Henry Schein (HSIC) risk factors, FY2025 10-K

Other

1. 01Additionally, certain of our manufacturing businesses hold patents on certain of our productsNew
2. 02Building trusted relationships with the key stakeholders who make up our Mosaic of Success - Team Schein Members (TSMs), customers, suppliers, stockholders, and society, helps drive our Company’s sustained growth, amplifies our collective strengths, and brings to life our vision of making the world healthier, togetherNew
3. 03TSM experience strategy is centered around our Team Schein Values under the pillars of Community, Caring, and Career89% rewritten
4. 04Additionally, in 2025 we conducted our second Corporate Citizenship Barometer quantify stakeholder perceptions of the Company’s environmental and social priorities, commitments, and impactsNew
5. 05Our Chief Executive Officer (“CEO”) engages directly in many of our ERG programsNew
6. 06Continued to offer a variety of opportunities to volunteer to drive purpose and engage in local communities in which TSMs live and work, such as through Carry the Load, the Care Global Challenge, Back to School, and Holiday CheerNew
7. 07Expanded our global and highly rated Steps for Suicide Prevention campaign, which brings TSMs together to walk for a cause and provide education, partnering with the American Foundation for Suicide Prevention, Suicide Awareness and Remembrance (for Veterans), and other local organizations53% rewritten
8. 08In 2025, we launched an “Intrinsic Motivation” campaign to help TSMs understand what drives them at work and how they can get more involved in initiatives that align to that motivator to help TSMs find work that is more meaningful, energizing, and fulfillingNew
9. 09Implemented globally the Core Leadership Capabilities (CLCs) for all TSMs that highlights the leadership capabilities that all TSMs are expected to demonstrate for career successNew
10. 10Continued roll-out of talent planning efforts designed to ensure a strong leadership pipeline across the organization by strategically identifying and developing talent through targeted development opportunities and intentional succession plans65% rewritten
11. 11Our Board is provided with periodic updates regarding our talent and succession planning efforts and participates in professional development activities with our TSMsNew
12. 12In 2025, we recognized 16 award winners around the world at our Global Directors and Vice Presidents Management MeetingNew
13. 13Unless the context specifically requires otherwise, the terms the “Company,” “Henry Schein,” “we,” “us” and “our” mean Henry Schein, Inc., a Delaware corporation, and its consolidated subsidiaries92% rewritten
14. 14In this role, Mr. Albertini is responsible for our Global Distribution and Value-Added Services segment and our Global Technology segment71% rewritten
15. 15Michael S. Ettinger has been our Executive Vice President and Chief Operating Officer since 2022
16. 16Christine Sheehy has been our Senior Vice President, Chief Human Resources Officer since November 202464% rewritten
17. 17Prior to holding his current position, Mr. South was our Vice President Corporate Finance since 2008, and Chief Accounting Officer from 2013 until 202267% rewritten
18. 18Mr. South is a Certified Public Accountant72% rewritten
19. 19Kochman joined us in 2015 and has held roles of increasing responsibility, including Vice President, Chief Corporate Affairs Officer, and Vice President, Corporate Affairs & Deputy Chief of Staff, Office of the CEONew
20. 20Prior to VSP Global, Mr. Pendergast served in roles of increasing responsibility at Natural Organics, Inc., from 2006 to 2008, IdeaSphere Inc./Twinlab Corporation from 2000 to 2006, IBM Corporation from 1987 to 1994 and 1998 to 2000 and Rohm and Haas from 1994 to 1998New

