- Second quarter reported net sales increased 1.6 percent
year-over-year to $1.65 billion.
- Internal sales increased 1.0 percent year-over-year, driven
by dental consumables growth of 2.9 percent; excluding certain
infection control products, internal sales of dental consumables
increased 4.7 percent year-over-year.
- Delivered second quarter GAAP earnings of $0.42 per diluted
share and adjusted earnings of $0.50 per diluted share.
- Returned $85.9 million to shareholders through dividends and
share repurchases.
- Revises fiscal 2024 GAAP earnings guidance to $2.04 to $2.14
per diluted share and adjusted earnings1 guidance of $2.35 to $2.45
per diluted share.
Patterson Companies, Inc. (Nasdaq: PDCO) today reported
operating results for its fiscal 2024 second quarter ended October
28, 2023.
“Our team executed well against softer than anticipated demand
within our end markets,” said Don Zurbay, President and CEO of
Patterson Companies. “Steady patient traffic supported strong
performance in our broad and resilient dental consumables portfolio
that was offset by lower sales in certain high-tech dental
equipment categories. Our Animal Health segment benefitted from the
depth of our offering and omnichannel presence across a wide range
of animal species. We delivered healthy sales growth in our
production animal business while our companion animal business was
impacted by moderating veterinary clinic visits.
“The macro environment challenges we faced during the second
quarter do not change our core objectives or continued conviction
in making strategic investments in our distribution capabilities,
software offerings, and value-added services. While we have
adjusted our fiscal 2024 guidance to reflect our current
expectations for the near term, we remain confident in the enduring
strength and resiliency of the Dental and Animal Health end
markets. We continue to believe that our talented team and
comprehensive value proposition make Patterson well positioned to
drive enhanced growth, profitability and value creation over the
long term.”
Second Quarter Fiscal 2024 Results Consolidated net sales
were $1.65 billion (see attached Sales Summary for further
details), an increase of 1.6 percent compared to the same period
last year. Internal sales, which are adjusted for the effects of
currency translation, contributions from recent acquisitions and
the net impact of an interest rate swap, increased 1.0 percent over
the prior year period.
Reported net income attributable to Patterson Companies, Inc.
for the second quarter of fiscal 2024 was $40.0 million, or $0.42
per diluted share, compared to $54.1 million, or $0.55 per diluted
share, in the second quarter of fiscal 2023. Adjusted net income1
attributable to Patterson Companies, Inc., which excludes deal
amortization, totaled $47.3 million for the second quarter of
fiscal 2024, or $0.50 per diluted share, compared to $61.2 million,
or $0.63 per diluted share, in the second quarter of fiscal 2023.
The year-over-year decrease in reported and adjusted net income
attributable to Patterson Companies, Inc. in the second quarter of
fiscal 2024 was primarily due to lower sales of dental technology
equipment and increased operating expenses compared to the prior
year period.
Patterson Dental Reported net sales in the Dental segment
for the second quarter of fiscal 2024 were $626.4 million. Internal
sales decreased 0.2 percent compared to the fiscal 2023 second
quarter. Internal sales of consumables increased 2.9 percent
year-over-year. Excluding the deflationary impact of certain
infection control products, internal sales of consumables increased
4.7 percent year-over-year. Compared to the prior year period,
internal sales of equipment decreased 6.3 percent and internal
sales of value-added services increased 3.1 percent.
Patterson Animal Health Reported net sales in the Animal
Health segment for the second quarter of fiscal 2024 were $1.02
billion. Internal sales growth of 0.2 percent year-over-year was
driven by growth in the production animal business, which more than
offset reduced sales in the companion animal business. Within the
Animal Health segment, internal sales of consumables decreased 0.6
percent, equipment increased 0.9 percent and value-added services
increased 67.9 percent.
Balance Sheet and Capital Allocation During the first six
months of fiscal 2024, Patterson Companies used $485.3 million of
cash from operating activities and collected deferred purchase
price receivables of $489.5 million, generating $4.2 million in
cash, compared to using $30.5 million in the prior year period.
