Henry Schein (HSIC) Form 10-Q SEC Filing

See accompanying notes.

PART

I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

March 28,

December 27,

2026

2025

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

Accounts receivable, net of allowance for credit losses of $

and $

(1)

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)

Stockholders' equity:

Preferred stock, $

par value,

shares authorized,

outstanding

Common stock, $

par value,

shares authorized,

issued and outstanding on March 28, 2026 and

issued and outstanding on December 27, 2025

Additional paid-in capital

Retained earnings

Accumulated other comprehensive loss

()

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 March 28, 2026 and December

27, 2025, includes trade accounts receivable of $

442

million and $

491

million, respectively, and long-term debt of $

360

million and

390

million, respectively.

See

Note 1 – Basis of Presentation

for further information.

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF INCOME

(in millions,

except share and per share data)

(unaudited)

Three Months Ended

March 28,

March 29,

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

()

Other, net

()

Income before taxes, equity in earnings of affiliates and noncontrolling interests

Income taxes

()

Equity in earnings of affiliates, net of tax

Net income

Less: Net income attributable to noncontrolling interests

()

Net income attributable to Henry Schein, Inc.

Earnings per share attributable to Henry Schein, Inc.:

Basic

Diluted

Weighted-average common

shares outstanding:

Basic

Diluted

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

(in millions)

(unaudited)

Three Months Ended

March 28,

March 29,

2026

2025

Net income

Other comprehensive income, net of tax:

Foreign currency translation gain

Unrealized gain (loss) from hedging activities

()

Other comprehensive income, net of tax

Comprehensive income

Comprehensive income attributable to noncontrolling interests:

Net income

()

Foreign currency translation gain

()

Comprehensive income attributable to noncontrolling interests

()

Comprehensive income attributable to Henry Schein, Inc.

See accompanying notes.

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'

Amount

Capital

Earnings

Income (Loss)

Interests

Equity

Balance, December 27, 2025

115,771,149

177

3,293

(226)

654

Net income (excluding loss of $

attributable to Redeemable

noncontrolling interests)

107

Foreign currency translation gain (excluding gain of $

attributable to Redeemable noncontrolling interests)

Unrealized gain from hedging activities,

net of tax of $

Distributions from noncontrolling shareholders

(7)

()

Change in fair value of redeemable securities

(18)

()

Noncontrolling interests and adjustments related to

business acquisitions and contingent consideration

Repurchase and retirement of common stock

(1,609,986)

(13)

(113)

()

Stock issued upon exercise of stock options

16,570

Stock-based compensation expense

383,040

Shares withheld for payroll taxes

(132,834)

(11)

()

Settlement of stock-based compensation awards

(3,257)

Balance, March 28, 2026

114,424,682

167

3,287

(189)

653

Accumulated

Common Stock

Additional

Other

Total

$0.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Amount

Capital

Earnings

Income (Loss)

Interests

Equity

Balance, December 28, 2024

124,155,884

3,771

(379)

638

Net income (excluding loss of $

attributable to Redeemable

noncontrolling interests)

110

Foreign currency translation gain (excluding gain of $

attributable to Redeemable noncontrolling interests)

Unrealized loss from hedging activities,

net of tax benefit of $

(5)

()

Pension adjustment gain, net of tax of $

Change in fair value of redeemable securities

(28)

()

Noncontrolling interests and adjustments related to

business acquisitions and contingent consideration

(60)

()

Repurchase and retirement of common stock

(2,255,485)

(21)

(141)

()

Stock issued upon exercise of stock options

10,351

Stock-based compensation expense

520,385

Shares withheld for payroll taxes

(187,493)

(11)

()

Settlement of stock-based compensation awards

Transfer of charges in excess of

capital

114

(114)

Balance, March 29, 2025

122,243,683

3,626

(317)

644

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS

(in millions)

(unaudited)

Three Months Ended

March 28,

March 29,

2026

2025

Cash flows from operating activities:

Net income

Adjustments to reconcile net income to net cash provided by (used in) 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

Provision for (benefit from) deferred income taxes

()

Equity in earnings of affiliates

()

Distributions from equity affiliates

Changes in unrecognized tax benefits

()

Other

()

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

()

Inventories

()

Other current assets

Accounts payable and accrued expenses

()

Net cash provided by (used in) operating activities

()

Cash flows from investing activities:

Purchases of property and equipment

()

Payments related to equity investments and business acquisitions,

net of cash acquired

()

Proceeds from loan to affiliate

Capitalized software costs

()

Other

()

Net cash used in investing activities

()

Cash flows from financing activities:

Net change in bank credit lines

Proceeds from issuance of long-term debt

Principal payments for long-term debt

()

Proceeds from issuance of stock upon exercise of stock options

Payments for repurchases and retirement of common stock

()

Payments for taxes related to shares withheld for employee taxes

()

Distributions to noncontrolling shareholders

()

Payments for contingent consideration

()

Acquisitions of noncontrolling interests in subsidiaries

()

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

()

Net change in cash and cash equivalents

()

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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 months ended March 28, 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 March 28, 2026 and December 27, 2025, certain trade accounts

receivable that can only be

used to settle obligations of this VIE were $

442

million and $

491

million, respectively, and the liabilities of this

VIE where the creditors have recourse to us were $

360

million and $

390

million, respectively.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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 months ended March

28, 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 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 annual reporting

periods beginning after December 15, 2027, and interim reporting periods

within those annual reporting periods,

with early adoption permitted.

We are currently evaluating the impact that ASU 2025-11 will have on our

consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-10, “

Government Grants (Topic 832) - Accounting for Government

Grants Received by Business Entities,

” which establishes guidance on the recognition, measurement, and

presentation of government grants received by business entities.

This ASU is effective for annual reporting periods

beginning after December 15, 2028, and interim reporting periods within

those annual reporting periods, with early

adoption permitted.

