Henry Schein quarterly profit rises to $119M
Nine-month operating cash flow was $306 million, compared with $331 million in the prior-year period.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Henry Schein (HSIC) reported net sales of $3.471 billion for the three months ended September 26, 2026, compared with $3.339 billion in the prior-year quarter. Net income attributable to Henry Schein was $119 million, versus $101 million, and diluted earnings per share were $1.06, compared with $0.84. For the nine months ended September 26, 2026, net sales were $10.297 billion versus $9.747 billion, and attributable net income was $320 million versus $297 million.
Net cash provided by operating activities was $306 million for the nine months, compared with $331 million. At September 26, 2026, cash and cash equivalents were $184 million, bank credit lines outstanding were $1.0 billion, and long-term debt was $2.382 billion. Henry Schein amended its revolving credit agreement to increase commitments to $1.25 billion and extend maturity to September 19, 2031. It also amended its receivables securitization facility, increasing the purchase limit to $525 million and extending its expiration date to September 24, 2029. Ronald N. South will transition from Senior Vice President and Chief Financial Officer to Senior Advisor effective November 4, 2026; Emmanuel Caprais will succeed him as Chief Financial Officer on that date.
2 points · 0 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month net sales: $10.297 billion, compared with $9.747 billion.
- Moderate pointNine-month attributable net income: $320 million, compared with $297 million.
Negative
- Moderate pointNine-month operating cash flow: $306 million, compared with $331 million.
Filing Explained
At September 26, 2026, the receivables facility’s full $525 million limit was outstanding; nine-month repurchases also reduced shares outstanding.
During the nine months ended
At
Key Figures
Net sales: $3.471 billion
Net income attributable to Henry Schein: $119 million
Diluted earnings per share: $1.06
+3 more
6 metrics
Net sales
$3.471 billion
Three months ended September 26, 2026; $3.339 billion in the prior-year quarter.
Net income attributable to Henry Schein
$119 million
Three months ended September 26, 2026; $101 million in the prior-year quarter.
Diluted earnings per share
$1.06
Three months ended September 26, 2026; $0.84 in the prior-year quarter.
Net sales
$10.297 billion
Nine months ended September 26, 2026; $9.747 billion in the prior-year period.
Net income attributable to Henry Schein
$320 million
Nine months ended September 26, 2026; $297 million in the prior-year period.
Net cash provided by operating activities
$306 million
Nine months ended September 26, 2026; $331 million in the prior-year period.
Key Terms
asset-backed securitization program, Term SOFR, redeemable noncontrolling interests, accelerated share repurchase program
4 terms
asset-backed securitization program financial
"structured as an asset-backed securitization program"
Term SOFR financial
"interest rate ... is based on Term SOFR plus a spread"
Term SOFR is a benchmark interest rate that reflects the cost of borrowing money over a specific period, based on actual transactions in the financial markets. It is used by lenders and borrowers to set the interest rates on loans and financial contracts, helping to ensure rates are fair and transparent. For investors, understanding term SOFR helps gauge borrowing costs and the overall direction of interest rates in the economy.
redeemable noncontrolling interests financial
"Some minority stockholders ... have the right ... to require us to acquire their ownership interest"
A redeemable noncontrolling interest is a minority ownership stake in a company that the holder can force the company to buy back at a set price or under certain conditions. For investors this matters because it creates a future cash obligation and can be treated more like a liability than permanent equity, affecting a company’s reported debt, net income and valuation — think of it as a part-owner who can cash out, forcing the business to pay them.
accelerated share repurchase program financial
"we executed an accelerated share repurchase program"
An accelerated share repurchase program is a way for a company to buy back its own shares quickly, often in a matter of days or weeks. It typically involves the company paying a financial firm to buy shares on its behalf, which can help boost the company's stock price and reduce the number of shares available to investors. This process is important because it can influence share value and signal confidence in the company's future.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were HSIC's sales?
For the nine months ended September 26, 2026, HSIC reported net sales of $10.297 billion, compared with $9.747 billion for the nine months ended September 27, 2025. For the three months ended September 26, 2026, net sales were $3.471 billion, compared with $3.339 billion in the prior-year quarter.
How much net income did HSIC report?
Net income attributable to Henry Schein was $320 million for the nine months ended September 26, 2026, compared with $297 million for the prior-year period. For the three months ended September 26, 2026, attributable net income was $119 million, compared with $101 million.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the
quarterly
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ____________ to ____________
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
incorporation or organization)
,
(Address of principal executive offices)
(Zip Code)
(
)
(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
The
Nasdaq
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit such files).
☒
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.
☒
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 period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
☐
☒
As of October 26, 2026,
there were
HENRY SCHEIN, INC.
INDEX
PART I. FINANCIAL INFORMATION
Page
ITEM 1.
Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets
as of September 26, 2026 and December 27, 2025
3
Condensed Consolidated Statements of Income
for the three and nine months ended
September 26, 2026 and September 27, 2025
4
Condensed Consolidated Statements of Comprehensive Income
for the
three and nine months ended September 26, 2026 and September 27, 2025
5
Condensed Consolidated Statement of Changes in Stockholders' Equity
for the three months ended September 26, 2026 and September 27, 2025
6
Condensed Consolidated Statement of Changes in Stockholders' Equity
for the nine months ended
September 26, 2026 and September 27, 2025
7
Condensed Consolidated Statements of Cash Flows
for the nine months ended
September 26, 2026 and September 27, 2025
8
Notes to Condensed Consolidated Financial Statements
9
Note 1 – Basis of Presentation
9
Note 2 – Significant Accounting Policies, Accounting Pronouncements Recently Adopted
and Recently Issued Accounting Pronouncements
10
Note 3 – Net Sales from Contracts with Customers
11
Note 4 – Segment Data
12
Note 5 – Business Acquisitions
15
Note 6 – Fair Value Measurements
18
Note 7 – Debt
21
Note 8 – Income Taxes
24
Note 9 – Plan of Restructuring and Related Costs
25
Note 10 – Legal Proceedings
26
Note 11 – Stock-Based Compensation
27
Note 12 – Redeemable Noncontrolling Interests
30
Note 13 – Comprehensive Income
31
Note 14 – Earnings Per Share
32
Note 15 – Supplemental Cash Flow Information
32
Note 16 – Related Party Transactions
33
Note 17 – KKR Investment and Accelerated Share Repurchase Program
34
ITEM 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
35
ITEM 3.
Quantitative and Qualitative Disclosures About Market Risk
52
ITEM 4.
Controls and Procedures
53
PART II. OTHER INFORMATION
ITEM 1.
Legal Proceedings
54
ITEM 1A.
Risk Factors
54
ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
54
ITEM 5.
Other Information
55
ITEM 6.
Exhibits
55
Signature
56
Table of Contents
See accompanying notes.
3
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
September 26,
December 27,
2026
2025
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
$
Accounts receivable, net of allowance for credit losses of $
Inventories, net
Prepaid expenses and other
Total current assets
Property and equipment, net
Operating lease right-of-use assets
Goodwill
Other intangibles, net
Investments and other
Total assets
$
$
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
$
Bank credit lines
Current maturities of long-term debt
Operating lease liabilities
Accrued expenses:
Payroll and related
Taxes
Other
Total current liabilities
Long-term debt (1)
Deferred income taxes
Operating lease liabilities
Other liabilities
Total liabilities
Redeemable noncontrolling interests
Commitments and contingencies
(nil)
(nil)
Stockholders' equity:
Preferred stock, $
Common stock, $
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
(187 )
(226 )
Total Henry Schein, Inc. stockholders' equity
Noncontrolling interests
Total stockholders' equity
Total liabilities, redeemable noncontrolling interests and stockholders' equity
$
$
(1)
Amounts presented include balances held by our consolidated variable interest entity (“VIE”). At September 26, 2026 and
December 27, 2025, amounts include trade accounts receivable of $
of $
Note 1 – Basis of Presentation
Table of Contents
See accompanying notes.
4
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except share and per share data)
(unaudited)
Three Months Ended
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Net sales
$
$
$
$
Cost of sales
Gross profit
Operating expenses:
Selling, general and administrative
Depreciation and amortization
Restructuring and related costs
Operating income
Other income (expense):
Interest income
Interest expense
(42 )
(38 )
(124 )
(111 )
Other, net
(1 )
(3 )
Income before taxes, equity in earnings of affiliates and
noncontrolling interests
Income taxes
(37 )
(28 )
(109 )
(94 )
Equity in earnings of affiliates, net of tax
Net income
Less: Net income attributable to noncontrolling interests
(7 )
(8 )
(20 )
(19 )
Net income attributable to Henry Schein, Inc.
$
$
$
$
Earnings per share attributable to Henry Schein, Inc.:
Basic
$
$
$
$
Diluted
$
$
$
$
Weighted-average common shares outstanding:
Basic
Diluted
Table of Contents
See accompanying notes.
5
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)
Three Months Ended
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Net income
$
$
$
$
Other comprehensive income, net of tax:
Foreign currency translation gain (loss)
(3 )
(1 )
Unrealized gain (loss) from hedging activities
(22 )
Other comprehensive income (loss), net of tax
(3 )
Comprehensive income
Comprehensive income attributable to noncontrolling interests:
Net income
(7 )
(8 )
(20 )
(19 )
Foreign currency translation loss (gain)
(4 )
(29 )
Comprehensive income attributable to noncontrolling
interests
(7 )
(6 )
(24 )
(48 )
Comprehensive income attributable to Henry Schein, Inc.
$
$
$
$
Table of Contents
See accompanying notes.
6
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF 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)
Equity
Balance, June 27, 2026
$
$
$
$
(184 )
$
$
Net income (excluding loss of $
noncontrolling interests)
-
-
-
-
Foreign currency translation gain (excluding $
attributable to Redeemable noncontrolling interests)
-
-
-
-
(3 )
-
(3 )
Unrealized gain from hedging activities,
net of tax of $
-
-
-
-
-
-
Distributions from noncontrolling shareholders
-
-
-
-
-
(11 )
(11 )
Change in fair value of redeemable securities
-
-
(21 )
-
-
-
(21 )
Noncontrolling interests and adjustments related to
business acquisitions and contingent consideration
-
-
-
-
-
Repurchase and retirement of common stock
(1,442,218 )
-
(12 )
(114 )
-
-
(126 )
Stock issued upon exercise of stock options
-
-
-
-
Stock-based compensation expense
-
-
-
-
Shares withheld for payroll taxes
(35,597 )
-
(2 )
-
-
-
(2 )
Settlement of stock-based compensation awards
-
-
-
-
-
Balance, September 26, 2026
$
$
$
$
(187 )
$
$
Accumulated
Common Stock
Additional
Other
Total
$0.01 Par Value
Paid-in
Retained
Comprehensive
Noncontrolling
Stockholders’
Shares
Amount
Capital
Earnings
Income (Loss)
Equity
Balance, June 28, 2025
$
$
$
$
(227 )
$
$
Net income (excluding loss of $
noncontrolling interests)
-
-
-
-
Foreign currency translation gain (loss) (excluding loss of $
attributable to Redeemable noncontrolling interests)
-
-
-
-
(1 )
Unrealized gain from hedging activities,
net of tax of $
-
-
-
-
-
Contributions from noncontrolling shareholders
-
-
-
-
-
Change in fair value of redeemable securities
-
-
(12 )
-
-
-
(12 )
Noncontrolling interests and adjustments related to
business acquisitions and contingent consideration
-
-
-
-
-
Repurchase and retirement of common stock
(3,335,985 )
-
(211 )
-
-
(204 )
Stock issued upon exercise of stock options
-
-
-
-
-
Stock-based compensation expense
-
-
-
Shares withheld for payroll taxes
(3,442 )
-
-
-
-
-
Settlement of stock-based compensation awards
-
-
-
-
-
Balance, September 27, 2025
$
$
$
$
(222 )
$
$
Table of Contents
See accompanying notes.
