
Stock options
403,885
402,268
Restricted stock units
10,315
200,568
Total anti-dilutivesecurities excluded from earnings per share computation
414,200
602,836
Note 15 – Supplemental Cash Flow Information
Cash paid for interest and income taxes was:
Three Months Ended
March 28,
March 29,
2026
2025
Cash paid for interest
$
33
$
32
Cash paid for income taxes, net of refunds
24
18
For the three months ended March 28, 2026 and March 29, 2025, wehad $
11
million and $
(6)
million of non-cash
net unrealized gains (losses) related to hedging activities, respectively.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
32
Note 16 – Related Party Transactions
During 2018, we entered into a joint venture with Internet Brands to create HenrySchein One, LLC.Internet
Brands initially held a
26
% noncontrolling interest, which has since increased to a
33.6
% noncontrolling interest in
Henry Schein One, LLC, and a freestanding and separately exercisable rightto put its noncontrolling interest to
Henry Schein, Inc. for fair value following the fifth anniversary of the effective date of theformation of the joint
venture.On January 29, 2025, Henry Schein, Inc. signed a Memorandum of Understandingwith Internet Brands to
extend the time-based trigger for the exercise of our call option to July 1, 2032and to pause the exercise by Internet
Brands of its put option for a period of
four years
, to January 29, 2029.
In connection with the formation of Henry Schein One, LLC we enteredinto a
ten-year
royalty agreement with
Internet Brands whereby we will pay Internet Brands approximately $
31
million annually for the use of their
intellectual property.During the three months ended March 28, 2026 and March29, 2025, we recorded $
8
million
and $
8
million, respectively, within selling, general and administrative in our condensed consolidated statements of
income, in connection with costs related to this royalty agreement.As of March 28, 2026 and December 27, 2025,
Henry Schein One, LLC had a net payable balance to Internet Brands of $
8
million and $
9
million, respectively,
comprised of amounts related to results of operations and the royalty agreement.The components of this payable
are recorded within accrued expenses: other within our condensed consolidated balancesheets.
We have interests in entities that we account for under the equity accounting method.In our normal course of
business, during the three months ended March 28, 2026 and March 29,2025, we recorded net sales of $
7
million
and $
13
million respectively, to such entities.During the three months ended March 28, 2026 and March 29,2025,
we purchased $
2
million and $
2
million respectively, from such entities.At March 28, 2026 and December 27,
2025, we had an aggregate $
31
million and $
39
million, respectively, due from our equity affiliates, and $
3
million
and $
7
million, respectively, due to our equity affiliates.
Certain of our facilities related to our acquisitions are leased from employeesand minority shareholders.These
leases are classified as operating leases and have a remaining lease term rangingfrom less than
a
year to
approximately
11 years
.As of March 28, 2026, current and non-current liabilities associated withrelated party
operating leases were $
5
million and $
21
million, respectively.At March 28, 2026, related party leases represented
7.0
% and
7.9
% of the total current and non-current operating lease liabilities, respectively.At December 27, 2025,
current and non-current liabilities associated with related party operatingleases were $
5
million and $
22
million,
respectively.At December 27, 2025, related party leases represented
6.6
% and
8.7
% of the total current and non-
current operating lease liabilities, respectively.
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
33
Note 17 – KKR Investment and Accelerated Share Repurchase Program
On January 29, 2025, Henry Schein, Inc. announced a strategic investmentby investment funds and other entities
affiliated with Kohlberg Kravis Roberts & Co. L.P. (“KKR”),pursuant to the terms of a Strategic Partnership
Agreement with KKR (the “Agreement”).Under the Agreement,
two
independent directors, Max Lin and William
K. “Dan” Daniel (each, and any replacement thereof, a “KKR Designee”),joined our Board of Directors.On May
16, 2025, we issued
3,285,152
shares of common stock to funds affiliated with KKR for an investment of $
250
million, at approximately $
76.10
per share.
On May 19, 2025, we executed an accelerated share repurchase programto repurchase a total of $
250
million of
our outstanding common stock based on volume-weighted average prices.In May 2025 we received
3,122,832
shares at an estimated fair value of $
224
million.In July 2025, we received an additional
368,651
shares at an
estimated fair value of $
26
million, representing the final amount of shares to be received underthis accelerated
share repurchase program.
Pursuant to the Agreement, KKR also had the ability to purchase additionalshares via open market purchases up to
a total equity stake of
14.9
% of the outstanding shares of common stock of the Company.On November 4, 2025,
the Company and KKR entered into an amendment to the Agreementthat increased the beneficial ownership limit
from
14.9
% to
19.9
% of the outstanding shares of the Company’s common stock that KKR is permitted to acquire
during the standstill period.The standstill provisions, including the increased ownership limit, continuein effect
for a period of six months following the later of the expiration of the term ofthe Agreement and the date on which
no director appointed pursuant to the Agreement is serving on the Boardof Directors.On December 7, 2025,
pursuant to the Agreement, KKR notified the Company of its electionto exercise the Extension Election (as defined
in the Agreement) whereby the Company’s Board of Directors has accordingly renominated the KKR Designeesto
stand for election at the Company’s upcoming 2026 annual meeting of stockholders for a term expiring atthe
Company’s 2027 annual meeting of stockholders.
34
ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Cautionary Note Regarding Forward-Looking Statements
In accordance with the “Safe Harbor” provisions of the Private SecuritiesLitigation Reform Act of 1995, we
provide the following cautionary remarks regarding important factorsthat, among others, could cause future results
to differ materially from the forward-looking statements, expectations and assumptionsexpressed or implied herein.
All forward-looking statements made by us are subject to risks and uncertaintiesand are not guarantees of future
performance.These forward-looking statements involve known and unknownrisks, uncertainties and other factors
that may cause our actual results, performance and achievementsor industry results to be materially different from
any future results, performance or achievements expressed or impliedby such forward-looking statements.These
statements are generally identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,”
“plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “tomake” or other comparable terms.Factors that
could cause or contribute to such differences include, but are not limited to,those discussed in the documents we
file with the Securities and Exchange Commission (SEC), including our AnnualReport on Form 10-K.