COMPANY RISKS

1. 21In 2025, our top 10 Global Distribution and Value- Added Services suppliers and our single largest supplier accounted for approximately 24% and 4%, respectively, of our aggregate purchases
2. 22Additionally, where we are the manufacturer of products for our speciality business ( dental implants, endodontics, and orthopedics), we are dependent upon third parties for raw materials and purchased components
3. 23In the event of any such interruption in supply, we would need to timely identify and obtain acceptable replacement sources48% rewritten
4. 24Our 2025 – 2027 BOLD+1 Strategic Plan is defined under “Business, Business Strategy” aboveNew
5. 25Our business could be affected by the Strategic Partnership Agreement with KKR73% rewritten
6. 26On November 4, 2025, the Company and KKR entered into an amendment to the Partnership Agreement that increased the beneficial ownership limit from 14.9% to19.9% of the outstanding shares of the Company’s common stock that KKR is permitted to acquire during the standstill periodNew
7. 27Our future growth (especially for our Global Technology and Global Specialty Products segments) is dependent upon our ability to develop or acquire and maintain and protect new products and services and utilize new technologies that achieve market acceptance with acceptable margins20% rewritten
8. 28The use of AI in healthcare offerings poses certain clinical risks resulting potential misdiagnosis or misinformation provided from AI applications, diminishing critical judgment, or loss of interpersonal care from cliniciansNew
9. 29All of these risks are amplified by the critical nature of healthcare decisions and the sensitivity of health-related information, and the occurrence of any of the above could have a material adverse effect on our business, financial condition or operating resultsNew
10. 30We cannot be sure, for example, that we will achieve the benefits of revenue growth that we expect from these transactions or that we will avoid unforeseen additional costs, taxes, or expenses
11. 31Furthermore, some of our acquisitions and future acquisitions may give rise to an obligation to make contingent payments or to satisfy certain repurchase obligations, which payments could have material adverse impacts on our financial results individually or in the aggregate
12. 32The provisions of our certificate of incorporation and by-laws may make it more difficult for a third-party to acquire us, may discourage acquisition bids and may impact the price that certain investors might be willing to pay in the future for shares of our common stock
13. 33In addition, certain of our employee incentive plans provide accelerated vesting of equity awards upon termination without cause within two years following a change in control, or grant the plan committee discretion to accelerate awards upon a change of control
14. 34The terms on which we purchase or sell products from many suppliers may entitle us to receive a rebate or other purchasing incentive based on the attainment of certain growth goals
15. 35Increased competition either from generic or equivalent branded products could result in us failing to earn rebates or incentives that are conditioned upon achievement of growth goals
16. 36Our ability to locate qualified, economically stable suppliers who satisfy our requirements, and to acquire sufficient products in a timely and effective manner, are critical to ensuring, among other things, that customer confidence is not diminished
17. 37Additionally, it could cause uncertainty about our management, operations or future strategic direction, which could result in the loss of future business opportunities or negatively impact our ability to attract and retain qualified talent

INDUSTRY RISKS

1. 38Our IS are susceptible to, among other things, natural disasters, power losses, telecommunication failures, cybersecurity threats and other criminal activity51% rewritten
2. 39Moreover, cyberattacks have become more difficult to detect and respond toNew
3. 40We utilize security technologies designed to protect and maintain the integrity of our IS and data, and our defenses are monitored and routinely tested internally and by external parties30% rewritten
4. 41As a practical matter, so long as we depend on IS to operate our business, and our business partners do the same, there can be no guaranty that such measures will successfully stop any one particular cybersecurity incident given the constantly evolving nature of the threatNew
5. 42A successful cyberattack has, and may again in the future, disrupt our business operations, adversely impact our financial accounting and reporting of results of operations, divert the attention of management, and adversely impact our results of operations
6. 43In addition, certain of our practice management products and services purchased by health care providers, such as physicians and dentists, are used to store and manage patient medical or dental records, and when cloud-based approaches are used, we may be responsible for hosting those records
7. 44Henry Schein One, our practice management software, revenue cycle management and patient relationship management solutions business was not affected, and our manufacturing businesses were mostly unaffected26% rewritten
8. 45We also may be perceived as a more vulnerable target of the cyber hackers as a result of the October 2023 incident
9. 46Manufacturers also could increase their efforts to sell directly to end-users and thereby eliminate or reduce our role in distribution
10. 47Additionally, traditional health care supply and distribution relationships are being challenged by online commerce solutions
11. 48Uncertainty surrounding possible changes to the health care environment, including changes to regulatory enforcement priorities, may directly or indirectly adversely affect usNew
12. 49It is possible that the adoption of the One Big Beautiful Bill Act could impact eligibility for participation in Medicare and Medicaid programs, resulting in a change in utilization of the health care systemNew
13. 50The multi-tiered costing structure continues to expand as many large integrated health care providers and others with significant purchasing power, such as GPOs, DSOs and MSOs, demand favorable pricing terms
14. 51In addition, such organizations may establish direct relationships with manufacturers, thereby either eliminating or reducing the services historically provided by distributors
15. 52While we have recently experienced increases in shipping costs, we do not expect these additional expenses to be material to our results now, however they could become material in a future fiscal period

