Henry Schein · Risk factors

Prior heading: We are dependent upon third parties for the manufacture and supply of substantially all of our products.

We obtain substantially all a significant volume of the products we distribute from third parties, with whom we generally do not have long-term contracts. contracts. While there is typically more than one source of supply, some key suppliers, in the aggregate, supply a significant portion of the products we sell. sell. In 2021, 2024, our top 10 health care distribution Global Distribution and Value- Added Services suppliers and our single largest supplier accounted for approximately 30% 25% and 4%, respectively, of our aggregate purchases. purchases. Additionally, where we are the manufacturer of certain dental specialty products we sell in the areas of oral surgery, implants, orthodontics and endodontics, we are dependent upon third parties for raw materials and purchased components. Because of our dependence upon such suppliers, our operations are subject to the suppliers’ ability and willingness to supply products in the quantities that we require, and the risks include delays caused by interruption in production based on conditions outside of our control, including a supplier’s failure to comply with applicable government requirements (which may result in product recalls and/or cessation of sales) or an interruption in the suppliers’ manufacturing capabilities. capabilities. In the event of any such interruption in supply, we would need to timely identify and obtain acceptable replacement sources on a timely basis. sources. There is no guarantee that we would be able to obtain such alternative sources of supply on a timely basis, if at all, and an extended interruption in supply, particularly of a high sales high-sales volume and/or high-margin product, could result in a significant disruption in our sales and operations, as well as damage to our relationships with customers and our reputation. reputation. In addition, certain of our suppliers recent periods, we have had their ability to service certain markets restricted or negatively impacted because of allegations experienced increased costs and shortages of forced labor in their supply chain. Forced labor legislation affecting the supply chain purchased components, which has increased around the world, had a negative impact on our profit margins and the United States recently passed the Uyghur Forced Labor Prevention Act. Our supply chain could be materially disrupted if on our suppliers fail sales for certain product categories, due to comply with, or are unable our inability to fully satisfy our demand for products, as a result of applicable forced labor legislation and regulations.demand.

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Prior heading: Our future growth (especially for our technology and value-added services segment) is dependent upon our ability to develop or acquire and maintain and protect new products and technologies that achieve market acceptance with acceptable margins.

Our future success depends on our ability to timely develop (or obtain the right to sell) competitive and innovative (particularly for our technology Global Technology and value-added services segment) Global Specialty Products segments) products and services and utilize new technologies, such as artificial intelligence (“AI”) (among other emerging technologies) and to market them and/or utilize them quickly and cost-effectively. cost-effectively. Our ability to anticipate customer needs and emerging trends and develop or acquire new products, services and technologies at competitive prices requires significant resources, including employees with the requisite skills, experience and expertise, particularly in our technology Global Technology segment, including dental practice management, patient engagement and demand creation software solutions. The solutions. failure to successfully address these challenges could materially disrupt our sales and operations. Additionally, operations. We have increased and expect to continue to increase our software use of AI technologies in various contexts to improve customer and e-services products, like software products generally, may contain undetected errors or bugs when introduced or as new versions are released. Any such defective software may result patient experiences and drive efficiencies in increased expenses related certain areas of our business. While these innovations can present benefits to the software Company, they also create risks and challenges. If investments in such emerging technologies are less successful at attracting and retaining customers than similar investments by our competitors, or if we are otherwise unsuccessful at realizing the benefits of these technological investments generally, this could adversely affect have a material adverse effect on our relationships with customers as well as business, financial condition, or operating results. Additionally, widely assessable generative AI that rapidly surpasses our reputation. With respect organizational ability to certain software and e-services that we develop, we rely primarily upon copyright, trademark and trade secret laws, as well as contractual and common law protections understand associated risks and confidentiality obligations. We cannot provide assurance that such legal protections will be available, adequate or enforceable in a timely manner opportunities (including employees’ failure to protect comply with policies governing AI usage) could endanger our software or e-services products.intellectual property, lead to misuse of data and cause reputational harm.

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Prior heading: Our expansion through acquisitions and joint ventures involves risks and may not result in the benefits and revenue growth we expect.

One of our business strategies has been to expand our domestic and international markets in part through acquisitions and joint ventures and we expect to continue to make acquisitions and enter into joint ventures in the future. Such transactions require significant management attention, may place significant demands on our operations, information systems and financial resources, and there future. There is risk that one or more may not succeed. succeed. We cannot be sure, for example, that we will achieve the benefits of revenue growth that we expect from these acquisitions or joint ventures transactions or that we will avoid unforeseen additional costs costs, taxes, or expenses. expenses. Our ability to successfully implement our acquisition and joint venture strategy depends upon, among other things, the following: • the availability of suitable acquisition or joint venture candidates at acceptable prices; • our ability to consummate such transactions, which could potentially be prohibited due to U.S. or foreign antitrust regulations; • the liquidity of our investments and the availability of financing on acceptable terms; • our ability to retain customers or product lines of the acquired businesses or joint ventures; • our ability to retain, recruit and incentivize the management of the companies we acquire; and • our ability to successfully integrate these companies’ operations, systems, services, products and personnel with our culture, management policies, legal, regulatory and compliance policies, information technology and cybersecurity systems and policies, internal procedures, working capital management, financial and financial, operational and internal controls and strategies. Furthermore, 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.aggregate. Additionally, when we decide to sell assets or a business, we may encounter difficulty in finding buyers or timely executing alternative exit strategies on acceptable terms, which could delay the accomplishment of our strategic objectives. Dispositions may also involve continued financial involvement in a divested business, such as through transition service agreements, indemnities or other current or contingent financial obligations.

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Prior heading: Security risks generally associated with our information systems and our technology products and services could materially adversely affect our business, and our results of operations could be materially adversely affected if such products, services or systems (or third-party systems we rely on) are interrupted, damaged by unforeseen events, are subject to cyberattacks or fail for any extended period of time.

