Henry Schein 10-Q 2022-03-26

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☒

QUARTERLY

REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the

quarterly

period ended

March 26, 2022

or

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT

OF 1934

For the transition period from ____________ to ____________

Commission File Number:

0-27078

HENRY SCHEIN, INC.

(Exact name of registrant as specified in its charter)

Delaware

11-3136595

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

135 Duryea Road

Melville

,

New York

(Address of principal executive offices)

11747

(Zip Code)

(

)

843-5500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.01 per share

HSIC

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required

to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such

shorter period that the registrant was required to file such

reports), and (2) has been subject to such filing requirements for the

past 90 days.

Yes

☒

No

☐

Indicate by

check mark

whether the registrant

has submitted

electronically every Interactive

Data File

required to

be submitted

pursuant

to

Rule

of

Regulation

S-T

during

the

preceding

months

(or

for

such

shorter

period

that

the

registrant

was

required to submit such files).

Yes

☒

No

☐

Indicate by

check mark

whether the

registrant is

a large

accelerated filer,

an accelerated

filer,

a non-accelerated

filer,

a smaller

reporting

company,

or

an

emerging

growth

company.

See

the

definitions

of

“large

accelerated

filer,”

“accelerated

filer,”

“smaller reporting company,” and “emerging growth company”

in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period

for

complying with any new or revised financial accounting standards provided

pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined

in Rule 12b-2 of the Exchange Act).

Yes

☐

No

☒

As of April 25, 2022,

there were

138,050,781

shares of the registrant’s common stock outstanding.

HENRY SCHEIN, INC.

INDEX

PART I. FINANCIAL INFORMATION

Page

ITEM 1.

Condensed Consolidated Financial Statements:

Condensed Balance Sheets as of March 26, 2022 and December 25, 2021

Condensed Statements of Income for the three months ended

March 26, 2022 and March 27, 2021

Condensed Statements of Comprehensive Income for the three months ended

March 26, 2022 and March 27, 2021

Condensed Statement of Changes in Stockholders' Equity for the three months ended

March 26, 2022 and March 27, 2021

Condensed Statements of Cash Flows for the three months ended

March 26, 2022 and March 27, 2021

Notes to Consolidated Financial Statements

Note 1 – Basis of Presentation

Note 2 – Critical Accounting Policies, Accounting Pronouncements Adopted

and Recently Issued Accounting Standards

Note 3 – Revenue 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 – Legal Proceedings

Note 10 – Stock-Based Compensation

Note 11 – Redeemable Noncontrolling Interests

Note 12 – Comprehensive Income

Note 13 – Plans of Restructuring

Note 14 – Earnings Per Share

Note 15 – Supplemental Cash Flow Information

Note 16 – Related Party Transactions

ITEM 2.

Management's Discussion and Analysis of

Financial Condition and Results of Operations

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

ITEM 4.

Controls and Procedures

PART II. OTHER INFORMATION

ITEM 1.

Legal Proceedings

ITEM 1A.

Risk Factors

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

ITEM 5.

Other Information

ITEM 6.

Exhibits

Signature

See accompanying notes.

PART

I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions,

except share data)

March 26,

December 25,

2022

2021

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

$

Accounts receivable, net of reserves of $

and $

1,444

1,452

Inventories, net

1,871

1,861

Prepaid expenses and other

Total current assets

3,830

3,844

Property and equipment, net

Operating lease right-of-use assets

Goodwill

2,857

2,854

Other intangibles, net

Investments and other

Total assets

$

8,447

$

8,481

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

$

1,054

Bank credit lines

Current maturities of long-term debt

Operating lease liabilities

Accrued expenses:

Payroll and related

Taxes

Other

Total current liabilities

2,144

2,307

Long-term debt

Deferred income taxes

Operating lease liabilities

Other liabilities

Total liabilities

3,610

3,805

Redeemable noncontrolling interests

Commitments and contingencies

(nil)

(nil)

Stockholders' equity:

Preferred stock, $

0.01

par value,

1,000,000

shares authorized,

none

outstanding

-

-

Common stock, $

0.01

par value,

480,000,000

shares authorized,

137,708,809

outstanding on March 26, 2022 and

137,145,558

outstanding on December 25, 2021

Additional paid-in capital

-

-

Retained earnings

3,759

3,595

Accumulated other comprehensive loss

(168)

(171)

Total Henry Schein, Inc. stockholders' equity

3,592

3,425

Noncontrolling interests

Total stockholders' equity

4,224

4,063

Total liabilities, redeemable noncontrolling

interests and stockholders' equity

$

8,447

$

8,481

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF INCOME

(unaudited, in millions, except share and per share data)

Three Months Ended

March 26,

March 27,

2022

2021

Net sales

$

3,179

$

2,925

Cost of sales

2,206

2,034

Gross profit

Operating expenses:

Selling, general and administrative

Depreciation and amortization

Restructuring costs

-

Operating income

Other income (expense):

Interest income

Interest expense

(7)

(6)

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

Income taxes

(57)

(57)

Equity in earnings of affiliates

Net income

Less: Net income attributable to noncontrolling interests

(5)

(9)

Net income attributable to Henry Schein, Inc.

$

$

Earnings per share attributable to Henry Schein, Inc.:

Basic

$

1.31

$

1.17

Diluted

$

1.30

$

1.16

Weighted-average common

shares outstanding:

Basic

137,296,581

142,298,387

Diluted

139,237,472

143,397,724

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

(unaudited, in millions)

Three Months Ended

March 26,

March 27,

2022

2021

Net income

$

$

Other comprehensive income (loss), net of tax:

Foreign currency translation gain (loss)

(38)

Unrealized gain from foreign currency hedging activities

Pension adjustment gain

-

Other comprehensive income (loss), net of tax

(34)

Comprehensive income

Comprehensive income attributable to noncontrolling interests:

Net income

(5)

(9)

Foreign currency translation (gain) loss

(1)

Comprehensive income attributable to noncontrolling interests

(6)

(3)

Comprehensive income attributable to Henry Schein, Inc.