Free cash flow1 (see definition below and attached free cash flow
table) during the first six months of fiscal 2024 improved by $28.0
million compared to the first six months of fiscal 2023 due to a
decreased level of working capital during the first six months of
fiscal 2024.
In the second quarter of fiscal 2024, Patterson declared a
quarterly cash dividend of $0.26 per share and returned $24.9
million in cash dividends to shareholders. Also, under an existing
share repurchase authorization, the company repurchased
approximately $61.0 million of shares during the second quarter of
fiscal 2024. Through the first six months of fiscal 2024, Patterson
Companies returned $140.8 million to shareholders in the form of
cash dividends and share repurchases. At of the end of the second
quarter of fiscal 2024, Patterson had approximately $319 million of
share repurchase authority remaining on its current share
repurchase authorization.
Year-to-Date Results Consolidated reported net sales for
the first six months of fiscal 2024 totaled $3.23 billion, a 2.5
percent year-over-year increase. Internal sales for the first six
months of fiscal 2024, which are adjusted for the effects of
currency translation, contributions from recent acquisitions and
the net impact of an interest rate swap, increased 1.6 percent
year-over-year. Through the first six months of fiscal 2024, Dental
segment internal sales increased 0.9 percent, including a 3.7
percent increase in consumables, a 6.0 percent decline in equipment
and a 4.4 percent increase in value-added services. Through the
first six months of fiscal 2024, Animal Health segment internal
sales increased 2.0 percent, including 1.4 percent growth in
consumables, a 1.3 percent decline in equipment and a 70.1 percent
increase in value-added services.
Reported net income attributable to Patterson Companies, Inc.
was $71.2 million, or $0.74 per diluted share, compared to $78.7
million, or $0.81 per diluted share in last year's period. Adjusted
net income1 attributable to Patterson Companies, Inc., which
excludes deal amortization, totaled $85.8 million, or $0.90 per
diluted share, compared to $92.9 million, or $0.95 per diluted
share, in the year-ago period.
Fiscal 2024 Guidance Patterson Companies today revised
its fiscal 2024 earnings guidance, which is provided on both a GAAP
and non-GAAP adjusted1 basis:
- GAAP earnings are expected to be in the range of $2.04 to $2.14
per diluted share.
- Non-GAAP adjusted earnings1 are expected to be in the range of
$2.35 to $2.45 per diluted share.
- Our non-GAAP adjusted earnings1 guidance excludes the after-tax
impact of:
- Deal amortization expenses of approximately $29.3 million
($0.31 per diluted share).
Our guidance reflects the strength of our business and
competitive positioning, as well as our expectations for the North
American and international end markets in which we operate, which
we expect to be affected by the ongoing challenges of inflationary
trends and higher interest rates as well as additional slow-down in
the broader economy. Beyond macroeconomic and geopolitical
uncertainty, our guidance further assumes that there are no
material adverse developments associated with wide-spread public
health concerns.
1Non-GAAP Financial Measures The Reconciliation of GAAP
to non-GAAP Measures table appearing behind the accompanying
financial information is provided to adjust reported GAAP measures,
namely net sales, gross profit, operating expenses, operating
income, other income (expense), net, income before taxes, income
tax expense, net income, net loss attributable to noncontrolling
interests, net income attributable to Patterson Companies, Inc.,
and diluted earnings per share attributable to Patterson Companies,
Inc. for the impact of deal amortization and an interest rate swap
along with any related tax effects of these items.