We rely on information systems (IS) (“IS”) in our business to obtain, rapidly process, analyze, manage and store customer, product, supplier and employee data to, among other things: • maintain and manage worldwide systems to facilitate the purchase and distribution of thousands of inventory items from numerous distribution centers; • receive, process and ship orders on a timely basis; • manage the accurate billing and collections for thousands of our customers; • process payments to suppliers; and • suppliers; provide products and services that maintain certain of our customers’ electronic medical or dental records (including protected health information of their patients). patients); and maintain and manage global human resources, compensation and payroll systems. There could be an adverse impact on our business, financial condition or operating results if we do not maintain an adequate information and technology infrastructure ( e.g. , hardware, networks, software, people and processes) to effectively protect and support the current and future information requirements of the business. In addition to health information in our customers’ electronic medical and dental records, certain of our IS stores other sensitive personal and financial information, such as health care and other information related to our employees and individuals we service, as well as other sensitive information such as credit card information from our third-party business partners, that is confidential, and in many cases subject to privacy laws. Our IS are susceptible to, among other things, natural disasters, power losses, telecommunication failures, cybersecurity threats and other criminal activity. Information security risks have generally significantly increased in recent years, years in part because of an overall increase in cyber incidents, their increased sophistication and the involvement of organized crime, hackers, terrorists and foreign state agents. In particular, the health care industry has been targeted by threat actors seeking to undermine companies’ cybersecurity defensive measures. We have processes in place intended to ensure that our security measures keep pace with new and emerging risks. We regularly review, monitor and implement multiple layers of security through technology, processes and our people. We 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 parties. Despite these efforts, our facilities and systems and those of our third-party service providers have been, and may in the future be, vulnerable to privacy and security incidents, cybersecurity attacks and data breaches, acts of vandalism or theft, computer viruses and other malicious code, misplaced or lost data, programming and/or human errors, attacks or other acts undermining IS of third party business partners including our customers, or other similar events that could impact the security, reliability and availability of our systems. In addition, hardware, software or applications developed internally or procured from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. As 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 threat. We have incurred and may in the future incur substantial costs as we update our cybersecurity defense systems and our general computer controls to meet evolving challenges, and legislative or regulatory action related to cybersecurity may increase our costs to develop or implement new technology products and services. A cyberattack that bypasses or compromises our IS security systems cybersecurity and/or general information technology (“IT”) controls (including third-party systems we rely on) causing an IS security breach may lead lead, and has in the past led, to a material disruption of our IS business systems (including third-party systems we rely on) and/or on), interruption of operations (including, without limitation, receiving, verifying and processing customer orders, customer service, accounts payable, warehouse management and shipping and systems tied to internal controls over financial reporting), the loss or alteration of business business, financial and other protected information, as well as a negative impact on our financial performance, and to an adverse impact on our financial accounting and reporting controls. A cyberattack that bypasses or compromises our IS cybersecurity and/or general computer controls or those of third parties with whom we engage may also lead to claims against us by affected parties and/or governmental agencies, and involve fines and penalties, costs for remediation, and as well as substantial defense and settlement expenses. expenses. Any of these impacts may alone, or collectively, have a material impact on our business. A 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. In addition, we develop products and provide services to our customers that are technology-based, and a cyberattack that bypasses the IS security systems of supporting our products or services causing a security breach and/or perceived security vulnerabilities in our products or services could also cause significant loss of business and reputational harm, and actual or perceived vulnerabilities may lead to claims against us by our customers and/or governmental agencies. agencies. In particular, 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. records, and when cloud-based approaches are used, we may be responsible for hosting those records. These customers customers, and in some cases, we are subject to laws and regulations which require that they protect the privacy and security of those records, and our products may be used as part of these customers’ comprehensive data security programs, including in connection with their efforts to comply with applicable privacy and security laws. Perceived or actual security vulnerabilities in our products or services, or the perceived or actual failure by us or our customers who use our products laws. In addition to comply with applicable legal requirements, may not only cause reputational harm immaterial and loss unrelated prior incidents at certain of business, but may also lead to claims against us by our customers and/or governmental agencies subsidiaries, in October 2023 Henry Schein experienced a cybersecurity incident that primarily affected the operations of our North American and involve damages, fines European dental and penalties, costs for remediation, medical distribution businesses. Henry Schein One, our practice management software, revenue cycle management and substantial defense patient relationship management solutions business was not affected, and settlement expenses. In addition, a cyberattack on a third-party that we use to manage a portion of our information systems could result in the same effects. Additionally, legislative or regulatory action related to manufacturing businesses were mostly unaffected. The October 2023 cybersecurity may increase incident disrupted key business operations, adversely impacted our costs to develop or implement new technology products financial results for the fourth quarter and services. From time full year 2023, diverted attention of management, and caused the Company to time, we have incur significant remediation costs. The incident had to address non-material security incidents (“security incidents”). There can be no assurance that we will not experience security incidents residual impact on our financial results in the future. Security incidents can be difficult to detect 2024, and any delay in identifying them could increase their harm. While we have implemented measures continue to protect our IS systems, such measures may not prevent these events. Any such security incidents could disrupt our operations, harm our reputation or otherwise have a material adverse effect review the effects of the incident on our business. the Company’s business. We have various insurance policies, including cybersecurity insurance, covering risks spent, and plan to expend in amounts that we consider adequate. There can be no assurance that the insurance coverage we maintain is sufficient or will be available in adequate amounts or at a reasonable cost future, additional resources to cover costs and expenses related continue to security incidents. Furthermore, procedures and safeguards must continually evolve protect against, or to meet new IS challenges, and enhancing protections, and conducting investigations and remediation, may impose additional costs on us. Finally, our address problems caused by, business interruptions and data security breaches. We also may be interrupted by shortfalls perceived as a more vulnerable target of IS systems providers engaged by our customers, such the cyber hackers as Internet-based services upon which our customers depend to access certain a result of our products.the October 2023 incident.

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Prior heading: The health care industry is experiencing changes due to political, economic and regulatory influences that could materially adversely affect our business.

The health care industry is highly regulated and subject to changing political, economic and regulatory influences. influences. In recent years, the health care industry has undergone, and is in the process of undergoing, been undergoing significant changes driven by various efforts to reduce costs, including, among other factors: trends toward managed care; collective purchasing arrangements and consolidation among office-based health care practitioners; and changes in reimbursements to customers, including increased attention to value-based payment arrangements, as well as growing enforcement activities (and related monetary recoveries) by governmental officials. officials. Both our profitability and the profitability that of our customers may be materially adversely affected by laws and regulations reducing reimbursement rates for pharmaceuticals, medical supplies and devices, and/or medical treatments or services, or changes to the methodology by which reimbursement levels are determined. determined. If we are unable to react effectively to these and other changes in the health care industry, our business could be materially adversely affected.affected. The ACA greatly expanded health insurance coverage in the United States and has been the target of legal and political challenges since its adoption. Any outcome of these challenges that changes the ACA could have a significant impact on the U.S. health care industry and the ability or willingness of individuals to engage with it.

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Prior heading: Expansion of group purchasing organizations (“GPO”), dental support organizations (“DSO”) or provider networks and the multi-tiered costing structure may place us at a competitive disadvantage.