$

$

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENT

OF CHANGES IN

STOCKHOLDERS’ EQUITY

(unaudited, in millions, except share data)

Accumulated

Common Stock

Additional

Other

Total

$0.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Shares

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, December 25, 2021

137,145,558

$

$

-

$

3,595

$

(171)

$

$

4,063

Net income (excluding $

attributable to Redeemable

noncontrolling interests)

-

-

-

-

Foreign currency translation gain (excluding gain of $

attributable to Redeemable noncontrolling interests)

-

-

-

-

-

Unrealized gain from foreign currency hedging activities,

net of tax of $

-

-

-

-

-

Purchase of noncontrolling interests

-

-

-

-

-

(7)

(7)

Change in fair value of redeemable securities

-

-

(3)

-

-

-

(3)

Stock-based compensation expense

876,161

-

-

-

-

Stock issued upon exercise of stock options

26,233

-

-

-

-

Shares withheld for payroll taxes

(336,331)

-

(28)

-

-

-

(28)

Settlement of stock-based compensation awards

(2,812)

-

-

-

-

-

-

Transfer of charges in excess of

capital

-

-

(17)

-

-

-

Balance, March 26, 2022

137,708,809

$

$

-

$

3,759

$

(168)

$

$

4,224

Accumulated

Common Stock

Additional

Other

Total

$0.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Shares

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, December 26, 2020

142,462,571

$

$

-

$

3,455

$

(108)

$

$

3,984

Net income (excluding $

attributable to Redeemable

noncontrolling interests)

-

-

-

-

Foreign currency translation loss (excluding loss of $

attributable to Redeemable noncontrolling interests)

-

-

-

-

(32)

-

(32)

Unrealized gain from foreign currency hedging activities,

net of tax of $

-

-

-

-

-

Pension adjustment gain, net of tax of $

-

-

-

-

-

Change in fair value of redeemable securities

-

-

(46)

-

-

-

(46)

Initial noncontrolling interests and adjustments related

to

business acquisitions

-

-

-

-

-

Repurchase and retirement of common stock

(1,325,242)

-

(12)

(77)

-

-

(89)

Stock-based compensation expense

281,645

-

-

-

-

Settlement of stock-based compensation awards

-

-

-

-

-

Shares withheld for payroll taxes

(108,861)

-

(7)

-

-

-

(7)

Transfer of charges in excess of

capital

-

-

(51)

-

-

-

Balance, March 27, 2021

141,310,113

$

$

-

$

3,493

$

(136)

$

$

3,997

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS

(unaudited, in millions)

Three Months Ended

March 26,

March 27,

2022

2021

Cash flows from operating activities:

Net income

$

$

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Stock-based compensation expense

Provision for (benefit from) losses on trade and other accounts receivable

(3)

Provision for (benefit from) deferred income taxes

(3)

Equity in earnings of affiliates

(4)

(6)

Distributions from equity affiliates

Changes in unrecognized tax benefits

Other

(7)

-

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

Inventories

(9)

(78)

Other current assets

(45)

Accounts payable and accrued expenses

(188)

(180)

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of fixed assets

(19)

(14)

Payments related to equity investments and business

acquisitions, net of cash acquired

(5)

(204)

Proceeds from loan to affiliate

-

Other

(7)

(5)

Net cash used in investing activities

(27)

(223)

Cash flows from financing activities:

Net change in bank borrowings

-

Principal payments for long-term debt

(53)

(18)

Proceeds from issuance of stock upon exercise of stock options

-

Payments for repurchases and retirement of common stock

-

(89)

Payments for taxes related to shares withheld for employee taxes

(26)

(6)

Distributions to noncontrolling shareholders

(5)

(7)

Acquisitions of noncontrolling interests in subsidiaries

(10)

-

Net cash used in financing activities

(62)

(120)

Effect of exchange rate changes on cash and cash equivalents

Net change in cash and cash equivalents

(277)

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

$

$

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

In accordance with the “Safe Harbor” provisions of the Private Securities

Litigation Reform Act of 1995, we

provide the following cautionary remarks regarding important factors

that, among others, could cause future results

to differ materially from the forward-looking statements, expectations and assumptions

expressed or implied

herein.

All forward-looking statements made by us are subject to

risks and uncertainties and are not guarantees of

future performance.

These forward-looking statements involve known and unknown

risks, uncertainties and other

factors that may cause our actual results, performance and achievements

or industry results to be materially

different from any future results, performance or achievements expressed or implied by such

forward-looking

statements.

These statements are generally identified by the use of such

terms as “may,” “could,” “expect,”

“intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,”

“to be,” “to make” or other comparable

terms.

Factors that could cause or contribute to such differences include, but are not limited

to, those discussed in

the documents we file with the Securities and Exchange Commission

(SEC), including our Annual Report on Form

10-K. Forward looking statements include the overall impact of the Novel

Coronavirus Disease 2019 (COVID-19)

on the Company, its results of operations, liquidity and financial condition (including any estimates of the impact

on these items), the rate and consistency with which dental and other practices

resume or maintain normal

operations in the United States and internationally, expectations regarding personal protective equipment (“PPE”)

and COVID-19 related product sales and inventory levels, whether additional

resurgences or variants of the virus

will adversely impact the resumption of normal operations, whether vaccine

mandates will adversely impact the

Company (by disrupting our workforce and/or business), whether supply chain

disruptions will adversely impact

our business, the impact of restructuring programs as well as of any

future acquisitions, and more generally current

expectations regarding performance in current and future periods.

Forward looking statements also include the (i)

ability of the Company to have continued access to a variety of COVID-19

test types, expectations regarding

COVID-19 test sales, demand and inventory levels, as well

as the efficacy or relative efficacy of the test results

given that the test efficacy has not been, or will not have been, independently

verified under normal FDA

procedures and (ii) potential for the Company to distribute the COVID-19

vaccines and ancillary supplies.