7
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF 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)
Equity
Balance, December 27, 2025
$
$
$
$
(226 )
$
$
Net income (excluding loss of $
noncontrolling interests)
-
-
-
-
Foreign currency translation gain (excluding gain of $
attributable to Redeemable noncontrolling interests)
-
-
-
-
-
Unrealized gain from hedging activities,
-
-
-
-
-
-
-
net of tax of $
-
-
-
-
-
Net distributions to noncontrolling shareholders
-
-
-
-
-
(18 )
(18 )
Change in fair value of redeemable securities
-
-
(55 )
-
-
-
(55 )
Noncontrolling interests and adjustments related to
business acquisitions and contingent consideration
-
-
-
-
-
Repurchase and retirement of common stock
(5,660,464 )
-
(46 )
(408 )
-
-
(454 )
Stock issued upon exercise of stock options
-
-
-
-
Stock-based compensation expense
-
-
-
-
Shares withheld for payroll taxes
(190,274 )
-
(15 )
-
-
-
(15 )
Settlement of stock-based compensation awards
(2,967 )
-
-
-
-
-
Balance, September 26, 2026
$
$
$
$
(187 )
$
$
Accumulated
Common Stock
Additional
Other
Total
$0.01 Par Value
Paid-in
Retained
Comprehensive
Noncontrolling
Stockholders’
Shares
Amount
Capital
Earnings
Income (Loss)
Equity
Balance, December 28, 2024
$
$
$
$
(379 )
$
$
Net income (excluding $
noncontrolling interests)
-
-
-
-
Foreign currency translation gain (excluding gain of $
attributable to Redeemable noncontrolling interests)
-
-
-
-
Unrealized loss from hedging activities,
net of tax benefit of $
-
-
-
-
(22 )
-
(22 )
Pension adjustment gain, net of tax of $
-
-
-
-
-
-
Net contributions from noncontrolling shareholders
-
-
-
-
-
Purchase of noncontrolling interests
-
-
(1 )
-
-
(1 )
(2 )
Change in fair value of redeemable securities
-
-
(50 )
-
-
-
(50 )
Noncontrolling interests and adjustments related to
business acquisitions and contingent consideration
-
-
(46 )
-
-
(1 )
(47 )
Issuance of common stock
-
-
-
-
Repurchase and retirement of common stock
(9,249,302 )
-
(75 )
(579 )
-
-
(654 )
Stock issued upon exercise of stock options
-
-
-
-
Stock-based compensation expense
-
-
-
Shares withheld for payroll taxes
(196,742 )
-
(14 )
-
-
-
(14 )
Settlement of stock-based compensation awards
-
-
-
-
-
Transfer of charges in excess of capital
-
-
-
(114 )
-
-
Balance, September 27, 2025
$
$
$
$
(222 )
$
$
Table of Contents
See accompanying notes.
8
HENRY SCHEIN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
Nine Months Ended
September 26,
September 27,
2026
2025
Cash flows from operating activities:
Net income
$
$
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Impairment charge on intangible assets
Non-cash restructuring and related charges
Stock-based compensation expense
Provision for losses on trade and other accounts receivable
Benefit from deferred income taxes
(2 )
Equity in earnings of affiliates
(2 )
(10 )
Distributions from equity affiliates
Changes in unrecognized tax benefits
(17 )
Other
(26 )
(44 )
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable
(238 )
(198 )
Inventories
(41 )
(25 )
Other current assets
(21 )
(3 )
Accounts payable and accrued expenses
Net cash provided by operating activities
Cash flows from investing activities:
Purchases of property and equipment
(85 )
(96 )
Payments related to equity investments and business acquisitions,
net of cash acquired
(30 )
(112 )
Proceeds from loan to affiliate
Capitalized software costs
(45 )
(38 )
Other
(16 )
(9 )
Net cash used in investing activities
(173 )
(253 )
Cash flows from financing activities:
Net change in bank credit lines
Proceeds from issuance of long-term debt
Principal payments for long-term debt
(60 )
(28 )
Debt issuance costs
(3 )
(2 )
Proceeds from issuance of stock upon exercise of stock options
Payments for repurchases and retirement of common stock
(450 )
(650 )
Issuance of common stock
Payments for taxes related to shares withheld for employee taxes
(15 )
(14 )
Distributions to noncontrolling shareholders
(44 )
(12 )
Payments for contingent consideration
(4 )
(19 )
Acquisitions of noncontrolling interests in subsidiaries
(42 )
(79 )
Net cash provided by (used in) financing activities
(138 )
Effect of exchange rate changes on cash and cash equivalents
(82 )
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
$
$
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
9
Note 1 – Basis of Presentation
Our condensed consolidated financial statements include the accounts of Henry Schein, 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 influence the operating
or financial decisions are accounted for under the equity method.
Our accompanying unaudited condensed consolidated financial statements have 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 complete financial statements.
The unaudited condensed consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and notes to the consolidated financial statements contained in our Annual Report
on Form 10-K for the year ended December 27, 2025 and with the information contained 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 of the 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 with accounting principles generally accepted in
the United States requires us to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the 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 and nine months ended September 26, 2026 are not 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 and assumptions made by us that affect, among
other things, our goodwill, long-lived asset and definite-lived intangible asset valuation; inventory valuation; equity
investment valuation; assessment of the annual effective tax rate; valuation of deferred income taxes and income
tax contingencies; the allowance for credit losses; fair value of contingent consideration; hedging activity; supplier
rebates; measurement of compensation cost for certain share-based performance awards and cash bonus plans; and
pension plan assumptions.
The primary beneficiary of a VIE is required to consolidate the assets and liabilities of the VIE. We are deemed to
be the primary beneficiary of the VIE when we have the power to direct activities that most significantly affect its
economic performance and have the obligation to absorb the majority of its 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, management representation, 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
Note 7 – Debt
,
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 September 26, 2026 and December 27, 2025, certain trade accounts receivable that can
only be used to settle obligations of this VIE were $
this VIE where the creditors have recourse to us were $
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
10
Note 2 – Significant Accounting Policies, Accounting Pronouncements Recently Adopted and Recently Issued
Accounting Pronouncements
Significant Accounting Policies
There have been no material changes in our significant accounting policies during the three and nine months ended
September 26, 2026, as compared to the significant accounting policies described in Item 8 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 entity to assume that
conditions at the balance sheet date remain unchanged throughout the remaining life of the asset when estimating
expected credit losses on current accounts receivable and current contract assets 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 financial statements.
Recently Issued Accounting Pronouncements
In May 2026, the FASB issued ASU 2026-02, “
Environmental Credits and Environmental Credit Obligations
(Topic 818)
,” which establishes recognition, measurement, presentation, and disclosure requirements for
environmental credits and related environmental credit obligations. This ASU is effective for annual reporting
periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods,
with early adoption permitted. Upon adoption, the guidance will be applied retrospectively. We do not expect the
adoption of this ASU to have a material impact on our consolidated financial statements.
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 financial statements and interim
disclosure requirements, and establishes a principle under which an entity must disclose events since the end of the
last annual reporting period that have a material impact on the entity. This ASU is effective for interim reporting
periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted, and
may be applied prospectively or retrospectively. 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 within those annual reporting periods, with early
adoption permitted. We do not expect the adoption of this ASU to have a material impact on our consolidated
financial statements.
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 with the economics of entities’ risk
management activities, including expanded eligibility of forecasted transactions, 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 reporting periods 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 statements and related disclosures.
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
11
In September 2025, the FASB issued ASU 2025-06, “
Intangibles - Goodwill and Other - Internal-Use Software
(Subtopic 350-40): Targeted Improvements to 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 periods within those annual reporting periods,
with early adoption permitted. Upon adoption, the guidance can be applied prospectively, retrospectively, or with a
modified transition approach. We are currently evaluating the impact that ASU 2025-06 will have on our
consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “
Income Statement - Reporting Comprehensive Income -
Expense Disaggregation Disclosure (Subtopic 220-40)
:
Disaggregation of Income Statement Expenses
,” which
requires additional disclosure about the specific expense categories in the notes to financial statements at interim
and annual reporting periods. The amendments in this ASU do not change or remove current expense disclosure
requirements, but affect where this information appears in the notes to financial statements. This ASU is effective
for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after
December 15, 2027, with early adoption permitted. Upon adoption, the guidance can be applied prospectively or
retrospectively. We are currently evaluating the impact that ASU 2024-03 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 Item 8 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
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Net Sales:
Global Distribution and Value -Added Services
Global Dental merchandise
$
$
$
$
Global Dental equipment
Global Value -added services
Global Dental
Global Medical
Total Global Distribution and Value -Added Services
Global Specialty Products
Global Technology
Eliminations
(45 )
(43 )
(139 )
(124 )
Total
$
$
$
$
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
12
Contract Liabilities
The following table presents our contract liabilities:
As of
September 26,
December 27,
September 27,
December 28,
Description
2026
2025
2025
2024
Current contract liabilities
$
$
$
$
Non-current contract liabilities
Total contract liabilities
$
$
$
$
During the nine months ended September 26, 2026, we recognized $
deferred at December 27, 2025. During the nine months ended September 27, 2025, we recognized $
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 other liabilities within our condensed
consolidated balance sheets.
Note 4
Segment Data
We conduct our business through
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 related technical services. This segment
also includes value-added services such as financial services, continuing education services, 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, marketing and sales of dental
implant and biomaterial products; and endodontic, orthodontic and orthopedic products 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 health care providers.
Our organizational structure also includes Corporate, which consists primarily of income and expenses associated
with support functions and projects.
Our chief operating decision maker (“CODM”) is our Chief Executive Officer (“CEO”). Our CODM uses adjusted
operating income as the profitability metric for purposes of making decisions about 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 performance management. 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 of contingent consideration, (f) litigation
settlements, and (g) costs associated with shareholder advisory matters and select implementation related value
creation consulting costs. These adjustments are: (i) non-cash or non-recurring in nature; (ii) not allocable or
controlled by the segment; or (iii) not tied to the operational performance of the segment. Assets by segment are
not a measure used to assess the performance of the Company by CODM and thus are not reported in our
disclosures.
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
13
Segment adjusted operating income is presented in the following table to reconcile to operating income as
presented on the condensed consolidated statement of income. The reconciliation from operating income to income
before taxes and equity in earnings of affiliates is presented on our condensed consolidated statements of income.