Risk factors and uncertainties that could cause actual results to differ materially fromcurrent and historical results
include, but are not limited to: our dependence on third parties forthe manufacture and supply of our products and
where we manufacture products, our dependence on third partiesfor raw materials or purchased components; risks
relating to the achievement of our strategic growth objectives, includinganticipated results of restructuring and
value creation initiatives; risks related to the Strategic Partnership Agreementwith KKR Hawaii Aggregator L.P.
entered into in January 2025; transitions in senior company leadership(including, without limitation, the transition
to our new Chief Executive Officer); our ability to develop or acquire andmaintain and protect new products
(particularly technology and specialty products) and services and utilizenew technologies that achieve market
acceptance with acceptable margins; transitional challenges associated with acquisitionsand joint ventures,
including the failure to achieve anticipated synergies/benefits, as well as significantdemands on our operations,
information systems, legal, regulatory, compliance, financial and human resources functions in connection with
acquisitions, dispositions and joint ventures; certain provisionsin our governing documents that may discourage
third-party acquisitions of us; adverse changes in supplier rebatesor other purchasing incentives; risks related to the
sale of corporate brand products; risks related to activist investors; securityrisks associated with our information
systems and technology products and services, such as cyberattacks orother privacy or data security breaches
(including the October 2023 incident); effects of a highly competitive (including,without limitation, competition
from third-party online commerce sites) and consolidating market; political,economic and regulatory influences on
the health care industry; risks from expansion of customer purchasingpower and multi-tiered costing structures;
increases in shipping costs for our products or other service issueswith our third-party shippers, and increases in
fuel and energy costs; changes in laws and policies governing manufacturing, developmentand investment in
territories and countries where we do business; general global and domesticmacro-economic and political
conditions, including inflation, deflation, recession, unemployment (and correspondingincrease in under-insured
populations), consumer confidence, sovereign debt levels, fluctuations inenergy pricing and the value of the U.S.
dollar as compared to foreign currencies and changes to other economicindicators; failure to comply with existing
and future regulatory requirements, including relating to health care;risks associated with the EU Medical Device
Regulation; failure to comply with laws and regulations relating to healthcare fraud or other laws and regulations;
failure to comply with laws and regulations relating to the collection, storageand processing of sensitive personal
information or standards in electronic health records or transmissions;changes in tax legislation, changes in tax
rates and availability of certain tax deductions; risks related to productliability, intellectual property and other
claims; risks associated with customs policies or legislative import restrictions;risks associated with disease
outbreaks, epidemics, pandemics (such as the COVID-19 pandemic), orsimilar wide-spread public health concerns
and other natural or man-made disasters; risks associated with our globaloperations; the threat or outbreak of war
(including, without limitation, geopolitical wars), terrorism or public unrest(including, without limitation, the wars
in Ukraine and Iran, the Israel-Gaza war and other unrest and threats in the MiddleEast and the possibility of a
wider European or global conflict); changes to laws and policies governingforeign trade, tariffs and sanctions or
greater restrictions on imports and exports, including changes to internationaltrade agreements and the current
imposition of (and the potential for additional) tariffs by the U.S. on numerouscountries and retaliatory tariffs;
supply chain disruption; litigation risks; new or unanticipated litigationdevelopments and the status of litigation
matters; our dependence on our senior management, employee hiring andretention, increases in labor costs or
35
health care costs, and our relationships with customers, suppliers andmanufacturers; and disruptions in financial
markets.The order in which these factors appear should not be construedto indicate their relative importance or
priority.
We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control
or predict.Accordingly, any forward-looking statements contained herein should not be relied upon as a prediction
of actual results.We undertake no duty and have no obligation to update forward-looking statements except as
required by law.
Where YouCan Find Important Information
We may disclose important information through one or more of the following channels: SEC filings, public
conference calls and webcasts, press releases, the investor relationspage of our website (www.henryschein.com)
and the social media channels identified on the About Media Center pageof our website.
Recent Developments
Chief Executive Officer
On January 12, 2026, we announced the appointment of FrederickM. Lowery as CEO, effective March 2, 2026.In
connection with his appointment, Mr. Lowery joined our Board of Directors.Mr. Lowery succeeded Stanley M.
Bergman, who served as CEO through March 1, 2026.Mr. Bergman retired as CEO and continues to serve as
Chairman of the Board.Mr. Bergman will retire as Chairman of the Board as of the end of the 2026 Annual
Meeting of Stockholders and the Board has approved the appointmentof Mr. Bergman as Chairman Emeritus
effective upon his retirement as Chairman.The Board intends to appoint a new Chairman promptlyfollowing the
Company’s 2026 annual meeting of stockholders.
Tariffs and Related Economic Conditions
The U.S. has adopted new and increased tariffs on imports from countries, whichtariffs remain subject to
frequently evolving exemptions and modifications, as well as to courtchallenges, including a recent invalidation in
the Supreme Court of many of the tariffs.Some countries have imposed retaliatory tariffs and other restrictions on
imports from the U.S.These developments, and anticipated future developments,have created a volatile
environment for global trade, and new trade policies with individual countries.It is unclear whether, or the extent
to which, the current tariffs on trade with numerous countries will remain in place,or change, the exceptions that
may apply, and their timing.
The tariffs did not have a material impact on our results of operations during fiscalyear 2025, although sales of
U.S. dental equipment were temporarily impacted by market uncertaintyrelated to tariffs in the second half of the
quarter ended June 28, 2025.
36
Executive-Level Overview
Henry Schein, Inc. is a solutions company for health care professionals poweredby a network of people and
technology.
We
believe we are the world’s largest provider of health care products and services primarily to office-
based dental and medical practitioners, as well as alternate sites of care.
We
serve more than one million customers
worldwide including dental practitioners, laboratories, physician practices andambulatory surgery centers, as well
as government, institutional health care clinics, home health providers, andother alternate care clinics.
We
believe
that we have a strong brand identity due to our more than 94 years of experiencedistributing health care products.