Risk factors and uncertainties that could cause actual results to differ materially from current

and historical results

include, but are not limited to: risks associated with COVID-19

and any variants thereof, as well as other disease

outbreaks, epidemics, pandemics, or similar wide-spread public health concerns

and other natural disasters; our

dependence on third parties for the manufacture and supply of our products;

our ability to develop or acquire and

maintain and protect new products (particularly technology products) and

technologies that achieve market

acceptance with acceptable margins; transitional challenges associated with acquisitions,

dispositions and joint

ventures, including the failure to achieve anticipated synergies/benefits; financial

and tax risks associated with

acquisitions, dispositions and joint ventures; certain provisions in our governing

documents that may discourage

third-party acquisitions of us; effects of a highly competitive (including, without

limitation, competition from third-

party online commerce sites) and consolidating market; the repeal or

judicial prohibition on implementation of the

Affordable Care Act; changes in the health care industry; risks from expansion of

customer purchasing power and

multi-tiered costing structures; increases in shipping costs for our products

or other service issues with our third-

party shippers; general global macro-economic and political conditions,

including international trade agreements,

potential trade barriers and terrorism; failure to comply with existing and

future regulatory requirements; risks

associated with the EU Medical Device Regulation; failure to comply with

laws and regulations relating to health

care fraud or other laws and regulations; failure to comply with laws

and regulations relating to the collection,

storage and processing of sensitive personal information or standards in electronic

health records or transmissions;

changes in tax legislation; risks related to product liability, intellectual property and other claims; litigation

risks; new or unanticipated litigation developments and the status of

litigation matters; risks associated with

customs policies or legislative import restrictions; cyberattacks or other

privacy or data security breaches; risks

associated with our global operations; our dependence on our senior management,

employee hiring and retention,

and our relationships with customers, suppliers and manufacturers;

and disruptions in financial markets.

The order

in which these factors appear should not be construed to indicate their

relative importance or priority.

We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control

or predict.

Accordingly, any forward-looking statements contained herein should not be relied upon as a prediction

of actual results.

We undertake no duty and have no obligation to update forward-looking statements.

Where You

Can Find Important Information

We may disclose important information through one or more of the following channels: SEC filings, public

conference calls and webcasts, press releases, the investor relations

page of our website (www.henryschein.com)

and the social media channels identified on the Newsroom page of our website.

Recent Developments

COVID-19 Pandemic

The COVID-19 pandemic negatively impacted the global economy, disrupted global supply chains and created

significant volatility and disruption of global financial markets in

2020 and 2021.

The impact of COVID-19 had a

material adverse effect on our business, results of operations and cash flows in the

second quarter of 2020.

In the

latter half of the second quarter of 2020, dental and medical practices began

to re-open worldwide, and continued to

do so during the second half of 2020.

During the year ended December 25, 2021, patient traffic levels returned to

levels approaching pre-pandemic levels.

Demand for dental products and certain medical products throughout 2021

was driven by sales of PPE, COVID-19 test kits and other COVID-19

related products.

During the three months

ended March 26, 2022, with the exception of COVID-19 test kits, we experienced

a decrease in the sales volume of

PPE and COVID-19 related products.

During the three months ended March 26, 2022,

as a result of an increase in COVID-19 variants, primarily in

Europe and to a lesser extent in North America, we experienced lower dental

patient traffic, which began to

increase as the quarter progressed.

Although some COVID-19 restrictions are still in place in parts of Europe,

we

expect these markets to recover but at a slower pace.

In contrast to our dental business, during the three months

ended March 26, 2022, our medical business benefited from an increase

in sales volume of COVID-19 test kits and

point-of-care diagnostics.

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 doubtful accounts; hedging activity;

supplier rebates; measurement of

compensation cost for certain share-based performance awards and cash bonus

plans; and pension plan

assumptions.

Due to the significant uncertainty surrounding the future impact of

COVID-19, our judgments

regarding estimates and impairments could change in the future.

There is an ongoing risk that the COVID-19

pandemic may again have a material adverse effect on our business, results of operations

and cash flows and may

result in a material adverse effect on our financial condition and liquidity.

However, the extent of the potential

impact cannot be reasonably estimated at this time.

Executive-Level Overview

Henry Schein, Inc. is a solutions company for health care professionals powered

by a network of people and

technology.

We believe we are the world’s largest

provider of health care products and services primarily to

office-

based dental and medical practitioners, as well as alternate sites of care.

We serve more than one million customers

worldwide including dental practitioners, laboratories, physician practices,

and ambulatory surgery centers, as well

as government, institutional health care clinics and other alternate care clinics.

We believe that we have a strong

brand identity due to our more than 89 years of experience distributing health

care products.

We are headquartered in Melville, New York,

employ nearly 22,000 people (of which approximately 10,600

are

based outside of the United States) and have operations or affiliates in 32 countries

and territories.

Our broad

global footprint has evolved over time through our organic success as well as

through contribution from strategic

acquisitions.

We have established strategically located distribution centers around the world to enable us to better serve our

customers and increase our operating efficiency.

This infrastructure, together with broad product and service

offerings at competitive prices, and a strong commitment to customer service,

enables us to be a single source of

supply for our customers’ needs.

While our primary go-to-market strategy is in our capacity as a distributor, we also manufacture certain

dental

specialty products and solutions in the areas of implants, orthodontics

and endodontics.

We have achieved scale in

these global businesses primarily through acquisitions as manufacturers

of these products typically do not utilize a

distribution channel to serve customers.

We conduct our business through two reportable segments: (i) health care distribution and (ii) technology and

value-added services.

These segments offer different products and services to the same customer base.

Our global

dental businesses serve office-based dental practitioners, dental laboratories, schools

and other institutions.

Our

global medical businesses serve office-based medical practitioners, ambulatory

surgery centers, other alternate-care

settings and other institutions.