We are currently evaluating the impact that ASU 2025-10 will have on our consolidated

financial statements and related disclosures.

In November 2025, the FASB issued ASU 2025-09, “

Derivatives and Hedging (Topic 815): Hedge Accounting

Improvements,

” which is intended to more closely align financial reporting 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.

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

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

modified transition approach.

We are currently evaluating the impact that ASU 2025-06 will have on our

consolidated financial statements.

Note 3 – Net Sales from Contracts with Customers

Net sales are recognized in accordance with policies disclosed in 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

March 28,

March 29,

2026

2025

Net Sales:

Global Distribution and Value

-Added Services

Global Dental merchandise

1,292

1,185

Global Dental equipment

417

384

Global Value

-added services

Global Dental

1,766

1,621

Global Medical

1,073

1,055

Total Global Distribution

and Value

-Added Services

Global Specialty Products

Global Technology

Eliminations

(41)

(37)

Total

Contract Liabilities

The following table presents our contract liabilities:

As of

March 28,

December 27,

March 29,

December 28,

Description

2026

2025

2024

Current contract liabilities

Non-current contract liabilities

Total contract

liabilities

During the three months ended March 28, 2026, we recognized $

million in net sales that had been previously

deferred at December 27, 2025.

During the three months ended March 29, 2025, we recognized $

million in net

sales that were previously deferred at December 28, 2024.

Current contract liabilities are included in accrued

expenses: other and the non-current contract liabilities are included in other

liabilities within our condensed

consolidated balance sheets.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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-

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 three months ended March 28, 2026, we acquired companies

within the Global Distribution and Value-

Added Services and Global Specialty Products segments.

Our acquired ownership interest in these companies

range from

% to

100

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 three

months ended March 28, 2026:

Preliminary

Allocation as of

March 28, 2026

Acquisition consideration:

Cash

Deferred consideration

Common (or preferred) equity instruments

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

(18)

Deferred income taxes

(6)

Other noncurrent liabilities

(1)

Total identifiable

net assets

Goodwill

Total net assets acquired

The accounting for acquisitions in the three months ended March 28, 2026

has not been completed in several areas,

including, but not limited to, pending assessment of certain assets,

primarily including identifiable intangibles, and

certain liabilities, primarily including deferred income taxes.

Goodwill is a result of the synergies and cross-selling opportunities that these 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

three months ended March 28, 2026:

Weighted Average

2026

Useful Lives (in years)

Customer relationships and lists

Trademarks / Tradenames

Total

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

During the three months ended March 28, 2026,

in connection with an acquisition of a controlling interest of an

affiliate, we recognized a gain of approximately $

million related to the remeasurement to fair value of our

previously held equity investment.

Such gain was calculated using a discounted cash flow model based on

Level 3

inputs, as defined in

Note 6 – Fair Value Measurements

which was recorded in

selling, general and administrative

in the condensed consolidated statements of income.

The impact of these acquisitions, individually and in the aggregate, 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 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

100

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 year ended

December 27, 2025:

Preliminary

Allocation as of

March 28, 2026

Acquisition consideration:

Cash

194

Deferred consideration

Estimated fair value of contingent consideration payable

Fair value of previously held equity method investments

Redeemable noncontrolling interest

Total consideration

390

Identifiable assets acquired and liabilities assumed:

Current assets

Intangible assets

146

Other noncurrent assets

Current liabilities

(27)

Long-term debt

(2)

Deferred income taxes

(23)

Other noncurrent liabilities

(7)

Total identifiable

net assets

193

Goodwill

197

Total net assets acquired

390

The accounting for certain acquisitions in the year ended December 27,

2025 has not been completed in several

areas, including, but not limited to, pending assessment of certain

assets, primarily including identifiable

intangibles, and certain liabilities, primarily including deferred income

taxes.

Measurement period adjustments

recorded through March 28, 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.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The following table summarizes the intangible assets acquired during the year

ended December 27, 2025:

Weighted Average

2025

Useful Lives (in years)

Customer relationships and lists

Trademarks / Tradenames

Product development

Non-compete agreements

Total

146

Pro forma financial information for our 2025 acquisitions has not been

presented because the impact of these

acquisitions was immaterial to our condensed consolidated

financial statements.

Acquisition Costs

During the three months ended March 28, 2026 and March 29, 2025, we incurred

million and $

million in

acquisition costs, respectively.

These costs are included in selling, general and administrative

in our condensed

consolidated statements of income.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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 March 28, 2026 and December 27, 2025 was

estimated at $

3,408

million and $

3,107

million, respectively.

Factors that we considered when estimating the fair

value of our debt include market conditions, such as interest rates and 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

using market-on-close pricing by industry providers as of the valuation

date that are classified within Level 2 of the

fair value hierarchy.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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.

See

Note 12 – Redeemable Noncontrolling

Interests

for additional information.

Intangible Assets

Assets measured on a non-recurring basis at fair value include intangibles.

Inputs for measuring intangibles are

classified as Level 3 within the fair value hierarchy.

Defined Benefit Plans

Assets of our defined benefit plans are measured on a recurring 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

(see

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.

Contingent consideration is remeasured to fair value at each reporting

period.

During the three months ended

March 28, 2026,

we updated the fair value of contingent consideration

in connection with 2025 and 2023 business

acquisitions, which resulted in expense of $

million and income of $

million, respectively.

During the three

months ended March 29, 2025,

we updated the fair value of contingent consideration in connection

with a 2023

business acquisition, which resulted in income of $

million.

These changes were recorded in selling, general and

administrative in the condensed consolidated statements of income.

During the three months ended March 28,

2026 and March 29, 2025, we also updated the fair value of contingent

consideration related to changes in

ownership in our consolidated subsidiaries.

