Henry Schein Posts Q3 Sales Jump, Net Income Up 2%

TL;DR

**HSIC is growing sales but piling on debt; watch those interest payments, traders!**

AI Summary

HENRY SCHEIN, INC. reported a strong financial performance for the three and nine months ended September 27, 2025. Net sales for the three months increased to $3,339 million from $3,174 million in the prior year, a 5.2% rise. For the nine months, net sales grew to $9,747 million from $9,482 million, a 2.8% increase. Net income attributable to Henry Schein, Inc. for the three months was $101 million, up from $99 million, representing a 2.0% increase. For the nine months, net income attributable to Henry Schein, Inc. was $297 million, a slight increase from $296 million. Operating income for the three months rose to $164 million from $157 million, while for the nine months it increased to $490 million from $466 million. The company's cash and cash equivalents increased to $136 million as of September 27, 2025, from $122 million at December 28, 2024. Long-term debt increased significantly to $2,153 million from $1,830 million, and bank credit lines also rose to $913 million from $650 million, indicating increased leverage. Restructuring costs were $34 million for the three months and $82 million for the nine months, reflecting ongoing operational adjustments. The company also saw a substantial foreign currency translation gain of $208 million for the nine months ended September 27, 2025, compared to a loss of $58 million in the prior year.

Why It Matters

Henry Schein's consistent revenue growth and slight net income increase demonstrate resilience in a competitive healthcare products market, which is crucial for investor confidence. The significant increase in long-term debt and bank credit lines, however, suggests a strategic shift towards leveraging capital for growth, potentially through acquisitions, which could impact future profitability and risk profiles. For employees and customers, stable financial performance indicates continued operational stability and product availability. The company's ongoing restructuring costs highlight efforts to optimize operations, which could lead to improved efficiency and service in the long run, but also signal potential internal changes. Competitively, Henry Schein's ability to grow sales amidst rising interest expenses suggests it is maintaining or expanding its market share against rivals like Patterson Companies.

Risk Assessment

Risk Level: medium — The company's long-term debt increased by $323 million to $2,153 million from $1,830 million, and bank credit lines rose by $263 million to $913 million from $650 million, indicating higher leverage. Interest expense for the nine months ended September 27, 2025, was $111 million, up from $96 million in the prior year, reflecting increased borrowing costs and potentially higher financial risk.

Analyst Insight

Investors should monitor Henry Schein's debt management strategies and future acquisition plans closely, as increased leverage could impact earnings per share. Evaluate the effectiveness of ongoing restructuring efforts and their contribution to long-term profitability. Consider the impact of rising interest rates on future interest expenses.

Financial Highlights

revenue

$9,747M

total Assets

$11,097M

total Debt

$2,183M

net Income

$297M

cash Position

$136M

revenue Growth

+2.8%

Key Numbers

• $3.339B — Net Sales (3 months) (Increased from $3.174B in prior year, a 5.2% rise.)
• $9.747B — Net Sales (9 months) (Increased from $9.482B in prior year, a 2.8% rise.)
• $101M — Net Income (3 months) (Increased from $99M in prior year, a 2.0% rise.)
• $297M — Net Income (9 months) (Slight increase from $296M in prior year.)
• $164M — Operating Income (3 months) (Increased from $157M in prior year.)
• $2.153B — Long-Term Debt (Increased from $1.830B at December 28, 2024, a 17.7% increase.)
• $913M — Bank Credit Lines (Increased from $650M at December 28, 2024, a 40.5% increase.)
• $111M — Interest Expense (9 months) (Increased from $96M in prior year, a 15.6% increase.)
• $82M — Restructuring Costs (9 months) (Increased from $73M in prior year, a 12.3% increase.)
• $208M — Foreign Currency Translation Gain (9 months) (Significant gain compared to a $58M loss in prior year.)

Key Players & Entities

• HENRY SCHEIN, INC. (company) — registrant
• Nasdaq Global Select Market (regulator) — exchange where common stock is registered
• Financial Accounting Standards Board (regulator) — issued accounting standards updates
• KKR (company) — investment partner
• Patterson Companies (company) — competitor
• $3,339 million (dollar_amount) — net sales for three months ended September 27, 2025
• $9,747 million (dollar_amount) — net sales for nine months ended September 27, 2025
• $101 million (dollar_amount) — net income attributable to Henry Schein, Inc. for three months ended September 27, 2025
• $2,153 million (dollar_amount) — long-term debt as of September 27, 2025
• $111 million (dollar_amount) — interest expense for nine months ended September 27, 2025