MACRO-ECONOMIC AND POLITICAL RISKS

1. 53Uncertain global and domestic macro-economic and political conditions could materially adversely affect our results of operations and financial condition
2. 54Uncertain global and domestic macro-economic and political conditions that affect the economy and the economic outlook of the United States, Europe, Asia and other parts of the world could have a material adverse effect on our business, financial condition or operating results27% rewritten
3. 55Recessionary or inflationary conditions and depressed levels of consumer and commercial spending may also cause customers to reduce, modify, delay, or cancel plans to purchase our products and may cause suppliers to reduce their output or change their terms of sale

AND LITIGATION RISKS

1. 56Failure to comply with existing and future regulatory requirements could materially adversely affect our business
2. 57However, compliance is not guaranteed either now or in the future as certain laws, regulations guidance may be subject to varying and evolving interpretations that could affect our ability to comply, as well as future changes, additions and enforcement approaches, including in light of political changes
3. 58We may be required to report drug pricing data under federal laws and regulations
4. 59These various evolving efforts create uncertainty and may adversely affect our business
5. 60Among the federal laws with which we must comply are the Controlled Substances Act, the Food, Drug & Cosmetic Act, the Federal Drug Quality and Security Act, including the Drug Supply Chain Security Act, and Section 361 of the Public Health Services Act
6. 61The FDA regulates certain computer software and digital health products intended for use in health care settings, including, for example, AI and machine learning-enabled medical devices and the cybersecurity of medical devices75% rewritten
7. 62For example, some of our imaging software is regulated as a medical device which subjects our businesses to substantial additional requirements, costs and potential enforcement actions or liabilities for noncompliance with respect to these productsNew
8. 63Allegations by a governmental body that we have not complied with these laws could have a material adverse effect on our businesses
9. 64If we enter into settlement agreements to resolve allegations of non-compliance, we could be required to make settlement payments or be subject to civil and criminal penalties, including fines and the loss of licenses80% rewritten
10. 65The EU MDR imposes strict requirements for the confirmation that a product meets the regulatory requirements, including regarding a product’s clinical evaluation and a company’s quality systems, and for the distribution, marketing and sale of medical devices, including post-market surveillance59% rewritten
11. 66The modifications created by the EU MDR may have an impact on the way we design and manufacture products and the way we conduct our business in the EEANew
12. 67Some of these laws, referred to as “false claims laws,” prohibit the submission or causing the submission of false or fraudulent claims for reimbursement to federal, state and other health care payers and programs
13. 68Most states have adopted similar state false claims acts, and these state laws have their own penalties which may be in addition to federal False Claims Act penalties, and other fraud and abuse laws47% rewritten
14. 69As a result, we regularly review and revise our marketing practices as necessary to facilitate compliance65% rewritten
15. 70CSRD requires in-scope companies to report sustainability-related information that is material from both a financial risk or opportunity and an environmental or social impact perspective, and the assessment of materiality is inherently subjectiveNew
16. 71CSRD is being transposed into national law across EU Member States, and further legislative or implementation changes may also increase our costsNew
17. 72However, the liability of legal persons is regulated at a national level
18. 73Intentional or unintentional failure to comply with settlement agreements or consent decrees could materially adversely affect our business
19. 74If we fail to comply with laws and regulations relating to the collection, storage and processing of sensitive personal information or standards in electronic health records or transmissions, we could be required to make significant changes to our products, or incur substantial fines, penalties, or other liabilities