These changes were recorded within additional paid-in capital in

the

condensed consolidated balance sheets.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The components of the change in the fair value of contingent consideration

for the three months ended March 28,

2026 and March 29, 2025 are presented in the following table:

Three Months Ended

March 28,

March 29,

2026

2025

Balance, beginning of period

Increase in contingent consideration due to business acquisitions and acquisitions of

noncontrolling interests in subsidiaries

Decrease in contingent consideration due to payments

()

Change in fair value of contingent consideration in connection with business acquisitions

()

Change in fair value of contingent consideration in connection with changes in ownership in

consolidated subsidiaries

()

Balance, end of period

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

March 28, 2026 and December 27,

2025:

March 28, 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

903

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

122

Redeemable noncontrolling interests

895

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 7 – Debt

Bank Credit Lines

Bank credit lines consisted of the following:

March 28,

December 27,

2026

2025

Revolving credit agreement

400

100

Other short-term bank credit lines

646

664

Total

Revolving Credit Agreement

August 20, 2021

, we entered into a $

1.0

billion revolving credit agreement (the “Revolving Credit Agreement”)

which was amended and restated on

July 11, 2023

to extend the maturity date to

July 11, 2028

and update the

interest rate provisions to reflect the current market approach for a

multicurrency facility.

On June 6, 2025, we

amended and restated the Revolving Credit Agreement to, among other

things, 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

March 28, 2026 the interest rate on this revolving credit facility was

3.67

% plus

1.08

%, for a combined rate of

4.75

As of December 27, 2025, the interest rate on this revolving credit

facility was

3.78

% plus

1.08

%, for a

combined rate of

4.86

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 March 28,

2026 and December 27, 2025, we had $

400

million and $

100

million in borrowings, respectively, under this

revolving credit facility.

During the three months ended March 28, 2026, the average

outstanding balance under

the Revolving Credit Agreement was approximately $

327

million.

As of March 28, 2026 and December 27, 2025,

there were $

million and $

million of letters of credit, respectively, provided to third parties under the

Revolving Credit Agreement.

Other Short-Term Bank Credit

Lines

As of March 28, 2026 and December 27, 2025,

we had various other short-term bank credit lines available,

various currencies, with a maximum borrowing capacity of $

782

million and $

787

million, respectively.

As of

March 28, 2026 and December 27, 2025, $

646

million and $

664

million, respectively, were outstanding.

During

the three months ended March 28, 2026, the average outstanding balances

under our various other short-term bank

credit lines was approximately $

677

million.

As of March 28, 2026 and December 27, 2025, borrowings under

other short-term bank credit lines had weighted average interest rates

4.54

% and

4.68

%, respectively.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Long-term debt

Long-term debt consisted of the following:

March 28,

December 27,

2026

2025

Private placement facilities

1,199

1,149

Term loan

749

U.S. trade accounts receivable securitization

360

390

Various

collateralized and uncollateralized loans payable with interest,

in varying installments through 2031 at interest rates

from

0.00

% to

6.25

% at March 28, 2026 and

from

0.00

% to

6.75

% at December 27, 2025

Finance lease obligations

Total

Less current maturities

()

Total long-term debt

Private Placement Facilities

Our private placement facilities provided by

four

insurance companies have a total facility amount of $

1.5

billion,

and are available on an uncommitted basis at fixed rate economic terms

to be agreed upon at the time of issuance,

from time to time through

December 19, 2028

The facilities allow us to issue senior promissory notes to the

lenders at a fixed rate based on an agreed upon spread over applicable treasury

notes at the time of issuance.

The

term of each possible issuance will be selected by us and can range from

five

15 years

(with an average life no

longer than

12 years

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 December

19, 2028 and (ii) modify certain

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

March 28, 2026, which have a weighted average

interest rate of

3.99

%, are presented in the following table:

Amount of

Date of

Borrowing

Outstanding

Rate

Due Date

June 16, 2017

100

3.42

June 16, 2027

September 15, 2017

100

3.52

September 15, 2029

January 2, 2018

100

3.32

January 2, 2028

September 2, 2020

100

2.35

September 2, 2030

June 2, 2021

100

2.48

June 2, 2031

June 2, 2021

100

2.58

June 2, 2033

May 4, 2023

4.79

May 4, 2028

May 4, 2023

4.84

May 4, 2030

May 4, 2023

4.96

May 4, 2033

May 4, 2023

150

4.94

May 4, 2033

December 15, 2025

100

5.23

December 15, 2032

December 15, 2025

5.28

December 15, 2032

February 24, 2026

5.40

February 24, 2034

Less: Deferred debt issuance costs

(1)

Total

1,199

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The components of our private placement facility borrowings as of December

27, 2025, which have a weighted

average interest rate of

3.93

%, are presented in the following table:

Amount of

Date of

Borrowing

Outstanding

Rate

Due Date

June 16, 2017

100

3.42

June 16, 2027

September 15, 2017

100

3.52

September 15, 2029

January 2, 2018

100

3.32

January 2, 2028

September 2, 2020

100

2.35

September 2, 2030

June 2, 2021

100

2.48

June 2, 2031

June 2, 2021

100

2.58

June 2, 2033

May 4, 2023

4.79

May 4, 2028

May 4, 2023

4.84

May 4, 2030

May 4, 2023

4.96

May 4, 2033

May 4, 2023

150

4.94

May 4, 2033

December 15, 2025

100

5.23

December 15, 2032

December 15, 2025

5.28

December 15, 2032

Less: Deferred debt issuance costs

(1)

Total

1,149

Term Loan

On July 11, 2023, we entered into a

three-year

750

million term loan credit agreement (the “Term Credit

Agreement”), which was originally scheduled to mature on

July 11, 2026

On June 6, 2025, this agreement was

amended and restated to, among other things, (i) extend the maturity date

June 6, 2030

, and (ii) modify certain

financial definitions and covenants.

The interest rate on this term loan is based on the

Term SOFR

plus a spread

based on our leverage ratio at the end of each financial reporting quarter.