Three Months Ended
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Gross Sales:
Global Distribution and Value -Added Services
(1)
$
$
$
$
Global Specialty Products
(2)
Global Technology
(3)
Total Gross Sales
Less: Eliminations:
Global Distribution and Value -Added Services
(4 )
(5 )
(13 )
(13 )
Global Specialty Products
(41 )
(38 )
(126 )
(111 )
Global Technology
Total Eliminations
(45 )
(43 )
(139 )
(124 )
Net Sales:
Global Distribution and Value -Added Services
Global Specialty Products
Global Technology
Total Net Sales
Segment Cost of Sales:
(4)
Global Distribution and Value -Added Services
Global Specialty Products
Global Technology
Segment Operating Expenses:
(5)
Global Distribution and Value -Added Services
Global Specialty Products
Global Technology
Operating Income:
Global Distribution and Value -Added Services
Global Specialty Products
Global Technology
Total Segment Operating Income
Corporate, net
(51 )
(33 )
(127 )
(99 )
Adjustments
(6)
(86 )
(98 )
(236 )
(227 )
Total Operating Income
$
$
$
$
Three Months Ended
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Depreciation and Amortization:
Global Distribution and Value -Added Services
$
$
$
$
Global Specialty Products
Global Technology
Total Segment Depreciation and Amortization
Corporate
Acquisition intangible amortization within
adjustments
(6)
Total Depreciation and Amortization
$
$
$
$
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
14
(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
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Adjustments:
Restructuring and related costs
$
(22 )
$
(34 )
$
(63 )
$
(82 )
Acquisition intangible amortization
(44 )
(46 )
(135 )
(133 )
Cyber incident-insurance proceeds, net of third-party advisory
expenses
Change in contingent consideration
(1 )
(6 )
(4 )
Litigation settlements
(1 )
(2 )
(1 )
(3 )
Impairment of intangible assets
(1 )
Costs associated with shareholder advisory matters and select
implementation related value creation consulting costs
(18 )
(10 )
(37 )
(24 )
Total adjustments
$
(86 )
$
(98 )
$
(236 )
$
(227 )
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
15
Note 5
Business Acquisitions
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.
2026 Acquisitions
During the nine months ended September 26, 2026, we acquired companies within the Global Distribution and
Value -Added Services and Global Specialty Products segments. Our acquired ownership interest in these
companies ranged from
% to
%.
The following table aggregates the preliminary estimated fair value, as of the date of the acquisition, of
consideration paid and net assets acquired for acquisitions during the nine months ended September 26, 2026:
Preliminary
Allocation as of
September 26, 2026
Acquisition consideration:
Cash
$
Deferred consideration
Subsidiary common equity issued to sellers
Fair value of previously held equity method investments
Redeemable noncontrolling interests
Total consideration
$
Identifiable assets acquired and liabilities assumed:
Current assets
$
Intangible assets
Other noncurrent assets
Current liabilities
(10 )
Deferred income taxes
(6 )
Other noncurrent liabilities
(1 )
Total identifiable net assets
Goodwill
Total net assets acquired
$
The accounting for acquisitions in the nine months ended September 26, 2026 has not been completed in several
areas, including, but not limited to, pending assessment of certain assets and certain liabilities.
Goodwill is a result of the synergies and cross-selling opportunities that these acquisitions are expected to provide
for us, as well as the expected growth potential. The majority of the acquired goodwill is not deductible for tax
purposes.
The following table summarizes the intangible assets acquired during the nine months ended September 26, 2026:
Weighted Average
2026
Customer relationships and lists
$
Trademarks / Tradenames
Total
$
During the nine months ended September 26, 2026, in connection with acquisitions of controlling interests of
affiliates, we recognized a gain of approximately $
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
16
previously held equity investment, recognized during the first quarter. Such gain was calculated using a discounted
cash flow model based on Level 3 inputs, as defined in
Note 6 – Fair Value Measurements
,
which was recorded in
selling, general and administrative
The impact of these acquisitions, individually and in the aggregate, was not considered material to our condensed
consolidated financial statements.
Pro forma financial information since the acquisition date has not been presented because the impact of these
acquisitions, individually and in the aggregate, was immaterial to our condensed consolidated financial statements.
2025 Acquisitions
During the year ended December 27, 2025, we acquired companies within the Global Distribution and Value-
Added Services, Global Specialty Products and Global Technology segments. Our acquired ownership interest in
these companies range from
% to
%.
The following table aggregates the final fair value, as of the date of the acquisition, of consideration paid and net
assets acquired for acquisitions during the year ended December 27, 2025:
Final
Allocation
Acquisition consideration:
Cash
$
Deferred consideration
Estimated fair value of contingent consideration payable
Fair value of previously held equity method investments
Redeemable noncontrolling interest
Total consideration
$
Identifiable assets acquired and liabilities assumed:
Current assets
$
Intangible assets
Other noncurrent assets
Current liabilities
(25 )
Long-term debt
(2 )
Deferred income taxes
(21 )
Other noncurrent liabilities
(6 )
Total identifiable net assets
Goodwill
Total net assets acquired
$
During the nine months ended September 26, 2026, we completed the accounting for all acquisitions that occurred
in the year ended December 27, 2025. Measurement period adjustments recorded through September 26, 2026
were immaterial and primarily related to certain intangible assets.
Goodwill is a result of the synergies and cross-selling opportunities that these acquisitions are expected to provide
for us, as well as the expected growth potential. The majority of the acquired goodwill is not deductible for tax
purposes.
During the three and nine months ended September 27, 2025, in connection with acquisitions of controlling
interests of affiliates, we recognized gains of approximately $
remeasurement to fair value of our previously held equity investments. Such gains were calculated using a
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
17
discounted cash flow model based on Level 3 inputs,
Note 6 – Fair Value Measurements
,
which was
recorded in selling, general and administrative in the condensed consolidated statements of income.
The following table summarizes the intangible assets acquired during the year ended December 27, 2025:
Weighted Average
2025
Customer relationships and lists
$
Trademarks / Tradenames
Product development
Non-compete agreements
Total
$
Pro forma financial information for our 2025 acquisitions has not been presented because the impact of these
acquisitions, individually and in the aggregate, was immaterial to our condensed consolidated financial statements.
Acquisition Costs
During the three and nine months ended September 26, 2026, we incurred $
costs, respectively. During the three and nine months ended September 27, 2025, we incurred $
million in acquisition costs, respectively. These costs are included in selling, general and administrative in our
condensed consolidated statements of income.
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
18
Note 6 – Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid 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 obtained from 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 the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (Level 1) and the lowest priority to 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 assets or liabilities that are accessible at the
measurement date.
• Level 2— Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly. Level 2 inputs include: quoted prices for similar assets or liabilities in active markets;
quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted
prices that are observable for the asset or liability; and inputs that are derived 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 instruments and the methodologies that we used to
measure their fair values.
Investments and notes receivable
There are no quoted market prices available for investments in unconsolidated affiliates 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 rates in the applicable markets. Our notes
receivable fair value is based on Level 3 inputs within the fair value hierarchy.
Debt
The fair value of our debt (including bank credit lines, current maturities of long-term debt and long-term debt) is
based on Level 3 inputs within the fair value hierarchy, and as of September 26, 2026 and December 27, 2025 was
estimated at $
value of our debt include market conditions, such as interest rates and credit spreads.
Derivative contracts
Derivative contracts are valued using quoted market prices and significant other observable inputs. Our derivative
instruments primarily include foreign currency forward contracts, interest rate swaps and total return swaps.
The fair values for the majority of our foreign currency derivative contracts are obtained by comparing our contract
rate to a published forward price of the underlying market rates, which are 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 2 of the fair value hierarchy, is determined
by comparing our contract rate to a forward market rate as of the valuation date.
The fair value of total return swaps is determined by valuing the underlying exchange traded funds of the swap
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
19
using market-on-close pricing by industry providers as of the valuation date that are classified within Level 2 of the
fair value hierarchy.
Redeemable noncontrolling interests
The values for redeemable noncontrolling interests are based on recent transactions and/or implied multiples of
earnings that are classified within Level 3 of the fair value hierarchy.
Note 12 – Redeemable Noncontrolling
Interests
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 certain of our non-U.S. defined benefit plans are measured on a recurring basis and 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 our condensed consolidated balance sheets. For
transactions accounted for as business combinations, subsequent changes in the estimated fair value of contingent
consideration payments are included in selling, general and administrative expenses in our condensed consolidated
statements of income
Note 5 – Business Acquisitions
)
.
For transactions involving changes in our ownership in
consolidated subsidiaries without a change in our control, subsequent changes in the estimated fair value of
contingent consideration payments are recognized in additional paid-in capital 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 each reporting period. Our fair value
measurement inputs include expected operating performance, discount and risk-free rates, and credit spread.
The components of the change in the fair value of contingent consideration for the three and nine months ended
September 26, 2026 and September 27, 2025 are presented in the following table:
Three Months Ended
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Balance, beginning of period
$
$
$
$
Increase in contingent consideration due to business
acquisitions and acquisitions of noncontrolling interests
in subsidiaries
Decrease in contingent consideration due to payments
(1 )
(5 )
(19 )
Change in fair value of contingent consideration in
connection with business acquisitions
(1)
Change in fair value of contingent consideration in
connection with changes in ownership in consolidated
subsidiaries
(2)
(31 )
(18 )
(65 )
(15 )
Balance, end of period
$
$
$
$
(1)
Amounts are recorded in selling, general and administrative in the condensed consolidated statements of income.
(2)
Amounts are recorded in additional paid-in capital in the condensed consolidated balance sheets.
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
20
The following table presents our assets and liabilities that are measured and recognized at fair value on a recurring
basis classified under the appropriate level of the fair value hierarchy as of September 26, 2026 and December 27,
2025:
September 26, 2026
Level 1
Level 2
Level 3
Total
Assets:
Derivative contracts designated as hedges
$
$
$
$
Derivative contracts undesignated
Total assets
$
$
$
$
Liabilities:
Derivative contracts designated as hedges
$
$
$
$
Derivative contracts undesignated
Total return swap
Contingent consideration
Total liabilities
$
$
$
$
Redeemable noncontrolling interests
$
$
$
$
December 27, 2025
Level 1
Level 2
Level 3
Total
Assets:
Derivative contracts designated as hedges
$
$
$
$
Derivative contracts undesignated
Total return swap
Total assets
$
$
$
$
Liabilities:
Derivative contracts designated as hedges
$
$
$
$
Derivative contracts undesignated
Contingent consideration
Total liabilities
$
$
$
$
Redeemable noncontrolling interests
$
$
$
$
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
21
Note 7 – Debt
Bank Credit Lines
Bank credit lines consisted of the following:
September 26,
December 27,
2026
2025
Revolving credit agreement
$
$
Other short-term bank credit lines
Total
$
$
Revolving Credit Agreement
On
, we entered into a $
Agreement”). On
, we amended and restated the Revolving Credit Agreement to, among other
things, (i) increase the aggregate revolving credit commitments from $
maturity date to
, and (iii) 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 end of each financial reporting quarter. As of September 26, 2026 the interest
rate on this revolving credit facility was
% plus
%, for a combined rate of
%. As of December 27,
2025, the interest rate on this revolving credit facility was
% plus
%, for a combined rate of
%.
The Revolving Credit Agreement requires, among other things, that we maintain certain maximum leverage ratios.
Additionally, the Revolving Credit Agreement contains customary representations, warranties and affirmative
covenants as well as customary negative covenants, subject to negotiated exceptions, on liens, indebtedness,
significant corporate changes (including mergers), dispositions and certain restrictive agreements. As of September
26, 2026 and December 27, 2025, we had $
revolving credit facility. During the nine months ended September 26, 2026, the average outstanding balance under
the Revolving Credit Agreement was approximately $
2025, there were $
Revolving Credit Agreement.
Other Short-Term Bank Credit Lines
As of September 26, 2026 and December 27, 2025, we had various other short-term bank credit lines available, in
various currencies, with a maximum borrowing capacity of $
September 26, 2026 and December 27, 2025, $
During the nine months ended September 26, 2026, the average outstanding balance under our various other short-
term bank credit lines was approximately $
borrowings under other short-term bank credit lines had weighted average interest rates of
% and
%,
respectively.
