Patterson Companies, Inc. (Nasdaq: PDCO) today reported
operating results for its fiscal year 2020 and fourth quarter ended
April 25, 2020.
“The strategies we executed during fiscal 2020 produced
accelerating performance through the first 11 months, enabling us
to exceed our goals for the year despite the impact of COVID-19,
resulting in full fiscal 2020 adjusted earnings growth of 10.7
percent,” said Mark Walchirk, President and CEO of Patterson
Companies. “Our strong business momentum from the first three
quarters of fiscal 2020 continued to build during the first two
months of our fiscal fourth quarter, helping to deliver fourth
quarter adjusted earnings growth of 16.2 percent compared to the
same period last year.
“Beginning in late-March, COVID-19 considerably disrupted our
end markets, impacting our performance for the balance of the year
and into the first quarter. Patterson took immediate actions in
response to COVID-19 to protect employee health and safety, ensure
business continuity for our customers and help to reduce the spread
of the virus in our communities. We also acted quickly in response
to this disruption by taking additional actions, including
aggressive cost savings measures, suspending all non-essential
capital expenditures and additional measures to preserve our
liquidity.
“The challenges related to COVID-19 are continuing into fiscal
2021, but we are confident in the long-term fundamentals of our end
markets and the essential role we serve with our customers. I am
especially proud of the way our Patterson team has responded during
this crisis, maintaining their focus on our customers and
reinforcing our value proposition to the businesses we serve. Our
successful efforts to strengthen Patterson throughout fiscal 2020,
demonstrated by our accelerating performance and earnings growth,
have positioned us well to navigate this near-term disruption and
emerge as a stronger Patterson.”
Fourth-Quarter Fiscal 2020
Results
Patterson’s performance in the first two months of the fourth
quarter was offset by disruption caused by COVID-19 across the
Company’s end markets starting in late-March and April,
considerably impacting overall fourth quarter results.
Consolidated net sales were approximately $1.29 billion (see
attached Sales Summary for further details) in the fiscal fourth
quarter ended April 25, 2020, a decrease of 10.5 percent compared
to the same period last year. Internal sales, which are adjusted
for the effects of currency translation and changes in product
selling relationships, decreased 10.0 percent. Internal sales for
the first two months of the fiscal fourth quarter, ended on March
21, around when COVID-19 began to impact performance, increased 5.1
percent compared to the same period last year.
Reported net loss attributable to Patterson Companies, Inc. for
the fourth quarter of fiscal 2020 totaled $608.6 million, or $6.44
per diluted share, compared to net income attributable to Patterson
Companies, Inc. of $28.0 million, or $0.30 per diluted share, in
the fourth quarter of fiscal 2019. The year-over-year decrease in
the period is primarily due to a pre-tax $675.1 million goodwill
impairment charge related to our Animal Health segment.
Fourth-quarter adjusted net income1 attributable to Patterson
Companies, Inc., which excludes deal amortization, integration and
business restructuring expenses, an investment loss and goodwill
impairment, totaled $41.1 million for the fourth quarter of fiscal
2020, or $0.43 per diluted share, compared to $35.0 million in the
same quarter of fiscal 2019, or $0.37 per diluted share. This
represents a 16.2 percent improvement over the prior year period.
The year-over-year increase in the period is attributable to the
strong sales momentum at the beginning of the fourth quarter and
immediate expense reductions in response to COVID-19.
Patterson Dental
Reported net sales in our Dental segment for the fourth quarter
of fiscal 2020, which represented approximately 32 percent of total
company sales, were $409.6 million compared to $563.5 million in
the fourth quarter of last year. Internal sales decreased 27.2
percent compared to the fiscal 2019 fourth quarter. Internal sales
for the first two months of the fiscal fourth quarter, ended on
March 21, increased 7.8 percent compared to the same period last
year.
Patterson Animal Health
Reported net sales in our Animal Health segment for the fourth
quarter of fiscal 2020, which comprised approximately 66 percent of
the Company’s total sales, were $853.2 million compared to $866.4
million in the fourth quarter of last year. Internal sales
decreased 0.8 percent compared to the fiscal 2019 fourth quarter.
Internal sales for the first two months of the fiscal fourth
quarter, ended on March 21, increased 3.7 percent compared to the
same period last year.
Full-Year Fiscal 2020
Results
Patterson’s fiscal 2020 results reflect the sales, profitability
and cash flow improvements the Company achieved throughout the
first 11 months of its fiscal year, which enabled Patterson to
deliver year-over-year adjusted earnings growth despite the end
market disruption caused by COVID-19 starting in late-March and
April.