Beginning in June 2026 and continuing

through June 2027, we are required to make quarterly payments of $

million.

In September 2027, the quarterly

payment amount increases to $

million, continuing through June 2030 with the remaining balance due June

As of March 28, 2026, the borrowings outstanding under this

term loan were $

749

million.

At March 28,

2026, the interest rate under the Term Credit Agreement was

3.67

% plus

1.25

%, for a combined rate of

4.92

of December 27, 2025, the borrowings outstanding under this term

loan were $

749

million.

At December 27, 2025,

the interest rate under the Term Credit Agreement was

3.76

% plus

1.25

%, for a combined rate of

5.01

After

renewing the Term Credit Agreement in June of 2025, our hedged portion of the Term Credit Agreement is now

approximately

% of the notional total.

As of March 28, 2026, the effective fixed rate was

5.69

% and the floating

rate was

4.92

%, resulting in a weighted average rate of

5.60

As of December 27, 2025, the effective fixed rate

was

5.69

% and the floating rate was

5.01

%, resulting in a weighted average rate of

5.62

The Term Credit

Agreement requires, among other things, that we maintain certain 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

three years

On December 6, 2024, we extended the

expiration date of this facility agreement to

December 6, 2027

This facility agreement has a purchase limit of $

450

million with

two

banks as agents.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

As of March 28, 2026 and December 27, 2025, the borrowings outstanding

under this securitization facility were

360

million and $

390

million, respectively.

At March 28, 2026, the interest rate on borrowings under

this facility

was based on the

asset-backed commercial paper rate

3.88

% plus

0.75

%, for a combined rate of

4.63

December 27, 2025, the interest rate on borrowings under this facility was

based on the asset-backed commercial

paper rate of

4.06

% plus

0.75

%, for a combined rate of

4.81

If our accounts receivable collection pattern changes due to 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

basis

points depending upon program utilization.

Note 8 – Income Taxes

For the three months ended March 28, 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.

The total amount of unrecognized tax benefits, which are included in

“other liabilities” within our condensed

consolidated balance sheets, as of March 28, 2026 and December 27, 2025

was $

million and $

million,

respectively, of which $

million and $

million, respectively, would affect the effective tax rate if recognized.

All tax returns audited by the IRS are officially closed through 2021.

The tax years subject to examination by the

IRS include years 2022 and forward.

In addition, limited positions reported in the 2017 tax year are subject

to IRS

examination.

The amount of tax interest expense included as a component of the provision

for taxes was $

million and $

million during the three months ended March 28, 2026 and March

29, 2025,

respectively.

The total amount of

accrued interest is included in other liabilities within our condensed

consolidated balance sheets, and was $

million as of March 28, 2026 and December 27, 2025.

The amount of penalties accrued for during the periods

presented was not material to our condensed consolidated financial statements.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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 currently expect this plan to be completed by the end of 2027.

During the three months ended March 28, 2026 and March 29, 2025, we recorded

restructuring and related charges

associated with the 2024 Plan of $

million and $

million, respectively.

The restructuring and related costs for

these periods primarily related to severance and employee-related costs,

costs to exit facilities and other exit costs.

We expect to record restructuring and related charges associated with the 2024 Plan through the end of 2027;

however, an estimate of the amount of these charges for 2026 through 2027 has not yet been determined.

During the quarter ended March 28, 2026, in connection with 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 $

million of restructuring and related charges discussed above.

Restructuring and related costs recorded for the three months ended

March 28, 2026 and March 29, 2025 in

connection with the 2024

Plan consisted of the following:

Three Months Ended March 28, 2026

Global Distribution

and Value-Added

Services

Global

Specialty

Products

Global

Technology

Corporate

Total

Severance and employee-related costs

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

Three Months Ended March 29, 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

Exit and other related costs

Restructuring and related costs

The following table summarizes the activity related to the liabilities associated

with our restructuring initiatives

for

the three months ended March 28, 2026.

The remaining accrued balance of restructuring and related costs

as of

March 28, 2026, which primarily relates to severance and employee-related costs,

is included in accrued expenses:

other within our condensed consolidated balance sheets.

Liabilities related to exited leased facilities are recorded

within our current and non-current operating lease liabilities within our condensed

consolidated balance sheets.

Total

Balance, December 27, 2025

Restructuring and related costs

Non-cash impairment, accelerated depreciation and amortization

()

Non-cash impairment on disposal of a business

()

Cash payments and other adjustments

()

Balance, March 28, 2026

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 10 – Legal Proceedings

Henry Schein, Inc. was named as a defendant in multiple opioid related

lawsuits (one or more of Henry Schein,

Inc.’s subsidiaries was also named as a defendant in a number of those cases).

Generally, the lawsuits allege that

the manufacturers of prescription opioid drugs engaged in a false

advertising campaign to expand the market for

such drugs and their own market share and that the entities in the supply

chain (including Henry Schein, Inc. and its

subsidiaries) reaped financial rewards by refusing or otherwise failing to

monitor appropriately and restrict the

improper distribution of those drugs.

The last remaining actions which were consolidated within

the MultiDistrict

Litigation (“MDL”) proceeding In Re National Prescription Opiate Litigation

(MDL No. 2804; Case No. 17-md-

have been settled for immaterial amounts and have been dismissed.

From time to time, we may become a party to other legal proceedings,

including, without limitation, product

liability claims, employment matters, commercial disputes, 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 other pending matters are currently

anticipated to have a material adverse effect on our

consolidated financial position, liquidity or results of operations.

As of March 28, 2026,

we had accrued our best estimate of potential losses 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.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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

one

share of Company

common stock upon vesting.

Employees:

Historically, awards were granted in varying forms, including RSUs, performance-based

restricted stock units (“PSUs”) and non-qualified stock options.

Beginning in the 2023 plan year, employee

awards consist of:

RSUs:

Vest

based on the recipient’s continued service over time.