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
22
Long-term debt
Long-term debt consisted of the following:
September 26,
December 27,
2026
2025
Private placement facilities
$
$
Term loan
U.S. trade accounts receivable securitization
Various collateralized and uncollateralized loans payable with interest,
in varying installments through 2031 at interest rates
from
% to
% at September 26, 2026 and
from
% to
% at December 27, 2025
Finance lease obligations
Total
Less current maturities
(142 )
(33 )
Total long-term debt
$
$
Private Placement Facilities
Our private placement facilities provided by
and are available on an uncommitted basis at fixed rate economic terms to be agreed upon at the time of issuance,
from time to time through
. The facilities allow us to issue senior promissory notes to the
lenders at a fixed rate based on an agreed upon spread over applicable treasury notes at the time of issuance. The
term of each possible issuance will be selected by us and can range from
five
longer than
). The proceeds of any issuances under the facilities will be used for general corporate
purposes, including working capital and capital expenditures, to refinance existing indebtedness, and/or to fund
potential acquisitions. On December 19, 2025, we amended and restated our private placement facilities to, among
other things, (i) extend the scheduled facility termination dates to
financial definitions and covenants. The agreements provide, among other things, that we maintain certain
maximum leverage ratios, and contain restrictions relating to subsidiary indebtedness, 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 of September 26, 2026, which have a weighted
average interest rate of
%, are presented in the following table:
Amount of
Date of
Borrowing
Borrowing
Borrowing
Outstanding
Rate
Due Date
$
%
Less: Deferred debt issuance costs
(1 )
Total
$
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
23
The components of our private placement facility borrowings as of December 27, 2025, which have a weighted
average interest rate of
%, are presented in the following table:
Amount of
Date of
Borrowing
Borrowing
Borrowing
Outstanding
Rate
Due Date
$
%
Less: Deferred debt issuance costs
(1 )
Total
$
Term Loan
On
, we entered into a
three-year
Agreement”), which was originally scheduled to mature on
. On
, this agreement was
amended and restated to, among other things, (i) extend the maturity date to
, and (ii) modify certain
financial definitions and covenants. On
, this agreement was amended to modify certain
financial definitions and covenants. The interest rate on this term loan is based on the
Term SOFR
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 $
payment amount increases to $
2030. As of September 26, 2026, the borrowings outstanding under this term loan were $
September 26, 2026, the interest rate under the Term Credit Agreement was
% plus
%, for a combined rate
of
%. As of December 27, 2025, the borrowings outstanding under this term loan were $
December 27, 2025, the interest rate under the Term Credit Agreement was
% plus
%, for a combined rate
of
%. The Term Credit Agreement requires, among other things, that we maintain certain maximum leverage
ratios. Additionally, the Term Credit Agreement contains customary representations, warranties and affirmative
covenants as well as customary negative covenants, subject to negotiated exceptions, on liens, 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
. On
, we amended the
facility to increase the purchase limit from $
agent, and extended the expiration date to
.
As of September 26, 2026 and December 27, 2025, the borrowings outstanding under this securitization facility
were $
this facility was based on the
asset-backed commercial paper rate
% plus
%, for a combined rate of
%. At December 27, 2025, the interest rate on borrowings under this facility was based on the
asset-
backed commercial paper rate
% plus
%, for a combined rate of
%.
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
24
If our accounts receivable collection pattern changes due to customers either 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
points depending upon program utilization.
Note 8 – Income Taxes
For the three months ended September 26, 2026, our effective tax rate was
%, compared to
% for the prior
year period. The difference between our effective and federal statutory tax rates primarily relates to state and
foreign income taxes and interest expense. For the three months ended September 27, 2025, the difference was
further impacted by the tax treatment associated with the acquisition of a controlling interest of a previously held
non-controlling equity investment.
For the nine months ended September 26, 2026, our effective tax rate was
% compared to
% for the prior
year period. The difference between our effective and federal statutory tax rates primarily relates to state and
foreign income taxes and interest expense. For the nine months ended September 27, 2025, the difference was
further impacted by the tax treatment associated with the acquisition of a controlling interest of a previously held
non-controlling equity investment.
The total amount of unrecognized tax benefits, which are included in “other liabilities” within our condensed
consolidated balance sheets, as of September 26, 2026 and December 27, 2025 was $
respectively, of which $
All tax returns audited by the IRS are officially closed through 2022. The tax years subject to examination by the
IRS include years 2023 and forward. In addition, limited positions reported in the 2017 tax year are subject to IRS
examination.
During the three months ended September 26, 2026 and September 27, 2025, the amount of tax interest
income/(expense) included as a component of the provision for taxes was $
(2 )
During the nine months ended September 26, 2026 and September 27, 2025, the amount of tax interest
income/(expense) included as a component of the provision for taxes was $
(3 )
The total amount of accrued interest is included in other liabilities within our condensed consolidated balance
sheets, and was $
penalties accrued for during the periods presented was not material to our condensed consolidated financial
statements.
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
25
Note 9 – Plan of Restructuring and Related Costs
On August 6, 2024, we committed to a restructuring plan (the “2024 Plan”) to integrate our acquisitions, right-size
operations and further increase efficiencies. 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 nine months ended September 26, 2026, in connection with the 2024 Plan, we recorded a loss of $
million related to the disposal of businesses in the Global Specialty Products segment. This amount is included in
the $
Restructuring and related costs recorded for the three and nine months ended September 26, 2026 and September
27, 2025 in connection with the 2024 Plan consisted of the following:
Three Months Ended September 26, 2026
Global Distribution
and Value-Added
Services
Global
Specialty
Products
Global
Technology
Corporate
Total
Severance and employee-related costs
$
$
$
$
$
Impairment and accelerated depreciation and amortization
of right-of-use lease assets and other long-lived assets
Exit and other related costs
Restructuring and related costs
$
$
$
$
$
Three Months Ended September 27, 2025
Global Distribution
and Value-Added
Services
Global
Specialty
Products
Global
Technology
Corporate
Total
Severance and employee-related costs
$
$
$
$
$
Impairment and accelerated depreciation and amortization
of right-of-use lease assets and other long-lived assets
(1 )
Exit and other related costs
Restructuring and related costs
$
$
$
$
$
Nine Months Ended September 26, 2026
Global Distribution
and Value-Added
Services
Global
Specialty
Products
Global
Technology
Corporate
Total
Severance and employee-related costs
$
$
$
$
$
Impairment and accelerated depreciation and amortization
of right-of-use lease assets and other long-lived assets
Exit and other related costs
Loss on disposal of a business
Restructuring and related costs
$
$
$
$
$
Nine Months Ended September 27, 2025
Global Distribution
and Value-Added
Services
Global
Specialty
Products
Global
Technology
Corporate
Total
Severance and employee-related costs
$
$
$
$
$
Impairment and accelerated depreciation and amortization
of right-of-use lease assets and other long-lived assets
(1 )
Exit and other related costs
Loss on disposal of a business
Restructuring and related costs
$
$
$
$
$
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
26
The following table summarizes the activity related to the liabilities associated with our restructuring initiatives for
the nine months ended September 26, 2026. The remaining accrued balance of restructuring and related costs as of
September 26, 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 condensed consolidated balance
sheets.
Total
Balance, December 27, 2025
$
Restructuring and related costs
Non-cash impairment, accelerated depreciation and amortization
(3 )
Non-cash impairment related to disposal of a business
(2 )
Cash payments and other adjustments
(62 )
Balance, September 26, 2026
$
Note 10 – Legal Proceedings
From time to time, Henry Schein, Inc. may become a party to legal proceedings, involving, without limitation,
product liability claims, employment matters, commercial disputes, governmental inquiries and investigations
(which may in some cases involve our entering into settlement arrangements or consent decrees), 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 pending matters are currently anticipated to have a material adverse
effect on our consolidated financial position, liquidity or results of operations.
As of September 26, 2026, we had accrued our best estimate of potential losses relating to claims that were
probable to result in liability and for which we were able to reasonably estimate a loss. This accrued amount, as
well as related expenses, was not material to our financial position, results of operations or cash flows. Our method
for determining estimated losses considers currently available facts, presently enacted laws and regulations and
other factors, including probable recoveries from third parties.
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HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
27
Note 11 – Stock-Based Compensation
Plan Administration and Award Types
Stock-based awards are granted to certain employees under the 2024 Stock Incentive 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
-month cliff vesting. An RSU entitles the holder to receive
common stock upon vesting.
●
Employees:
restricted stock units (“PSUs”) and non-qualified stock options. Beginning in the 2023 plan year, employee
awards consist of:
o
RSUs:
o
PSUs:
contingent on the achievement of specified performance targets and the recipient’s continued
service. The number of shares that ultimately vest and are received by the 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):
(“Stock Options”) are awards that allow the recipient to purchase shares 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 contractual term of
grant date, subject to earlier expiration upon certain termination events and accelerated vesting
upon certain events.
Allocation and Vesting Schedules
The following table summarizes the 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
%
RSU (time)
-year graded
(
%/year)
%
PSU (performance)
-year cliff
%
Stock Options
-year graded
(
%/year)
2026 (Sign-On)
%
RSU (time)
-year graded
(
-1/3%/year)
2025
%
RSU (time)
-year cliff
%
PSU (performance)
-year cliff
Executive Management Committee
(succeeded by the Henry Schein
Leadership Team in July 2026)
2026
%
RSU (time)
-year graded
(
%/year)
%
PSU (performance)
-year cliff
2025
%
RSU (time)
-year cliff
%
PSU (performance)
-year cliff
Vice Presidents
2026
%
RSU (time)
-year graded
(
%/year)
%
PSU (performance)
-year cliff
2025
%
RSU (time)
% at 3rd year /
% at 4th year
%
PSU (performance)
-year cliff
Director Level
2026
%
RSU (time)
-year graded
(
%/year)
2025
%
RSU (time)
% at 3rd year /
% at 4th year
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
28
Accounting Policy Change
Effective in the first quarter of 2026, we updated our accounting policy for recognizing stock-based compensation
expense for graded-vesting awards with service conditions only, transitioning from the accelerated 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 consolidated financial statements
was immaterial for retrospective application.
Valuation and Performance Measurements
●
RSUs and PSUs: For RSUs and PSUs, fair value is estimated based on the closing stock price on the grant
date. For PSUs, the number of shares that ultimately vest and are received by the recipient and related
compensation cost recognized as an expense may range above or below the target based on the Company’s
performance against pre-determined specified targets over the applicable performance period, as
determined by the Compensation Committee.
●
Stock Options: Compensation expense is recognized on a straight-line basis, 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-determined adjustments to the performance
measurements to the extent that related activities were not contemplated in 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 remeasurement gains related to acquisitions.
●
Certain capital transactions, including share repurchases.
●
Impact of differences in budgeted average outstanding shares (other than those resulting from 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 PSU grants only).
●
Implementation-related value creation consulting costs (for 2026 PSU grants only).
Our condensed consolidated statements of income reflect pre-tax share-based compensation expense of $
and $
months ended September 27, 2025, we recorded pre-tax share-based compensation expense of $
million, respectively.
Total unrecognized compensation cost related to unvested awards as of September 26, 2026 was $
which is expected to be recognized over a weighted-average period of approximately
Our condensed consolidated statements of cash flows present our stock-based compensation expense as a
reconciling adjustment between net income and net cash provided by operating activities for all periods presented.
There were no cash benefits associated with tax deductions in excess of recognized compensation for the nine
months ended September 26, 2026 and September 27, 2025.