The health care products industry is subject to a multi-tiered costing structure, which can vary by manufacturer and/or product. product. Under this structure, certain institutions can obtain more favorable prices for health care products than we are able to obtain. obtain. The multi-tiered costing structure continues to expand as many large integrated health care providers and others with significant purchasing power, such as GPOs GPOs, DSOs and DSOs, MSOs, demand more favorable pricing terms. terms. Additionally, the formation of provider networks, GPOs and GPOs, DSOs and MSOs may shift purchasing decisions to entities or persons with whom we do not have a historical relationship and may threaten our ability to compete effectively, which could in turn negatively impact our financial results. results. In addition, such organizations may establish direct relationships with manufacturers, thereby either eliminating or reducing the services historically provided by distributors. Although we are seeking to obtain similar terms from manufacturers to access lower prices demanded by GPO and GPO, DSO and MSO contracts or other contracts, and to develop relationships with existing and emerging provider networks, GPOs GPOs, DSOs and DSOs, MSOs, we cannot guarantee that such terms will be obtained or contracts executed.

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Prior heading: Increases in shipping costs or service issues with our third-party shippers could harm our business.

Our ability to meet our customers’ expedited delivery expectations is an integral component of our business strategy for which our customers rely. rely. Shipping is a significant expense in the operation of our business. business. We ship almost all of our orders through third-party delivery services, and typically bear the cost of shipment. shipment. Accordingly, any significant increase in shipping rates could have a material adverse effect on our business, financial condition or operating results. results. While 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 be material in the future. Similarly, strikes or other service interruptions by those shippers, including at transportation centers or shipping ports, could cause our operating expenses to rise and materially adversely affect our ability to deliver products on a timely basis.

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Prior heading: Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition.

Uncertain 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 materially adversely affect have a material adverse effect our results of operations and business, financial condition. condition or operating results. These uncertainties, include, among other things: • election results; • changes to laws and policies governing foreign trade (including, without limitation, the United States-Mexico-Canada Agreement (USMCA), the EU-UK Trade and Cooperation Agreement of December 2020 and other international trade agreements); • greater restrictions on imports and exports; • supply chain disruptions; • changes in laws and policies governing health care or data privacy; • tariffs and sanctions; • changes to the relationship between the United States and China; • sovereign debt levels; • the inability of political institutions to effectively resolve actual or perceived economic, currency or budgetary crises or issues; • consumer confidence; • unemployment levels (and a corresponding increase in the uninsured and underinsured population); • changes in regulatory and tax regulations; • interest rate fluctuations; • availability of capital; • increases in fuel things, those listed under “Managements Discussion and energy costs; • the effect Analysis of inflation on our ability to procure products and our ability to increase prices over time and pass through to our customers price increases we may receive; • changes in tax rates Financial Condition and the availability of certain tax deductions; • increases in health care costs; • the threat or outbreak of war, terrorism or public unrest (including, without limitation, the possibility Results of war in the Ukraine and a wider European or global conflict); and • changes in laws and policies governing manufacturing, development and investment in territories and countries where we do business. Operations, Cautionary Note Regarding Forward-Looking Statements.” Additionally, changes in government, government debt and/or budget crises may lead to reductions in government spending in certain countries, which could reduce overall health care spending, spending and/or lead to higher income or corporate taxes, which could depress spending overall. overall. Recessionary or inflationary conditions and depressed levels of consumer and commercial spending may also cause customers to reduce, modify, delay delay, or cancel plans to purchase our products and may cause suppliers to reduce their output or change their terms of sale. sale. We have experienced inflationary pressures, including higher freight costs and interest expense, and pressures resulting from the strengthening of the dollar, which have and continue to impact our results of operations. We generally sell products to customers with payment terms. terms. If customers’ cash flow or operating and financial performance deteriorate, or if they are unable to make scheduled payments or obtain credit, they may not be able to, or may delay, payment to us. us. Likewise, for similar reasons suppliers may restrict credit or impose different payment terms.

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Prior heading: Failure to comply with existing and future regulatory requirements could materially adversely affect our business.