Consolidated reported net sales for fiscal 2020 totaled $5.49
billion, a 1.5 percent year-over-year decrease. Internal sales
decreased 0.9 percent compared to fiscal 2019. Internal sales for
the first 11 months of the fiscal year, ended on March 21,
increased 2.7 percent compared to the same period last year.
Reported net loss attributable to Patterson Companies, Inc. was
$588.4 million, or $6.25 per diluted share, compared to reported
net income attributable to Patterson Companies, Inc. of $83.6
million, or $0.89 per diluted share in fiscal 2019. The
year-over-year decline was primarily attributable to a pre-tax
$675.1 million goodwill impairment charge related to our Animal
Health segment.
Adjusted net income1 attributable to Patterson Companies, Inc.,
which excludes deal amortization, integration and business
restructuring expenses, certain legal expenses, accelerated
debt-related costs, discrete tax matters, investment (gain) loss
and goodwill impairment, totaled $147.6 million, or $1.55 per
diluted share, compared to $130.9 million, or $1.40 per diluted
share, in the year-ago period. This represents a 10.7 percent
improvement over the prior year. The year-over-year increase is
primarily attributable to improved performance in the Dental
segment across consumables, equipment and value-added services.
Balance Sheet and Capital
Allocation
During the full year of fiscal 2020 Patterson Companies used
$243.5 million of cash from operating activities and collected
deferred purchase price receivables of $540.9 million, netting
$297.4 million in cash, compared to a total of $450.5 million
during the full year of fiscal 2019. The previous year period
contained a trade accounts receivable facility amount of $171.0
million and the current period contained a trade accounts
receivable facility amount of $29.0 million. Free cash flow1 (see
definition below and attached free cash flow table) generated
during fiscal 2020 is $7.8 million higher than the fiscal 2019
period primarily due to a decrease in working capital.
In the fourth quarter of fiscal 2020, Patterson Companies paid
$24.9 million in cash dividends to shareholders. For the full
fiscal year, Patterson has returned $100.4 million in cash
dividends to shareholders.
Fiscal 2021 Guidance
Given the ongoing disruption of North American and international
market conditions and the inability to accurately predict the
economic effects of COVID-19 and related government actions,
Patterson is not issuing fiscal 2021 earnings guidance at this
time.
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 operating (loss) income, (loss)
income before taxes, income tax (benefit) expense, net (loss)
income attributable to Patterson Companies, Inc. and diluted (loss)
earnings per share attributable to Patterson Companies, Inc., for
the impact of deal amortization, integration and business
restructuring expenses, certain legal expenses, accelerated
debt-related costs, discrete tax matters, investment (gain) loss
and goodwill impairment, along with the related tax effects of
these items.
The term “free cash flow” used in this release is defined as net
cash (used in) provided by operating activities less capital
expenditures less the one-time benefit from the initiation of our
trade account receivables facilities plus collection of deferred
purchase price receivables.
In addition, the term “internal sales” used in this release
represents net sales adjusted to exclude foreign currency impact
and changes in product selling relationships. 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 changes in constant currency provides
useful supplementary information to investors in light of
significant fluctuations in currency rates.
Management believes that these non-GAAP measures may provide a
helpful representation of the company's fourth-quarter and full
year 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.
Fourth-Quarter Conference Call and Replay
Patterson Companies’ fiscal 2020 fourth-quarter earnings
conference call will start at 10 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 2020
fourth-quarter conference call can be heard for one week at
800-585-8367 and by providing the Conference ID 7898036 when
prompted.
