Patterson Companies, Inc. (Nasdaq: PDCO) today reported consolidated sales of $812,762,000 for the fourth quarter of fiscal 2010 ended April 24, an increase of 4% from $779,884,000 in the year-earlier quarter. Internal growth accounted for 1% of the fourth quarter sales increase, with acquisitions and foreign currency adjustments accounting for the balance. Net income of $61,805,000 or $.52 per diluted share rose 15% from $53,961,000 or $0.46 per diluted share in the fourth quarter of fiscal 2009.
Full-year fiscal 2010 consolidated sales totaled $3,237,376,000, up 5% from $3,094,227,000 in fiscal 2009. Net income for the year came to $212,254,000 or $1.78 per diluted share, an increase of 6% from $199,635,000 or $1.69 per diluted share in fiscal 2009.
Sales of Patterson Dental Supply, Patterson's largest business, were $547,264,000 in the fourth quarter, up 3% from $533,547,000 in the year-earlier period.
- Sales of consumable dental supplies and printed office products rose 2% from last year's fourth quarter and were essentially flat with last year's fourth quarter before the impact of currency adjustments.
- Sales of dental equipment and software, including currency adjustments, were largely unchanged from the year-earlier level.
- Sales of other services and products, consisting primarily of technical service parts and labor, software support services and artificial teeth, rose 16% from last year's fourth quarter.
Sales of the Webster Veterinary unit increased 2% in the fourth quarter of fiscal 2010 to $161,978,000. All of Webster's fourth quarter growth was internally generated. Sales of Patterson Medical, the rehabilitation supply and equipment unit, increased 18% to $103,520,000. Patterson Medical's internally-generated sales rose 4%, while the acquisitions of Mobilis Healthcare Group in April 2009 and Empi Therapy Solutions in June 2009 accounted for the balance of the fourth quarter sales increase.
Scott P. Anderson, president and chief executive officer, commented: "Patterson's overall fourth quarter results generally reflect the impact of the nation's slow economic recovery. This impact was particularly evident in the performance of our dental business in terms of uneven patient demand for dental services and the hesitancy of practitioners to commit to new capital investments. We believe the dental market is stabilizing, and we are encouraged by some preliminary indications that the market may be starting to strengthen. Although a broadly based recovery of the dental market is expected to be gradual, we are taking a pro-active approach, having initiated new sales and marketing programs to stimulate sales in several product categories. This includes using our leadership in equipment technology to bolster our performance until the market for basic equipment recovers. We believe Patterson is positioned to capture a significant share of the equipment business that has been deferred during the past two years. To strengthen our performance during the coming year, we also will maintain a sharp focus on expense control at all levels of our organization."
He continued: "Patterson Medical posted solid fourth quarter operating results, even excluding the impact of the Mobilis and Empi Therapy Solutions acquisitions, which are continuing to meet our expectations. The assimilation of both units is proceeding on schedule, and the expenses related to these acquisitions continued to moderate in the fourth quarter. We believe Patterson Medical is increasingly well-positioned as a strong growth driver, and we are continuing to identify and evaluate strategic acquisition opportunities for this business. We also were generally pleased with Webster's fourth quarter performance, although revenues were affected by a shift in its sales mix toward agency sales of certain pharmaceuticals. This sales mix shift masked a further increase in sales of other consumable supplies as well as a strongly improved operating margin. We also were encouraged by improved sales of veterinary equipment. During the fourth quarter, Webster entered into an exclusive marketing agreement with VetSource, a leading North American provider of integrated specialty pharmacy distribution, including its home delivery capabilities. We also made a minority equity investment in the company. We believe that offering the VetSource solution further strengthens Webster's value-added platform."
Unlocking the secrets of analytical services: An insider interview with colman byrne