We strive to be compliant with the applicable laws, regulations and guidance described below, below in all material respects, and believe we have effective compliance programs and other controls in place to ensure substantial compliance. compliance. However, compliance is not guaranteed either now or in the future as certain laws, regulations and guidance may be subject to varying and evolving interpretations that could affect our ability to comply, as well as, as future changes, additions and enforcement approaches, including in light of political changes. The Biden Administration has indicated that it will be more aggressive in its pursuing alleged violations of law, and it has revoked certain guidance that would have limited governmental use of informal agency guidance to pursue such violations, as well as indicating it was more prepared to pursue individuals for corporate law violations, including an aggressive approach to anti-corruption activities. changes. Changes with respect to the applicable laws, regulations and guidance described below may require us to update or revise our operations, services, marketing practices, and compliance programs and controls, and may impose additional and unforeseen costs on us, pose new or previously immaterial risks to us, or may otherwise have a material adverse effect on our business. business. There can be no assurance that current and future government regulations will not adversely affect our business, and we cannot predict new regulatory priorities, the form, content or timing of regulatory actions, and their impact on the health care industry and on our business and operations. Global efforts toward healthcare cost containment to contain health care costs continue to exert pressure on product pricing. pricing. In the United States, in addition to other government efforts to control health care costs, there has been increased scrutiny on drug pricing and concurrent efforts to control or reduce drug costs by Congress, the President, executive branch agencies and various states. At the state level, several states. We may be required to report drug pricing data under federal laws and regulations. Several U.S. states have adopted laws laws, that may apply to some of our operations, that require drug manufacturers manufacturers, including re-packagers or re-labelers, to provide advance notice of certain price increases and to report information relating to those price increases, while others have taken legislative or administrative action to establish established prescription drug affordability boards or multi-payer purchasing pools to reduce the cost of prescription drugs. drugs. At the federal level, several related bills have been introduced for example, the Inflation Reduction Act of 2022, among other things, requires drug manufacturers that raise certain of their drug prices faster than the rate of inflation to pay rebates to Medicare, and regulations proposed which, if enacted or finalized, respectively, would impact over time will authorize the federal government to negotiate directly with drug pricing manufacturers to lower the prices of certain brand-name drugs covered by Medicare. These various evolving efforts create uncertainty and related costs. may adversely affect our business. Under the Physician Payment Sunshine Act, we are required to collect and report detailed information regarding certain financial relationships we have with covered recipients, including recipients ( e.g. , physicians, dentists, teaching hospitals, and certain other non-physician practitioners. health care practitioners). We or our subsidiaries may be required to report information under certain state transparency laws that address circumstances not covered by the Physician Payment Sunshine Act, and some of these state laws, as well as the federal law, can be unclear. Act. We are also subject to similar foreign regulations requiring transparency of certain interactions between suppliers and their customers. laws. While we believe we have substantially compliant programs and controls in place satisfying the above laws and requirements, such compliance imposes additional costs on us and the requirements are sometimes unclear. In the United States, government actions to seek to increase health-related price transparency may also affect our business. unclear. Our business is subject to additional requirements under various local, state, federal and international foreign laws and regulations applicable to the sale and distribution of, and third-party payment for, pharmaceuticals and medical devices and HCT/P products. products. Among the federal laws with which we must comply are the Controlled Substances Act, the FDC Act, the Federal Drug Quality and Security Act, including DSCSA, and Section 361 of the Public Health Services Act. Act. Among other things, such laws, laws and the regulations promulgated thereunder: • regulate the introduction, manufacture, advertising, marketing and marketing, promotion, sampling, pricing and pricing, reimbursement, labeling, packaging, storage, handling, returning or returning, recalling, reporting, and distribution of, and record keeping recordkeeping for drugs, HCT/P products and medical devices, including requirements with respect to unique medical device identifiers; • subject us to inspection by the FDA FDA, OSHA, and DEA and similar state authorities; • regulate the storage, transportation and disposal of certain of our products that are considered hazardous materials; • require us to advertise and promote our drugs and devices in accordance with applicable FDA requirements; • regulations; require us to report average sales price (ASP) to CMS for drugs or biologicals payable under Medicare Part B with or without a Medicaid drug rebate agreement; require registration with the FDA and the DEA and various state agencies; • require record keeping and documentation of transactions involving drug products; • require us to design and operate a system to identify and report suspicious orders of controlled substances to the DEA; • DEA and certain states; require us to manage returns of products that have been recalled and subject us to inspection of our recall procedures and activities; • impose on us reporting requirements if a pharmaceutical, HCT/P product or medical device causes an adverse event, serious illness, injury or death; • require manufacturers, wholesalers, repackagers re-packagers and dispensers of prescription drugs to identify and trace certain prescription drugs as they are distributed; • require the licensing of prescription drug wholesalers and third-party logistics providers; and • mandate compliance with standards for the recordkeeping, storage and storage, handling and documentation of transactions involving prescription drugs, drugs and associated reporting requirements. The FDA has become increasingly active in addressing the regulation of regulates certain computer software and digital health products intended for use in health care settings. The Cures Act, signed into law on December 13, 2016, among other things, amended the settings, including, for example, AI and machine learning-enabled medical device definition to exclude certain software from FDA regulation, including certain clinical decision support software. On September 27, 2019, the FDA issued a suite of guidance documents on digital health products, which incorporated applicable Cures Act standards, including regarding the types of clinical decision support tools devices and other software that are exempt from regulation by the FDA as cybersecurity of medical devices, and continues to issue new guidance in this area. devices. Certain of our businesses involve the development and sale of software and related products to support physician and dental practice management, and it is possible that the FDA or foreign government authorities could determine that one or more of our products is subject to regulation as a medical device, which could subject us or one our businesses to substantial additional requirements, costs, potential enforcement actions or more liabilities for noncompliance with respect to these products. For 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 products. Applicable federal, state, local and foreign laws and regulations also may require us to meet various standards relating to, among other things, licensure or licensure, registration, program eligibility, procurement, third-party reimbursement, sales and marketing practices, product integrity and supply tracking to product manufacturers, product labeling, personnel, privacy and security of health or other personal information, installation, maintenance and repair of equipment and the importation and exportation of products. products. The FDA and DEA, as well as CMS (including with respect to complex Medicare reimbursement requirements applicable to our specialty home medical supplies business), business) and state Medicaid agencies, have recently increased their regulatory and enforcement activities and, in particular, the DEA has heightened enforcement activities due to the opioid crisis in the United States. One of our 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 $4 million in revenue. Our business is also subject to requirements of similar and other foreign governmental laws and regulations affecting our operations abroad. States. The failure to comply with any of these laws or regulations, or new interpretations of existing laws and regulations, them, or the imposition of any additional laws and regulations, could materially adversely affect our business. business. The costs to us associated with complying with the various applicable statutes and regulations, as they now exist and as they may be modified, could be material. material. Allegations by a governmental body that we have not complied with these laws could have a material adverse effect on our businesses. businesses. While we believe that we are substantially compliant with applicable laws and regulations, and believe we have adequate compliance programs and controls in place to ensure substantial compliance, if it is determined that we have not complied with these laws, we are potentially subject to penalties, including warning letters, substantial civil and criminal penalties, mandatory recall of product, seizure of product and injunction, consent decrees and suspension or limitation of payments to us, product sale and distribution. distribution. If 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 licenses. licenses. Non-compliance with government requirements could also adversely affect our ability to participate in important federal and state government health care programs, such as Medicare and Medicaid, and damage our reputation.

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Prior heading: The EU Medical Device Regulation may adversely affect our business.

The EU MDR, applicable since May 26, 2021, MDR significantly modifies and intensifies modified the regulatory compliance requirements for the medical device industry as a whole. whole. Among other things, the EU MDR: • strengthens the rules on placing devices on the market and reinforce reinforces surveillance once they are available; • thereafter; establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; • improves the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; • sets up a central database (EUDAMED) to provide patients, healthcare health care professionals and the public with comprehensive information on products available devices, importers, and distributors registered in the EU; • strengthens rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check by experts before they are placed on the market; and • identifies importers and distributors and medical device products through registration contains specific provisions in a database (EUDAMED not due until May 26, 2022 and after). In particular, the event of interruption or discontinuation of supply of a device. The EU MDR imposes stricter 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 surveillance. Medical surveillance. Pursuant to Regulation 2023/607 and subject to certain conditions, medical devices that have been assessed and/or certified (i) obtained a certificate under the EU Medical Device Directive from May 25, 2017, (ii) which was still valid on May 26, 2021, and (iii) has not been subsequently withdrawn may continue to be placed on the market until 2024 (or or put into service until the expiry of their certificates, if applicable and earlier); however, requirements regarding the distribution, marketing and sale including quality systems and post-market surveillance have to be observed by manufacturers, importers December 31, 2027 for higher risk devices or December 31, 2028 for medium and distributors as of the application date. lower risk devices. The 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 European Economic Area.EEA.

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Prior heading: If we fail to comply with laws and regulations relating to health care fraud or other laws and regulations, we could suffer penalties or be required to make significant changes to our operations, which could materially adversely affect our business.