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
29
The following weighted-average assumptions were used in determining the fair values of stock options issued
during the nine months ended September 26, 2026 using the Black-Scholes valuation model:
2026
Expected dividend yield
%
Expected stock price volatility
%
Risk-free interest rate
%
Expected life of options (years)
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 volatilities from 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 simplified method for estimating the expected term as
permitted under Staff Accounting Bulletin Topic 14. The grant date fair value for stock options granted during the
nine months ended September 26, 2026 was $
The following table summarizes the stock option activity for the nine months ended September 26, 2026:
Stock Options
Weighted Average
Aggregate
Weighted Average
Remaining Contractual
Shares
Exercise Price
Life (in years)
Outstanding at beginning of period
$
Granted
Exercised
(60,434 )
Forfeited
(8,099 )
Outstanding at end of period
$
$
Options exercisable at end of period
$
The following tables summarize the activity of our unvested RSUs and PSUs for the nine months ended September
26, 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
$
$
Granted
Performance adjustment
n/a
n/a
Vested
(482,575 )
(83,629 )
Forfeited
(118,400 )
(326,251 )
Outstanding at end of period
$
$
The fair value of vested RSUs and PSUs was $
September 26, 2026; and $
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
30
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 required to purchase all or a portion of the
outstanding interest in a consolidated subsidiary from the noncontrolling interest holder under the terms of a put
option contained in contractual agreements. The components of the change in the redeemable noncontrolling
interests for the nine months ended September 26, 2026 and September 27, 2025 are presented in the following
table:
September 26,
September 27,
2026
2025
Balance, beginning of period
$
$
Decrease in redeemable noncontrolling interests due to acquisitions of noncontrolling
interests in subsidiaries
(42 )
(78 )
Increase in redeemable noncontrolling interests due to business acquisitions
Net loss attributable to redeemable noncontrolling interests
(2 )
Distributions declared
(25 )
(15 )
Effect of foreign currency translation gain attributable to redeemable noncontrolling
interests
Change in fair value of redeemable securities
Balance, end of period
$
$
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
31
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 of applicable taxes as of:
September 26,
December 27,
2026
2025
Attributable to redeemable noncontrolling interests:
Foreign currency translation adjustment
$
(22 )
$
(26 )
Attributable to noncontrolling interests:
Foreign currency translation adjustment
$
$
Attributable to Henry Schein, Inc.:
Foreign currency translation adjustment
$
(166 )
$
(196 )
Unrealized loss from hedging activities
(15 )
(24 )
Pension adjustment loss
(6 )
(6 )
Accumulated other comprehensive loss
$
(187 )
$
(226 )
Total Accumulated other comprehensive loss
$
(208 )
$
(251 )
The following table summarizes the components of comprehensive income, net of applicable taxes as follows:
Three Months Ended
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Net income
$
$
$
$
Foreign currency translation gain (loss)
(3 )
(1 )
Tax effect
Foreign currency translation gain (loss)
(3 )
(1 )
Unrealized gain (loss) from hedging activities
(30 )
Tax effect
(1 )
(1 )
(4 )
Unrealized gain (loss) from hedging activities
(22 )
Pension adjustment gain
Tax effect
(1 )
Pension adjustment gain
Comprehensive income
$
$
$
$
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 our comprehensive income. The foreign currency
translation gain during the nine months ended September 26, 2026 and nine months ended September 27, 2025 was
primarily due to changes in foreign currency exchange rates of the Brazilian Real, British Pound, Euro, Swiss
Franc, Israel Shekel, Canadian Dollar, and New Zealand Dollar.
The unrealized gains (losses) from hedging activities during the three and nine months ended September 26, 2026
and September 27, 2025 were attributable to a net investment hedge.
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
32
The following table summarizes our total comprehensive income, net of applicable taxes as follows:
Three Months Ended
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Comprehensive income attributable to
Henry Schein, Inc.
$
$
$
$
Comprehensive income attributable to
noncontrolling interests
Comprehensive income (loss) attributable to
Redeemable noncontrolling interests
(2 )
Comprehensive income
$
$
$
$
Note 14
Earnings Per Share
Basic earnings per share is computed by dividing net income attributable to 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 issuable for unvested RSUs and upon
exercise of stock options using the treasury stock method in periods in which they have a dilutive effect.
A reconciliation of shares used in calculating earnings per basic and diluted share follows:
Three Months Ended
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Basic
Effect of dilutive securities:
Stock options and restricted stock units
Diluted
The number of antidilutive securities that were excluded from the calculation of diluted weighted average common
shares outstanding are as follows:
Three Months Ended
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Stock options
Restricted stock units
Total anti-dilutive securities excluded from earnings per
share computation
Note 15 – Supplemental Cash Flow Information
Cash paid for interest and income taxes was:
Nine Months Ended
September 26,
September 27,
2026
2025
Cash paid for interest
$
$
Cash paid for income taxes, net of refunds
For the nine months ended September 26, 2026 and September 27, 2025, we had $
(30 )
non-cash net unrealized gains (losses) related to hedging activities, respectively.
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
33
Note 16 – Related Party Transactions
During 2018, we entered into a joint venture with Internet Brands to create Henry Schein One, LLC. Internet
Brands initially held a
% noncontrolling interest, which has since increased to a
% noncontrolling interest in
Henry Schein One, LLC, and a freestanding and separately exercisable right to put its noncontrolling interest to
Henry Schein, Inc. for fair value following the fifth anniversary of the effective date of the formation of the joint
venture. On January 29, 2025, Henry Schein, Inc. signed a Memorandum of Understanding with Internet Brands to
extend the time-based trigger for the exercise of our call option to July 1, 2032 and to pause the exercise by Internet
Brands of its put option for a period of
, to January 29, 2029.
In connection with the formation of Henry Schein One, LLC we entered into a
ten-year
Internet Brands whereby we will pay Internet Brands approximately $
intellectual property. During the three and nine months ended September 26, 2026, we recorded $
million, respectively, within selling, general and administrative in our condensed consolidated statements of
income, in connection with costs related to this royalty agreement. During the three and nine months ended
September 27, 2025, we recorded $
administrative in our condensed consolidated statements of income, in connection with costs related to this royalty
agreement. As of September 26, 2026 and December 27, 2025, Henry Schein One, LLC had a net payable balance
to Internet Brands of $
and the royalty agreement. The components of this payable are recorded within accrued expenses: other within our
condensed consolidated balance sheets.
We have interests in entities that we account for under the equity accounting method. In our normal course of
business, during the three and nine months ended September 26, 2026, we recorded net sales of $
million, respectively, to such entities. During the three and nine months ended September 27, 2025, we recorded
net sales of $
September 26, 2026, we purchased $
nine months ended September 27, 2025, we purchased $
At September 26, 2026 and December 27, 2025, we had an aggregate $
due from our equity affiliates, and $
Certain of our facilities related to our acquisitions are leased from employees and minority shareholders. These
leases are classified as operating leases and have a remaining lease term ranging from less than
a
approximately
. As of September 26, 2026, current and non-current liabilities associated with related party
operating leases were $
represented
% and
% of the total current and non-current operating lease liabilities, respectively. At
December 27, 2025, current and non-current liabilities associated with related party operating leases were $
million and $
% and
% of
the total current and non-current operating lease liabilities, respectively.
Table of Contents
HENRY SCHEIN, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in millions, except share and per share data)
(unaudited
)
34
Note 17 – KKR Investment and Accelerated Share Repurchase Program
On January 29, 2025, Henry Schein, Inc. announced a strategic investment by 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,
K. “Dan” Daniel (each, and any replacement thereof, a “KKR Designee”), joined our Board of Directors. On May
16, 2025, we issued
million, at approximately $
On May 19, 2025, we executed an accelerated share repurchase program to repurchase a total of $
our outstanding common stock based on volume-weighted average prices. In May 2025 we received
shares at an estimated fair value of $
estimated fair value of $
share repurchase program.
Pursuant to the Agreement, KKR also had the ability to purchase additional shares via open market purchases up to
a total equity stake of
% of the outstanding shares of common stock of the Company. On November 4, 2025,
the Company and KKR entered into an amendment to the Agreement that increased the beneficial ownership limit
from
% to
% 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, continue in effect
for a period of six months following the later of the expiration of the term of the Agreement and the date on which
no director appointed pursuant to the Agreement is serving on the Board of Directors. On December 7, 2025,
pursuant to the Agreement, KKR notified the Company of its election to exercise the Extension Election (as defined
in the Agreement) whereby the Company’s Board of Directors has accordingly renominated the KKR Designees for
a term expiring at the Company’s 2027 annual meeting of stockholders.
Table of Contents
35
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 Securities Litigation Reform Act of 1995, we
provide the following cautionary remarks regarding important factors that, among others, could cause future results
to differ materially from the forward-looking statements, expectations and assumptions expressed or implied herein.
All forward-looking statements made by us are subject to risks and uncertainties and are not guarantees of future
performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance and achievements or industry results to be materially different from
any future results, performance or achievements expressed or implied by 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,” “to make” 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 Annual Report on Form 10-K, and will be
contained in subsequent periodic filings we make with the SEC. These documents identify in detail important risk
factors that could cause our actual performance to differ materially from current expectations.
Risk factors and uncertainties that could cause actual results to differ materially from current and historical results
include, but are not limited to: our dependence on third parties for the manufacture and supply of our products and
where we manufacture products, our dependence on third parties for raw materials or purchased components; risks
relating to the achievement of our strategic growth objectives, including anticipated results of restructuring and
value creation initiatives; risks related to the Strategic Partnership Agreement with KKR Hawaii Aggregator L.P.
entered into in January 2025; transitions in senior company leadership (including, without limitation, our Chief
Executive Officer, Chief Financial Officer, and other executive officers); our ability to develop or acquire and
maintain and protect new products (particularly technology and specialty products) and services and utilize new
technologies that achieve market acceptance with acceptable margins; transitional challenges associated with
acquisitions and joint ventures, including the failure to achieve anticipated synergies/benefits, as well as significant
demands on our operations, information systems, legal, regulatory, compliance, financial and human resources
functions in connection with acquisitions, dispositions and joint ventures; certain provisions in our governing
documents that may discourage third-party acquisitions of us; adverse changes in supplier rebates or other
purchasing incentives; risks related to the sale of corporate brand products; risks related to activist investors;
security risks associated with our information systems and technology products and services, such as cyberattacks
or other 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
purchasing power and multi-tiered costing structures; increases in shipping costs for our products or other service
issues with our third-party shippers, and increases in fuel and energy costs; changes in laws and policies governing
manufacturing, development and investment in territories and countries where we do business; general global and
domestic macro-economic and political conditions, including inflation, deflation, recession, unemployment (and
corresponding increase in under-insured populations), consumer confidence, sovereign debt levels, fluctuations in
energy pricing and the value of the U.S. dollar as compared to foreign currencies and changes to other economic
indicators; 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
health care fraud or other laws and regulations; failure to comply with laws and regulations relating to the
collection, storage and 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 product liability, 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), or similar wide-spread public health concerns and other natural or man-made disasters; risks associated
with our global operations; 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 conflict and other
unrest and threats in the Middle East and the possibility of a wider European or global conflict); changes to laws
and policies governing foreign trade, tariffs and sanctions or greater restrictions on imports and exports, including
changes to international trade agreements and the current imposition of (and the potential for additional) tariffs by
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36
the U.S. on numerous countries and retaliatory tariffs; supply chain disruption; litigation risks; new or unanticipated
litigation developments and the status of litigation matters; our dependence on our senior management, employee
hiring and retention, increases in labor costs or health care costs, and our relationships with customers, suppliers
and manufacturers; and disruptions in financial markets. The order in which these factors appear should not be
construed to 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 You Can 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 relations page of our website (www.henryschein.com)
and the social media channels identified on the About Media Center page of our website.
