Scott Anderson Steps Down as Chairman,
President and CEO
Jim Wiltz to Serve as Interim President and
CEO; John Buck Appointed Chairman
Patterson Companies, Inc. (Nasdaq: PDCO) today announced that
Scott P. Anderson, President, Chief Executive Officer and Chairman
of the Board, will step down from those roles, effective
immediately. Mr. Anderson will continue to serve as a Director
until the 2017 Annual Meeting of Shareholders, but will not stand
for re-election to the Board. James W. Wiltz, a current director
and the Company’s former Chief Executive Officer, will assume the
role of Interim President and Chief Executive Officer and remain on
the Board. John D. Buck, currently the Company’s Lead Director,
will assume the role of non-executive Chairman. The Company’s Board
of Directors has formed a search committee, consisting of Ellen A.
Rudnick, Jody H. Feragen, Neil A. Schrimsher and Mr. Buck, and has
retained Spencer Stuart to begin an immediate search for a
permanent President and Chief Executive Officer.
“On behalf of the Board, I want to thank Scott for his many
contributions to Patterson throughout his tenure. Under his
leadership, Patterson has refined its focus on core, synergistic
markets, modernized its technology platform and enhanced its team
to position the Company to drive innovation, profitable growth and
long-term shareholder value. After careful consideration, Scott and
the Board have mutually determined that now is the time for a new
leader to guide Patterson going forward,” said Mr. Buck. “I also
want to thank Jim for stepping in on an interim basis to lead the
Company that he knows so well. I am confident Patterson is in
excellent hands as the Board conducts a thorough search for the
next leader.”
“I’m pleased to step into the role of Interim CEO,” said Mr.
Wiltz. “I look forward to working with the team as we maintain a
laser-focus on sales execution while ensuring we remain the partner
of choice across our core markets with the right sales, service,
support and product offerings to capitalize on our competitive
strengths and the market opportunities ahead.”
Mr. Anderson said, “It has been my honor to lead this great
Company over the past seven years and to be a part of its growth
story for the past 25 years. We have amazing customers and
employees, all of whom have very bright futures ahead. I look
forward to assisting the Board in the transition and watching the
Company thrive for decades to come.”
Mr. Anderson has agreed to serve in a Special Advisor capacity
to the Company, subject to certain non-compete and non-solicit
provisions and other terms and conditions, and will be available to
the Company to advise on certain matters at its sole request. The
full details of the agreement will be filed with the Securities and
Exchange Commission.
James W. Wiltz Biography
Mr. Wiltz has served as a director of Patterson since March 2001
and held a variety of roles over more than 40 years at Patterson,
before retiring as the Company’s President and Chief Executive
Officer in April 2010, a role he had held since May 2005. Prior to
assuming that role, Mr. Wiltz served as our President and Chief
Operating Officer from April 2003 through May 2005. From 1996 to
2003, Mr. Wiltz served as President of our subsidiary, Patterson
Dental Supply, Inc. Since January 2010, Mr. Wiltz has served as a
director of HealthEast Care System, a non-profit healthcare
provider, and on its finance committee.
Fiscal 2018 Guidance
Patterson reiterated its previously provided earnings guidance
from continuing operations for fiscal 2018:
- GAAP earnings are expected to be in the
range of $1.90 to $2.05 per diluted share.
- Non-GAAP adjusted earnings1 are
expected to be in the range of $2.25 to $2.40 per diluted
share.
- Our non-GAAP adjusted earnings1
guidance excludes the after-tax impact of:
- Deal amortization expense of
approximately $25.5 million ($0.27 per diluted share)
- Integration and business restructuring
expenses of approximately $6.4 million ($0.07 per diluted
share)
- Transaction-related costs of
approximately $0.3 million ($0.00 per diluted share)
The Company’s guidance is for current continuing operations as
well as completed or previously announced acquisitions and does not
include the impact of potential future acquisitions or similar
transactions, if any, or impairments and material restructurings
beyond those previously publicly disclosed. The guidance assumes
North American and international market conditions similar to those
experienced in fiscal 2017.
1Non-GAAP Financial Measures
The Reconciliation of GAAP to non-GAAP Measures table appearing
below is provided to adjust reported GAAP measures, namely earnings
from continuing operations, net income from continuing operations,
and earnings per diluted share from continuing operations, for the
impact of transaction related costs, deal amortization, intangible
asset impairment, integration and business restructuring expenses,
accelerated debt issuance costs and discrete tax matters.
Management believes that these non-GAAP measures may provide a
helpful representation of the Company’s earnings guidance for
fiscal 2018, and enable comparison of financial results between
periods where certain items may vary independent of business
performance. These non-GAAP financial measures are presented
solely for informational and comparative purposes and should not be
regarded as a replacement for corresponding, similarly captioned,
GAAP measures.
About Patterson Companies, Inc.
Patterson Companies, Inc. (Nasdaq: PDCO) is a value-added
distributor serving the dental and animal health markets.
Dental Market
Patterson’s Dental segment provides a virtually complete range
of consumable dental products, equipment and software, turnkey
digital solutions and value-added services to dentists and dental
laboratories throughout North America.
Animal Health Market
Patterson’s Animal Health segment is a leading distributor of
products, services and technologies to both the production and
companion animal health markets in North America and the U.K.