Certain of our businesses are subject to federal and state (and similar foreign) health care fraud and abuse, referral and reimbursement laws and regulations with respect to their operations. operations. Some 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. programs. Other laws, referred to as “anti-kickback laws,” prohibit soliciting, offering, receiving or paying remuneration in order to induce or reward the referral of a patient or ordering, purchasing, leasing or arranging for, or recommending ordering, purchasing or leasing of, items or services that are paid for by federal, state and other health care payers and programs. programs. Certain additional state and federal laws, such as the federal Physician Self-Referral Law, commonly known as the “Stark Law,” Law (“Stark Law”), prohibit physicians and other health care professionals from referring a patient to an entity with which the physician (or family member) has a financial relationship, for the furnishing of certain designated health services (for example, durable medical equipment and medical supplies), unless an exception applies. Violations of Anti-Kickback statutes or the Stark Law may be enforced as violations of the federal False Claims Act. applies. The fraud and abuse laws and regulations have been subject to heightened enforcement activity over the past few years, and significant enforcement activity has been often as the result of “relators” who serve as whistleblowers by filing complaints in the name of the United States (and if applicable, particular states) under applicable false claims laws, and who may receive up to 30% of total government recoveries. recoveries. Penalties under fraud and abuse laws may be severe, including treble damages and substantial civil penalties under the federal False Claims Act, as well as potential loss of licenses and the ability to participate in federal and state health care programs, criminal penalties, or imposition of a corporate compliance monitor, which could have a material adverse effect on our business. business. Also, these measures may be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that could require us to make changes in our operations or incur substantial defense and settlement expenses. expenses. Even unsuccessful challenges by regulatory authorities or private relators could result in reputational harm and the incurring of substantial costs. costs. Most states have adopted similar state false claims laws, acts, and these state laws have their own penalties which may be in addition to federal False Claims Act penalties, as well as and other fraud and abuse laws. With respect to measures of this type, the The United States government (among others) has expressed concerns about financial relationships between suppliers or manufacturers on the one hand and physicians, dentists and other health care providers, on the other. other. As a result, we regularly review and revise our marketing practices as necessary to facilitate compliance. Our aspirations, goals and disclosures related to environmental, social and governance matters and the focus on regulators and private litigants among other things on related claims made by companies and funds expose us to numerous risks, including reputational, financial, legal and other risks, that could have an adverse impact on us. California has adopted stringent new climate disclosure requirements, as has the EU. As of April 4, 2024, the SEC has temporarily suspended implementation of its climate disclosure rules. In the EU, the Directive No. 2019/1937 of 23 October 2019 23, 2019, on the protection of persons who report breaches of Union law, which was to be implemented by EU member states by December 17, 2021, organizes the legal protection of whistleblowers. whistleblowers. This Directive covers whistleblowers reporting breaches of certain EU laws, in particular as regards public health, the above-mentioned Directive No. 2001/83, Regulation No. 726/2004 or, as regards data protection, the GDPR. The Directive laws and regulations and protects a wide range of people and includes including former employees. employees. All private companies with 50 or more employees are required to create effective internal reporting channels. The implementation of this Directive by EU member states is still underway for many of them. As of mid-January 2022, only five channels. All EU Member States have fully now implemented it (Denmark, Lithuania, Malta, Portugal the Directive. We also are subject to the requirements of Directive No. 2022/2464 on corporate sustainability reporting (“CSRD”) that became effective on January 5, 2023. CSRD requires in-scope companies to report on sustainability-related information that is material from a financial risk or opportunity perspective to their business and Sweden) while from an impact perspective on the process environment or society. The materiality of sustainability matters is ongoing in subjective and may be interpreted differently by various stakeholders. CSRD, its transposition into national EU Member State law, and associated guidance are evolving and reporting requirements may change, which may further increase the others but with varying degrees costs of progress. complying with CSRD. CSRD has not yet been fully implemented by all EU Member States. We also are subject to certain United States and foreign laws and regulations concerning the conduct of our foreign operations, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, German anti-corruption laws and other anti-bribery laws and laws pertaining to the accuracy of our internal books and records, which have been the focus of increasing enforcement activity globally in recent years. records. Our businesses are generally subject to numerous other laws and regulations that could impact our financial results, including, without limitation, securities, antitrust, consumer protection, protection and marketing laws and regulations. In the EU, both active and passive bribery corruption in the private sector are criminalized. criminalized. The EU Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector establishes more detailed rules on the liability of legal persons and deterrent sanctions. sanctions. However, the liability of legal persons is regulated at a national level. Failure to comply with fraud and abuse laws and regulations, and other laws and regulations, could result in significant civil and criminal penalties and costs, including the loss of licenses and the ability to participate in federal and state health care programs, and could have a material adverse effect on our business. business. We may determine to enter into settlements, make payments, agree to consent decrees or enter into other arrangements to resolve such matters. matters. Intentional or unintentional failure to comply with settlement agreements or consent decrees could materially adversely affect our business. While we believe that we are substantially compliant with applicable fraud and abuse and other laws and regulations, and believe we have adequate compliance programs and controls in place to ensure substantial compliance, we cannot predict whether changes in applicable law, or interpretation of laws, or changes in our services or marketing practices in response to changes in applicable law or interpretation of laws, could have a material adverse effect on our business.

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Prior heading: If 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.