Recent Developments
Chief Financial Officer
On October 8, 2026, we announced that, effective November 4, 2026, Ronald N. South will transition from his
position as Senior Vice President and Chief Financial Officer to the role of Senior Advisor. Emmanuel Caprais,
Senior Financial Advisor as of October 12, 2026, will succeed Mr. South as Chief Financial Officer effective
November 4, 2026.
Tariffs and Related Economic Conditions
The U.S. has adopted new and increased tariffs on imports from countries, and the scope, applicability and legal
basis for these tariffs continue to evolve through legislative and executive actions, exemptions and ongoing judicial
challenges. Although the U.S. Supreme Court invalidated certain tariffs imposed under the International
Emergency Economic Powers Act (IEEPA), the U.S. government has subsequently implemented additional tariff
measures under other statutory authorities, and further changes to U.S. trade policy remain possible. Some
countries have imposed, or may impose, retaliatory tariffs or 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 an adverse material impact on our results of operations during fiscal year 2025 and the nine
months ended September 26, 2026, although sales of U.S. dental equipment were temporarily impacted by market
uncertainty related to tariffs in the second half of the quarter ended June 28, 2025.
During the three and nine months ended September 26, 2026, we recognized a net benefit of $28 million and $30
million, respectively, related to previously paid IEEPA tariffs. We expect to recognize additional benefit from
tariff refunds during the fourth quarter of 2026.
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37
Executive-Level Overview
Henry Schein, Inc. is a solutions company for health care professionals powered by 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 and ambulatory surgery centers, as well
as government, institutional health care clinics, home health providers, and other alternate care clinics.
We
believe
that we have a strong brand identity due to our more than 94 years of experience distributing health care products.
We
are headquartered in Melville, New York, employ approximately 25,000 people (of which more than 13,000 are
based outside of the United States) and have operations or affiliates in 34 countries and territories. Our broad
global footprint has evolved over time through our organic growth as well as through contribution from strategic
acquisitions.
We
have established strategically located distribution centers around the 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, enables us 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 of cost-effective,
high-quality consumable merchandise products.
We
also manufacture, source and sell a range of company-owned
manufactured products, primarily implants, biomaterial products, endodontics, handpiece and 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, as manufacturers 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 related technical services. This segment
also includes value-added services such as financial services, continuing education services, 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, marketing and sales of dental
implant and biomaterial products; and endodontic, orthodontic and orthopedic products 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 health care providers.
A key element to grow closer to our customers is our One Schein initiative, which is a unified go-to-market
approach that enables practitioners to work synergistically with our supply chain, equipment sales and service and
other value-added services, allowing our customers to leverage the combined 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 products and 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 low prices. It also has accelerated the
growth of DSOs, GPOs, HMOs, group practices, other managed care accounts 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 and Artificial Intelligence
solutions, which can enhance the efficiency and facilitation of practice management.
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38
Our operating results in recent years have been significantly affected by strategies and 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 of relatively 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 manage large quantities of supplies
in their offices, the distribution of health care supplies and small equipment to office-based health care 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 typically made by the
practitioner or an administrative assistant. Supplies and small equipment are generally purchased from more than
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 are made 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 as a provider of products and services
to the health care industry. This trend has resulted in our expansion into service areas that complement our existing
operations and provide opportunities for us to develop synergies with, and thus strengthen, the acquired businesses.
As industry consolidation continues, we believe that we are positioned to capitalize on this trend, as we believe we
have the ability to support increased sales through our existing infrastructure, although there 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 intend to continue to seek opportunities to expand our role as a
provider of products and services to the health care industry. There can be no assurance that we will be able to
successfully pursue any such opportunity or consummate any such transaction, if pursued.
Aging Population and Other Market Influences
The health care products distribution industry continues to experience growth due to the aging population,
increased health care awareness, the proliferation of medical technology and testing, new pharmacological
treatments, and expanded third-party insurance coverage, partially offset by the effects of unemployment on
insurance coverage. In addition, the physician market continues to benefit from the shift of procedures and
diagnostic testing from acute care settings to alternate-care sites, particularly physicians’ 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 of approximately 4%
between 2026 and 2036 and approximately 6% between 2026 and 2046.
According to the U.S. Census Bureau’s International Database, in 2026 there are over seven million Americans
aged 85 years or older, the segment of the population most in need of long-term care and elder-care services. By
the year 2050, that number is projected to increase to over 17 million. The population aged 65 to 84 years is
projected to increase by approximately 12% during the same period.
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39
As a result of these market dynamics, annual expenditures for health care services continue to increase in the
United States.
We
believe that demand for our products and services will grow while continuing 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 that total national health care spending reached
approximately $5.3 trillion in 2024, or 18.0% of the nation’s gross domestic product, the benchmark measure for
annual production of goods and services in the United States. Health care spending is projected to reach
approximately $9.0 trillion by 2034, or 20.6% of the nation’s projected gross domestic product.
We
believe similar demographic changes are also occurring in other markets 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 diagnostics and 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 sell medical equipment and supplies
directly to patients. Federal, state and certain foreign governments have also increased enforcement 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, in vitro
diagnostic devices, software regulated as a medical device, and sales of medical equipment and supplies directly to
patients, that are paid for by third parties and/or patients and must operate in compliance with a variety of
burdensome and complex coding, billing and record-keeping requirements in order to substantiate claims for
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 medical care, and there have
been efforts to limit such private and government insurance programs, including efforts, thus far unsuccessful, 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, handling and disposal of hazardous or
potentially hazardous substances; “forever chemicals” such as per-and polyfluoroalkyl 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 working conditions. In addition,
activities to control medical costs, including laws and regulations lowering reimbursement rates for
pharmaceuticals, medical devices, medical supplies and/or medical treatments or services, are ongoing. Laws and
regulations are subject to change and their evolving implementation may impact our operations and financial
performance.
Certain of our businesses also maintain contracts with governmental agencies and are subject to certain regulatory
requirements specific to government contractors.
Our businesses are generally subject to numerous laws and regulations that could impact our financial performance,
and failure to comply with such laws or regulations could have a material adverse effect on our businesses.
A more detailed discussion of laws, regulations and governmental activity is included in Management’s Discussion
and Analysis of Financial Condition and Results of Operations, contained in our Annual Report on Form 10-K for
the fiscal year ended December 27, 2025, filed with the SEC on February 24, 2026.
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40
Results of Operations
The following tables summarize the significant components of our operating results for the three and nine months
ended September 26, 2026 and September 27, 2025 and cash flows for the nine months ended September 26, 2026
and September 27, 2025 (in millions):
Three Months Ended
Nine Months Ended
September 26,
September 27,
September 26,
September 27,
2026
2025
2026
2025
Operating results:
Net sales
$
3,471
$
3,339
$
10,297
$
9,747
Cost of sales
2,366
2,313
7,021
6,705
Gross profit
1,105
1,026
3,276
3,042
Operating expenses:
Selling, general and administrative
819
760
2,459
2,276
Depreciation and amortization
71
68
208
194
Restructuring and related costs
22
34
63
82
Operating income
$
193
$
164
$
546
$
490
Other expense, net
$
(33)
$
(30)
$
(99)
$
(90)
Income taxes
(37)
(28)
(109)
(94)
Net income
126
109
340
316
Net income attributable to Henry Schein, Inc.
119
101
320
297
Nine Months Ended
September 26,
September 27,
2026
2025
Cash flows:
Net cash provided by operating activities
$
306
$
331
Net cash used in investing activities
(173)
(253)
Net cash provided by (used in) financing activities
(138)
18
Plan of Restructuring and Related Costs
On August 6, 2024, we committed to a restructuring plan (the “2024 Plan”) 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 September 26, 2026 and September 27, 2025, we recorded restructuring and related
charges associated with the 2024 Plan of $22 million and $34 million, respectively. During the nine months ended
September 26, 2026 and September 27, 2025, we recorded restructuring charges associated with the 2024 Plan of
$63 million and $82 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 nine months ended September 26, 2026, in connection with the 2024 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 $63 million of restructuring and related charges discussed above.
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41
Three Months Ended September 26, 2026 Compared to Three Months Ended September 27, 2025
Note: Percentages for Net Sales; Gross Profit; Operating Expenses; Other Expense, 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 Executive Officer 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 were as follows:
September 26,
% of
September 27,
% of
Increase/(Decrease)
2026
Total
2025
Total
$
%
Global Distribution and Value -Added Services
Global Dental Merchandise
(1)
$
1,295
37.3
%
$
1,210
36.2
%
$
85
7.0
%
Global Dental Equipment
(2)
449
12.9
440
13.2
9
2.3
Global Value -Added Services
(3)
62
1.8
64
1.9
(2)
(4.8)
Global Dental
1,806
52.0
1,714
51.3
92
5.4
Global Medical
(4)
1,138
32.8
1,126
33.8
12
1.1
Total Global Distribution and Value -Added Services
2,944
84.8
2,840
85.1
104
3.7
Global Specialty Products
(5)
391
11.3
369
11.0
22
6.1
Global Technology
(6)
181
5.2
173
5.2
8
5.2
Eliminations
(45)
(1.3)
(43)
(1.3)
(2)
n/a
Total
$
3,471
100.0
%
$
3,339
100.0
%
$
132
4.0
(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/(Decline)
Foreign
Exchange
Impact
Total Sales
Growth/
(Decline)
Local Internal
Growth/(Decline)
Acquisition/
(Disposition)
Growth
Global Distribution and Value -Added Services
Global Dental Merchandise
5.1
%
1.3
%
6.4
%
0.6
%
7.0
%
Global Dental Equipment
2.4
-
2.4
(0.1)
2.3
Global Value -Added Services
(4.8)
-
(4.8)
-
(4.8)
Global Dental
4.1
0.9
5.0
0.4
5.4
Global Medical
1.0
-
1.0
0.1
1.1
Total Global Distribution and Value -Added Services
2.9
0.5
3.4
0.3
3.7
Global Specialty Products
3.4
2.6
6.0
0.1
6.1
Global Technology
6.5
(1.3)
5.2
-
5.2
Total
3.1
0.7
3.8
0.2
4.0
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42
Global Sales
Global net sales for the three months ended September 26, 2026 increased 4.0%, attributable to internal growth of
3.1%, acquisition growth of 0.7%, and an increase in foreign exchange of 0.2%. 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 September 26, 2026 increased
3.7%. The components of our sales increase are presented in the table above.
The 4.1% increase in internally generated local currency dental sales was primarily due to merchandise and
traditional equipment sales growth in the U.S. and merchandise and equipment sales growth in international
markets.
The 1.0% increase in internally generated local currency medical sales was attributable to growth of our Home
Solutions businesses, partially offset by lower sales of point of care diagnostic test products and vaccines related to
respiratory illness.
Global Specialty Products Sales
Global Specialty Products net sales for the three months ended September 26, 2026 increased 6.1%. The
components of our sales increase are presented in the table above.
The 3.4% increase in internally generated local currency sales was attributable to growth in our value and premium
implant businesses.
Global Technology Sales
Global Technology net sales for the three months ended September 26, 2026 increased 5.2%. The components of
sales growth are presented in the table above.