We
are headquartered in Melville, New York, employ more than 25,000 people (of which more than 13,000 are
based outside of the United States) and have operations or affiliates in 34 countries andterritories.Our broad
global footprint has evolved over time through our organic growth as well as throughcontribution from strategic
acquisitions.
We
have established strategically located distribution centers aroundthe world to enable us to better serve our
customers and increase our operating efficiency.This infrastructure, together with broad product and service
offerings at competitive prices, and a strong commitment to customer service, enablesus to be a single source of
supply for our customers’ needs.
As a distributor, we market and sell branded products as well as our own corporate brand portfolio ofcost-effective,
high-quality consumable merchandise products.
We
also manufacture, source and sell a range of company-owned
manufactured products, primarily implants, biomaterial products, endodontics, handpieceand small equipment,
hand instrument and repair, restoratives, orthodontics, wound care, orthopedics and dental lab products.
We
have
achieved scale in these global businesses primarily through acquisitions, asmanufacturers of these products
typically do not utilize a distribution channel to serve customers.
Our reportable segments consist of: (i) Global Distribution and Value-Added Services; (ii) Global Specialty
Products; and (iii) Global Technology.
Global Distribution and Value-Added Services includes distribution to the global dental and medical markets of
national brand and corporate brand merchandise, as well as equipment and relatedtechnical services.This segment
also includes value-added services such as financial services, continuing educationservices, consulting and other
services.This segment also markets and sells under our own corporate brand,a portfolio of cost-effective, high-
quality consumable merchandise.Global Specialty Products includes manufacturing, marketingand sales of dental
implant and biomaterial products; and endodontic, orthodontic and orthopedicproducts and other health care-
related products and services.Global Technology includes development and distribution of practice management
software, e-services and other products, which are distributed to healthcare providers.
A key element to grow closer to our customers is our One Schein initiative, whichis a unified go-to-market
approach that enables practitioners to work synergistically with our supply chain, equipmentsales and service and
other value-added services, allowing our customers to leverage thecombined value that we offer through a single
program.Specifically, One Schein provides customers with streamlined access to our comprehensive offering of
national brand products, corporate brand products and proprietary specialty productsand solutions (including
implant, orthodontic and endodontic products).In addition, customers have access to a wide range of services,
including software and other value-added services.
Industry Overview
In recent years, the health care industry has increasingly focused on cost containment.This trend has benefited
distributors capable of providing a broad array of products and services at lowprices.It also has accelerated the
growth of DSOs, GPOs, HMOs, group practices, other managed careaccounts and collective buying groups, which,
in addition to their emphasis on obtaining products at competitive prices,tend to favor distributors capable of
providing specialized management information support.
We
believe that the trend towards cost containment has
the potential to favorably affect demand for technology solutions, including software, whichcan enhance the
efficiency and facilitation of practice management.
37
Our operating results in recent years have been significantly affected by strategiesand transactions that we
undertook to expand our business, domestically and internationally, in part to address significant changes in the
health care industry, including consolidation of health care distribution companies, health care reform, trends
toward managed care, cuts in Medicare and collective purchasing arrangements.
Industry Consolidation
The health care products distribution industry, as it relates to office-based health care practitioners, is fragmented
and diverse.The industry ranges from sole practitioners working out ofrelatively small offices to group practices
or service organizations ranging in size from a few practitioners to a large number of practitioners who have
combined or otherwise associated their practices.
Due in part to the inability of office-based health care practitioners to store and managelarge quantities of supplies
in their offices, the distribution of health care supplies and small equipment to office-based healthcare practitioners
has been characterized by frequent, small quantity orders, and a need for rapid,reliable and substantially complete
order fulfillment.The purchasing decisions within an office-based health care practice are typicallymade by the
practitioner or an administrative assistant.Supplies and small equipment are generally purchased from morethan
one distributor, with one generally serving as the primary supplier.
The trend of consolidation extends to our customer base.Health care practitioners are increasingly seeking to
partner, affiliate or combine with larger entities such as hospitals, health systems, group practices or physician
hospital organizations.In many cases, purchasing decisions for consolidated groups aremade at a centralized or
professional staff level; however, orders are delivered to the practitioners’ offices.
Our approach to acquisitions and joint ventures has been to expand our role asa provider of products and services
to the health care industry.This trend has resulted in our expansion into service areas that complementour existing
operations and provide opportunities for us to develop synergies with, and thus strengthen, the acquiredbusinesses.
As industry consolidation continues, we believe that we are positionedto capitalize on this trend, as we believe we
have the ability to support increased sales through our existing infrastructure, althoughthere can be no assurances
that we will be able to successfully accomplish this.
We
are focused on building relationships with decision makers
who do not reside in the office-based practitioner setting.
As the health care industry continues to change, we continually evaluate possiblecandidates for joint venture or
acquisition and intend to continue to seek opportunities to expand ourrole as a provider of products and services to
the health care industry.There can be no assurance that we will be able to successfully pursueany such
opportunity or consummate any such transaction, if pursued.If additional transactions are entered into or
consummated, we would incur merger and/or acquisition-related costs, and therecan be no assurance that the
integration efforts associated with any such transaction would be successful.
Aging Population and Other Market Influences
The health care products distribution industry continues to experience growthdue to the aging population,
increased health care awareness, the proliferation of medical technologyand testing, new pharmacological
treatments, and expanded third-party insurance coverage, partially offset by the effects of unemploymenton
insurance coverage.In addition, the physician market continues to benefit from theshift of procedures and
diagnostic testing from acute care settings to alternate-care sites, particularlyphysicians’ offices.
According to the U.S. Census Bureau’s International Database, between 2026 and 2036, the 45 and older
population is expected to grow by approximately 10%.Between 2026 and 2046, this age group is expected to grow
by approximately 17%.This compares with expected total U.S. population growth rates ofapproximately 4%
between 2026 and 2036and approximately 6% between 2026 and 2046.
According to the U.S. Census Bureau’s International Database, in 2026 there are approximately seven million
Americans aged 85 years or older, the segment of the population most in need of long-term careand elder-care
38
services.By the year 2050, that number is projected to increase to approximately17 million.The population aged
65 to 84 years is projected to increase by approximately 12% duringthe same period.