PSUs:

A PSU entitles the holder to receive

one

share of Company common stock upon vesting,

contingent on the achievement of specified performance targets and the recipient’s continued

service.

The number of shares that ultimately vest and are received 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.

Non-Qualified Stock Options (granted solely to our CEO in 2026):

Non-qualified stock options

(“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

ten years

from the

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)

100

RSU (time)

-year graded

(

-1/3%/year)

2025

RSU (time)

-year cliff

PSU (performance)

-year cliff

Executive Management Committee

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

100

RSU (time)

-year graded

(

%/year)

2025

100

RSU (time)

% at 3rd year /

% at 4th year

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Accounting Policy Change

Effective in the first quarter of 2026, we updated our accounting policy for recognizing

stock-based compensation

expense for awards with service conditions only, transitioning from the graded-vesting method to the straight-line

method.

We adopted this change as we believe the straight-line method is the predominant practice in our industry.

The effect of this change in accounting policy and its impact on our 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 $

million

and $

million for the three months ended March 28, 2026 and March 29, 2025, respectively.

Total unrecognized compensation cost related to unvested awards as of March 28, 2026 was $

million, which is

expected to be recognized over a weighted-average period of approximately

3.0

years.

Our condensed consolidated statements of cash flows present 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 three

months ended March 28, 2026 and March 29, 2025.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The following weighted-average assumptions were used in determining

the most recent fair values of stock options

using the Black-Scholes valuation model:

2026

Expected dividend yield

Expected stock price volatility

Risk-free interest rate

Expected life of options (years)

6.00

We have not declared cash dividends on our stock in the past and we do not anticipate declaring cash dividends in

the foreseeable future.

The expected stock price volatility is based on implied 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 following table summarizes the stock option activity for the three

months ended March 28, 2026:

Stock Options

Weighted Average

Aggregate

Weighted Average

Remaining Contractual

Intrinsic

Exercise Price

Life (in years)

Value

Outstanding at beginning of period

Granted

Exercised

()

Forfeited

()

Outstanding at end of period

6.1

Options exercisable at end of period

The following tables summarize the activity of our unvested RSUs and PSUs for

the three months ended March 28,

2026:

RSUs (Time-Based)

PSUs (Performance-Based)

Weighted Average

Grant Date Fair

Shares/Units

Value Per Share

Shares/Units

Value Per Share

Outstanding at beginning of period

1,606,542

75.69

387,960

75.89

Granted

646,793

77.78

227,501

74.25

Performance adjustment

n/a

300,049

74.97

Vested

(302,090)

84.05

(80,950)

81.54

Forfeited

(43,957)

76.07

(295,611)

77.00

Outstanding at end of period

1,907,288

75.06

538,949

74.88

The fair value of vested RSUs and PSUs was $

million and $

million, respectively, for the three months ended

March 28, 2026; and $

million and $

million, respectively, for the three months ended March 29, 2025.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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 three months ended March 28, 2026 and March 29, 2025

are presented in the following table:

March 28,

March 29,

2026

2025

Balance, beginning of period

Decrease in redeemable noncontrolling interests due to acquisitions of noncontrolling

interests in subsidiaries

()

Increase in redeemable noncontrolling interests due to business acquisitions

Net loss attributable to redeemable noncontrolling interests

()

Distributions declared

()

Effect of foreign currency translation gain attributable to redeemable noncontrolling

interests

Change in fair value of redeemable securities

Balance, end of period

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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:

March 28,

December 27,

2026

2025

Attributable to redeemable noncontrolling interests:

Foreign currency translation adjustment

()

Attributable to noncontrolling interests:

Foreign currency translation adjustment

Attributable to Henry Schein, Inc.:

Foreign currency translation adjustment

()

Unrealized loss from hedging activities

()

Pension adjustment loss

()

Accumulated other comprehensive loss

()

Total Accumulated

other comprehensive loss

()

The following table summarizes the components of comprehensive income, net

of applicable taxes as follows:

Three Months Ended

March 28,

March 29,

2026

2025

Net income

Foreign currency translation gain

Tax effect

Foreign currency translation gain

Unrealized gain (loss) from hedging activities

()

Tax effect

()

Unrealized gain (loss) from hedging activities

()

Pension adjustment gain

Tax effect

()

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 (loss) during the three months ended March 28, 2026 and

three months ended March 29, 2025 was

primarily due to changes in foreign currency exchange rates of the Brazilian

Real, Euro, British Pound, and Israel

Shekel.

The hedging gain (loss) during the three months ended March 28, 2026 and

March 29, 2025 was attributable to a

net investment hedge.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The following table summarizes our total comprehensive income, net of

applicable taxes as follows:

Three Months Ended

March 28,

March 29,

2026

2025

Comprehensive income attributable to

Henry Schein, Inc.

Comprehensive income attributable to

noncontrolling interests

Comprehensive income attributable to

Redeemable noncontrolling interests

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

March 28,

March 29,

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

March 28,

March 29,

2026

2025

Stock options

403,885

402,268

Restricted stock units

10,315

200,568

Total anti-dilutive

securities excluded from earnings per share computation

Note 15 – Supplemental Cash Flow Information Cash paid for interest and income taxes was:

Three Months Ended

March 28,

March 29,

2026

2025

Cash paid for interest

Cash paid for income taxes, net of refunds

For the three months ended March 28, 2026 and March 29, 2025, we

had $

million and $

()

million of non-cash

net unrealized gains (losses) related to hedging activities, respectively.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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

33.6

% 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

four years

, to January 29, 2029.

In connection with the formation of Henry Schein One, LLC we entered

into a

ten-year

royalty agreement with

Internet Brands whereby we will pay Internet Brands approximately $

million annually for the use of their

intellectual property.

During the three months ended March 28, 2026 and March

29, 2025, we recorded $

million

and $

million, respectively, within selling, general and administrative in our condensed consolidated statements of

income, in connection with costs related to this royalty agreement.