The health care distribution reportable segment aggregates our global

dental and medical operating segments.

This

segment distributes consumable products, small equipment, laboratory

products, large equipment, equipment repair

services, branded and generic pharmaceuticals, vaccines, surgical products, dental

specialty products (including

implant, orthodontic and endodontic products), diagnostic tests, infection-control

products, PPE and vitamins.

Our global technology and value-added services business provides software,

technology and other value-added

services to health care practitioners.

Our technology business offerings include practice management software

systems for dental and medical practitioners.

Our value-added practice solutions include practice consultancy,

education, revenue cycle management and financial services on a non-recourse

basis, e-services, practice

technology, network and hardware services, as well as consulting, and continuing education services for

practitioners.

A key element to grow closer to our customers is our One Schein initiative, which

is a unified go-to-market

approach that enables practitioners to work synergistically with our supply chain,

equipment sales and service and

other value-added services, allowing our customers to leverage

the combined value that we offer through a single

program.

Specifically, One Schein provides customers with streamlined access to our comprehensive offering of

national brand products, our private label products and proprietary specialty

products and solutions (including

implant, orthodontic and endodontic products).

In addition, customers have access to a wide range of services,

including software and other value-added services.

Industry Overview

In recent years, the health care industry has increasingly focused on cost containment.

This trend has benefited

distributors capable of providing a broad array of products and services at

low prices.

It also has accelerated the

growth of HMOs, group practices, other managed care accounts and collective

buying groups, which, in addition to

their emphasis on obtaining products at competitive prices, tend to

favor distributors capable of providing

specialized management information support.

We believe that the trend towards cost containment has the potential

to favorably affect demand for technology solutions, including software, which can

enhance the efficiency and

facilitation of practice management.

Our operating results in recent years have been significantly affected by strategies

and transactions that we

undertook to expand our business, domestically and internationally, in part to address significant changes

in the

health care industry, including consolidation of health care distribution companies, health care reform, trends

toward managed care, cuts in Medicare and collective purchasing arrangements.

Our current and future results have been and could be impacted by

the COVID-19 pandemic, the current economic

environment and continued economic and public health uncertainty.

Since the onset of the COVID-19 pandemic in

early 2020, we have been carefully monitoring its impact on our global

operations and have taken appropriate steps

to minimize the risk to our employees.

We have seen and expect to continue to see changes in demand trends for

some of our products and services, supply chain challenges and labor

challenges, as rates of infection fluctuate, new

strains or variants of COVID-19 emerge and spread, vaccine uptake and mandates

increase and change,

governments adapt their approaches to combatting the virus (including

without limitation, vaccine mandates), and

local conditions change across geographies.

For example, vaccine mandates affecting our workforce, whether

imposed through government regulations or contracts with governmental authorities

or other customers, could

potentially cause staffing shortages if employees choose not to comply as well as

other consequences to our

business or operations, managing and tracking vaccination status and ongoing

testing for exempt employees could

potentially increase our costs, as could addressing inconsistent COVID-19

vaccination mandates.

As a result, we

expect to see continued volatility through at least the duration of the pandemic.

Industry Consolidation

The health care products distribution industry, as it relates to office-based health care practitioners, is fragmented

and diverse.

The industry ranges from sole practitioners working out

of relatively small offices to group practices

or service organizations ranging in size from a few practitioners to a large number of practitioners who have

combined or otherwise associated their practices.

Due in part to the inability of office-based health care practitioners to store and manage

large quantities of supplies

in their offices, the distribution of health care supplies and small equipment to office-based health

care practitioners

has been characterized by frequent, small quantity orders, and a need for

rapid, reliable and substantially complete

order fulfillment.

The purchasing decisions within an office-based health care practice are typically

made by the

practitioner or an administrative assistant.

Supplies and small equipment are generally purchased from more

than

one distributor, with one generally serving as the primary supplier.

The trend of consolidation extends to our customer base.

Health care practitioners are increasingly seeking to

partner, affiliate or combine with larger entities such as hospitals, health systems, group practices or physician

hospital organizations.

In many cases, purchasing decisions for consolidated groups

are made at a centralized or

professional staff level; however, orders are delivered to the practitioners’ offices.

We believe that consolidation within the industry will continue to result in a number of distributors, particularly

those with limited financial, operating and marketing resources, seeking

to combine with larger companies that can

provide growth opportunities.

This consolidation also may continue to result in distributors seeking

to acquire

companies that can enhance their current product and service offerings or provide

opportunities to serve a broader

customer base.

Our trend with regard to acquisitions and joint ventures has been to expand

our role as a provider of products and

services to the health care industry.

This trend has resulted in our expansion into service areas that complement

our

existing operations and provide opportunities for us to develop synergies with, and

thus strengthen, the acquired

businesses.

As industry consolidation continues, we believe that we are positioned

to capitalize on this trend, as we believe we

have the ability to support increased sales through our existing infrastructure,

although there can be no assurances

that we will be able to successfully accomplish this.

We also have invested in expanding our sales/marketing

infrastructure to include a focus on building relationships with decision

makers who do not reside in the office-

based practitioner setting.

As the health care industry continues to change, we continually evaluate possible

candidates for joint venture or

acquisition and intend to continue to seek opportunities to expand our

role as a provider of products and services to

the health care industry.

There can be no assurance that we will be able to successfully pursue

any such

opportunity or consummate any such transaction, if pursued.

If additional transactions are entered into or

consummated, we would incur merger and/or acquisition-related costs, and

there can be no assurance that the

integration efforts associated with any such transaction would be successful.

In response to the COVID-19

pandemic, we had taken a range of actions to preserve cash, including

the temporary suspension of significant

acquisition activity.

During the second half of 2020, as global conditions improved, we resumed

our acquisition

strategy.