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, 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: the effects of the highly competitive dental and animal
health supply markets in which we compete; the COVID-19 pandemic
and measures taken in response thereto; general economic
conditions, including political and economic uncertainty; risks
from disruption to our information systems; our ability to comply
with restrictive covenants in our amended credit agreement; our
dependence on relationships with sales representatives, service
technicians and customers; our ability to realize the long-term
strategic benefits of our acquisition of Animal Health
International; potential disruption of distribution capabilities,
including service issues with third-party shippers; our ability to
provide our sales force and customers with the latest technology;
our dependence on suppliers for the manufacture and supply of the
products we sell; material changes in our purchasing relationship
with suppliers; the risk that private label sales could adversely
affect our relationships with suppliers; our dependence on positive
perceptions of Patterson’s reputation; risks inherent in acquiring
other businesses; the risk that our acquired technology or
developed technology might not be successful in maintaining or
gaining customers; litigation risks, including new or unanticipated
litigation developments and new or unanticipated regulatory
investigations; changes in consumer preferences; regulatory
restrictions; the cyclicality of the livestock market; the outbreak
of an infectious disease within the production animal or companion
animal population; pressure from animal rights groups; adverse
changes in supplier rebates; fluctuations in quarterly financial
results; volatility in the price of our stock; risks from the
expansion of customer purchasing power; increases in
over-the-counter sales of companion animal products; the risks
inherent in international operations, including currency
fluctuations; the effects of health care reform; failure to comply
with regulatory requirements and data privacy laws; cyberattacks or
other privacy or data security breaches; the risk of the products
we sell becoming obsolete or containing undetected errors;
volatility in the financial markets; our dependence on our senior
management; our dependence on leadership development and succession
planning; disruptions from our enterprise resource planning system;
risks associated with shareholder activism; the risk of being
required to record impairment charges; the risk of audit by tax
authorities; risks associated with interest rate fluctuations; and
the risk that our governing documents and Minnesota law may
discourage takeovers and business combinations. 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
Twelve Months Ended
April 25, 2020
April 27, 2019
April 25, 2020
April 27, 2019
Net sales
$
1,286,461
$
1,436,706
$
5,490,011
$
5,574,523
Gross profit
294,032
312,527
1,197,410
1,190,775
Operating expenses
233,440
265,904
1,094,474
1,053,059
Goodwill impairment
675,055
—
675,055
—
Operating (loss) income
(614,463
)
46,623
(572,119
)
137,716
Other (expense) income:
Other (expense) income, net
(10,994
)
(443
)
23,499
8,178
Interest expense
(7,467
)
(9,817
)
(41,787
)
(39,666
)
(Loss) income before taxes
(632,924
)
36,363
(590,407
)
106,228
Income tax (benefit) expense
(24,127
)
8,678
(1,040
)
23,352
Net (loss) income
(608,797
)
27,685
(589,367
)
82,876
Net loss attributable to noncontrolling
interests
(211
)
(305
)
(921
)
(752
)
Net (loss) income attributable to
Patterson Companies, Inc.
$
(608,586
)
$
27,990
$
(588,446
)
$
83,628
(Loss) earnings per share attributable to
Patterson Companies, Inc.:
Basic
$
(6.44
)
$
0.30
$
(6.25
)
$
0.90
Diluted
$
(6.44
)
$
0.30
$
(6.25
)
$
0.89
Weighted average shares:
Basic
94,462
92,990
94,154
92,755
Diluted
94,462
93,899
94,154
93,484
Dividends declared per common share
$
0.26
$
0.26
$
1.04
$
1.04
PATTERSON COMPANIES,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
April 25, 2020
April 27, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
77,944
$
95,646
Receivables, net
416,523
582,094
Inventory
812,194
761,018
Prepaid expenses and other current
assets
236,104
165,605
Total current assets
1,542,765
1,604,363
Property and equipment, net
303,725
305,790
Operating lease right-of-use assets,
net
79,021
—
Goodwill and identifiable intangibles,
net
452,229
1,167,379
Long-term receivables, net and other
337,610
191,737
Total assets
$
2,715,350
$
3,269,269
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
862,093
$
648,418
Other accrued liabilities
182,099
203,319
Operating lease liabilities
30,706
—
Current maturities of long-term debt
—
23,975
Total current liabilities
1,074,898
875,712
Long-term debt
587,766
725,341
Non-current operating lease
liabilities
49,854
—
Other non-current liabilities
166,388
187,709
Total liabilities
1,878,906
1,788,762
Stockholders' equity
836,444
1,480,507
Total liabilities and stockholders'
equity
$
2,715,350
$
3,269,269
PATTERSON COMPANIES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Twelve Months Ended
April 25, 2020
April 27, 2019
Operating activities:
Net (loss) income
$
(589,367
)
$
82,876
Adjustments to reconcile net (loss) income
to net cash (used in) provided by operating activities:
Depreciation and amortization
82,182
82,773
Investment gain
(34,334
)
—
Goodwill impairment
675,055
—
Non-cash employee compensation
37,354
33,425
Deferred consideration in securitized
receivables
(540,944
)
(402,367
)
Change in assets and liabilities, net of
acquired
126,510
251,451
Net cash (used in) provided by operating
activities
(243,544
)
48,158
Investing activities:
Additions to property and equipment
(41,809
)
(60,734
)
Collection of deferred purchase price
receivables
540,944
402,367
Other investing activities
—
(906
)
Net cash provided by investing
activities
499,135
340,727
Financing activities:
Dividends paid
(100,442
)
(99,468
)
Proceeds from issuance of long-term debt,
net
296,700
—
Payments on long-term debt
(460,840
)
(249,542
)
Payments on revolving credit
—
(16,000
)
Other financing activities
(6,647
)
9,764
Net cash used in financing activities
(271,229
)
(355,246
)
Effect of exchange rate changes on
cash
(2,064
)
(977
)
Net change in cash and cash
equivalents
(17,702
)
32,662
Cash and cash equivalents at beginning of
period
95,646
62,984
Cash and cash equivalents at end of
period
$
77,944
$
95,646
PATTERSON COMPANIES,
INC.