The internally generated local currency increase of 6.5% in Global Technology sales was primarily attributable to
the increased rate of customer adoption of our core practice management solutions, particularly our cloud-based
platforms, and a growth in revenue cycle management solutions.
Gross Profit
Gross profit and gross margin percentages by segment and in total were as follows:
September 26,
Gross
September 27,
Gross
Increase/(Decrease)
2026
Margin %
2025
Margin %
$
%
Global Distribution and Value -Added Services
$
758
25.8
%
$
702
24.7
%
$
56
8.0
%
Global Specialty Products
222
56.8
204
55.3
18
9.0
Global Technology
125
68.9
115
66.9
10
8.4
Corporate
-
n/a
5
n/a
(5)
n/a
Total
$
1,105
31.8
$
1,026
30.7
$
79
7.7
Gross margin may not be comparable to that of other distribution companies due to differing 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 generates higher gross margins, as it
primarily includes products we develop and manufacture, compared to the Global Distribution and Value-Added
Services segment, which principally distributes third-party and corporate brand products. While the Global
Specialty Products segment has increasingly leveraged the Global Distribution and Value-Added Services segment
as a sales channel, the impact on overall margins has not been material. The Global Technology segment also
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43
generates higher gross margins, reflecting our role as both developer and provider of software products and
services.
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 of higher 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 September
26, 2026 compared to the prior-year-period is due primarily to increased internally generated sales volume as
described above. During the three months ended September 26, 2026, in the Global Distribution and Value-Added
Services segment, we recognized a net benefit of $20 million related to refunds for certain IEEPA tariffs previously
paid in the United States. In addition to the benefit of the tariff refunds, the increase in gross margin rates was
attributable primarily to favorable business mix and benefits from our value creation initiatives.
The increase in Global Specialty Products gross profit primarily reflects increased internally generated sales
volume and gross profit from acquisitions. During the three months ended September 26, 2026, in the Global
Specialty Products segment, we recognized a net benefit of $8 million related to refunds for certain IEEPA tariffs
previously paid in the United States. In addition to the benefit of the tariff refunds, the increase 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 administrative expenses; depreciation and amortization; and
restructuring and related costs) by segment were as follows:
% of
% of
September 26,
Respective
September 27,
Respective
Increase/(Decrease)
2026
Sales
2025
Sales
$
%
Global Distribution and Value -Added Services
$
537
18.2
%
$
524
18.5
%
$
13
2.4
%
Global Specialty Products
166
42.5
133
36.0
33
25.4
Global Technology
72
39.7
69
40.3
3
3.7
Corporate
51
n/a
38
n/a
13
n/a
826
23.8
764
22.9
62
8.1
Adjustments
(1)
86
n/a
98
n/a
(12)
n/a
Total operating expenses
$
912
26.3
$
862
25.8
$
50
5.7
(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.
September 26,
September 27,
2026
2025
Adjustments:
Restructuring and related costs
$
22
$
34
Acquisition intangible amortization
44
46
Change in contingent consideration
1
6
Litigation settlements
1
2
Costs associated with shareholder advisory matters and select implementation related value
creation consulting costs
18
10
Total adjustments
$
86
$
98
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44
The net increase in operating expenses was attributable to the following:
Operating Costs
(excluding
acquisitions)
Acquisitions
Adjustments
Total
Global Distribution and Value -Added Services
$
8
$
5
$
-
$
13
Global Specialty Products
25
8
-
33
Global Technology
3
-
-
3
Corporate
13
-
-
13
49
13
-
62
Adjustments
-
-
(12)
(12)
Total operating expenses
$
49
$
13
$
(12)
$
50
The components of the net increase in total operating expenses are presented in the table above. The increase in
operating costs (excluding acquisitions) during the three months ended September 26, 2026 was primarily
attributable to costs associated with our sales growth. During the three months ended September 27, 2025, our
operating costs were favorably impacted by a benefit of $28 million related to the remeasurement to the fair value
of a previously held equity investment within our Global Specialty Products segment.
Other Expense, Net
Other expense, net was as follows:
September 26,
September 27,
Variance
2026
2025
$
%
Interest income
$
9
$
9
$
-
(4.4)
%
Interest expense
(42)
(38)
(4)
(11.5)
Other, net
-
(1)
1
(86.5)
Other expense, net
$
(33)
$
(30)
$
(3)
(14.7)
Interest income during the three months ended September 26, 2026 included $2 million of a benefit related to
refunds of certain IEEPA tariffs previously paid in the United States. Interest expense increased primarily due to
increased borrowings.
Income Taxes
Our effective tax rate was 23.1% for the three months ended September 26, 2026, compared to 21.3% for the prior
year period. The difference between our effective and federal statutory tax rates primarily relates to state and
foreign income taxes and interest expense. For the three months ended September 27, 2025, the difference was
further impacted by the tax treatment associated with the acquisition of a controlling interest of a previously held
non-controlling equity investment.
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45
Nine Months Ended September 26, 2026 Compared to Nine Months Ended September 27, 2025
Note: Percentages for Net Sales; Gross Profit; Operating Expenses; Other Expense, 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 Executive Officer 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 were as follows:
September 26,
% of
September 27,
% of
Increase/(Decrease)
2026
Total
2025
Total
$
%
Global Distribution and Value -Added Services
Global Dental Merchandise
(1)
$
3,924
38.1
%
$
3,613
37.1
%
$
311
8.6
%
Global Dental Equipment
(2)
1,322
12.8
1,263
13.0
59
4.7
Global Value -Added Services
(3)
180
1.8
174
1.8
6
3.1
Global Dental
5,426
52.7
5,050
51.9
376
7.4
Global Medical
(4)
3,268
31.7
3,197
32.8
71
2.2
Total Global Distribution and Value -Added Services
8,694
84.4
8,247
84.7
447
5.4
Global Specialty Products
(5)
1,207
11.7
1,122
11.5
85
7.6
Global Technology
(6)
535
5.2
502
5.1
33
6.8
Eliminations
(139)
(1.3)
(124)
(1.3)
(15)
n/a
Total
$
10,297
100.0
%
$
9,747
100.0
%
$
550
5.6
(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/(decline) were as follows:
Constant Currency
Growth/(Decline)
Total Constant
Currency Growth
Foreign
Exchange
Impact
Total Sales
Growth
Local Internal
Growth
Acquisition/
(Disposition)
Growth
Global Distribution and Value -Added Services
Global Dental Merchandise
4.7
%
1.3
%
6.0
%
2.6
%
8.6
%
Global Dental Equipment
2.7
-
2.7
2.0
4.7
Global Value -Added Services
1.8
0.6
2.4
0.7
3.1
Global Dental
4.1
0.9
5.0
2.4
7.4
Global Medical
2.0
0.1
2.1
0.1
2.2
Total Global Distribution and Value -Added Services
3.3
0.6
3.9
1.5
5.4
Global Specialty Products
2.6
2.7
5.3
2.3
7.6
Global Technology
7.5
(1.3)
6.2
0.6
6.8
Total
3.4
0.7
4.1
1.5
5.6
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46
Global Sales
Global net sales for the nine months ended September 26, 2026 increased 5.6%, attributable to internal growth of
3.4%, acquisition growth of 0.7%, and an increase in foreign exchange of 1.5%. 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 nine months ended September 26, 2026 increased
5.4%. The components of our sales increase are presented in the table above.
The 4.1% increase in internally generated local currency dental sales was primarily due to merchandise sales
growth in U.S. and international markets, growth in traditional dental equipment in the U.S. and international
markets, partially offset by decreased sales in value-added services attributable to lower brokerage revenue.
The 2.0% increase in internally generated local currency medical sales was attributable to growth of our Home
Solutions business and dialysis products, partially offset by lower sales of point of care diagnostic test products and
vaccines related to respiratory illness.
Global Specialty Products Sales
Global Specialty Products net sales for the nine months ended September 26, 2026 increased 7.6%. The
components of our sales increase are presented in the table above.
The 2.6% increase in internally generated local currency sales was attributable to growth in our value implant,
premium implant and biomaterial businesses.
Global Technology Sales
Global Technology net sales for the nine months ended September 26, 2026 increased 6.8%. The components of
sales growth are presented in the table above.
The internally generated local currency increase of 7.5% in Global Technology sales was primarily attributable to
the increased rate of customer adoption of our core practice management solutions, particularly our cloud-based
platforms as well as an increase in revenue cycle management solutions.
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47
Gross Profit
Gross profit and gross margin percentages by segment and in total were as follows:
September 26,
Gross
September 27,
Gross
Increase/(Decrease)
2026
Margin %
2025
Margin %
$
%
Global Distribution and Value -Added Services
$
2,234
25.7
%
$
2,071
25.1
%
$
163
7.9
%
Global Specialty Products
675
55.9
621
55.4
54
8.7
Global Technology
370
69.1
339
67.5
31
9.2
Corporate
(3)
n/a
11
n/a
(14)
n/a
Total
$
3,276
31.8
$
3,042
31.2
$
234
7.7
Gross margin may not be comparable to that of other distribution companies due to differing 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 generates higher gross margins, as it
primarily includes products we develop and manufacture, compared to the Global Distribution and Value-Added
Services segment, which principally distributes third-party and corporate brand products. While the Global
Specialty Products segment has increasingly leveraged the Global Distribution 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 of software products and
services.
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 of higher 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 nine months ended September
26, 2026 compared to the prior-year-period is due primarily to increased internally generated sales volume as
described above. During the nine months ended September 26, 2026, in the Global Distribution and Value-Added
Services segment, we recognized a net benefit of $21 million related to refunds for certain IEEPA tariffs previously
paid in the United States. In addition to the benefit of the tariff refunds, the increase in gross margin rates was
attributable primarily to favorable business mix and benefits from our value creation initiatives.
The increase in Global Specialty Products gross profit primarily reflects increased internally generated sales
volume and gross profit from acquisitions. During the nine months ended September 26, 2026, in the Global
Specialty Products segment, we recognized a net benefit of $9 million related to refunds for certain IEEPA tariffs
previously paid in the United States. In addition to the benefit of the tariff refunds, the increase 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.
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48
Operating Expenses
Operating expenses (consisting of selling, general and administrative expenses; depreciation and amortization; and
restructuring and related costs) by segment were as follows:
% of
% of
September 26,
Respective
September 27,
Respective
Increase
2026
Sales
2025
Sales
$
%
Global Distribution and Value -Added Services
$
1,649
19.0
%
$
1,567
19.0
%
$
82
5.2
%
Global Specialty Products
499
41.3
442
39.4
57
13.0
Global Technology
222
41.4
206
41.1
16
7.6
Corporate
124
n/a
110
n/a
14
n/a
2,494
24.2
2,325
23.9
169
7.3
Adjustments
(1)
236
n/a
227
n/a
9
n/a
Total operating expenses
$
2,730
26.5
$
2,552
26.2
$
178
7.0
(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.