20. 75These IT systems may be vulnerable to breakdown, wrongful intrusions, data breaches and malicious attack, which could require us to expend significant resources to eliminate these problems and address related security concerns, and could involve claims against us by private parties and/or governmental agencies21% rewritten
21. 76These requirements may not be harmonized, may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or our practices
22. 77In addition, the European Parliament and the Council of the EU adopted the GDPR that has been effective since May 25, 2018, which increased privacy rights for Data Subjects in the European Economic Area (EEA), including individuals who are our customers, suppliers and employees
23. 78Member states may individually impose additional requirements and penalties regarding certain limited matters (for which the GDPR left some room of flexibility), such as employee personal data
24. 79Switzerland enacted FADP37% rewritten
25. 80Effective November 1, 2021, China’s PIPL imposes specific rules for processing personal information and specifies that the law shall also apply to personal information activities carried out outside China but for the purpose of providing products or services to PRC citizens
26. 81Data protection laws in other countries, such as Brazil, are also quickly evolving, with many countries having updated, or are in the process of updating, their laws to bring them more in line with the model created by GDPR
27. 82Other states have enacted or are considering enacting similar privacy laws, which may subject us to additional requirements and restrictions that could have an impact on our business46% rewritten
28. 83The evolving complexity of privacy and data security legislation in the U.S. and other jurisdictions globally may complicate our compliance efforts and further increase our risk of regulatory enforcement, penalties and litigation73% rewritten
29. 84The regulatory landscape for AI is changing rapidly, with both domestic and international activityNew
30. 85Other countries are also applying their data and consumer protection laws to AI, particularly generative AI, and are considering and implementing specific legal frameworks with respect to AINew
31. 86Compliance with these laws is challenging, constantly evolving and time consuming and federal regulators, state attorneys general and plaintiff’s attorneys have been and will likely continue to be active in this space
32. 87Our products or services may be used as part of these customers’ comprehensive data security programs, including in connection with their efforts to comply with applicable data privacy and security laws and contractual requirements
33. 88Processing of such data is generally prohibited, except for specific exceptions
34. 89In order to maintain certification of our EHR products, we must satisfy the changing governmental standards
35. 90Each information blocking violation carries a $1 million penalty69% rewritten
36. 91Although we believe we are positioned to accomplish this, the effort may involve increased costs, and our failure to implement product modifications, or otherwise satisfy applicable standards, could have a material adverse effect on our businessNew
37. 92In addition, tax laws and regulations are extremely complex and subject to varying interpretations
38. 93We face inherent risk of exposure to product liability, intellectual property infringement and other claims in the event that the use of the products we sell results in injury
39. 94As a result, we could be subject to the potential risk of product liability, intellectual property infringement or other claims relating to the manufacture and distribution of products by those entities
40. 95Customs policies or legislative import restrictions could hinder the Company’s ability to import goods necessary to our operations on a timely basis and result in government enforcement actions and/or sanctions
41. 96Certain of our suppliers have had their ability to service certain markets restricted or negatively impacted because of allegations of forced labor in their supply chain

GENERAL RISKS

1. 97Our global operations are subject to inherent risks that could materially adversely affect our business52% rewritten
2. 98Our future success is substantially dependent upon our senior management, and our revenues and profitability depend on our relationships with capable personnel, as well as customers, suppliers and manufacturers of the products that we distributeNew
3. 99Our future success is substantially dependent upon the efforts and abilities of members of our senior managementNew
4. 100Disruptions in the financial markets may materially adversely affect the availability and cost of credit to us