SALES SUMMARY
(Dollars in thousands)
(Unaudited)
April 25, 2020
April 27, 2019
Total Sales
Growth
Foreign Exchange
Impact
Other (a)
Internal Sales
Growth
Three Months
Ended
Consolidated net sales
Consumable
$
1,062,259
$
1,154,802
(8.0
)
%
(0.5
)
%
—
%
(7.5
)
%
Equipment and software
124,535
190,536
(34.6
)
(0.1
)
—
(34.5
)
Value-added services and other
99,667
91,368
9.1
(0.2
)
—
9.3
Total
$
1,286,461
$
1,436,706
(10.5
)
%
(0.5
)
%
—
%
(10.0
)
%
Dental
Consumable
$
230,543
$
312,061
(26.1
)
%
(0.1
)
%
—
%
(26.0
)
%
Equipment and software
110,798
174,572
(36.5
)
(0.1
)
—
(36.4
)
Value-added services and other
68,253
76,844
(11.2
)
(0.1
)
—
(11.1
)
Total
$
409,594
$
563,477
(27.3
)
%
(0.1
)
%
—
%
(27.2
)
%
Animal Health
Consumable
$
831,716
$
842,741
(1.3
)
%
(0.7
)
%
—
%
(0.6
)
%
Equipment and software
13,737
15,964
(14.0
)
—
—
(14.0
)
Value-added services and other
7,788
7,706
1.1
(1.2
)
—
2.3
Total
$
853,241
$
866,411
(1.5
)
%
(0.7
)
%
—
%
(0.8
)
%
Corporate
Value-added services and other
$
23,626
$
6,818
246.5
%
—
%
—
%
246.5
%
Total
$
23,626
$
6,818
246.5
%
—
%
—
%
246.5
%
(a) Sales of certain products previously
recognized on a gross basis were recognized on a net basis during
the three and twelve months ended April 25, 2020.
PATTERSON COMPANIES,
INC.
SALES SUMMARY
(Dollars in thousands)
(Unaudited)
April 25, 2020
April 27, 2019
Total Sales
Growth
Foreign Exchange
Impact
Other (a)
Internal Sales
Growth
Twelve Months
Ended
Consolidated net sales
Consumable
$
4,378,018
$
4,482,016
(2.3
)
%
(0.5
)
%
(0.2
)
%
(1.6
)
%
Equipment and software
736,702
753,805
(2.3
)
(0.1
)
—
(2.2
)
Value-added services and other
375,291
338,702
10.8
(0.2
)
—
11.0
Total
$
5,490,011
$
5,574,523
(1.5
)
%
(0.4
)
%
(0.2
)
%
(0.9
)
%
Dental
Consumable
$
1,136,083
$
1,214,814
(6.5
)
%
(0.1
)
%
—
%
(6.4
)
%
Equipment and software
677,548
694,864
(2.5
)
(0.1
)
—
(2.4
)
Value-added services and other
288,291
282,112
2.2
(0.1
)
—
2.3
Total
$
2,101,922
$
2,191,790
(4.1
)
%
(0.1
)
%
—
%
(4.0
)
%
Animal Health
Consumable
$
3,241,935
$
3,267,202
(0.8
)
%
(0.6
)
%
(0.3
)
%
0.1
%
Equipment and software
59,154
58,941
0.4
—
—
0.4
Value-added services and other
35,164
28,385
23.9
(1.2
)
—
25.1
Total
$
3,336,253
$
3,354,528
(0.5
)
%
(0.6
)
%
(0.3
)
%
0.4
%
Corporate
Value-added services and other
$
51,836
$
28,205
83.8
%
—
%
—
%
83.8
%
Total
$
51,836
$
28,205
83.8
%
—
%
—
%
83.8
%
(a) Sales of certain products previously
recognized on a gross basis were recognized on a net basis during
the three and twelve months ended April 25, 2020.
