Patterson Companies Reports Improved Third Quarter Operating Results

Patterson Companies, Inc. (Nasdaq: PDCO) today reported that consolidated sales totaled $895,030,000 in the third quarter of fiscal 2012 ended January 28, an increase of 9% from $824,650,000 in the year-earlier period. Net income of $53,108,000 or $0.50 per diluted share included incremental expense of $0.03 per diluted share related to Patterson’s Employee Stock Ownership Plan (ESOP). Excluding this ESOP-related expense, third quarter earnings were $0.53 per diluted share. Patterson reported earnings of $55,396,000 or $0.47 per diluted share in the third quarter of fiscal 2011. As reported previously, the ESOP expense will affect fiscal 2012 earnings by an estimated $0.12 per diluted share.

Sales of Patterson Dental, Patterson’s largest business, increased 9% from the year-earlier period to $605,041,000 in this year’s third quarter.

• Sales of consumable dental supplies and printed office products increased over 3% in the third quarter.
• Sales of dental equipment and software increased more than 21% from the year-earlier level, driven by double-digit increases in sales of CEREC dental restorative products and digital radiography products.
• Sales of other services and products, consisting primarily of technical service, parts and labor, software support services and artificial teeth, were down 4% from last year’s third quarter.

Third quarter sales of the Webster Veterinary unit increased nearly 17% to $174,643,000, with the August 2011 acquisition of American Veterinary Supply Corporation, a full-service veterinary distributor located on Long Island, accounting for 3% of the unit’s sales growth for this period. Sales of Patterson Medical, the rehabilitation supply and equipment unit, declined 2% to $115,346,000, primarily reflecting weak equipment sales during the quarter.

Scott P. Anderson, president and chief executive officer, commented: “We are pleased with Patterson’s third quarter results, indicating that we are performing effectively amid unsettled economic conditions. Within Patterson Dental, we posted solidly higher sales of consumable supplies as patient levels continued to strengthen during this period. Sales of dental equipment, paced by CEREC systems and digital radiography products, rebounded from the unexpectedly weak performance in last year’s third quarter. Our equipment business benefited from marketing efforts aimed at capitalizing upon the growing acceptance of new digital technologies, which are enabling dentists to strengthen their productivity, generate additional income and improve clinical outcomes. We believe ample opportunities exist for our new-technology offerings, and we will continue to focus our marketing initiatives on further boosting demand for capital equipment.”

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