- Interest rate swap -- Our customer financing net sales include
the impact of changes in interest rates on deferred purchase price
receivables, as the average interest rate in our contract portfolio
may not fluctuate at the same rate as interest rate markets,
resulting in an increase or reduction of gain on contract sales. We
enter into an interest rate swap to hedge a portion of the related
interest rate risk. These agreements do not qualify for hedge
accounting, and the gains or losses on an interest rate swap are
reported in other income and expense in our condensed consolidated
statements of operation and other comprehensive income. Beginning
this quarter and for the first quarter of fiscal 2024, we present a
non-GAAP adjustment to reclassify the mark-to-market adjustment on
the interest rate swap from other income (expense) to net sales to
align the swap impact with the impact on customer financing net
sales. We believe adjusted net sales, adjusted gross profit and
adjusted operating income, which include the gains and losses on
the interest rate swap, provides additional comparability from
period to period because they present the impact of interest rate
fluctuations, net of the mark-to-market swap adjustment, within
adjusted net sales. We note the net impact of interest rate
fluctuations has a minimal impact on net income. Deal amortization
along with the related tax effect of this item. We believe this
adjustment provides comparability with other companies.
The term “free cash flow” used in this release is defined as net
cash used in operating activities less capital expenditures plus
the collection of deferred purchase price receivables.
In addition, the term “internal sales” used in this release
represents net sales adjusted for the effects of currency
translation, contributions from recent acquisitions and the net
impact of an interest rate swap. Foreign currency impact represents
the difference in results that is attributable to fluctuations in
currency exchange rates the company uses to convert results for all
foreign entities where the functional currency is not the U.S.
dollar. The company calculates the impact as the difference between
the current period results translated using the current period
currency exchange rates and using the comparable prior period’s
currency exchange rates. The company believes the disclosure of net
sales excluding the impact of foreign currency, an interest rate
swap and recent acquisitions provides useful supplementary
information to investors in light of fluctuations in these
variables that are independent of our period-over-period
performance.
Management believes that these non-GAAP measures may provide a
helpful representation of the company’s performance 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.
Second Quarter Conference Call and Replay Patterson
Companies’ fiscal 2024 second quarter conference call will start at
8:30 a.m. Eastern today. Investors can listen to a live webcast of
the conference call at www.pattersoncompanies.com. The conference
call will be archived on the Patterson Companies website. A replay
of the fiscal 2024 second quarter conference call can be heard for
one week at 1-800-770-2030 and by providing the Conference ID 71954
when prompted.
About Patterson Companies Inc. Patterson Companies Inc.
(Nasdaq: PDCO) connects dental and animal health customers in North
America and the U.K. to the latest products, technologies, services
and innovative business solutions that enable operational and
professional success. Our comprehensive portfolio, distribution
network and supply chain is equaled only by our dedicated,
knowledgeable people who deliver unrivalled expertise and unmatched
customer service and support.
Learn more: pattersoncompanies.com
This press release contains, and our officers and
representatives may from time to time make, certain
“forward-looking statements” within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995, including statements regarding future financial performance,
and the objectives and expectations of management. Forward-looking
statements often include words such as “believes,” “expects,”
“anticipates,” “estimates,” “intends,” “plans,” “seeks” or words of
similar meaning, or future or conditional verbs, such as “will,”
“should,” “could” or “may.”
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not place undue
reliance on any of these forward-looking statements.