Aging Population and Other Market Influences

The health care products distribution industry continues to experience growth

due to the aging population,

increased health care awareness, the proliferation of medical technology

and testing, new pharmacology treatments,

and expanded third-party insurance coverage, partially offset by the effects of unemployment on insurance

coverage. In addition, the physician market continues to benefit from the shift

of procedures and diagnostic testing

from acute care settings to alternate-care sites, particularly physicians’

offices.

According to the U.S. Census Bureau’s International Database, in 2021 there were more than six and a half million

Americans aged 85 years or older, the segment of the population most in need of long-term care

and elder-care

services. By the year 2050, that number is projected to nearly triple to approximately

19 million. The population

aged 65 to 84 years is projected to increase by approximately 32% during

the same period.

As a result of these market dynamics, annual expenditures for health

care services continue to increase in the

United States.

We believe that demand for our products and services will grow while continuing to be impacted by

current and future operating, economic, and industry conditions. The Centers

for Medicare and Medicaid Services,

or CMS, published “National Health Expenditure Data” indicating

that total national health care spending reached

approximately $4.1 trillion in 2020, or 19.7% of the nation’s gross domestic product, the benchmark

measure for

annual production of goods and services in the United States.

Health care spending is projected to reach

approximately $6.2 trillion in 2028, approximately 19.7% of the

nation’s projected gross domestic product.

The

latest projections begin after the latest historical year 2018 and go through

2028. These projections do not take into

account the impacts of COVID-19 because of the timing of the report and

the highly uncertain nature of the

pandemic.

Government

Certain of our businesses involve the distribution, importation, exportation,

marketing and sale of, and third party

payment for, pharmaceuticals and medical devices, and in this regard, we are subject to extensive

local, state,

federal and foreign governmental laws and regulations, including

as applicable to our wholesale distribution of

pharmaceuticals and medical devices, and as part of our specialty home medical

supply business that distributes and

sells medical equipment and supplies directly to patients.

The federal government and state governments have also

increased enforcement activity in the health care sector, particularly in areas of fraud and abuse, anti-bribery

and

corruption, controlled substances handling, medical device regulations and

data privacy and security standards.

In addition, certain of our businesses must operate in compliance with

a variety of burdensome and complex billing

and record-keeping requirements in order to substantiate claims for payment under

federal, state and commercial

healthcare reimbursement programs.

One of these businesses was recently suspended by CMS from

receiving

payments from Medicare, although it is permitted to continue to perform

and bill for Medicare services.

The

amounts billed are being deposited in an escrow account pending resolution

of an audit.

The Company has not

recognized revenue for these services and has currently deferred slightly over $8

million in revenue (including $4

million deferred during the three months ended March 26, 2022 and slightly

over $4 million deferred during the

three months ended December 25, 2021).

Government and private insurance programs fund a large portion of the total cost of medical

care, and there have

been efforts to limit such private and government insurance programs, including efforts,

thus far unsuccessful, to

seek repeal of the entire United States Patient Protection and Affordable Care Act,

as amended by the Health Care

and Education Reconciliation Act, each enacted in March 2010, (as amended,

the “ACA”).

In addition, activities to

control medical costs, including laws and regulations lowering reimbursement

rates for pharmaceuticals, medical

devices and/or medical treatments or services, are ongoing.

Many of these laws and regulations are subject to

change and their evolving implementation may impact our operations and

our financial performance.

Our businesses are generally subject to numerous laws and regulations that could

impact our financial performance,

and failure to comply with such laws or regulations could have a

material adverse effect on our business.

A more detailed discussion of governmental laws and regulations

is included in Management’s Discussion &

Analysis of Financial Condition and Results of Operations,

contained in our Annual Report on Form 10-K for the

fiscal year ended December 25, 2021, filed with the SEC on February 15, 2022.

Results of Operations

The following table summarizes the significant components of our operating

results and cash flows for the three

months ended March 26, 2022 and March 27, 2021:

Three Months Ended

March 26,

March 27,

2022

2021

Operating results:

Net sales

$

3,179

$

2,925

Cost of sales

2,206

2,034

Gross profit

Operating expenses:

Selling, general and administrative

Depreciation and amortization

Restructuring costs

-

Operating income

$

$

Other expense, net

$

(5)

$

(4)

Net income

Net income attributable to Henry Schein, Inc.

Three Months Ended

March 26,

March 27,

2022

2021

Cash flows:

Net cash provided by operating activities

$

$

Net cash used in investing activities

(27)

(223)

Net cash used in financing activities

(62)

(120)

Plans of Restructuring

On November 20, 2019, we committed to a contemplated restructuring

initiative intended to mitigate stranded costs

associated with the spin-off of our animal health business and to rationalize operations

and to provide expense

efficiencies.

These restructuring activities were completed in 2021.

During the three months ended March 27, 2021, we recorded restructuring

costs of $3 million.

As of March 26,

2022 and December 25, 2021, the remaining accrued balance for restructuring

costs was $3 million and $4 million,

respectively.

Three Months Ended March 26, 2022 Compared to Three Months Ended March 27, 2021

Net Sales

Net sales were as follows:

March 26,

% of

March 27,

% of

Increase

2022

Total

2021

Total

$

%

Health care distribution

(1)

Dental

$

1,828

57.5

%

$

1,789

61.2

%

$

2.2

%

Medical

1,172

36.9

33.9

18.3

Total health care distribution

3,000

94.4

2,780

95.1

7.9

Technology and value-added services

(2)

5.6

4.9

23.4

Total

$

3,179

100.0

%

$

2,925

100.0

%

$

8.7

(1)

Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and

generic pharmaceuticals, vaccines, surgical products, dental specialty products (including implant, orthodontic and endodontic

products), diagnostic tests, infection-control products, PPE and vitamins.

(2)

Consists of practice management software and other value-added products, which are distributed primarily to health care providers,

practice consultancy, education, revenue cycle management and financial services on a non-recourse basis, e-services, continuing

education services for practitioners, consulting and other services.