PATTERSON COMPANIES,
INC.
OPERATING (LOSS) INCOME BY
SEGMENT
(In thousands)
(Unaudited)
Three Months Ended
Twelve Months Ended
April 25, 2020
April 27, 2019
April 25, 2020
April 27, 2019
Operating (loss) income
Dental
$
32,846
$
50,649
$
168,304
$
179,236
Animal Health
(645,979
)
25,376
(594,743
)
81,472
Corporate
(1,330
)
(29,402
)
(145,680
)
(122,992
)
Total
$
(614,463
)
$
46,623
$
(572,119
)
$
137,716
PATTERSON COMPANIES,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
(Dollars in thousands, except
per share amounts)
(Unaudited)
For the three months ended April 25,
2020
GAAP
Deal amortization
Integration and business
restructuring expenses
Legal expenses
Accelerated debt-related
costs
Discrete tax matters
Investment (gain) loss
Goodwill impairment
Non-GAAP
Operating (loss) income
$
(614,463
)
$
9,252
$
2,000
$
—
$
—
$
—
$
—
$
675,055
$
71,844
Other expense, net
(18,461
)
—
—
—
—
—
623
—
(17,838
)
(Loss) income before taxes
(632,924
)
9,252
2,000
—
—
—
623
675,055
54,006
Income tax (benefit) expense
(24,127
)
2,201
500
—
—
—
156
34,428
13,158
Net (loss) income
(608,797
)
7,051
1,500
—
—
—
467
640,627
40,848
Net loss attributable to noncontrolling
interests
(211
)
—
—
—
—
—
—
—
(211
)
Net (loss) income attributable to
Patterson Companies, Inc.
$
(608,586
)
$
7,051
$
1,500
$
—
$
—
$
—
$
467
$
640,627
$
41,059
Weighted average shares*
94,462
95,394
Diluted (loss) earnings per share
attributable to Patterson Companies, Inc.**
$
(6.44
)
$
0.07
$
0.02
$
—
$
—
$
—
$
—
$
6.72
$
0.43
Operating (loss) income as a % of
sales
(47.8
)
%
5.6
%
Effective tax rate
3.8
%
24.4
%
For the three months ended April 27,
2019
GAAP
Deal amortization
Integration and business
restructuring expenses
Legal expenses
Accelerated debt-related
costs
Discrete tax matters
Investment (gain) loss
Goodwill impairment
Non-GAAP
Operating (loss) income
$
46,623
$
9,238
$
—
$
—
$
—
$
—
$
—
$
—
$
55,861
Other expense, net
(10,260
)
—
—
—
—
—
—
—
(10,260
)
(Loss) income before taxes
36,363
9,238
—
—
—
—
—
—
45,601
Income tax (benefit) expense
8,678
2,198
—
—
—
—
—
—
10,876
Net (loss) income
27,685
7,040
—
—
—
—
—
—
34,725
Net loss attributable to noncontrolling
interests
(305
)
—
—
—
—
—
—
—
(305
)
Net (loss) income attributable to
Patterson Companies, Inc.
$
27,990
$
7,040
$
—
$
—
$
—
$
—
$
—
$
—
$
35,030
Weighted average shares*
93,899
93,899
Diluted (loss) earnings per share
attributable to Patterson Companies, Inc.**
$
0.30
$
0.07
$
—
$
—
$
—
$
—
$
—
$
—
$
0.37
Operating (loss) income as a % of
sales
3.2
%
3.9
%
Effective tax rate
23.9
%
23.9
%
* When we present GAAP or non-GAAP net loss attributable to
Patterson Companies, Inc., incremental shares related to dilutive
securities are not included in the diluted EPS calculation because
they would have an anti-dilutive impact on EPS. When we present
GAAP or non-GAAP net income attributable to Patterson Companies,
Inc., incremental shares related to dilutive securities are
included in the diluted EPS calculation.
** May not sum due to rounding and
difference in weighted average shares used to calculate diluted
(loss) earnings per share.