As a result of these market dynamics, annual expenditures for health care servicescontinue to increase in the
United States.
We
believe that demand for our products and services will grow whilecontinuing to be impacted by
current and future operating, economic and industry conditions.The Centers for Medicare and Medicaid Services,
or CMS, published “National Health Expenditure Data” indicating thattotal national health care spending reached
approximately $5.3 trillion in 2024, or 18.0% of the nation’s gross domestic product, the benchmark measurefor
annual production of goods and services in the United States.Health care spending is projected to reach
approximately $8.6 trillion by 2033, or 20.3% of the nation’s projected gross domestic product.
We
believe similar demographic changes are also occurring in othermarkets we serve outside the U.S.
Government
Certain of our businesses involve the distribution, manufacturing, importation,exportation, marketing, sale and/or
promotion of pharmaceuticals, medical devices and/or in vitro diagnosticsand in this regard, we are subject to
extensive local, state, federal and foreign governmental laws and regulations,including as applicable to our
wholesale distribution of pharmaceuticals, medical devices, and in vitro diagnostics;manufacturing activities; and
as part of our specialty home medical supplies businesses that distribute and sellmedical equipment and supplies
directly to patients.Federal, state and certain foreign governments have also increasedenforcement activity in the
health care sector, particularly in areas of fraud and abuse, anti-bribery and anti-corruption, controlled substances
handling, medical device regulations and data privacy and security standards.
Certain of our businesses involve pharmaceuticals and/or medical devices,including orthopaedic,software
regulated as a medical device, and sales of medical equipment and suppliesdirectly to patients, that are paid for by
third parties and/or patients and must operate in compliance with a variety of burdensomeand complex coding,
billing and record-keeping requirements in order to substantiate claimsfor payment under federal, state and
commercial/private health care reimbursement programs.
Government and private insurance programs fund a large portion of the total cost of medicalcare, and there have
been efforts to limit such private and government insurance programs, including efforts, thus farunsuccessful, to
seek repeal of the entire United States Patient Protection and Affordable Care Act,as amended by the Health Care
and Education Reconciliation Act, each enacted in March 2010.
Certain of our businesses are subject to various additional federal, state,local and foreign laws and regulations,
including with respect to the sale, transportation, importation, storage, handlingand disposal of hazardous or
potentially hazardous substances; “forever chemicals” such as per-andpolyfluoroalkyl substances; warnings related
to potential cancer or reproductive harm linked to chemicals; amalgam bans; pricing disclosures;supply chain
transparency around human trafficking and forced labor practices; and safe workingconditions.In addition,
activities to control medical costs, including laws and regulations loweringreimbursement rates for
pharmaceuticals, medical devices, medical supplies and/or medicaltreatments or services, are ongoing.Laws and
regulations are subject to change and their evolving implementation may impactour operations and financial
performance.
Certain of our businesses also maintain contracts with governmental agenciesand are subject to certain regulatory
requirements specific to government contractors.
Our businesses are generally subject to numerous laws and regulations that couldimpact our financial performance,
and failure to comply with such laws or regulations could have a materialadverse effect on our businesses.A few
noteworthy or recent items that may impact our businesses are noted below:
●
Effective February 2, 2026, the FDA’sQuality Management System Regulation (QMSR) harmonizes
21 CFR Part 820 with the internationally recognized ISO 13485:2016 standardfor quality management
systems.Concurrently, the FDA retired their QSIT inspection framework and implemented a new
inspection framework under Compliance Program 7382.850,
Inspection of Medical Device Manufacturers,
39
to align inspections with ISO’s focus on overall system effectiveness, integrated risk management, supplier
oversight, and CAPA performance.
●
On March 18, 2026, the Council of the EU and two European Parliament committeesadopted their joint
negotiating position on the European Commission’s November 2025 proposed
Digital Omnibus on AI
Regulation
.Trilogue negotiations will commence among the Parliament, Council, and Commission to
agree on a final version of the text.Any adopted changes would amend the AI Act, which has a staggered
implementation timeline running until full applicability in August 2026.
●
On March 26, 2026, the European Parliament formally adopted the EU Directiveon Combating Corruption,
which establishes a harmonized, criminal law framework to prevent andcombat corruption, such as bribery
in the public and private sectors, across the EU.The Directive will enter into force on the twentieth day
following its publication in the
Official Journal of the European Union.
Member States must transpose the
Directive into local laws, regulations and administrative provisions withintwo (2) years (with limited
exceptions) to reflect the Directive’s harmonized definitions of corruption-related offenses and penalty
structures.
●
Directive No. 2025/794 of April 14, 2025, known as the “Stop-the-Clock”Directive, amended Directives
(EU) 2022/2464 (CSRD) by introducing a uniform two-year postponement ofthe sustainability reporting
requirements for financial years beginning on or after January 1, 2025 andon or after January 1, 2026.It
also extends the deadline for transposing Directive (EU) 2024/1760 (CSDDD)by one year (i.e., July 26,
2027) and the date of application of the transposed provisions dependingon the type of companies subject
to it (July 26, 2028 or July 26, 2029, as applicable).
●
Regulation (EU) 2025/327 of February 11, 2025 on the European Health Data Space and amending
Directive 2011/24/EU and Regulation (EU) 2024/2847 establishes the European Health Data Space
(EHDS) by providing for common rules, standards and infrastructures and a governanceframework, with a
view to facilitating access to electronic health data for the purpose of primaryuse and secondary use of this
data.This could potentially affect Henry Schein or its customers.
●
The U.S. has adopted new and increased tariffs on imports from countries, andsuch tariffs remain subject
to frequently evolving exemptions and modifications, as well as to court challenges,including a recent
invalidation in the Supreme Court of many of the tariffs, such as IEEPA tariffs, on February 20, 2026.
Some countries have imposed retaliatory tariffs and other restrictions on imports from theU.S.These
developments, and anticipated future developments, have created avolatile environment for global trade,
and new trade policies with individual countries.It is unclear whether, or the extent to which, the current
tariffs on trade with numerous countries will remain in place, or change, the exceptionsthat may apply, and
their timing.