The 8.7% increase in net sales includes an increase of 10.1% in local currency

sales (7.7% increase in internally

generated sales and 2.4% growth from acquisitions) partially offset by a decrease

of 1.4% related to foreign

currency exchange.

We estimate that sales of PPE and COVID-19 related products were approximately $487

million, an increase of 4.4% versus the prior year.

Excluding PPE and COVID-19 related products, the estimated

increase in internally generated local currency sales was 8.9%.

The 2.2% increase in dental net sales includes an increase of 4.4% in local

currency sales (3.5% increase in

internally generated sales and 0.9% growth from acquisitions) partially offset by a

decrease of 2.2% related to

foreign currency exchange.

The 4.4% increase in local currency sales was attributable to an increase in dental

consumable merchandise sales of 2.4% (1.3% increase in internally generated

sales and 1.1% growth from

acquisitions) and an increase in dental equipment and service

sales of 12.0% (11.9% increase in internally

generated sales and 0.1% growth from acquisitions).

Our sales growth in dental merchandise was lower than our

sales growth in dental equipment during the first half of the three months

ended March 26, 2022.

As a result of an

increase in COVID-19 variants, primarily in Europe and to a lesser extent

in North America, our dental

merchandise growth was impacted by lower patient traffic, which began to increase as the

quarter progressed.

Dental equipment sales increased in both our North American and international

markets, which is primarily

attributable to increased demand and strong order backlog.

We estimate that our dental business recorded sales of

approximately $143 million of PPE and COVID-19 related products, an estimated

decrease of 15.3% versus the

prior year.

Excluding PPE and COVID-19 related products, the estimated

increase in internally generated local

currency dental sales was 6.3%.

The 18.3% increase in medical net sales includes an increase of 18.5%

in local currency sales (14.7% increase in

internally generated sales and 3.8% growth from acquisitions), partially offset by

a decrease of 0.2% related to

foreign currency exchange.

We estimate that our medical business recorded sales of approximately $344 million of

PPE, COVID-19 test kits, point-of-care diagnostics and other COVID-19

related products for the three months

ended March 26, 2022, an estimated increase of 15.7%

compared to the prior year.

Excluding sales of PPE,

COVID-19 test kits, point-of-care diagnostics and other COVID-19

related products, the estimated increase in

internally generated local currency medical sales was 14.5%.

The 23.4% increase in technology and value-added services net sales includes

an increase of 24.1%

in local

currency sales (11.1% increase in internally generated sales and 13.0% growth from acquisitions)

partially offset by

a decrease of 0.7% related to foreign currency exchange.

During the quarter ended March 26, 2022, the trend for

transactional software sales improved compared to the prior year, as more patients visited dental practices

worldwide, generating demand for our sales cycle management solutions,

and also from cloud-based solutions that

drive practice efficiency and patient engagement.

Gross Profit

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

March 26,

Gross

March 27,

Gross

Increase

2022

Margin %

2021

Margin %

$

%

Health care distribution

$

28.6

%

$

28.4

%

$

8.6

%

Technology and value-added services

64.9

70.3

13.8

Total

$

30.6

$

30.5

$

9.2

As a result of different practices of categorizing costs associated with distribution networks

throughout our

industry, our gross margins may not necessarily be comparable to other distribution companies.

Additionally, we

realize substantially higher gross margin percentages in our technology and value-added services

segment than in

our health care distribution segment.

These higher gross margins result from being both the developer and seller of

software products and services, as well as certain financial services.

The software industry typically realizes higher

gross margins to recover investments in development.

Within our health care distribution segment, gross profit margins may vary from one period to the next.

Changes in

the mix of products sold as well as changes in our customer mix have been

the most significant drivers affecting

our gross profit margin.

For example, sales of our private label products achieve

gross profit margins that are

higher than average total gross profit margins of all products.

With respect to customer mix, sales to our large-

group customers are typically completed at lower gross margins due to the higher

volumes sold as opposed to the

gross margin on sales to office-based practitioners, who normally purchase lower volumes at

greater frequencies.

Health care distribution gross profit increased $68 million, or 8.6%, primarily

due to the increase in net sales

discussed above.

In addition, health care distribution gross profit margin benefitted from supplier rebates

during

the quarter due to increased purchase volumes.

The overall increase in our health care distribution gross profit

includes an increase of $37 million from internally generated sales, $19

million additional gross profit from

acquisitions, and a $12 million increase in the gross margin rates due to product mix and supplier

rebates.

Technology and value-added services gross profit increased $14 million, or 13.8%, due to a $10 million increase in

internally generated sales and $8 million additional gross profit from acquisitions,

partially offset by a decrease of

$4 million from gross margin rates due to product mix.

Technology and value-added services gross profit margin

decreased to 64.9% from 70.3% primarily due to lower gross margins of recently acquired

companies in the

business services sector.

Selling, General and Administrative

Selling, general and administrative expenses by segment and in

total were as follows:

% of

% of

March 26,

Respective

March 27,

Respective

Increase

2022

Net Sales

2021

Net Sales

$

%

Health care distribution

$

21.5

%

$

21.3

%

$

9.1

%

Technology and value-added services

46.4

48.0

19.2

Total

$

22.9

$

22.6

$

10.2

Selling, general and administrative expenses (including restructuring costs

in the three months ended March 27,

2021. increased $68 million, or 10.2%.

The $54 million increase in selling, general and administrative expenses within

our health care distribution segment

was attributable to an increase of $36 million of operating costs and an increase

of $21 million of additional costs

from acquired companies, partially offset by a decrease of $3 million in restructuring costs.

The $14 million

increase in selling, general and administrative expenses within our technology

and value-added services segment

was attributable to an increase of $7 million of operating costs and an

increase of $7 million of additional costs

from acquired companies.

As a component of total selling, general and administrative expenses,

selling expenses increased $57 million, or

14.8% to $443 million primarily due to an increase in payroll and payroll

related costs and travel and convention

expenses.