FAQ

Risk Factors

• Cyber Incident Impact [high — operational]: The company experienced a significant cyber incident, which resulted in disruptions to its business operations and potential data breaches. While the full financial impact is still being assessed, the incident necessitated significant remediation efforts and may lead to future costs related to security enhancements and potential litigation.
• Increased Leverage [high — financial]: Henry Schein has significantly increased its long-term debt to $2.153 billion and bank credit lines to $913 million. This rise in leverage, coupled with a $111 million interest expense for the nine months, increases financial risk and sensitivity to interest rate fluctuations.
• Restructuring Costs [medium — operational]: The company incurred $82 million in restructuring costs for the nine months ended September 27, 2025, indicating ongoing operational adjustments. These costs, while aimed at improving efficiency, can impact short-term profitability and signal underlying business challenges.
• Foreign Currency Fluctuations [medium — market]: A substantial foreign currency translation gain of $208 million was recorded for the nine months ended September 27, 2025, compared to a loss of $58 million in the prior year. While this gain boosted results, it highlights the significant impact of currency volatility on reported earnings.
• Compliance and Regulatory Environment [medium — regulatory]: As a global distributor of healthcare products, Henry Schein operates in a highly regulated industry. Changes in healthcare regulations, reimbursement policies, and compliance requirements in various jurisdictions can impact sales, operations, and profitability.
• Competition in Healthcare Distribution [medium — market]: The healthcare distribution market is competitive, with pressure from large national distributors, regional players, and increasingly, direct-to-provider models. Maintaining market share and pricing power requires continuous innovation and efficient operations.

Industry Context

Henry Schein operates in the highly competitive global healthcare distribution market, serving dentists, physicians, and veterinary practices. The industry is characterized by consolidation, increasing demand for integrated technology solutions, and evolving regulatory landscapes. Key trends include the shift towards value-based care, the growing importance of supply chain efficiency, and the impact of digital health technologies.

Regulatory Implications

As a critical player in the healthcare supply chain, Henry Schein faces significant regulatory scrutiny. Compliance with evolving healthcare laws, data privacy regulations (especially post-cyber incident), and international trade policies are paramount. Any missteps in compliance can lead to substantial fines, reputational damage, and operational disruptions.

What Investors Should Do

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Key Dates

• 2025-09-27: End of Q3 2025 reporting period — Key financial results for the three and nine months ending this date were reported, showing increased net sales and operating income but also higher debt levels.
• 2025-09-27: Cyber Incident — A significant cyber incident occurred, impacting operations and potentially leading to future costs and liabilities.
• 2024-12-28: End of Fiscal Year 2024 — Balance sheet figures from this date serve as the comparative baseline for the current period's assets and liabilities.

Glossary

VIE

Variable Interest Entity. A legal entity whose equity is not sufficient to support its activities, or where the equity investors lack the characteristics of a voting interest. Companies that are primary beneficiaries of VIEs must consolidate their financial statements. (Henry Schein consolidates a VIE related to its U.S. trade accounts receivable securitization, impacting reported accounts receivable and long-term debt.)

Restructuring Costs

Expenses incurred as a result of a significant reorganization of a company's business operations, such as layoffs, facility closures, or business divestitures. (The company incurred $82 million in restructuring costs for the nine months ended September 27, 2025, indicating ongoing operational adjustments.)

Foreign Currency Translation Gain/Loss

The gain or loss resulting from converting the financial statements of a foreign subsidiary from its functional currency to the reporting currency of the parent company. (A significant $208 million gain was recorded for the nine months ended September 27, 2025, compared to a loss in the prior year, highlighting currency impacts.)

Operating Lease Right-of-Use Assets

An asset recognized under ASC 842 for the right to use an underlying asset for the lease term. (These assets, along with corresponding liabilities, are part of the company's balance sheet, reflecting lease obligations.)

Accumulated Other Comprehensive Loss

A component of equity that includes unrealized gains and losses that are not reported in net income, such as foreign currency translation adjustments. (The company has an accumulated other comprehensive loss of $222 million as of September 27, 2025, influenced by foreign currency movements.)

Year-Over-Year Comparison

Compared to the prior year's filing, Henry Schein has demonstrated revenue growth, with net sales increasing by 5.2% for the quarter and 2.8% for the nine months. However, this growth is accompanied by a significant increase in leverage, with long-term debt rising by 17.7% and bank credit lines by 40.5%. While operating income has seen an increase, net income growth has been modest. New risks have emerged, notably a significant cyber incident that has disrupted operations and incurred restructuring costs, alongside a substantial shift in foreign currency translation impact from a loss to a gain.