Any number of factors could affect our actual results and cause
such results to differ materially from those contemplated by any
forward-looking statements, including, but not limited to, the
following: wide-spread public health concerns as we experienced,
and may continue to experience, with the COVID-19 pandemic; our
dependence on suppliers to manufacture and supply substantially all
of the products we sell; potential disruption of distribution
capabilities, including service issues with third-party shippers;
our dependence on relationships with sales representatives and
service technicians to retain customers and develop business;
adverse changes in supplier rebates or other purchasing incentives;
risks of selling private label products, including the risk of
adversely affecting our relationships with suppliers; the risk of
technological and market obsolescence for the products we sell; the
risk of failing to innovate and develop new and enhanced software
and e-services products; our dependence on positive perceptions of
Patterson’s reputation; risks associated with illicit human use of
pharmaceutical products we distribute; risks inherent in acquiring
and disposing of assets or other businesses and risks inherent in
integrating acquired businesses; turnover or loss of key personnel
or highly skilled employees; risks associated with information
systems, software products and cyber-security attacks; risks
related to climate change; our ability to comply with restrictive
covenants and other limits in our credit agreement; the risk that
our governing documents and Minnesota law may discourage takeovers
and business combinations; the effects of the highly competitive
dental and animal health supply markets in which we compete; the
effects of consolidation within the dental and animal health supply
markets; exposure to the risks of the animal production business,
including changing consumer demand, the cyclical livestock market,
weather conditions, the availability of natural resources and other
factors outside our control, and the risks of the companion animal
business, including the possibility of disease adversely affecting
the pet population; exposure to the risks of the health care
industry, including changes in demand due to political, economic
and regulatory influences and other factors outside our control;
increases in over-the-counter sales and e-commerce options; risks
from the formation or expansion of GPOs, provider networks and
buying groups that may place us at a competitive disadvantage;
risks of litigation and government inquiries and investigations,
including the diversion of management’s attention, the cost of
defending against such actions, the possibility of damage awards or
settlements, fines or penalties, or equitable remedies (including
but not limited to the revocation of or non-renewal of licenses)
and inherent uncertainty; failure to comply with health care fraud
or other laws and regulations; change and uncertainty in the health
care industry; failure to comply with existing or future U.S. or
foreign laws and regulations including those governing the
distribution of pharmaceuticals and controlled substances; failure
to comply with evolving data privacy laws and regulations; tax
legislation; risks inherent in international operations, including
currency fluctuations; and uncertain macro-economic conditions,
including inflationary pressures.
The order in which these factors appear should not be construed
to indicate their relative importance or priority. We caution that
these factors may not be exhaustive, accordingly, any
forward-looking statements contained herein should not be relied
upon as a prediction of actual results.
You should carefully consider these and other relevant factors,
including those risk factors in Part I, Item 1A, (“Risk Factors”)
in our most recent Form 10-K and information which may be contained
in our other filings with the U.S. Securities and Exchange
Commission, or SEC, when reviewing any forward-looking
statement.
Investors should understand it is impossible to predict or
identify all such factors or risks. As such, you should not
consider the foregoing list, or the risks identified in our SEC
filings, to be a complete discussion of all potential risks or
uncertainties.
Any forward-looking statement made by us in this press release
is based only on information currently available to us and speaks
only as of the date on which it is made. We do not undertake any
obligation to release publicly any revisions to any forward-looking
statements whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise.
PATTERSON COMPANIES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended
Six Months Ended
October 28, 2023
October 29, 2022
October 28, 2023
October 29, 2022
Net sales
$
1,652,772
$
1,626,204
$
3,229,517
$
3,149,469
Gross profit
339,026
328,089
658,081
640,222
Operating expenses
282,123
267,994
562,956
545,283
Operating income
56,903
60,095
95,125
94,939
Other income (expense):
Other income, net
7,096
18,203
18,997
19,983
Interest expense
(10,642
)
(7,544
)
(20,154
)
(13,107
)
Income before taxes
53,357
70,754
93,968
101,815
Income tax expense
13,502
17,105
22,983
23,906
Net income
39,855
53,649
70,985
77,909
Net loss attributable to noncontrolling
interests
(103
)
(424
)
(207
)
(754
)
Net income attributable to Patterson
Companies, Inc.