●
In the United States, the One Big Beautiful Bill Act (“OBBBA”),signed into law on July 4, 2025, includes
a number of provisions that are expected to result in reductions in the number ofMedicaid enrollees, as
well as reductions in federal funding to state Medicaid programs, resultingin potentially adverse impacts
on utilization of services and coverage of products.The OBBBA also includes changes to corporate tax
rates, limitations on certain deductions and modifications to internationaltax provisions.
A more detailed discussion of laws, regulations and governmental activityis included in Management’s Discussion
and Analysis of Financial Condition and Results of Operations, containedin our Annual Report on Form 10-K for
the fiscal year ended December 27, 2025, filed with the SEC on February24, 2026.
40
Results of Operations
The following tables summarize the significant components of our operatingresults and cash flows for the three
months ended March 28, 2026 and March 29, 2025 (in millions):
Three Months Ended
March 28,
March 29,
2026
2025
Operating results:
Net sales
$
3,368
$
3,168
Cost of sales
2,298
2,168
Gross profit
1,070
1,000
Operating expenses:
Selling, general and administrative
809
738
Depreciation and amortization
67
62
Restructuring and related costs
12
25
Operating income
$
182
$
175
Other expense, net
$
(32)
$
(30)
Income taxes
(38)
(35)
Net income
112
113
Net income attributable to Henry Schein, Inc.
107
110
Three Months Ended
March 28,
March 29,
2026
2025
Cash flows:
Net cash provided by (used in) operating activities
$
(97)
$
37
Net cash used in investing activities
(63)
(99)
Net cash provided by financing activities
120
89
Plan of Restructuring and Related Costs
On August 6, 2024, we committed to a restructuring plan (the “2024Plan”) to integrate our acquisitions, right-size
operations and further increase efficiencies.We currently expect this plan to be completed by the end of 2027.
During the three months ended March 28, 2026 and March 29, 2025, we recordedrestructuring and related charges
associated with the 2024 Plan of $12 million and $25 million, respectively.The restructuring and related costs for
these periods primarily related to severance and employee-related costs,costs to exit facilities and other exit costs.
We expect to record restructuring and related charges associated with the 2024 Plan through the end of 2027;
however, an estimate of the amount of these charges for 2026 through 2027 has not yet been determined.
During the quarter ended March 28, 2026, in connection with the2024 Plan, we recorded a loss of $2 million
related to the disposal of businesses in the Global Specialty Productssegment.This amount is included in the $12
million of restructuring and related charges discussed above.
41
Three Months Ended March 28, 2026 Compared to Three Months Ended March 29, 2025
Note: Percentages for Net Sales; Gross Profit; Operating Expenses; OtherExpense, Net; and Income Taxes are
based on actual values and may not recalculate due to rounding.
Our reportable segments are determined based on how our Chief ExecutiveOfficer manages the business, assesses
performance and allocates resources.We have three reportable segments:(i) Global Distribution and Value-Added
Services; (ii) Global Specialty Products; and (iii) Global Technology.
Net Sales
Net sales by reportable segment and by major product or service type wereas follows:
March 28,
% of
March 29,
% of
Increase / (Decrease)
2026
Total
2025
Total
$
%
Global Distribution and Value-Added Services
Global Dental Merchandise
(1)
$
1,292
38.4
%
$
1,185
37.4
%
$
107
9.0
%
Global Dental Equipment
(2)
417
12.4
384
12.1
33
8.6
Global Value-Added Services
(3)
57
1.7
52
1.7
5
10.6
Global Dental
1,766
52.5
1,621
51.2
145
9.0
Global Medical
(4)
1,073
31.8
1,055
33.3
18
1.7
Total Global Distribution and Value-Added Services
2,839
84.3
2,676
84.5
163
6.1
Global Specialty Products
(5)
397
11.8
367
11.6
30
8.1
Global Technology
(6)
173
5.1
162
5.1
11
7.0
Eliminations
(41)
(1.2)
(37)
(1.2)
(4)
n/a
Total
$
3,368
100.0
%
$
3,168
100.0
%
$
200
6.3
(1)
Includes infection-control products, handpieces, preventatives, impression materials, composites, anesthetics, teeth, gypsum,
acrylics, articulators, abrasives, PPE products and our own corporate brand of consumable merchandise.
(2)
Includes dental chairs, delivery units and lights, digital dental laboratories, X-ray supplies and equipment, equipment repair
services and high-tech and digital restoration equipment.
(3)
Consists of financial services on a non-recourse basis, continuing education services for practitioners, consulting and other services.
(4)
Includes branded and generic pharmaceuticals, home solutions products, vaccines, surgical products, diagnostic tests, infection-
control products, X-ray products, equipment, PPE products, and vitamins.
(5)
Includes manufacturing, marketing and sales of dental implant and biomaterial products; and endodontic, orthodontic and
orthopedic products and other health care-related products and services.
(6)
Consists of the development and distribution of practice management software, e-services and other technology-enabled products
for health care providers.
The components of our sales growth were as follows:
Constant Currency
Growth/(Decline)
Total Constant
Currency Growth
Foreign
Exchange
Impact
Total Sales
Growth
Local Internal
Growth
Acquisition
Growth/
(Decline)
Global Distribution and Value-Added Services
Global Dental Merchandise
3.0
%
1.2
%
4.2
%
4.8
%
9.0
%
Global Dental Equipment
3.5
-
3.5
5.1
8.6
Global Value-Added Services
7.8
1.2
9.0
1.6
10.6
Global Dental
3.2
1.0
4.2
4.8
9.0
Global Medical
1.3
0.1
1.4
0.3
1.7
Total Global Distribution and Value-Added Services
2.5
0.6
3.1
3.0
6.1
Global Specialty Products
1.7
1.7
3.4
4.7
8.1
Global Technology
6.9
(1.3)
5.6
1.4
7.0
Total
2.5
0.7
3.2
3.1
6.3
42
Global Sales
Global net sales for the three months ended March 28, 2026 increased 6.3%,attributable to internal growth of 2.5%,
acquisition growth of 0.7%, and an increase in foreign exchange of 3.1%.The components of our sales increase are
presented in the table above.