Our businesses that involve physician and dental practice management products, equipment and our specialty home medical supply business, supplies businesses, and our self-funded employee benefits programs include electronic information technology (IT) systems that store and process personal health, clinical, financial financial, and other sensitive information of individuals. individuals. These information technology 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 agencies. We are directly or indirectly subject to numerous and evolving federal, state, local and foreign laws and regulations that protect the privacy and security of personal information, information (including health data), such as HIPAA, the Controlling the Assault of Non-Solicited Pornography and Marketing Act, the Telephone Consumer Protection Act of 1991, CAN-SPAM, TCPA, Section 5 of the Federal Trade Commission FTC Act, the CCPA, CCPA and the CPRA various other privacy laws that becomes effective on January 1, 2023. have or will soon come into effect. Laws and regulations relating to privacy and data protection are continually evolving and subject to potentially differing interpretations. interpretations, including those relating to AI. These 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. practices. In addition, cybersecurity laws such as the federal Cyber Incident Reporting for Critical Infrastructure Act of 2022, proposed Federal Acquisition Regulations and amendments to SEC reporting requirements may require us to provide notifications about cybersecurity incidents in limited timeframes and before investigations are complete. Our businesses’ failure to comply with these laws and regulations could expose us to breach of contract claims, substantial fines, penalties and other liabilities and expenses, costs for remediation and harm to our reputation. Also, evolving reputation. Evolving laws and regulations in this area could restrict the ability of our customers to obtain, use or disseminate patient information, or could require us to incur significant additional costs to re-design our products to reflect these legal requirements, which could have a material adverse effect on our operations. In addition, the European Parliament and the Council of the EU have adopted the GDPR, GDPR effective from May 25, 2018, which increases increased privacy rights for individuals in the EU or EEA, or “Data Subjects”, Data Subjects, including individuals who are our customers, suppliers and employees. employees. The GDPR extended the scope of responsibilities for data controllers and data processors processors, and generally imposes increased requirements and potential penalties on companies, such as us, that are either established in the EU and process personal data of Data Subjects (regardless the Data Subject location), or that are not established in the EU but that offer goods or services to Data Subjects in the EU or monitor their behavior (including by companies based outside of Europe). in the EU. Noncompliance can result in penalties of up to the greater of EUR 20 million, or 4% of global company revenues. revenues (sanction that may be public), and Data Subjects also have the right to may seek compensation for damages. damages. Member states may individually impose additional requirements and penalties regarding certain matters, limited matters (for which the GDPR left some room of flexibility), such as employee personal data. data. With respect to the personal data it protects, the GDPR requires, among other things, company controller accountability, consents from Data Subjects or other another acceptable legal basis to process the personal data, breach notifications notification within 72 hours, hours of a personal data breach where required, data integrity and security, and fairness and transparency regarding the storage, use or other processing of the personal data. data. The GDPR also provides rights to Data Subjects relating notably to information, access, modification, rectification, erasure and transporting of the personal data. On August 20, 2021, China promulgated data and the PIPL, which took effect right to object to the processing. Despite Brexit, the UK also has data protection laws equivalent to the GDPR). Switzerland enacted FADP. Uncertainty about compliance with these data protection laws remains, with the possibilities that data protection authorities located in different EU Member States may interpret GDPR differently, or requirements of national laws may vary between the EU Member States, or guidance on GDPR and compliance practices may be often updated or otherwise revised. Any of these events will increase the complexity and costs of processing personal data in the European Economic Area, UK or Switzerland or concerning individuals located in these jurisdictions. Effective November 1, 2021. The 2021, China’s PIPL imposes specific rules for processing personal information and it also 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. citizens. Any non-compliance with these laws and regulations may subject us to fines, orders to rectify or terminate any actions that are deemed illegal by regulatory authorities, other penalties, as well as reputational damage damage, or legal proceedings against us, which may affect our business, financial condition or results of operations. operations. The PIPL carries maximum penalties of CNY50 million or 5% of the annual revenue of entities that process personal data. Data protection laws in other countries 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. In the United States, the CCPA, which increases the privacy protections afforded California residents, became effective January 1, 2020. The CCPA generally requires companies, 2020, establishes a privacy framework for covered businesses such as us, to institute additional protections regarding the collection, use and disclosure ours by, among other things, creating an expanded definition of certain personal information of information, establishing new data privacy rights for California residents. Compliance with the obligations imposed by the CCPA depends in part on how particular regulators interpret residents and apply them. Regulations were released in August creating a new and potentially severe statutory damages framework for violations of 2020, but there remains some uncertainty about how the CCPA will be interpreted by the courts CCPA, as well as potentially severe statutory damages and enforced by the regulators. If we fail to comply with the CCPA or if regulators assert private a right of action against businesses that we have failed suffer a data security breach due to comply with the CCPA, we may be subject their violation of a duty to certain fines or other penalties implement reasonable security procedures and litigation, any practices. This private right of which action may negatively impact our reputation, require us to expend significant resources, increase the likelihood of, and harm our business. Furthermore, risks associated with, data breach litigation. In addition, California voters approved adopted the CPRA on November 3, 2020, (effective January 1, 2023) which will amend enhances and expand strengthens regulatory requirements and individual protections that currently exist under the CCPA, including by providing consumers with additional rights with respect CCPA. Other states have enacted or are considering enacting similar privacy laws, which may subject us to their personal information, additional requirements and creating restrictions that could have an impact on our business. Comprehensive privacy laws in a new state agency number of other states are now in effect, and similarly enacted broad laws relating to enforce CCPA privacy, data protection, and CPRA. The CPRA information security that will come into effect on January 1, 2023, applying to information collected by businesses on or after January 1, 2022. Other states, as well as later in 2025 and 2026, further complicating our privacy compliance obligations through the federal government, have introduction of increasingly considered disparate requirements across the adoption various U.S. jurisdictions in which we operate. Additionally, certain other states have enacted specific health data privacy laws and other states are considering similar legislation. Congress is considering legislation that may preempt some or all of similarly expansive personal such U.S. state privacy laws, backed by significant civil penalties but which may also provide a more expansive private right of action for non-compliance. Virginia and Colorado were both successful in passing privacy claims than exists under current state laws. The evolving complexity of privacy and data security legislation in 2021, becoming effective on January 1, 2023 the United States may complicate our compliance efforts and July 1, 2023 respectively. further increase our risk of regulatory enforcement, penalties and litigation. While we believe we have substantially compliant programs and controls in place to comply with the GDPR, CCPA, PIPL privacy laws domestically and CPRA requirements, internationally, our compliance with data privacy and cybersecurity laws is likely to impose additional costs on us, and we cannot predict whether the interpretations of the requirements, or changes in our practices in response to new requirements or interpretations of the requirements, could have a material Further, countries are applying their data and consumer protection laws to AI, particularly generative AI, and are considering and implementing specific legal frameworks with respect to AI, for example the EU AI Act 2024 (which as with the GDPR, will have extra-territorial effect). Any failure or perceived failure by us to comply with such requirements could have an adverse effect impact on our business. Anticipated further evolution of regulations and legislation on this topic may substantially increase the penalties to which we could be subject in the event of any non-compliance. Compliance 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. We may incur substantial expense in complying with legal obligations to be imposed by new regulations and we may be required to make significant changes to our solutions and expanding business operations, all of which may adversely affect our operations. We also sell products and services that health care providers, such as physicians and dentists, use to store and manage patient medical or dental records. records. These customers and we are subject to laws, regulations and industry standards, such as HIPAA and the Payment Card Industry Data Security Standards, which require the protection of the privacy and security of those records. records. Our 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. requirements. Perceived or actual security vulnerabilities in our products or services, or the perceived or actual failure by us or our customers who use our products or services to comply with applicable legal or contractual data privacy and security requirements, may not only cause us significant reputational harm, but may also lead to claims against us by our customers and/or governmental agencies and involve substantial fines, penalties and other liabilities and expenses and costs for remediation. Under Additionally, under the GDPR, health data belong to the category of “sensitive data” and benefit from specific protections. protection. Processing of such data is generally prohibited, except for specific exceptions. Certain of our businesses involve the manufacture and sale of EHR electronic health record (EHR) systems and other products linked to government supported incentive programs, where the EHR systems must be certified as having certain capabilities designated in evolving standards, such as those adopted by CMS and ONC. ONC. In order to maintain certification of our EHR products, we must satisfy the changing governmental standards. standards. If any of our other EHR systems do not meet these standards, yet have been relied upon by health care providers to receive federal incentive payments, we may be exposed to risk, such as under federal health care fraud and abuse laws, including the False Claims Act. Act. Additionally, effective September 1, 2023, the HHS-OIG issued a final rule implementing civil money penalties for information blocking as established by the Cures Act. OIG incorporated regulations published by ONC as the basis for enforcing information blocking penalties. Each information blocking violation carries a $1 million penalty. While we believe we are substantially in compliance with such certifications and with applicable fraud and abuse laws and regulations and that we have adequate compliance programs and controls in place to ensure substantial compliance, we cannot predict whether changes in applicable law, or interpretation of laws, or resulting changes in our, our compliance programs and controls, could have a material adverse effect on our business. Moreover, in order to satisfy our customers and comply with evolving legal requirements, our products may need to incorporate increasingly complex functionality, such as with respect to reporting and information blocking. blocking. Although 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 business. Additionally, as electronic medical devices are increasingly connected to each other and to other technology, the ability of these connected systems to safely and effectively exchange and use exchanged information becomes increasingly important. important. As a medical device manufacturer, we must manage risks including those associated with an electronic interface that is incorporated into a medical device.