As of March 28, 2026 and December 27, 2025,

Henry Schein One, LLC had a net payable balance to Internet Brands of $

million and $

million, respectively,

comprised of amounts related to results of operations and the royalty agreement.

The components of this payable

are recorded within accrued expenses: other within our condensed consolidated 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 months ended March 28, 2026 and March 29,

2025, we recorded net sales of $

million

and $

million respectively, to such entities.

During the three months ended March 28, 2026 and March 29,

2025,

we purchased $

million and $

million respectively, from such entities.

At March 28, 2026 and December 27,

2025, we had an aggregate $

million and $

million, respectively, due from our equity affiliates, and $

million

and $

million, respectively, due to our equity affiliates.

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

year to

approximately

11 years

As of March 28, 2026, current and non-current liabilities associated with

related party

operating leases were $

million and $

million, respectively.

At March 28, 2026, related party leases represented

7.0

% and

7.9

% of the total current and non-current operating lease liabilities, respectively.

At December 27, 2025,

current and non-current liabilities associated with related party operating

leases were $

million and $

million,

respectively.

At December 27, 2025, related party leases represented

6.6

% and

8.7

% of the total current and non-

current operating lease liabilities, respectively.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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,

two

independent directors, Max Lin and William

K. “Dan” Daniel (each, and any replacement thereof, a “KKR Designee”),

joined our Board of Directors.

On May

16, 2025, we issued

3,285,152

shares of common stock to funds affiliated with KKR for an investment of $

250

million, at approximately $

76.10

per share.

On May 19, 2025, we executed an accelerated share repurchase program

to repurchase a total of $

million of

our outstanding common stock based on volume-weighted average prices.

In May 2025 we received

shares at an estimated fair value of $

million.

In July 2025, we received an additional

shares at an

estimated fair value of $

million, representing the final amount of shares to be received under

this accelerated

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

14.9

% of the outstanding shares of common stock of the Company.

On November 4, 2025,

the Company and KKR entered into an amendment to the Agreement

that increased the beneficial ownership limit

from

14.9

% to

19.9

% of the outstanding shares of the Company’s common stock that KKR is permitted to acquire

during the standstill period.

The standstill provisions, including the increased ownership limit, 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

stand for election at the Company’s upcoming 2026 annual meeting of stockholders for a term expiring at

the

Company’s 2027 annual meeting of stockholders.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Report on Form 10-K.

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.

In the United States, the One Big Beautiful Bill Act (“OBBBA”),

signed into law on July 4, 2025, includes

a number of provisions that are expected to result in reductions in the number of

Medicaid enrollees, as

well as reductions in federal funding to state Medicaid programs, resulting

in potentially adverse impacts

on utilization of services and coverage of products.

The OBBBA also includes changes to corporate tax

rates, limitations on certain deductions and modifications to international

tax provisions.

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.

Results of Operations

The following tables summarize the significant components of our operating

results and cash flows for the three

months ended March 28, 2026 and March 29, 2025 (in millions):

Three Months Ended

March 28,

March 29,

2026

2025

Operating results:

Net sales

3,368

3,168

Cost of sales

2,298

2,168

Gross profit

1,070

1,000

Operating expenses:

Selling, general and administrative

809

738

Depreciation and amortization

Restructuring and related costs

Operating income

182

175

Other expense, net

(32)

(30)

Income taxes

(38)

(35)

Net income

112

113

Net income attributable to Henry Schein, Inc.

107

110

Three Months Ended

March 28,

March 29,

2026

2025

Cash flows:

Net cash provided by (used in) operating activities

(97)

Net cash used in investing activities

(63)

(99)

Net cash provided by financing activities

120

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 March 28, 2026 and March 29, 2025, we recorded

restructuring and related charges

associated with the 2024 Plan of $12 million and $25 million, respectively.

The restructuring and related costs for

these periods primarily related to severance and employee-related costs,

costs to exit facilities and other exit costs.

We expect to record restructuring and related charges associated with the 2024 Plan through the end of 2027;

however, an estimate of the amount of these charges for 2026 through 2027 has not yet been determined.

During the quarter ended March 28, 2026, in connection with 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 $12

million of restructuring and related charges discussed above.

Three Months Ended March 28, 2026 Compared to Three Months Ended March 29, 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:

March 28,

% of

March 29,

% of

Increase / (Decrease)

2026

Total

2025

Total

Global Distribution and Value

-Added Services

Global Dental Merchandise

(1)

1,292

38.4

1,185

37.4

107

9.0

Global Dental Equipment

(2)

417

12.4

384

12.1

8.6

Global Value

-Added Services

(3)

1.7

10.6

Global Dental

1,766

52.5

1,621

51.2

145

9.0

Global Medical

(4)

1,073

31.8

1,055

33.3

1.7

Total Global Distribution and Value

-Added Services

2,839

84.3

2,676

84.5

163

6.1

Global Specialty Products

(5)

397

11.8

367

11.6

8.1

Global Technology

(6)

173

5.1

162

5.1

7.0

Eliminations

(41)

(1.2)

(37)

(1.2)

(4)

n/a

Total

3,368

100.0

3,168

100.0

200

6.3

(1)

Includes infection-control products, handpieces, preventatives, impression materials, composites, anesthetics, teeth, gypsum,

acrylics, articulators, abrasives, PPE products and our own corporate brand of consumable merchandise.

(2)

Includes dental chairs, delivery units and lights, digital dental laboratories, X-ray supplies and equipment, equipment repair

services and high-tech and digital restoration equipment.

(3)

Consists of financial services on a non-recourse basis, continuing education services for practitioners, consulting and other services.

(4)

Includes branded and generic pharmaceuticals, home solutions products, vaccines, surgical products, diagnostic tests, infection-

control products, X-ray products, equipment, PPE products, and vitamins.