$
39,958
$
54,073
$
71,192
$
78,663
Earnings per share attributable to
Patterson Companies, Inc.:
Basic
$
0.42
$
0.56
$
0.75
$
0.81
Diluted
$
0.42
$
0.55
$
0.74
$
0.81
Weighted average shares:
Basic
94,710
96,913
95,127
96,771
Diluted
95,156
97,552
95,722
97,708
Dividends declared per common share
$
0.26
$
0.26
$
0.52
$
0.52
PATTERSON COMPANIES,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
October 28, 2023
April 29, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
113,886
$
159,669
Receivables, net
490,428
477,384
Inventory
858,028
795,072
Prepaid expenses and other current
assets
328,334
351,011
Total current assets
1,790,676
1,783,136
Property and equipment, net
218,977
212,283
Operating lease right-of-use assets,
net
101,532
92,956
Goodwill and identifiable intangibles,
net
368,351
388,293
Investments
162,531
160,022
Long-term receivables, net and other
247,623
242,456
Total assets
$
2,889,690
$
2,879,146
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
688,687
$
724,993
Other accrued liabilities
223,723
250,949
Operating lease liabilities
30,132
28,390
Current maturities of long-term debt
36,000
36,000
Borrowings on revolving credit
170,000
45,000
Total current liabilities
1,148,542
1,085,332
Long-term debt
449,974
451,231
Non-current operating lease
liabilities
74,393
67,376
Other non-current liabilities
161,692
156,672
Total liabilities
1,834,601
1,760,611
Stockholders' equity
1,055,089
1,118,535
Total liabilities and stockholders'
equity
$
2,889,690
$
2,879,146
PATTERSON COMPANIES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
October 28, 2023
October 29, 2022
Operating activities:
Net income
$
70,985
$
77,909
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization
42,836
41,090
Non-cash employee compensation
11,650
8,393
Non-cash losses (gains) and other, net
3,166
5,085
Change in assets and liabilities:
Receivables
(487,186
)
(508,811
)
Inventory
(67,416
)
(100,596
)
Accounts payable
(30,911
)
41,557
Accrued liabilities
(24,908
)
(47,519
)
Other changes from operating activities,
net
(3,492
)
(37,269
)
Net cash used in operating activities
(485,276
)
(520,161
)
Investing activities:
Additions to property and equipment and
software
(33,467
)
(26,779
)
Collection of deferred purchase price
receivables
489,452
489,639
Payments related to acquisitions, net of
cash acquired
(1,108
)
—
Payments related to investments
—
(15,000
)
Net cash provided by investing
activities
454,877
447,860
Financing activities:
Dividends paid
(50,331
)
(50,732
)
Repurchases of common stock
(90,491
)
(15,000
)
Payments on long-term debt
(1,500
)
—
Draw on revolving credit
125,000
145,000
Other financing activities
4,141
(1,766
)
Net cash provided by (used in) financing
activities
(13,181
)
77,502
Effect of exchange rate changes on
cash
(2,203
)
(6,935
)
Net change in cash and cash
equivalents
(45,783
)
(1,734
)
Cash and cash equivalents at beginning of
period
159,669
142,014
Cash and cash equivalents at end of
period
$
113,886
$
140,280
PATTERSON COMPANIES,
INC.
SALES SUMMARY
(Dollars in thousands)
(Unaudited)
October 28, 2023
October 29, 2022
Total Sales
Growth
Foreign Exchange
Impact
Net Interest Rate Swap
Acquisition Impact
Internal Sales
Growth
Three Months
Ended
Consolidated net sales
Consumable
$
1,319,363
$
1,301,256
1.4
%
0.9
%
—
%
0.2
%
0.3
%
Equipment
230,293
243,896
(5.6
)
(0.2
)
—
—
(5.4
)
Value-added services and other
103,116
81,052
27.2
0.7
(12.7
)
6.5
32.7
Total
$
1,652,772
$
1,626,204
1.6
%
0.7
%
(0.6
)%
0.5
%
1.0
%
Dental
Consumable
$
346,492
$
337,489
2.7
%
(0.2
)%
—
%
—
%
2.9
%
Equipment
200,127
214,006
(6.5
)
(0.2
)
—
—
(6.3
)
Value-added services and other
79,762
77,428
3.0
(0.1
)
—
—
3.1
Total
$
626,381
$
628,923
(0.4
)%
(0.2
)%
—
%
—
%
(0.2
)%
Animal Health
Consumable
$
972,871
$
963,767
0.9
%
1.2
%
—
%
0.3
%
(0.6
)%
Equipment
30,166
29,890
0.9
—
—
—
0.9
Value-added services and other
21,585
9,339
131.1
6.5
—
56.7
67.9
Total
$
1,024,622
$
1,002,996
2.2
%
1.2
%
—
%
0.8
%
0.2
%
Corporate
Value-added services and other
$
1,769
$
(5,715
)
(131.0
)%
—
%
180.0
%
—
%
(311.0
)%
Total
$
1,769
$
(5,715
)
(131.0
)%
—
%
180.0
%
—
%
(311.0
)%
PATTERSON COMPANIES,
INC.