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Prior heading: Our business, results of operations, cash flows, financial condition and liquidity may be negatively impacted by the effects of disease outbreaks, epidemics, pandemics, or similar wide-spread public health concerns and other natural disasters. The COVID-19 pandemic and the responses of governments to it had, and 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.

Our business, business operations, results of operations, cash flows, financial condition and liquidity may be negatively impacted by the effects of disease outbreaks, epidemics, pandemics, similar wide-spread public health concerns and other natural disasters. The COVID-19 pandemic has had, and continues to have, an unprecedented impact on society, worldwide economic activity, or man-made disasters, such as terrorism, civil unrest, fire and the health care sector (particularly, the dental market). As extreme weather (“disasters”). For example, as a global healthcare health care solutions company, the COVID-19 pandemic and the governmental responses to it had, and may again have, had 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. Even after the COVID-19 pandemic has begun to subside, we may again experience material adverse impacts to our business, condition, operating results of operations and cash flows as a result of, among other things, its global economic impact, including any recession that may occur in the future, or a prolonged period of economic slowdown or the reluctance of patients to return for elective dental or medical care. flows. The impacts and potential impacts from the COVID-19 pandemic include, but are not limited to: • Significant volatility in supply, demand and selling prices for personal protective equipment (PPE), COVID-19 tests and other COVID-19 related products. Available supply, customer demand and selling prices for PPE, COVID-19 tests and other COVID-19 related products fluctuated in fiscal 2021 included, and we expect such volatility to continue for the duration could include as a result of the COVID-19 pandemic. This has resulted in inventory reserves, fluctuating margins and increased revenue related to such products. Although we have experienced significant growth in sales volumes for PPE, COVID-19 tests and other COVID-19 related products during the COVID-19 pandemic, there can be no assurance that disasters, adverse impacts such growth as significant volatility in sales volumes will be maintained during or following the COVID-19 pandemic. Our estimates for supply, demand and selling prices are inherently uncertain and if supply, demand, selling prices or other market dynamics significantly fluctuate in the future beyond our current assumptions, additional inventory reserves may be required, margins may be reduced and/or revenue may decline for such products, each which could materially adversely impact our business, results of prices, interrupted operations and cash flows. Additionally, governmental policies designed to reduce the transmission of COVID-19 and variants thereof could once again lead to the closure of dental offices or deferral of elective procedures and wellness exams by medical and dental patients. Such previous closures and restrictions impacted our customers’ spending with us and had, and if reinstated may again have, a material adverse effect on our business, results of operations and cash flows. Although we believe industries that most practices currently are able to access adequate supply, we still may be unable to supply our customers with the specific brand and/or quantity of certain PPE products, COVID-19 tests and other COVID-19 related products they demand, which may lead to our customers seeking alternative sources of supply. Healthcare professionals’ inability to obtain a sufficient quantity and/or brand of certain PPE, COVID-19 tests and other COVID-19 related products would adversely impact our business, results of operations and cash flows, and could materially adversely affect our financial condition and liquidity; • Reduction in Peoples’ Ability and Willingness to be in Public. Restrictions recommended by several public health organizations, and implemented, from time to time, by federal, state and local governments, to slow and limit the transmission of COVID-19 and variants thereof has caused and may in the future cause some people to be less willing to go to elective medical and dental appointments, which could again materially adversely affect demand for our products. A lengthened period of materially suppressed demand could again cause material adverse impacts on our business, results of operations and cash flows and could materially adversely affect our financial condition and liquidity; • Potential delays in customer payments, or defaults on our customer credit arrangements. We generally sell products to customers with payment terms. If customers’ cash flows use or operating and financial performance deteriorate due to the impact of manufacture the COVID-19 pandemic, or if they are unable to make scheduled payments or obtain credit, they may not be able to pay, or may delay payment to us. Likewise, for similar reasons, suppliers may restrict credit or impose more stringent payment terms. The inability of current and/or potential customers to pay us for our products and/or services or any demands by suppliers for more stringent payment terms may materially adversely affect our business, results of operations, cash flows, financial condition and liquidity and may limit the amounts we can borrow under our trade accounts receivable securitization; • Impact on third parties’ ability to meet their obligations to us; impact on our ability to meet obligations to third parties. Failure of third parties on which we rely, including our suppliers, contract manufacturers, distributors, contractors (including third-party shippers), joint venture partners distribute for personal protective equipment (PPE), test kits and external business partners, to meet their obligations to us, or significant disruptions related products, reduction in their peoples’ ability to do so, which may be caused by their own financial or operational difficulties, travel restrictions and border closures and/or other domestic and global supply chain disruptions, may materially adversely affect our business, results of operations, cash flows, financial condition and liquidity. Certain of our contracts with supply partners contain minimum purchase requirements or include rebate provisions if we satisfy certain sales or purchasing targets that, in certain cases we have not been able to satisfy and in other cases we may not be able to fully satisfy, due to the impact of the COVID-19 pandemic. Our failure to satisfy such contractual provisions or renegotiate more favorable terms could materially adversely affect our business, results of operations and cash flows; • Negative impact on our workforce and impact of adapted business practices. The spread of COVID-19 and variants thereof caused us willingness to modify our business practices (including employee travel, employee work locations, and physical participation in meetings, events and conferences), and we may take further actions as may be required by government authorities or our customers or that we determine are in the best interests of our employees. As the COVID-19 pandemic continues to unfold, we will continue to evaluate appropriate actions for our business. Many of our employees shifted abruptly to working remotely and our office-based workers who are able to work from home continue to do so. An extended period of modified business practices and remote work arrangements could have a negative public, impact on employee morale, strain our business continuity plans, introduce operational risk (including but not limited to cybersecurity risks), and impair our ability to efficiently operate our business; • Significant changes in political conditions. Significant changes in political conditions in markets in which we purchase and distribute our products have occurred and are expected to continue at least during the pendency of the pandemic, including quarantines, governmental or regulatory actions, closures or other restrictions that limit or close our operating facilities, restrict our employees’ ability to travel or perform necessary business functions, or otherwise constrain the operations of our adapted business partners, suppliers or customers, which may materially adversely affect our business, results of operations, cash flows, financial condition and liquidity; • Potential impact on our ability to meet obligations under credit facilities. An extended negative impact from the COVID-19 pandemic on our business, results of operations, cash flows, financial condition and liquidity could impact our ability to meet our obligations under credit facilities or outstanding long term debt, which contain maximum leverage ratios, and customary representations, warranties and affirmative covenants; • Volatility in the financial markets. Volatility practices, volatility in the financial markets may materially adversely affect the availability and cost of credit to us; • Refocusing management resources to mitigate effects of the COVID-19 pandemic. Our management is focused on mitigating the effects of the COVID-19 pandemic, which has required, and may continue to require for the duration of the pandemic, a large investment of time and resources across the Company, and may delay certain strategic and other plans, which could materially adversely affect our business; • Potential increased costs associated with our self-insured medical insurance programs. We may incur significant employee health care costs under our self-insurance medical insurance programs if a large number of our employees and/or their covered family members become ill from COVID-19 markets, and variants thereof; • Vaccination or testing mandates. The imposition of government or customer mandated vaccination unavailability or testing mandates may impact our ability to retain current employees, attract new employees and retain certain product and service contracts. It is possible that a significant number impairment of our employees have not been vaccinated, and in the event of a vaccine mandate some of those employees may seek exemptions manufacturing, distribution, or otherwise resist vaccination. The imposition of vaccine mandates could potentially cause labor shortages if employees refuse to get vaccinated and their employment is terminated, either voluntarily other facilities, or involuntarily. Such labor shortages could also affect our ability to retain certain specific contracts to which the mandates may apply, reduce our sales and/or affect our ability to fulfill customer orders, impacting our revenue and profitability. Furthermore, managing and tracking vaccination status and ongoing testing for exempt and/or unvaccinated employees could potentially increase our costs, as could addressing inconsistent mandates. COVID-19 vaccine mandates and similar regulations have the potential to materially adversely affect our business, as the scope, nature and effect of firmwide systems such mandates are uncertain at this time; and • Reputational risk associated with response to the COVID-19 pandemic. If we do not respond appropriately to the COVID-19 pandemic, or if customers do not perceive our response to be adequate, we could suffer damage to our reputation and our brands, which could materially adversely affect as our business. The impact of the COVID-19 pandemic may also exacerbate other risks discussed below, any of which could have a material adverse effect on us.IS.