September 26,
September 27,
2026
2025
Adjustments:
Restructuring and related costs
$
63
$
82
Acquisition intangible amortization
135
133
Cyber incident-insurance proceeds, net of third-party advisory expenses
-
(20)
Change in contingent consideration
-
4
Litigation settlements
1
3
Impairment of intangible assets
-
1
Costs associated with shareholder advisory matters and select implementation related value
creation consulting costs
37
24
Total adjustments
$
236
$
227
The net increase in operating expenses was attributable to the following:
Operating Costs
(excluding
acquisitions)
Acquisitions
Adjustments
Total
Global Distribution and Value -Added Services
$
67
$
15
$
-
$
82
Global Specialty Products
34
23
-
57
Global Technology
16
-
-
16
Corporate
14
-
-
14
131
38
-
169
Adjustments
-
-
9
9
Total operating expenses
$
131
$
38
$
9
$
178
The components of the net increase in total operating expenses are presented in the table above. The increase in
operating costs (excluding acquisitions) during the nine months ended September 26, 2026 was primarily
attributable to costs associated with our sales growth and the unfavorable impact of foreign exchange rates. During
the nine months ended September 26, 2026, our operating costs were impacted by a benefit of $11 million related to
remeasurement to the fair value of a previously held equity investment within our Global Specialty Products
segment. During the nine months ended September 27, 2025, our operating costs were impacted by a benefit of
$28 million related to remeasurement to the fair value of a previously held equity investment within our Global
Specialty Products segment and a $4 million benefit within our Global Distribution and Value-Added Services
segment.
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49
Other Expense, Net
Other expense, net was as follows:
September 26,
September 27,
Variance
2026
2025
$
%
Interest income
$
24
$
24
$
-
(1.5)
%
Interest expense
(124)
(111)
(13)
(11.5)
Other, net
1
(3)
4
(113.3)
Other expense, net
$
(99)
$
(90)
$
(9)
(10.5)
Interest income during the nine months ended September 26, 2026 included $2 million of a benefit related to
refunds of certain IEEPA tariffs previously paid in the United States. Interest expense increased primarily due to
increased borrowings.
Income Taxes
Our effective tax rate was 24.5% for the nine months ended September 26, 2026, compared to 23.5% for the prior
year period. The difference between our effective and federal statutory tax rates primarily relates to state and
foreign income taxes and interest expense. For the nine months ended September 27, 2025, the difference was
further impacted by the tax treatment associated with the acquisition of a controlling interest of a previously held
non-controlling equity investment.
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50
Liquidity and Capital Resources
Our principal capital requirements have included funding of acquisitions, purchases of 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 receivables and payables. Historically, sales have
tended to be stronger during the second half of the year and special inventory forward buy-in opportunities have
been most prevalent just before the end of the year, and have caused our working capital requirements to be higher
from the end of the third quarter to the end of the first quarter of the following year.
We finance our business primarily through cash generated from our operations, revolving credit facilities and debt
placements. Please see
Note 7 – Debt
operations is dependent on the continued demand of our customers for our products and services, and access to
products and services from our suppliers.
Our business requires a substantial investment in working capital, which is 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, may change. 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 with sufficient liquidity to meet our currently
foreseeable short-term and long-term capital needs.
Net cash provided by operating activities was $306 million for the nine months ended September 26, 2026,
compared to net cash provided by operating activities of $331 million for the prior year. The net change of $25
million was primarily attributable to an increase in operating income, partially offset by changes in working capital
accounts (primarily accounts receivable, inventory, and other current assets).
Net cash used in investing activities was $173 million for the nine months ended September 26, 2026, compared to
net cash used in investing activities of $253 million for the prior year. The net change of $80 million was primarily
attributable to lower acquisition activity.
Net cash used in financing activities was $138 million for the nine months ended September 26, 2026, compared to
net cash provided by financing activities of $18 million for the prior year period. In May 2025, funds affiliated
with KKR invested $250 million in Henry Schein through the purchase of 3,285,152 shares of common stock.
Shortly thereafter, we initiated a $250 million accelerated share repurchase program to offset the resulting dilution.
As a result, during the nine months ended September 26, 2026 we had lower proceeds from the issuance of
common stock and lower share repurchases compared to the prior year period. Other factors contributing to the net
change of $156 million in financing activities primarily include lower net borrowings as well as lower payments for
acquisitions of noncontrolling interests and contingent consideration.
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51
The following table summarizes selected measures of liquidity and capital resources:
September 26,
December 27,
2026
2025
Cash and cash equivalents
$
184
$
156
Working capital
(1)
1,178
1,236
Debt:
Bank credit lines
$
1,000
$
764
Current maturities of long-term debt
142
33
Long-term debt
2,382
2,310
Total debt
$
3,524
$
3,107
Leases:
Current operating lease liabilities
$
79
$
78
Non-current operating lease liabilities
288
251
(1)
Includes $606 million and $491 million of certain accounts receivable which serve as security for U.S. trade accounts receivable
securitization at September 26, 2026 and December 27, 2025, respectively.
Our cash and cash equivalents consist of bank balances and investments in 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 operations increased to 46.6 days as of September 26, 2026
from 45.3 days as of September 27, 2025. During the nine months ended September 26, 2026, we wrote off
approximately $9 million of fully reserved accounts receivable against our trade receivable reserve. Our inventory
turns from operations decreased to 4.6 as of September 26, 2026 from 4.8 as of September 27, 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 other facilities, vehicles
and certain equipment. Our leases have remaining terms of less than one year to approximately 22 years, some of
which may include options to extend the leases for up to 10 years. As of September 26, 2026, our right-of-use
assets related to operating leases were $336 million and our current and non-current operating lease liabilities were
$79 million and $288 million, respectively.
Stock Repurchases
On January 27, 2025, our Board of Directors authorized the repurchase of up to an additional $500 million in shares
of our common stock.
On May 19, 2025, we executed an accelerated share repurchase program to 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 under this accelerated
share repurchase program.
On September 8, 2025, our Board of Directors authorized the repurchase of up to an additional $750 million in
shares of our common stock.
From March 3, 2003 through September 26, 2026, we repurchased $6.4 billion, or 113,537,092 shares, under our
common stock repurchase programs, with $330 million available as of September 26, 2026 for future share
repurchases.
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52
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 required to purchase all or a portion of the
outstanding interest in a consolidated subsidiary from the noncontrolling interest holder under the terms of a put
option contained in contractual agreements. As of September 26, 2026 and December 27, 2025, our balance for
redeemable noncontrolling interests was $914 million and $895 million, respectively. Please see
Note 12 –
Redeemable Noncontrolling Interests
Critical Accounting Estimates
There have been no material changes in our critical accounting estimates from 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 adopted or will be adopted, see
Note 2 - Significant
Accounting Policies, Accounting Pronouncements Recently Adopted and Recently Issued Accounting
Pronouncements
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our exposure to market risk from that disclosed in Item 7A of our Annual
Report on Form 10-K for the year ended December 27, 2025.
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53
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of management, including our 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 report as such term is defined in Rules 13a-15(e)
and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based
on this evaluation, our management, including our principal executive officer and principal financial officer,
concluded that our disclosure controls and procedures were effective as of September 26, 2026, to ensure that all
material information required to be disclosed by us in reports that we file or submit under the Exchange Act is
accumulated and communicated to them as appropriate to allow timely decisions regarding required disclosure and
that all such information is recorded, processed, summarized and reported within 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 continued systems implementations, acquisition integrations and value creation initiative
activities undertaken during the quarter ended September 26, 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 September 26, 2026, we continued systems implementation activities for the phased roll-
out of a new e-commerce system for our Global Distribution and Value-Added Services segment in the U.S. and
Europe. Also, we concluded systems implementation activities for the implementation of a new global
consolidation and financial reporting system as well as the implementation of a new ERP system for our Global
Technology segment in the U.S.
Additionally, post-acquisition integration related activities continued for businesses acquired during prior years
within our Global Specialty Products segment. These acquisitions, the majority of which utilize separate
information and financial accounting systems, have been included in our condensed consolidated financial
statements since their respective dates of acquisition.
Finally, activities related to value creation initiatives and the transition to a global business services model were
initiated for certain businesses. These activities included current process knowledge transfer from the Company to
the global business services provider as well as process monitoring by the Company as the global business services
provider assumed processing responsibilities.
All continued systems implementations, acquisition integrations and value creation initiative activities involve
necessary and appropriate change-management controls that are considered in our quarterly assessment 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 provide only 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 that all control issues, if any, within a company
have been detected.
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54
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For a discussion of Legal Proceedings, see
Note 10 – Legal Proceedings
Consolidated Financial Statements included under Item 1.
ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors disclosed in Part I, Item 1A, of our Annual Report on
Form 10-K for the year ended December 27, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Purchases of Equity Securities by the Issuer
Our share repurchase program, announced on March 3, 2003, originally allowed us to repurchase up to two million
shares pre-stock splits (eight million shares post-stock splits) of our common stock, which represented
approximately 2.3% of the shares outstanding at the commencement of 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 on January 27, 2025 and an
additional $750 million authorized on September 8, 2025) of shares of our common stock to be repurchased under
this program.
On May 19, 2025, we executed an accelerated share repurchase program to 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 under this accelerated
share repurchase program.
As of September 26, 2026, we had repurchased approximately $6.4 billion of common stock (113,537,092 shares)
under these initiatives, with $330 million available for future share repurchases.
The following table summarizes repurchases of our common stock under our stock repurchase program during the
fiscal quarter ended September 26, 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)
6/28/2026 through 8/01/2026
591,832
$
85.37
591,832
4,715,750
8/2/2026 through 8/29/2026
275,620
88.81
275,620
4,243,735
8/30/2026 through 9/26/2026
574,766
86.99
574,766
3,819,604
1,442,218
1,442,218
(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.
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55
ITEM 5. OTHER INFORMATION
On July 30, 2026, we announced that, effective October 30, 2026, Mark E. Mlotek, the Company’s Executive Vice
President and Chief Strategic Officer, would transition out of his current role into a senior advisory role. The
effective date of Mr. Mlotek’s transition has been extended to December 26, 2026. As previously announced, Mr.
Mlotek will thereafter continue in a senior advisory role.
ITEM 6. EXHIBITS
10.1
Amended and Restated Executive Severance Plan, effective as of September 28,
2026.**+
10.2
Amended and Restated Henry Schein, Inc. Executive Change in Control Plan,
effective as of September 28, 2026.**+
10.3
Amendment No. 13 dated as of September 24, 2026 to Receivables Purchase
Agreement, dated as of April 17, 2013, by and among us, as servicer, HSFR,
Inc., as seller, the agent, and the various purchaser groups and purchaser agents
from time to time party thereto.+
10.4
First Amendment dated as of September 21, 2026 to the Amended and Restated
Term Loan Credit Agreement, dated as of June 6, 2025, among us, the several
lenders parties thereto, JPMorgan Chase Bank, N.A., as administrative agent
and the other agents party thereto.+
10.5
Fourth Amended and Restated Revolving Credit Agreement, dated as of
September 21, 2026, among us, the several lenders parties thereto, and
JPMorgan Chase Bank, N.A., as administrative agent, U.S. Bank National
Association, as syndication agent, and The Toronto-Dominion Bank, New York
Branch, Bank of America, N.A., UniCredit Bank GMBH, New York Branch,
the Bank of New York Mellon, ING Bank, N.V., Dublin Branch, HSBC Bank
USA, N.A. and MUFG Bank, Ltd., as co-documentation agents. (Incorporated
by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on
September 22, 2026.)
10.6
Offer Letter between us and Emmanuel Caprais. (Incorporated by reference to
Exhibit 10.1 to our Current Report on Form 8-K filed on October 8, 2026.)**
10.7
Restrictive Covenant Agreement between us and Emmanuel Caprais.
(Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K
filed on October 8, 2026.)**
31.1
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+
31.2
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+
32.1
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.+
101.INS
Inline XBRL Instance Document - the instance document does not appear in 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 September 26, 2026, formatted in Inline XBRL (included within
Exhibit 101 attachments).+
_________
+ Filed or furnished herewith.
** Indicates management contract or compensatory plan or agreement.
Table of Contents
56
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant 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: November 3, 2026