As a percentage of net sales, selling expenses increased to 13.9%

from 13.2%.

As a component of total selling, general and administrative expenses, general

and administrative expenses

increased $11 million, or 3.7% to $287 million primarily due to an increase in payroll and payroll related

costs and

travel and convention expenses.

As a percentage of net sales, general and administrative expenses decreased

to

9.0% from 9.3%.

Other Expense, Net

Other expense, net, was as follows:

March 26,

March 27,

Variance

2022

2021

$

%

Interest income

$

$

$

-

-

%

Interest expense

(7)

(6)

(1)

(16.7)

Other expense, net

$

(5)

$

(4)

$

(1)

(25.0)

Interest expense increased $1 million primarily due to increased interest

rates.

Income Taxes

For the three months ended March 26, 2022 our effective tax rate was 24.0% compared

to 25.1% for the prior year

period.

The difference between our effective tax rates and the federal statutory tax rate for the three

months ended

March 26, 2022 primarily relates to state and foreign income taxes and

interest expense as well as share-based

compensation.

The difference between our effective tax rate and the federal statutory tax rate for the three months

ended March 27, 2021 was primarily due 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 (which had been temporarily suspended

in April 2020, but were resumed in early

March 2021).

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 anticipate

future increases in our working capital requirements.

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.

We believe that our cash and cash equivalents, our ability to access private debt markets and public equity markets,

and our available funds under existing credit facilities provide us with

sufficient liquidity to meet our currently

foreseeable short-term and long-term capital needs.

Net cash provided by operating activities was $93 million for the

three months ended March 26, 2022, compared to

net cash provided by operating activities of $63 million for the comparable

prior year period.

The net change of

$30 million was primarily attributable to higher net income and decreased

working capital, specifically a decrease

in inventory

levels of PPE and COVID-19 related products, and reduced levels

of prepaid inventory and lower

outstanding vendor rebates.

These working capital decreases were partially offset by an increase in accounts

receivable balances resulting from increased sales.

Net cash used in investing activities was $27 million for the three

months ended March 26, 2022, compared to $223

million for the comparable prior year period.

The net change of $196 million was primarily attributable to

decreased payments for equity investments and business acquisitions.

Net cash used in financing activities was $62 million for the three

months ended March 26, 2022, compared to net

cash used in financing activities of $120 million for the comparable

prior year period.

The net change of $58

million was primarily due to decreased repurchases of common stock.

The following table summarizes selected measures of liquidity and capital

resources:

March 26,

December 25,

2022

2021

Cash and cash equivalents

$

$

Working

capital

(1)

1,686

1,537

Debt:

Bank credit lines

$

$

Current maturities of long-term debt

Long-term debt

Total debt

$

$

Leases:

Current operating lease liabilities

$

$

Non-current operating lease liabilities

(1)

Includes $77 million and $138 million of certain accounts receivable which serve as security for U.S. trade accounts receivable

securitization at March 26, 2022 and December 25, 2021, 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 decreased

to 42 days as of March 26, 2022 from 43

days as of March 27, 2021.

During the three months ended March 26, 2022, we wrote off approximately $3 million

of fully reserved accounts receivable against our trade receivable reserve.

Our inventory turns from operations

decreased to 4.7 as of March 26, 2022 from 5.2 as of March 27, 2021.

Our working capital accounts may be

impacted by current and future economic conditions.

Leases

We have operating and finance leases for corporate offices, office space, distribution and other facilities, vehicles,

and certain equipment.

Our leases have remaining terms of less than one year to

approximately 19 years, some of

which may include options to extend the leases for up to 10 years.

As of March 26, 2022, our right-of-use assets

related to operating leases were $331 million and our current and non-current

operating lease liabilities were $76

million and $277 million, respectively.

Stock Repurchases

On March 8, 2021, we announced the reinstatement of our share repurchase

program.

From March 3, 2003 through March 26, 2022, we repurchased $4.0 billion,

or 81,068,993 shares, under our

common stock repurchase programs, with $200 million available as of March

26, 2022 for future common stock

share repurchases.

During the fiscal quarter ended March 26, 2022,

we did not repurchase any shares of our common stock because

we

had a 10b5-1 plan that did not result in any shares being repurchased during

the quarter.

We intend to put in place

an additional plan effective May 4, 2022.

Critical Accounting Policies and Estimates

There have been no material changes in our critical accounting policies and

estimates from those disclosed in Item

7 of our Annual Report on Form 10-K for the year ended December 25, 2021,

except accounting policies adopted

as of December 26, 2021, which are discussed in

Note 2-Critical Accounting Policies, Accounting Pronouncements

Adopted and Recently Issued Accounting Standards

of the Notes to the Consolidated Financial Statements included

under Item 1.

Accounting Standards Update

For a discussion of accounting standards updates that have been adopted

or will be adopted, see

Note 2-Critical

Accounting Policies, Accounting Pronouncements Adopted

and Recently Issued Accounting Standards of the Notes

to the Consolidated Financial Statements included under Item 1.

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 25, 2021.

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

26, 2022, 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.

Changes in Internal Control over Financial Reporting

The combination of continued acquisition integrations and system

implementation undertaken during the quarter

and carried over from prior quarters when considered in the aggregate, represents

a material change in our internal

control over financial reporting.

During the three months ended March 26, 2022, post-acquisition integration

related activities continued for our

dental and medical businesses acquired during prior quarters.

These acquisitions, the majority of which utilize

separate information and financial accounting systems, have been

included in our consolidated financial statements

since their respective dates of acquisition.

In addition, during the quarter ended March 26, 2022, we completed the

systems implementation activities to

upgrade the warehouse management system for our Australian dental

business.

All continued acquisition integrations and systems implementation 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 9–Legal Proceedings

of the Notes to the Condensed Consolidated

Financial Statements included under Item 1.