SALES SUMMARY
(Dollars in thousands)
(Unaudited)
October 28, 2023
October 29, 2022
Total Sales
Growth
Foreign Exchange
Impact
Net Interest Rate Swap
Acquisition Impact
Internal Sales
Growth
Six Months
Ended
Consolidated net sales
Consumable
$
2,635,088
$
2,563,025
2.8
%
0.6
%
—
%
0.2
%
2.0
%
Equipment
394,264
417,831
(5.6
)
(0.2
)
—
—
(5.4
)
Value-added services and other
200,165
168,613
18.7
0.4
(0.9
)
6.2
13.0
Total
$
3,229,517
$
3,149,469
2.5
%
0.4
%
—
%
0.5
%
1.6
%
Dental
Consumable
$
698,539
$
675,329
3.4
%
(0.3
)%
—
%
—
%
3.7
%
Equipment
337,676
360,516
(6.3
)
(0.3
)
—
—
(6.0
)
Value-added services and other
157,466
150,995
4.3
(0.1
)
—
—
4.4
Total
$
1,193,681
$
1,186,840
0.6
%
(0.3
)%
—
%
—
%
0.9
%
Animal Health
Consumable
$
1,936,549
$
1,887,696
2.6
%
0.9
%
—
%
0.3
%
1.4
%
Equipment
56,588
57,315
(1.3
)
—
—
—
(1.3
)
Value-added services and other
42,475
18,355
131.4
4.6
—
56.7
70.1
Total
$
2,035,612
$
1,963,366
3.7
%
0.9
%
—
%
0.8
%
2.0
%
Corporate
Value-added services and other
$
224
$
(737
)
(130.4
)%
—
%
212.3
%
—
%
(342.7
)%
Total
$
224
$
(737
)
(130.4
)%
—
%
212.3
%
—
%
(342.7
)%
PATTERSON COMPANIES,
INC.
SALES SUMMARY
(Dollars in thousands)
(Unaudited)
July 29, 2023
July 30, 2022
Total Sales
Growth
Foreign Exchange
Impact
Net Interest Rate Swap
Acquisition Impact
Internal Sales
Growth
Three Months
Ended
Consolidated net sales
Consumable
$
1,315,725
$
1,261,769
4.3
%
0.3
%
—
%
0.2
%
3.8
%
Equipment
163,971
173,935
(5.7
)
(0.3
)
—
—
(5.4
)
Value-added services and other
97,049
87,561
10.8
0.1
10.0
5.8
(5.1
)
Total
$
1,576,745
$
1,523,265
3.5
%
0.2
%
0.6
%
0.5
%
2.2
%
Dental
Consumable
$
352,047
$
337,840
4.2
%
(0.4
)%
—
%
—
%
4.6
%
Equipment
137,549
146,510
(6.1
)
(0.4
)
—
—
(5.7
)
Value-added services and other
77,704
73,567
5.6
(0.2
)
—
—
5.8
Total
$
567,300
$
557,917
1.7
%
(0.4
)%
—
%
—
%
2.1
%
Animal Health
Consumable
$
963,678
$
923,929
4.3
%
0.5
%
—
%
0.3
%
3.5
%
Equipment
26,422
27,425
(3.7
)
—
—
—
(3.7
)
Value-added services and other
20,890
9,016
131.7
2.7
—
56.7
72.3
Total
$
1,010,990
$
960,370
5.3
%
0.5
%
—
%
0.8
%
4.0
%
Corporate
Value-added services and other
$
(1,545
)
$
4,978
(131.0
)%
—
%
175.2
%
—
%
(306.2
)%
Total
$
(1,545
)
$
4,978
(131.0
)%
—
%
175.2
%
—
%
(306.2
)%
PATTERSON COMPANIES,
INC.