(5)

Includes manufacturing, marketing and sales of dental implant and biomaterial products; and endodontic, orthodontic and

orthopedic products and other health care-related products and services.

(6)

Consists of the development and distribution of practice management software, e-services and other technology-enabled products

for health care providers.

The components of our sales growth were as follows:

Constant Currency

Growth/(Decline)

Total Constant

Currency Growth

Foreign

Exchange

Impact

Total Sales

Growth

Local Internal

Growth

Acquisition

Growth/

(Decline)

Global Distribution and Value

-Added Services

Global Dental Merchandise

3.0

1.2

4.2

4.8

9.0

Global Dental Equipment

3.5

5.1

8.6

Global Value

-Added Services

7.8

1.2

9.0

1.6

10.6

Global Dental

3.2

1.0

4.2

4.8

9.0

Global Medical

1.3

0.1

1.4

0.3

1.7

Total Global Distribution and Value

-Added Services

2.5

0.6

3.1

3.0

6.1

Global Specialty Products

1.7

3.4

4.7

8.1

Global Technology

6.9

(1.3)

5.6

1.4

7.0

Total

2.5

0.7

3.2

3.1

6.3

Global Sales

Global net sales for the three months ended March 28, 2026 increased 6.3%,

attributable to internal growth of 2.5%,

acquisition growth of 0.7%, and an increase in foreign exchange of 3.1%.

The components of our sales increase are

presented in the table above.

Global Distribution and Value-Added Services Sales

Global Distribution and Value-Added Services net sales for the three months ended March 28, 2026 increased

6.1%.

The components of our sales increase are presented in

the table above.

The 3.2% increase in internally generated local currency dental sales was

primarily due to sales growth in U.S.,

growth in traditional dental equipment in the U.S. and international

markets, and value-added services sales

attributable to increased sales in our practice transitions business.

The 1.3% increase in internally generated local currency medical sales was

attributable to growth of our Home

Solutions business and dialysis products,

partially offset by lower point of care diagnostic test products related to

respiratory illness.

Global Specialty Products Sales

Global Specialty Products net sales for the three months ended March

28, 2026 increased 8.1%.

The components

of our sales increase are presented in the table above.

The 1.7% increase in internally generated local currency sales was attributable

to growth in our value implant and

biomaterial businesses.

Global Technology Sales

Global Technology net sales for the three months ended March 28, 2026 increased 7.0%.

The components of sales

growth are presented in the table above.

The internally generated local currency increase of 6.9% in Global Technology sales was primarily attributable to

the adoption of our core practice management solutions, particularly

our cloud-based platforms.

Gross Profit

Gross profit and gross margin percentages by segment and in total were as follows:

March 28,

Gross

March 29,

Gross

Increase / (Decrease)

2026

Margin %

2025

Margin %

Global Distribution and Value

-Added Services

732

25.8

681

25.4

7.6

Global Specialty Products

220

55.3

206

56.0

6.7

Global Technology

119

68.6

110

67.9

8.2

Corporate

(1)

n/a

(4)

n/a

Total

1,070

31.8

1,000

31.6

7.1

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 three months ended March 28,

2026 compared to the prior-year-period is due primarily to increased internally generated sales volume

as described

above.

The increase in gross margin rates was attributable primarily to the impact

of higher gross margins in the

Global Distribution and Value-added Services and Global Technology

businesses as well as favorable business

mix.

The increase in Global Specialty Products gross profit primarily reflects

increased internally generated sales

volume and gross profit from acquisitions.

The decrease in gross margin rates was due to product mix.

The increase in Global Technology gross profit is the result primarily of higher internally generated sales.

The

increase in gross margin rates was due to product mix.

Operating Expenses

Operating expenses (consisting of selling, general and administrative

expenses; depreciation and amortization; and

restructuring and related costs) by segment were as follows:

% of

March 28,

Respective

March 29,

Respective

Increase / (Decrease)

2026

Sales

2025

Sales

Global Distribution and Value

-Added Services

549

19.4

514

19.2

7.0

Global Specialty Products

162

40.7

150

40.7

8.2

Global Technology

41.8

42.1

6.4

Corporate

n/a

(5)

n/a

817

24.3

770

24.3

6.1

Adjustments

(1)

n/a

Total operating expenses

888

26.4

825

26.0

7.8

(1)

Adjustments represent items excluded from segment operating income to enable comparison of financial results between periods.

These

items may vary independently of business performance.

Please see

Note 4 – Segment Data

These adjustments (current quarter vs. prior

quarter) consist of (i) acquisition intangible amortization ($45 million vs. $43 million), (ii) restructuring and related costs ($12 million

vs. $25 million), (iii) change in contingent consideration ($1

million vs. $(2) million), (iv) cyber incident-insurance proceeds, net of

third-party advisory expenses (no activity) vs. $(20) million net proceeds), (v) impairment of intangible assets (no activity) vs. $1

million),

and (vi) costs associated with shareholder advisory matters and implementation related select value creation consulting costs

($13 million vs. $8 million).

The net increase in operating expenses was

attributable to the following:

Operating Costs

(excluding

acquisitions)

Acquisitions

Adjustments

Total

Global Distribution and Value

-Added Services

Global Specialty Products

Global Technology

Corporate

(5)

Adjustments

Total operating expenses

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

March 28, 2026 was primarily attributable

to unfavorable impact of foreign exchange rates.

During the three months ended March 28, 2026, our operating

costs were favorably impacted by the remeasurement to the fair value

of a previously held equity investment of $11

million within our Global Specialty Products segment.

During the three months ended March 29, 2025, our

operating costs were favorably impacted by insurance proceeds of $20 million

related to the October 2023 cyber

incident included in the Adjustments category.