Global Distribution and Value-Added Services Sales
Global Distribution and Value-Added Services net sales for the three months ended March 28, 2026 increased
6.1%.The components of our sales increase are presented inthe table above.
The 3.2% increase in internally generated local currency dental sales wasprimarily due to sales growth in U.S.,
growth in traditional dental equipment in the U.S. and internationalmarkets, and value-added services sales
attributable to increased sales in our practice transitions business.
The 1.3% increase in internally generated local currency medical sales wasattributable to growth of our Home
Solutions business and dialysis products,partially offset by lower point of care diagnostic test products related to
respiratory illness.
Global Specialty Products Sales
Global Specialty Products net sales for the three months ended March28, 2026 increased 8.1%.The components
of our sales increase are presented in the table above.
The 1.7% increase in internally generated local currency sales was attributableto growth in our value implant and
biomaterial businesses.
Global Technology Sales
Global Technology net sales for the three months ended March 28, 2026 increased 7.0%.The components of sales
growth are presented in the table above.
The internally generated local currency increase of 6.9% in Global Technology sales was primarily attributable to
the adoption of our core practice management solutions, particularlyour cloud-based platforms.
Gross Profit
Gross profit and gross margin percentages by segment and in total were as follows:
March 28,
Gross
March 29,
Gross
Increase / (Decrease)
2026
Margin %
2025
Margin %
$
%
Global Distribution and Value-Added Services
$
732
25.8
%
$
681
25.4
%
$
51
7.6
%
Global Specialty Products
220
55.3
206
56.0
14
6.7
Global Technology
119
68.6
110
67.9
9
8.2
Corporate
(1)
n/a
3
n/a
(4)
n/a
Total
$
1,070
31.8
$
1,000
31.6
$
70
7.1
Gross margin may not be comparable to that of other distribution companies due todiffering industry practices in
the classification of distribution network costs.Gross margin percentages also vary across our segments, reflecting
differences in business models.The Global Specialty Products segment generateshigher gross margins, as it
primarily includes products we develop and manufacture, comparedto the Global Distribution and Value-Added
Services segment, which principally distributes third-party and corporate brandproducts.While the Global
Specialty Products segment has increasingly leveraged the GlobalDistribution and Value-Added Services segment
as a sales channel, the impact on overall margins has not been material.The Global Technology segment also
generates higher gross margins, reflecting our role as both developer and provider ofsoftware products and
services.
43
Within our Global Distribution and Value-Added Services segment, gross profit margins may fluctuate between the
periods as a result of the changes in product mix and customer mix.With respect to customer mix, sales to our
large-group customers are typically completed at lower gross margins as a result ofhigher sales volumes, while
sales to office-based practitioners generally carry higher gross margins due to lower volumes.
The increase in Global Distribution and Value-Added Services gross profit for the three months ended March 28,
2026 compared to the prior-year-period is due primarily to increased internally generated sales volumeas described
above.The increase in gross margin rates was attributable primarily to the impactof higher gross margins in the
Global Distribution and Value-added Services and Global Technologybusinesses as well as favorable business
mix.
The increase in Global Specialty Products gross profit primarily reflectsincreased internally generated sales
volume and gross profit from acquisitions.The decrease in gross margin rates was due to product mix.
The increase in Global Technology gross profit is the result primarily of higher internally generated sales.The
increase in gross margin rates was due to product mix.
Operating Expenses
Operating expenses (consisting of selling, general and administrativeexpenses; depreciation and amortization; and
restructuring and related costs) by segment were as follows:
% of
% of
March 28,
Respective
March 29,
Respective
Increase / (Decrease)
2026
Sales
2025
Sales
$
%
Global Distribution and Value-Added Services
$
549
19.4
%
$
514
19.2
%
$
35
7.0
%
Global Specialty Products
162
40.7
150
40.7
12
8.2
Global Technology
73
41.8
68
42.1
5
6.4
Corporate
33
n/a
38
n/a
(5)
n/a
817
24.3
770
24.3
47
6.1
Adjustments
(1)
71
n/a
55
n/a
16
n/a
Total operating expenses
$
888
26.4
$
825
26.0
$
63
7.8
(1)
Adjustments represent items excluded from segment operating income to enable comparison of financial results between periods.These
items may vary independently of business performance.Please see
.These adjustments (current quarter vs. prior
quarter) consist of (i) acquisition intangible amortization ($45 million vs. $43 million), (ii) restructuring and related costs ($12 million
vs. $25 million), (iii) change in contingent consideration ($1million vs. $(2) million), (iv) cyber incident-insurance proceeds, net of
third-party advisory expenses (no activity) vs. $(20) million net proceeds), (v) impairment of intangible assets (no activity) vs. $1
million),and (vi) costs associated with shareholder advisory matters and implementation related select value creation consulting costs
($13 million vs. $8 million).
The net increase in operating expenses wasattributable to the following:
Operating Costs
(excluding
acquisitions)
Acquisitions
Adjustments
Total
Global Distribution and Value-Added Services
$
30
$
5
$
-
$
35
Global Specialty Products
6
6
-
12
Global Technology
5
-
-
5
Corporate
(5)
-
-
(5)
36
11
-
47
Adjustments
-
-
16
16
Total operating expenses
$
36
$
11
$
16
$
63
The components of the net increase in total operating expenses are presentedin the table above.The increase in
operating costs (excluding acquisitions) during the three months endedMarch 28, 2026 was primarily attributable
to unfavorable impact of foreign exchange rates.During the three months ended March 28, 2026, our operating
costs were favorably impacted by the remeasurement to the fair valueof a previously held equity investment of $11
million within our Global Specialty Products segment.During the three months ended March 29, 2025, our
operating costs were favorably impacted by insurance proceeds of $20 millionrelated to the October 2023 cyber
incident included in the Adjustments category.
44
Other Expense, Net
Other expense, net was as follows:
March 28,
March 29,
Variance
2026
2025
$
%
Interest income
$
7
$
6
$
1
21.8
%
Interest expense
(39)
(35)
(4)
(12.6)
Other, net
-
(1)
1
n/a
Other expense, net
$
(32)
$
(30)
$
(2)
(8.0)
Interest income increased primarily due to increased interest rates.Interest expense increased primarily due to
increased borrowings.