OPERATING INCOME BY
SEGMENT
(In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
October 28, 2023
October 29, 2022
October 28, 2023
October 29, 2022
Operating income (loss)
Dental
$
55,277
$
60,950
$
93,947
$
97,845
Animal Health
26,346
28,316
56,039
50,175
Corporate
(24,720
)
(29,171
)
(54,861
)
(53,081
)
Total
$
56,903
$
60,095
$
95,125
$
94,939
PATTERSON COMPANIES,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
(Dollars in thousands, except
per share amounts)
(Unaudited)
For the three months ended October 28,
2023
GAAP
Deal amortization
Interest rate swap
Non-GAAP
Net sales
$
1,652,772
$
—
$
2,786
$
1,655,558
Gross profit
339,026
—
2,786
341,812
Operating expenses
282,123
(9,628
)
—
272,495
Operating income
56,903
9,628
2,786
69,317
Other income (expense), net
(3,546
)
—
(2,786
)
(6,332
)
Income before taxes
53,357
9,628
—
62,985
Income tax expense
13,502
2,305
—
15,807
Net income
39,855
7,323
—
47,178
Net loss attributable to noncontrolling
interests
(103
)
—
—
(103
)
Net income attributable to Patterson
Companies, Inc.
$
39,958
$
7,323
$
—
$
47,281
Diluted earnings per share attributable to
Patterson Companies, Inc.*
$
0.42
$
0.08
$
—
$
0.50
Gross margin
20.5
%
20.6
%
Operating margin
3.4
%
4.2
%
Effective tax rate
25.3
%
25.1
%
For the three months ended October 29,
2022
GAAP
Deal amortization
Interest rate swap
Non-GAAP
Net sales
$
1,626,204
$
—
$
13,072
$
1,639,276
Gross profit
328,089
—
13,072
341,161
Operating expenses
267,994
(9,327
)
—
258,667
Operating income
60,095
9,327
13,072
82,494
Other income (expense), net
10,659
—
(13,072
)
(2,413
)
Income before taxes
70,754
9,327
—
80,081
Income tax expense
17,105
2,237
—
19,342
Net income
53,649
7,090
—
60,739
Net loss attributable to noncontrolling
interests
(424
)
—
—
(424
)
Net income attributable to Patterson
Companies, Inc.
$
54,073
$
7,090
$
—
$
61,163
Diluted earnings per share attributable to
Patterson Companies, Inc.*
$
0.55
$
0.07
$
—
$
0.63
Gross margin
20.2
%
20.8
%
Operating margin
3.7
%
5.0
%
Effective tax rate
24.2
%
24.2
%
* May not sum due to rounding
PATTERSON COMPANIES,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
(Dollars in thousands, except
per share amounts)
(Unaudited)
For the six months ended October 28,
2023
GAAP
Deal amortization
Interest rate swap
Non-GAAP
Net sales
$
3,229,517
$
—
$
9,561
$
3,239,078
Gross profit
658,081
—
9,561
667,642
Operating expenses
562,956
(19,254
)
—
543,702
Operating income
95,125
19,254
9,561
123,940
Other income (expense), net
(1,157
)
—
(9,561
)
(10,718
)
Income before taxes
93,968
19,254
—
113,222
Income tax expense
22,983
4,609
—
27,592
Net income
70,985
14,645
—
85,630
Net loss attributable to noncontrolling
interests
(207
)
—
—
(207
)
Net income attributable to Patterson
Companies, Inc.
$
71,192
$
14,645
$
—
$
85,837
Diluted earnings per share attributable to
Patterson Companies, Inc.*
$
0.74
$
0.15
$
—
$
0.90
Gross margin
20.4
%
20.6
%
Operating margin
2.9
%
3.8
%
Effective tax rate
24.5
%
24.4
%
For the six months ended October 29,
2022
GAAP
Deal amortization
Interest rate swap
Non-GAAP
Net sales
$
3,149,469
$
—
$
11,124
$
3,160,593
Gross profit
640,222
—
11,124
651,346
Operating expenses
545,283
(18,678
)
—
526,605
Operating income
94,939
18,678
11,124
124,741
Other income (expense), net
6,876
—
(11,124
)
(4,248
)
Income before taxes
101,815
18,678
—
120,493
Income tax expense
23,906
4,474
—
28,380
Net income
77,909
14,204
—
92,113
Net loss attributable to noncontrolling
interests
(754
)
—
—
(754
)
Net income attributable to Patterson
Companies, Inc.