This press release contains certain forward-looking statements,
as defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are information of a non-historical
nature and are subject to risks and uncertainties that are beyond
Patterson's ability to control. Forward-looking statements
generally can be identified by words such as "believes," "expects,"
"anticipates," "foresees," "forecasts," "estimates" or other words
or phrases of similar import. It is uncertain whether any of the
events anticipated by the forward-looking statements will transpire
or occur, or if any of them do, what impact they will have on the
results of operations and financial condition of Patterson or the
price of Patterson stock. These forward-looking statements involve
certain risks and uncertainties that could cause actual results to
differ materially from those indicated in such forward-looking
statements, including but not limited to the other risks and
important factors contained and identified in Patterson's filings
with the Securities and Exchange Commission, such as its Quarterly
Reports on Form 10-Q and Annual Reports on Form 10-K, any of which
could cause actual results to differ materially from the
forward-looking statements. Any forward-looking statement in this
press release speaks only as of the date on which it is made.
Except to the extent required under the federal securities laws,
Patterson does not intend to update or revise the forward-looking
statements.
PATTERSON COMPANIES, INC. RECONCILIATION OF GAAP TO
NON-GAAP MEASURES (Dollars in thousands, except per share
amounts) (Unaudited) For the three months
ended April 29, 2017 GAAP
Transaction-related
costs
Deal amortization
Intangible asset
impairment
Integration and business
restructuring expenses
Accelerated debt
issuance costs
Discrete tax matters
Non-GAAP Operating income from continuing
operations $ 96,155 $ 178 $ 9,745 $ — $ 257 $ — $ — $
106,335 Other expense, net (10,368) —
—
— — — — (10,368) Income from continuing operations
before taxes 85,787 178 9,745 — 257 — — 95,967 Income tax expense
24,430 67 3,375 — 98 — 2,383 30,353 Net income from
continuing operations $ 61,357 $ 111 $ 6,370 $ — $ 159 $ —
$ (2,383) $ 65,614 Diluted EPS from continuing operations* $
0.65 $ — $ 0.07 $ — $ — $ — $ (0.03) $ 0.69
Consolidated operating income as a % of sales 6.7% 7.4% Effective
tax rate 28.5% 31.6%
For the three months ended April 30,
2016 GAAP
Transaction-related
costs
Deal amortization
Intangible asset
impairment
Integration and business
restructuring expenses
Accelerated debt
issuance costs
Discrete tax matters
Non-GAAP Operating income from continuing operations $
106,344 $ 567 $ 10,779 $ — $ 1,948 $ — $ — $ 119,638 Other expense,
net (8,543) — — — — — — (8,543) Income from
continuing operations before taxes 97,801 567 10,779 — 1,948 — —
111,095 Income tax expense 32,181 214 3,869 — 736 — —
37,000 Net income from continuing operations $ 65,620 $ 353 $ 6,910
$ — $ 1,212 $ — $ — $ 74,095 Diluted EPS from
continuing operations* $ 0.68 $ — $ 0.07 $ — $ 0.01 $ —
$ — $ 0.77 Consolidated operating income as a % of
sales 7.3 % 8.2 % Effective tax rate 32.9 % 33.3 %
For
the twelve months ended April 29, 2017 GAAP
Transaction-related
costs
Deal amortization
Intangible asset
impairment
Integration and business
restructuring expenses
Accelerated debt
issuance costs
Discrete tax matters
Non-GAAP Operating income from continuing operations $
287,928 $ 1,657 $ 39,957 $ 36,312 $ 6,561 $ — $ — $ 372,415 Other
expense, net (37,047) — — — — — — (37,047) Income
from continuing operations before taxes 250,881 1,657 39,957 36,312
6,561 — — 335,368 Income tax expense 77,093 625 13,769 13,263 2,481
— 4,789 112,020 Net income from continuing operations
$ 173,788 $ 1,032 $ 26,188 $ 23,049 $ 4,080 $ — $
(4,789) $ 223,348 Diluted EPS from continuing operations* $ 1.82 $
0.01 $ 0.27 $ 0.24 $ 0.04 $ — $ (0.05) $ 2.34
Consolidated operating income as a % of sales 5.1 % 6.7 % Effective
tax rate 30.7 % 33.4 %
For the twelve months ended April
30, 2016 GAAP
Transaction-related
costs
Deal amortization
Intangible asset
impairment
Integration and business
restructuring expenses
Accelerated debt
issuance costs
Discrete tax matters
Non-GAAP Operating income from continuing operations $
347,713 $ 13,699 $ 39,468 $ — $ 7,144 $ — $ — $ 408,024 Other
expense, net (46,020) — — — — 5,153 — (40,867) Income
from continuing operations before taxes 301,693 13,699 39,468 —
7,144 5,153 — 367,157 Income tax expense 116,009 3,339 14,051 —
2,701 1,948 (12,300) 125,748 Net income from
continuing operations $ 185,684 $ 10,360 $ 25,417 $ — $ 4,443 $
3,205 $ 12,300 $ 241,409 Diluted EPS from continuing
operations* $ 1.90 $ 0.11 $ 0.26 $ — $ 0.05 $ 0.03 $
0.13 $ 2.47 Consolidated operating income as a % of sales
6.5 % 7.6 % Effective tax rate 38.5 % 34.2 %
* May not sum due to rounding
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version on businesswire.com: http://www.businesswire.com/news/home/20170601005726/en/
Patterson Companies, Inc.Ann B. Gugino, 651-686-1600Executive
Vice President & CFOorJohn M. Wright, 651-686-1364Vice
President, Investor Relations
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