Income Taxes
Our effective tax rate was 25.5% for the three months ended March 28, 2026, comparedto 24.9% for the prior year
period.The difference between our effective and federal statutory tax rates primarily relates to stateand foreign
income taxes and interest expense.
45
Liquidity and Capital Resources
Our principal capital requirements have included funding of acquisitions, purchasesof additional noncontrolling
interests, repayments of debt principal, the funding of working capital needs,purchases of fixed assets and
repurchases of common stock.Working capital requirements generally result from increased sales, special
inventory forward buy-in opportunities and payment terms for receivablesand payables.Historically, sales have
tended to be stronger during the second half of the year and special inventoryforward buy-in opportunities have
been most prevalent just before the end of the year, and have caused our working capital requirementsto be higher
from the end of the third quarter to the end of the first quarter ofthe following year.
We finance our business primarily through cash generated from our operations, revolving credit facilities and debt
placements.Please see
for further information.Our ability to generate sufficient cash flows from
operations is dependent on the continued demand of our customersfor our products and services, and access to
products and services from our suppliers.
Our business requires a substantial investment in working capital, whichis susceptible to fluctuations during the
year as a result of inventory purchase patterns and seasonal demands.Inventory purchase activity is a function of
sales activity, special inventory forward buy-in opportunities and our desired level of inventory.
We finance our business to provide adequate funding for at least 12 months.Funding requirements are based on
forecasted profitability and working capital needs, which, on occasion, maychange.Consequently, we may change
our funding structure to reflect any new requirements.
Our acquisition strategy is focused on investments in companies,including high growth high margin businesses
aligned with our BOLD+1 strategy, that add new customers and sales teams, increase our geographic footprint
(whether entering a new country, such as emerging markets, or building scale where we have already invested in
businesses), and finally, those that enable us to access new products and technologies.
We believe that our cash and cash equivalents, our ability to access private debt markets and public equity markets,
and our available funds under existing credit facilities provide us withsufficient liquidity to meet our currently
foreseeable short-term and long-term capital needs.
Net cash used in operating activities was $97 million for the three monthsended March 28, 2026, compared to net
cash provided by operating activities of $37 million for the prior year.The net change of $134 million was
primarily attributable to changes in working capital accounts (primarilyaccounts receivable, inventory, and
accounts payable and accrued expenses), partially offset by an increase in operatingincome.
Net cash used in investing activities was $63 million for the three monthsended March 28, 2026, compared to net
cash used in investing activities of $99 million for the prior year.The net change of $36 million was primarily
attributable to lower acquisition activity.
Net cash provided by financing activities was $120 million for thethree months ended March 28, 2026, compared
to net cash provided by financing activities of $89 million for the prioryear.The net change of $31 million was
primarily due to a reduction in acquisitions of noncontrolling interestsin subsidiaries, and decreased repurchases of
common stock, partially offset by decreased net borrowings.
46
The following table summarizes selected measures of liquidity and capitalresources:
March 28,
December 27,
2026
2025
Cash and cash equivalents
$
138
$
156
Workingcapital
(1)
1,199
1,236
Debt:
Bank credit lines
$
1,046
$
764
Current maturities of long-term debt
35
33
Long-term debt
2,327
2,310
Total debt
$
3,408
$
3,107
Leases:
Current operating lease liabilities
$
78
$
78
Non-current operating lease liabilities
263
251
(1)
Includes $442 million and $491 million of certain accounts receivable which serve as security for U.S. trade accounts receivable
securitization at March 28, 2026 and December 27, 2025, respectively.
Our cash and cash equivalents consist of bank balances and investmentsin money market funds representing
overnight investments with a high degree of liquidity.
Accounts receivable days sales outstanding and inventory turns
Our accounts receivable days sales outstanding from operationsincreased to 45.7 days as of March 28, 2026 from
44.1 days as of March 29, 2025.During the three months ended March 28, 2026, we wroteoff approximately $5
million of fully reserved accounts receivable against our trade receivablereserve.Our inventory turns from
operations decreased to 4.6 as of March 28, 2026 from 4.8 as of March 29, 2025.Our working capital accounts
may be impacted by current and future economic conditions.
Leases
We
have operating and finance leases for corporate offices, office space, distribution and otherfacilities, vehicles
and certain equipment.Our leases have remaining terms of less than one year to approximately22 years, some of
which may include options to extend the leases for up to 10 years.As of March 28, 2026, our right-of-use assets
related to operating leases were $312 million and our current and non-currentoperating lease liabilities were $78
million and $263 million, respectively.
Stock Repurchases
On January 27, 2025, our Board of Directors authorized the repurchaseof up to an additional $500 million in shares
of our common stock.
On May 19, 2025, we executed an accelerated share repurchase programto repurchase a total of $250 million of
our outstanding common stock based on volume-weighted averageprices.In May 2025, we received 3,122,832
shares at an estimated fair value of $224million.In July 2025, we received an additional 368,651 shares at an
estimated fair value of $26 million, representing the final amount of sharesto be received under this accelerated
share repurchase program.
On September 8, 2025, our Board of Directors authorized the repurchase ofup to an additional $750 million in
shares of our common stock.
From March 3, 2003 through March 28, 2026, we repurchased $6.1 billion, or109,486,614 shares,under our
common stock repurchase programs, with $655 million availableas of March 28, 2026 for future share repurchases.
47
Redeemable Noncontrolling Interests
Some minority stockholders in certain of our subsidiaries have the right,at certain times, to require us to acquire
their ownership interest in those entities at fair value.Accounting Standards Codification Topic 480-10 is
applicable for noncontrolling interests where we are or may be requiredto purchase all or a portion of the
outstanding interest in a consolidated subsidiary from the noncontrollinginterest holder under the terms of a put
option contained in contractual agreements.As of March 28, 2026 and December 27, 2025, our balancefor
redeemable noncontrolling interests was $903 million and $895 million,respectively.Please see
for further information.