Other Expense, Net

Other expense, net was as follows:

March 28,

March 29,

Variance

2026

2025

Interest income

21.8

Interest expense

(39)

(35)

(4)

(12.6)

Other, net

(1)

n/a

Other expense, net

(32)

(30)

(2)

(8.0)

Interest income increased primarily due to increased interest rates.

Interest expense increased primarily due to

increased borrowings.

Income Taxes

Our effective tax rate was 25.5% for the three months ended March 28, 2026, compared

to 24.9% 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.

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

for further information.

Our ability to generate sufficient cash flows from

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 used in operating activities was $97 million for the three months

ended March 28, 2026, compared to net

cash provided by operating activities of $37 million for the prior year.

The net change of $134 million was

primarily attributable to changes in working capital accounts (primarily

accounts receivable, inventory, and

accounts payable and accrued expenses), partially offset by an increase in operating

income.

Net cash used in investing activities was $63 million for the three months

ended March 28, 2026, compared to net

cash used in investing activities of $99 million for the prior year.

The net change of $36 million was primarily

attributable to lower acquisition activity.

Net cash provided by financing activities was $120 million for the

three months ended March 28, 2026, compared

to net cash provided by financing activities of $89 million for the prior

year.

The net change of $31 million was

primarily due to a reduction in acquisitions of noncontrolling interests

in subsidiaries, and decreased repurchases of

common stock, partially offset by decreased net borrowings.

The following table summarizes selected measures of liquidity and capital

resources:

March 28,

December 27,

2026

2025

Cash and cash equivalents

138

156

Working

capital

(1)

1,199

1,236

Debt:

Bank credit lines

1,046

764

Current maturities of long-term debt

Long-term debt

2,327

2,310

Total debt

3,408

3,107

Leases:

Current operating lease liabilities

Non-current operating lease liabilities

263

251

(1)

Includes $442 million and $491 million of certain accounts receivable which serve as security for U.S. trade accounts receivable

securitization at March 28, 2026 and December 27, 2025, respectively.

Our cash and cash equivalents consist of bank balances and 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 45.7 days as of March 28, 2026 from

44.1 days as of March 29, 2025.

During the three months ended March 28, 2026, we wrote

off approximately $5

million of fully reserved accounts receivable against our trade receivable

reserve.

Our inventory turns from

operations decreased to 4.6 as of March 28, 2026 from 4.8 as of March 29, 2025.

Our working capital accounts

may be impacted by current and future economic conditions.

Leases

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 March 28, 2026, our right-of-use assets

related to operating leases were $312 million and our current and non-current

operating lease liabilities were $78

million and $263 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 March 28, 2026, we repurchased $6.1 billion, or

109,486,614 shares,

under our

common stock repurchase programs, with $655 million available

as of March 28, 2026 for future share repurchases.

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 March 28, 2026 and December 27, 2025, our balance

for

redeemable noncontrolling interests was $903 million and $895 million,

respectively.

Please see

Note 12 –

Redeemable Noncontrolling Interests

for further information.

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

of the Notes to the Condensed Consolidated Financial Statements

included under Item 1.

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.

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 March

28, 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 acquisitions, continued acquisition integrations and system

implementation activity undertaken

during the quarter ended March 28, 2026, and carried over from prior quarters,

when considered in the aggregate,

represents a material change in our internal control over financial reporting.

During the quarter ended March 28, 2026, we completed the acquisition

of a controlling interest of a Global

Specialty Products segment affiliate and a Global Distribution and Value-Added Services segment business in the

U.S.

Also, post-acquisition integration related activities continued for businesses

acquired during prior quarters

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.

Additionally, during the quarter ended March 28, 2026, we continued systems implementation activities for the

phased roll-out of a new e-commerce system for our Global Distribution

and Value

-Added Services segment in the

U.S. and Canada.

All acquisitions, continued acquisition integrations, and system implementation

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.

PART

II.

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

For a discussion of Legal Proceedings, see

Note 10 – Legal Proceedings

of the Notes to the Condensed

Consolidated Financial Statements included under Item 1.

ITEM 6.

EXHIBITS

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.+

99.1

Form of 2026 Restricted Stock Unit Agreement for time-based restricted stock

unit awards pursuant to the Henry Schein, Inc. 2024 Stock Incentive Plan (as

amended and restated on May 21, 2024).**+

99.2

Form of 2026 Stock Option Agreement pursuant to the Henry Schein, Inc. 2024

Stock Incentive Plan (as amended and restated effective as of May 21, 2024)

(Frederick M. Lowery).**+

99.3

Form of 2026 Restricted Stock Unit Agreement for time-based restricted stock

unit awards pursuant to the Henry Schein, Inc. 2023 Non-Employee Director

Stock Incentive Plan (as amended and restated effective as of May 23, 2023)

(Stanley M. Bergman).**+

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 March 28, 2026, formatted in Inline XBRL (included within

Exhibit 101 attachments).+

Filed or furnished herewith.

** Indicates management contract or compensatory plan or agreement.

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.

Henry Schein HSIC Form 10-Q filing Q1 FY2026

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Basis of Presentation

Note 2 – Significant Accounting Policies, Accounting Pronouncements Recently Adopted and Recently Issued Accounting Pronouncements

Note 3 – Net Sales from Contracts with Customers

Note 4 – Segment Data

Note 5 – Business Acquisitions

Note 6 – Fair Value Measurements

Note 7 – Debt

Note 8 – Income Taxes

Note 9 – Plan of Restructuring and Related Costs

Note 10 – Legal Proceedings

Note 11 – Stock-Based Compensation

Note 12 – Redeemable Noncontrolling Interests

Note 13 – Comprehensive Income

Note 14

Note 15 – Supplemental Cash Flow Information Cash paid for interest and income taxes was:

Note 16 – Related Party Transactions

Note 17 – KKR Investment and Accelerated Share Repurchase Program

ITEM 2.

ITEM 3.

ITEM 4.

ITEM 6.

ITEM 1A. RISK FACTORS