$
78,663
$
14,204
$
—
$
92,867
Diluted earnings per share attributable to
Patterson Companies, Inc.*
$
0.81
$
0.15
$
—
$
0.95
Gross margin
20.3
%
20.6
%
Operating margin
3.0
%
3.9
%
Effective tax rate
23.5
%
23.6
%
* May not sum due to rounding
PATTERSON COMPANIES,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
(Dollars in thousands, except
per share amounts)
(Unaudited)
For the three months ended July 29,
2023
GAAP
Deal amortization
Interest rate swap
Non-GAAP
Net sales
$
1,576,745
$
—
$
6,775
$
1,583,520
Gross profit
319,055
—
6,775
325,830
Operating expenses
280,833
(9,626
)
—
271,207
Operating income
38,222
9,626
6,775
54,623
Other income (expense), net
2,389
—
(6,775
)
(4,386
)
Income before taxes
40,611
9,626
—
50,237
Income tax expense
9,481
2,304
—
11,785
Net income
31,130
7,322
—
38,452
Net loss attributable to noncontrolling
interests
(104
)
—
—
(104
)
Net income attributable to Patterson
Companies, Inc.
$
31,234
$
7,322
$
—
$
38,556
Diluted earnings per share attributable to
Patterson Companies, Inc.*
$
0.32
$
0.08
$
—
$
0.40
Gross margin
20.2
%
20.6
%
Operating margin
2.4
%
3.4
%
Effective tax rate
23.3
%
23.5
%
For the three months ended July 30,
2022
GAAP
Deal amortization
Interest rate swap
Non-GAAP
Net sales
$
1,523,265
$
—
$
(1,948
)
$
1,521,317
Gross profit
312,133
—
(1,948
)
310,185
Operating expenses
277,289
(9,351
)
—
267,938
Operating income
34,844
9,351
(1,948
)
42,247
Other income (expense), net
(3,783
)
—
1,948
(1,835
)
Income before taxes
31,061
9,351
—
40,412
Income tax expense
6,801
2,237
—
9,038
Net income
24,260
7,114
—
31,374
Net loss attributable to noncontrolling
interests
(330
)
—
—
(330
)
Net income attributable to Patterson
Companies, Inc.
$
24,590
$
7,114
$
—
$
31,704
Diluted earnings per share attributable to
Patterson Companies, Inc.*
$
0.25
$
0.07
$
—
$
0.32
Gross margin
20.5
%
20.4
%
Operating margin
2.3
%
2.8
%
Effective tax rate
21.9
%
22.4
%
* May not sum due to rounding
PATTERSON COMPANIES,
INC.
FREE CASH FLOW
(In thousands)
(Unaudited)
Six Months Ended
October 28, 2023
October 29, 2022
Net cash used in operating activities
$
(485,276
)
$
(520,161
)
Additions to property and equipment and
software
(33,467
)
(26,779
)
Collection of deferred purchase price
receivables
489,452
489,639
Free cash flow
$
(29,291
)
$
(57,301
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231129971564/en/
INVESTORS: John M. Wright, Investor Relations
Patterson Companies Inc. 651.686.1364
investor.relations@pattersoncompanies.com
MEDIA: Patterson Corporate Communications Patterson
Companies Inc. 651.905.3349
corporate.communications@pattersoncompanies.com
pattersoncompanies.com
Patterson Companies (NASDAQ:PDCO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Patterson Companies (NASDAQ:PDCO)
Historical Stock Chart
From Apr 2023 to Apr 2024