Key Financial Figures

• $0.01 — Common Stock Additional Other Total $0.01 Par Value Paid-in Retained Comprehen

Filing Documents

• hsic-20250927.htm (10-Q) — 2653KB
• ex101.htm (EX-10.1) — 106KB
• ex311.htm (EX-31.1) — 12KB
• ex312.htm (EX-31.2) — 12KB
• ex321.htm (EX-32.1) — 8KB
• 0001000228-25-000066.txt ( ) — 13627KB
• hsic-20250927.xsd (EX-101.SCH) — 87KB
• hsic-20250927_cal.xml (EX-101.CAL) — 96KB
• hsic-20250927_def.xml (EX-101.DEF) — 442KB
• hsic-20250927_lab.xml (EX-101.LAB) — 997KB
• hsic-20250927_pre.xml (EX-101.PRE) — 642KB
• hsic-20250927_htm.xml (XML) — 2935KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Page ITEM 1. Condensed Consolidated Financial Statements: Condensed Consolidated Balance Sheets as of September 27, 2025 and December 28, 2024 3 Condensed Consolidated Statements of Income for the three and nine months ended September 27, 2025 and September 28, 2024 4 Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 27, 2025 and September 28, 2024 5 Condensed Consolidated Statement of Changes in Stockholders' Equity for the three months ended September 27, 2025 and September 28, 2024 6 Condensed Consolidated Statement of Changes in Stockholders' Equity for the nine months ended September 27, 2025 and September 28, 2024 7 Condensed Consolidated Statements of Cash Flows for the nine months ended September 27, 2025 and September 28, 2024 8 Notes to Condensed Consolidated Financial Statements 9 Note 1 – Basis of Presentation 9 Note 2 – Significant Accounting Policies and Recently Issued Accounting Standards 10 Note 3 – Cyber Incident 11 Note 4 – Net Sales from Contracts with Customers 12 Note 5 – Segment Data 13 Note 6 – Business Acquisitions 16 Note 7 – Fair Value Measurements 19 Note 8 – Debt 22 Note 9 – Income Taxes 25 Note 10 – Plans of Restructuring 26 Note 11 – Legal Proceedings 28 Note 12 – Stock-Based Compensation 29 Note 13 – Redeemable Noncontrolling Interests 32 Note 14 – Comprehensive Income 32 Note 15 – Earnings Per Share 34 Note 16 – Supplemental Cash Flow Information 34 Note 17 – Related Party Transactions 35 Note 18 – KKR Investment and Accelerated Share Repurchase Program 36 ITEM 2.

Management's Discussion and Analysis of

Management's Discussion and Analysis of Financial Condition and Results of Operations 37 ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 55 ITEM 4.

Controls and Procedures

Controls and Procedures 55

OTHER INFORMATION

PART II. OTHER INFORMATION ITEM 1.

Legal Proceedings

Legal Proceedings 57 ITEM 1A.

Risk Factors

Risk Factors 57 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 57 ITEM 5. Other Information 58 ITEM 6. Exhibits 59 Signature 60 Table of Contents See accompanying notes. 3 PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED

ITEM 1. CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS HENRY SCHEIN, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, except share data) September 27, December 28, 2025 2024 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 136 $ 122 Accounts receivable, net of allowance for credit losses of $ 84 and $ 78 (1) 1,743 1,482 Inventories, net 1,912 1,810 Prepaid expenses and other 604 569 Total current assets 4,395 3,983 Property and equipment, net 603 531 Operating lease right-of-use assets 308 293 Goodwill 4,147 3,887 Other intangibles, net 1,046 1,023 Investments and other 598 501 Total assets $ 11,097 $ 10,218 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,035 $ 962 Bank credit lines 913 650 Current maturities of long-term debt 30 56 Operating lease liabilities 81 75 Accrued expenses: Payroll and related 291 303 Taxes 181 139 Other 618 618 Total current liabilities 3,149 2,803 Long-term debt (1) 2,153 1,830 Deferred income taxes 144 102 Operating lease liabilities 264 259 Other liabilities 487 387 Total liabilities 6,197 5,381 Redeemable noncontrolling interests 877 806 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, 118,567,917 issued and outstanding on September 27, 2025 and 124,155,884 issued and outstanding on December 28, 2024 1 1 Additional paid-in capital 207 - Retained earnings 3,375 3,771 Accumulated other comprehensive loss ( 222 ) ( 379 ) Total Henry Schein, Inc. stockholders' equity 3,361 3,393 Noncontrolling interests 662 638 Total stockholders' equity 4,023 4,031 Total liabilities, redeemable noncontrolling interests and stockholders' equity $ 11,097 $ 10,218 (1) Amoun

financial statements

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 28, 2024 and with the information contained in our other publicly- available filings with the Securities and Exchange Commission. The condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation of the consolidated results of operations and financial position for the interim periods presented. All such adjustments are of a normal recurring nature. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the three and nine months ended September 27, 2025 are not necessarily indicative of the results to be expected for any other interim period or for the year ending December 27, 2025. 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; 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