Critical Accounting Estimates
There have been no material changes in our critical accounting estimatesfrom those disclosed in Item 7 of our
Annual Report on Form 10-K for the year ended December 27, 2025.
Accounting Standards Update
For a discussion of accounting standards updates that have been adoptedor will be adopted, see
of the Notes to the Condensed Consolidated Financial Statementsincluded under Item 1.
ITEM 3.QUANTITATIVEAND QUALITATIVEDISCLOSURES ABOUT MARKET RISK
There have been no material changes in our exposure to market riskfrom that disclosed in Item 7A of our Annual
Report on Form 10-K for the year ended December 27, 2025.
48
ITEM 4.CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of management, includingour principal executive officer and
principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this quarterly reportas such term is defined in Rules 13a-15(e)
and 15d-15(e) promulgated under the Securities Exchange Act of 1934, asamended (the “Exchange Act”).Based
on this evaluation, our management, including our principal executiveofficer and principal financial officer,
concluded that our disclosure controls and procedures were effective as of March28, 2026, to ensure that all
material information required to be disclosed by us in reports that we fileor submit under the Exchange Act is
accumulated and communicated to them as appropriate to allow timelydecisions regarding required disclosure and
that all such information is recorded, processed, summarized and reportedwithin the time periods specified in the
SEC’s rules and forms, and the rules of the Nasdaq stock exchange.
Changes in Internal Control over Financial Reporting
The combination of acquisitions, continued acquisition integrations and systemimplementation activity undertaken
during the quarter ended March 28, 2026, and carried over from prior quarters,when considered in the aggregate,
represents a material change in our internal control over financial reporting.
During the quarter ended March 28, 2026, we completed the acquisitionof a controlling interest of a Global
Specialty Products segment affiliate and a Global Distribution and Value-Added Services segment business in the
U.S.Also, post-acquisition integration related activities continued for businessesacquired during prior quarters
within our Global Specialty Products segment.These acquisitions, the majority of which utilize separate
information and financial accounting systems, have been includedin our condensed consolidated financial
statements since their respective dates of acquisition.
Additionally, during the quarter ended March 28, 2026, we continued systems implementation activities for the
phased roll-out of a new e-commerce system for our Global Distributionand Value-Added Services segment in the
U.S. and Canada.
All acquisitions, continued acquisition integrations, and system implementationactivities involve necessary and
appropriate change-management controls that are considered in our quarterlyassessment of the design and
operating effectiveness of our internal control over financial reporting.
Limitations of the Effectiveness of Internal Control
A control system, no matter how well conceived and operated, can provideonly reasonable, not absolute, assurance
that the objectives of the internal control system are met.Because of the inherent limitations of any internal control
system, no evaluation of controls can provide absolute assurance thatall control issues, if any, within a company
have been detected.
49
PARTII.OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
For a discussion of Legal Proceedings, see
of the Notes to the Condensed
Consolidated Financial Statements included under Item 1.
ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors disclosed inPart I, Item 1A, of our Annual Report on
Form 10-K for the year ended December 27, 2025.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIESAND USE OF PROCEEDS
Purchases of Equity Securities by the Issuer
Our share repurchase program, announced on March 3, 2003, originallyallowed us to repurchase up to two million
shares pre-stock splits (eight million shares post-stock splits) of our commonstock, which represented
approximately 2.3% of the shares outstanding at the commencementof the program.Subsequent additional
increases since 2003 that have aggregated to an additional $6.7 billion,authorized by our Board, to the repurchase
program provide for a total of $6.8 billion (including $500 million authorized onJanuary 27, 2025 and an
additional $750 million authorized on September 8, 2025) of shares of our commonstock to be repurchased under
this program,with $655 million currently available for future share repurchases.
On May 19, 2025, we executed an accelerated share repurchase program torepurchase a total of $250 million of
our outstanding common stock based on volume-weighted average prices.In May 2025 we received 3,122,832
shares at an estimated fair value of $224 million.In July 2025, we received an additional 368,651 shares at an
estimated fair value of $26 million, representing the final amount of sharesto be received under this accelerated
share repurchase program.
As of March 28, 2026, we had repurchased approximately $6.1 billion ofcommon stock (109,486,614)shares
under these initiatives,with $655 million available for future share repurchases.
The following table summarizes repurchases of our common stockunder our stock repurchase program during the
fiscal quarter ended March 28, 2026:
Total Number
Maximum Number
Total
of Shares
of Shares
Number
Average
Purchased as Part
that May Yet
of Shares
Price Paid
of Our Publicly
Be Purchased Under
Fiscal Month
Purchased (1)
Per Share
Announced Program
Our Program (2)
12/28/2025 through 1/31/2026
720,444
$
77.25
720,444
9,595,535
2/1/2026 through 2/28/2026
565,846
78.37
565,846
8,252,525
3/1/2026 through 3/28/2026
323,696
77.23
323,696
9,083,576
1,609,986
1,609,986
(1)
All repurchases were executed in the open market under our existing publicly announced authorized program.
(2)
The maximum number of shares that may yet be purchased under this program is determined at the end of each month based on the
closing price of our common stock at that time.This table excludes shares withheld from employees to satisfy minimum tax withholding
requirements for equity-based transactions.
50
ITEM 6.EXHIBITS
101.INS
Inline XBRL Instance Document - the instance document does not appearin the
Interactive Data File because its XBRL tags are embedded within the Inline
XBRL document+
101.SCH
Inline XBRL Taxonomy Extension Schema Document+
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document+
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document+
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document+
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document+
104
The cover page of Henry Schein, Inc.’s Quarterly Report on Form 10-Q for the
quarter ended March 28, 2026, formatted in Inline XBRL (included within
Exhibit 101 attachments).+
_________
+ Filed or furnished herewith.
** Indicates management contract or compensatory plan or agreement.
51
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, theRegistrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
Henry Schein, Inc.
(Registrant)
By: /s/ RONALD N. SOUTH
Ronald N. South
Senior Vice President and
Chief Financial Officer
(Authorized Signatory and Principal Financial
and Accounting Officer)
Dated: May 5, 2026