PATTERSON COMPANIES,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
(Dollars in thousands, except
per share amounts)
(Unaudited)
For the twelve months ended April 25,
2020
GAAP
Deal amortization
Integration and business
restructuring expenses
Legal expenses ‡
Accelerated debt-related
costs
Discrete tax matters
Investment (gain) loss
Goodwill impairment
Non-GAAP
Operating (loss) income
$
(572,119
)
$
37,010
$
15,461
$
81,254
$
—
$
—
$
—
$
675,055
$
236,661
Other expense, net
(18,288
)
—
—
—
9,943
—
(33,711
)
—
(42,056
)
(Loss) income before taxes
(590,407
)
37,010
15,461
81,254
9,943
—
(33,711
)
675,055
194,605
Income tax (benefit) expense
(1,040
)
8,802
3,870
7,113
2,486
—
(7,728
)
34,428
47,931
Net (loss) income
(589,367
)
28,208
11,591
74,141
7,457
—
(25,983
)
640,627
146,674
Net loss attributable to noncontrolling
interests
(921
)
—
—
—
—
—
—
—
(921
)
Net (loss) income attributable to
Patterson Companies, Inc.
$
(588,446
)
$
28,208
$
11,591
$
74,141
$
7,457
$
—
$
(25,983
)
$
640,627
$
147,595
Weighted average shares*
94,154
95,059
Diluted (loss) earnings per share
attributable to Patterson Companies, Inc.**
$
(6.25
)
$
0.30
$
0.12
$
0.78
$
0.08
$
—
$
(0.27
)
$
6.74
$
1.55
Operating (loss) income as a % of
sales
(10.4
)
%
4.3
%
Effective tax rate
0.2
%
24.6
%
For the twelve months ended April 27,
2019
GAAP
Deal amortization
Integration and business
restructuring expenses
Legal expenses
Accelerated debt-related
costs
Discrete tax matters
Investment (gain) loss
Goodwill impairment
Non-GAAP
Operating (loss) income
$
137,716
$
38,193
$
—
$
28,263
$
—
$
—
$
—
$
—
$
204,172
Other expense, net
(31,488
)
—
—
—
—
—
—
—
(31,488
)
(Loss) income before taxes
106,228
38,193
—
28,263
—
—
—
—
172,684
Income tax (benefit) expense
23,352
8,992
—
7,523
—
2,686
—
—
42,553
Net (loss) income
82,876
29,201
—
20,740
—
(2,686
)
—
—
130,131
Net loss attributable to noncontrolling
interests
(752
)
—
—
—
—
—
—
—
(752
)
Net (loss) income attributable to
Patterson Companies, Inc.
$
83,628
$
29,201
$
—
$
20,740
$
—
$
(2,686
)
$
—
$
—
$
130,883
Weighted average shares*
93,484
93,484
Diluted (loss) earnings per share
attributable to Patterson Companies, Inc.**
$
0.89
$
0.31
$
—
$
0.22
$
—
$
(0.03
)
$
—
$
—
$
1.40
Operating (loss) income as a % of
sales
2.5
%
3.7
%
Effective tax rate
22.0
%
24.6
%
‡ Includes costs and expenses incurred in
the first quarter of fiscal 2020 of $17,666 related to the
settlement of litigation with SourceOne Dental, Inc., costs and
expenses incurred in the second quarter of fiscal 2020 of $58,300
related to the probable settlement of litigation with the U.S.
Attorney's Office for the Western District of Virginia and $5,288
related to other settlements.
* When we present GAAP or non-GAAP net
loss attributable to Patterson Companies, Inc., incremental shares
related to dilutive securities are not included in the diluted EPS
calculation because they would have an anti-dilutive impact on EPS.
When we present GAAP or non-GAAP net income attributable to
Patterson Companies, Inc., incremental shares related to dilutive
securities are included in the diluted EPS calculation.
** May not sum due to rounding and
difference in weighted average shares used to calculate diluted
(loss) earnings per share.
PATTERSON COMPANIES,
INC.
FREE CASH FLOW
(In thousands)
(Unaudited)
Twelve Months Ended
April 25, 2020
April 27, 2019
Net cash (used in) provided by operating
activities
$
(243,544
)
$
48,158
Additions to property and equipment
(41,809
)
(60,734
)
Collection of deferred purchase price
receivables
540,944
402,367
Impact of trade account receivables
facility
(29,000
)
(171,000
)
Free cash flow
$
226,591
$
218,791
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200624005163/en/
INVESTOR: John M. Wright, Investor Relations Patterson
Companies Inc. 651.686.1364
john.wright@pattersoncompanies.com
MEDIA: Patterson Corporate Communications
Patterson Companies Inc. 651.905.3349
corporate.communications@pattersoncompanies.com
WEB: pattersoncompanies.com
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