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Prior heading: Our global operations are subject to inherent risks that could materially adversely affect our business.

Our global operations are subject to risks that may could materially adversely affect our business. The risks that our global operations are subject to include, business, including, among other things: • difficulties and costs relating to staffing and managing foreign operations; • difficulties and delays inherent in sourcing products, establishing channels of distribution and contract manufacturing in foreign markets; • fluctuations in the value of foreign currencies (including, without limitation, in connection with Brexit); • currencies; uncertainties relating to the EU-UK Trade trade agreements and Cooperation Agreement of December 2020, including for example potential implementation problems such as border delays, as well as potential changes to the U.K. regulatory scheme to replace EU requirements; • international trade relationships; longer payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions; • repatriation of cash from our foreign operations to the United States; • regulatory requirements, including including, without limitation, anti-bribery, anti-corruption and laws pertaining to the accuracy of our internal books and records; • litigation risks, new or unanticipated litigation developments and the status of litigation matters; • risks; unexpected difficulties in importing or exporting our products and import/export tariffs, quotas, sanctions or penalties; • limitations on our ability under local laws to protect our intellectual property; • unexpected regulatory, legal, economic and political changes in foreign markets; • changes in tax regulations that influence purchases of capital equipment; • civil disturbances, geopolitical turmoil, including terrorism, war or political or military coups; • coups; and risks associated with climate change, including physical risks such as impacts from extreme weather events and other potential physical consequences, regulatory and technological requirements, market developments, stakeholder expectations and reputational risk; and • public health emergencies, including COVID-19.risk.

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Prior heading: Our future success is substantially dependent upon our senior management, and our revenues and profitability depend on our relationships with capable sales personnel as well as customers, suppliers and manufacturers of the products that we distribute.

Our future success is substantially dependent upon the efforts and abilities of members of our existing senior management, particularly Stanley M. Bergman, Chairman and Chief Executive Officer. The Officer. In November 2022, Mr. Bergman’s employment agreement was extended through December 31, 2025. Although the Company has an internal succession plan for its senior leadership team, including Mr. Bergman, the loss of the services of Mr. Mr. Bergman could have a material adverse effect on our business. We have an employment agreement with Mr. Bergman. business. We do not currently have “key man” life insurance policies on any of our employees. employees. Competition for senior management is intense, burnout and turn-over rates are increasing workplace concerns during the COVID-19 pandemic, concerns, and we may not be successful in attracting and retaining key personnel. personnel. Additionally, our future revenues and profitability depend on our ability to maintain satisfactory relationships with qualified sales personnel personnel, as well as customers, suppliers and manufacturers. manufacturers. If we fail to maintain our existing relationships with such persons or fail to acquire relationships with such key persons in the future, our business may be materially adversely affected.

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