There have been no material changes from the risk factors disclosed in

Part 1, Item 1A, of our Annual Report on

Form 10-K for the year ended December 25, 2021.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES

AND USE OF PROCEEDS

Purchases of equity securities by the issuer

Our share repurchase program announced on March 3, 2003

, originally allowed us to repurchase up to two million

shares pre-stock splits (eight million shares post-stock splits) of our common

stock, which represented

approximately 2.3% of the shares outstanding at the commencement of

the program.

Subsequent additional

increases totaling $4.1 billion, authorized by our Board of Directors,

to the repurchase program provide for a total

of $4.2 billion of shares of our common stock to be repurchased under this

program.

As of March 26, 2022, we had repurchased approximately $4.0 billion of

common stock (81,068,993 shares) under

these initiatives, with $200 million available for future common stock

share repurchases.

During the fiscal quarter ended March 26, 2022, we did not repurchase

any shares of our common stock because we

had a 10b5-1 plan that did not result in any shares being repurchased during

the quarter.

We intend to put in place

an additional plan effective May 4, 2022.

The maximum number of shares that could be purchased under this program

is determined at the end of each month

based on the closing price of our common stock at that time.

The maximum number of shares that could be

repurchased as of January 29, 2022, February 26, 2022, and March

26, 2022 were 2,642,010, 2,290,428 and

2,276,610, respectively.

OTHER INFORMATION

On May 2, 2022, the Compensation Committee of the Board of Directors

(the “Compensation Committee”)

approved the adoption of the Henry Schein, Inc. Executive Change in Control

Plan (the “CIC Plan”). The CIC Plan

contains the following material terms and conditions (terms capitalized but

not defined in the below description

have the definitions set forth in the CIC Plan):

Eligibility and Participation.

Members of our Executive Management Committee (“EMC”) and

other

employees of the Company or its subsidiaries who are specifically designated

by the “Administrator” are

eligible to participate in the CIC Plan, in each case,

subject to such person’s execution of a “Participation

Agreement” provided by the Company (in the form attached as Appendix

A to the CIC Plan), and provided

that such person is a member of a select group of management or highly

compensated employees.

Benefits Under the CIC Plan.

In the event that a participant in the Plan is terminated without “Cause”, or

resigns for “Good Reason”, in each case, during the period starting

90 days prior to a “Change in Control”

(or, if earlier, the date of the first public announcement of a pending “Change in Control”) and ending two

years following a Change in Control (such termination of employment,

a “Termination”), then subject to

execution and non-revocation of a release of claims, the participant will be

entitled to receive:

●

base salary through the Termination date;

●

a pro-rated annual bonus based on actual performance for the year

in which the Termination

occurs;

●

an amount equal to the product of (A) the sum of the participant’s base salary and target annual

bonus amount, multiplied by (B) the “Severance Multiple”;

●

immediate vesting of the participant’s outstanding stock options (to the maximum extent

permitted by the applicable stock option plan), restricted stock/units, deferred

stock awards and

non-qualified retirement benefits;

●

settlement of the participant’s deferred compensation arrangements in accordance with the

applicable plan or election form; and

●

COBRA continuation health coverage subsidized by the Company (with

the participant paying the

applicable active employee rate) for up to the applicable severance period

(not to exceed 18

months).

Under the Plan, the Compensation Committee has the sole discretion

to set and/or increase a participant’s

Severance Multiple under the Plan, but in no event to a value greater

than 3.0. The Compensation Committee has

set the Severance Multiple for each participant (other than a participant who

serves as our Chief Executive Officer)

who is an “executive officer” (as determined under Securities and Exchange Commission

rules) to 2.0, and has set

the Severance Multiple for all other participants to 1.0.

Restrictive Covenants.

The CIC Plan contains perpetual confidentiality and non-disparagement

provisions,

and prohibits solicitation of Company employees for 24 months following the

participant’s termination of

employment for any reason.

Amendment and Termination.

The CIC Plan cannot be terminated or amended in any way

that materially

and adversely affects the right of a participant without such participant’s consent. Additionally, the CIC

Plan cannot be amended or terminated in any way during the time period

starting 90 days prior to a Change

in Control (or the date the Company enters into a definitive agreement to

effect a Change in Control) and

ending on the later of (i) two years after a Change in Control or (ii) the date

that all payments and benefits

under the Plan have been paid.

The foregoing summary of the CIC Plan does not purport to be complete

and is subject to, and qualified in its

entirety by, the full text of the CIC Plan, which is attached as Exhibit 10.3 and incorporated herein by reference.

EXHIBITS

10.1

Form of 2022 Restricted Stock Unit Agreement for time-based restricted stock

unit awards pursuant to the Henry Schein, Inc. 2020 Stock Incentive Plan (as

amended and restated effective as of May 21, 2020).**+

10.2

Form of 2022 Restricted Stock Unit Agreement for performance-based

restricted stock unit awards pursuant to the Henry Schein, Inc. 2020 Stock

Incentive Plan (as amended and restated effective as of May 21, 2020).**+

10.3

Henry Schein, Inc. Executive Change in Control Plan, effective as of May 2,

2022**+

31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+

31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+

32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.+

101.INS

Inline XBRL Instance Document - the instance document does not appear

in the

Interactive Data File because its XBRL tags are embedded within the

Inline

XBRL document+

101.SCH

Inline XBRL Taxonomy Extension Schema Document+

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document+

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document+

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document+

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document+

The cover page of Henry Schein, Inc.’s Quarterly Report on Form 10-Q for the

quarter ended March 26, 2022, formatted in Inline XBRL (included within

Exhibit 101 attachments).+

+ Filed or furnished herewith.

** Indicates management contract or compensatory plan or agreement.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the

Registrant has duly caused this Report to

be signed on its behalf by the undersigned thereunto duly authorized.

Henry Schein, Inc.

(Registrant)

By: /s/ Ronald N. South

Ronald N. South

Senior Vice President and

Chief Financial Officer

(Authorized Signatory and Principal Financial

and Accounting Officer)

Dated: May 3, 2022