Patterson Companies fourth quarter consolidated sales increase 9% to $883,819,000

Patterson Companies, Inc.May 26 2011

Patterson Companies, Inc. (Nasdaq: PDCO) today reported consolidated sales of $883,819,000 for the fourth quarter of fiscal 2011 ended April 30, an increase of 9% from $812,762,000 in the year-earlier quarter. Net income was $62,707,000 or $0.53 per diluted share, compared to $61,805,000 or $.52 per diluted share in the fourth quarter of fiscal 2010.

Fiscal 2011 consolidated sales totaled $3,415,670,000, up 6% from $3,237,376,000 in fiscal 2010. Net income for the year came to $225,385,000 or $1.89 per diluted share, an increase of 6% from $212,254,000 or $1.78 per diluted share in fiscal 2010. During fiscal 2011, Patterson used internally-generated cash to buy back 3.3 million shares of its common stock, including 1.9 million shares repurchased in the fourth quarter.

Sales of Patterson Dental Supply, Patterson's largest business, totaled $573,120,000 in the fourth quarter, up 5% from $547,264,000 in the year-earlier period.

• Sales of consumable dental supplies and printed office products rose 3% from last year's fourth quarter.
• Sales of dental equipment and software increased 11% from the year-earlier level, paced by mid-teen sales growth of new-technology equipment, including CEREC dental restorative systems and digital radiography products. Sales of basic dental equipment, including chairs, units and lights, posted single-digit growth in the fourth quarter.
• Sales of other services and products, consisting primarily of technical service parts and labor, software support services and artificial teeth, increased 4% from last year's fourth quarter, excluding the impact of the equipment financing business.

Fourth quarter sales of Patterson Medical, the rehabilitation supply and equipment unit, rose 22% to $126,758,000. Internally-generated sales increased 3% for this period, while the June 2010 acquisitions of the healthcare businesses of DCC Healthcare accounted for the balance of the year-over-year sales growth. Sales of the Webster Veterinary unit increased 14% from the year-earlier period to $183,941,000, reflecting improved sales of both consumable supplies and equipment and software.

Scott P. Anderson, president and chief executive officer, commented: "We are encouraged by the solid performances of our three businesses in the fourth quarter. We believe the fundamentals of the North American dental market are continuing to strengthen as evidenced by our improved consumables sales growth in recent periods. Given this market firming, we believe the improvement in our dental equipment business indicates that dentists are gradually becoming more confident about investing in their practices. Equipment sales also benefited from additional marketing programs implemented at the beginning of the quarter. As a result of these factors, we believe that we are rebuilding sales momentum in our dental equipment business."

He continued: "We are encouraged by Patterson Medical's overall performance during this period. Internally-generated sales attained planned levels and benefited from solid demand for the unit's industry-leading range of consumable supplies. The integration of the acquired DCC units is proceeding on schedule, and incremental expenses related to this process are expected to diminish significantly going forward. We continue to believe Patterson Medical is well positioned, domestically and internationally, as an ongoing growth driver."

Anderson added: "Webster Veterinary's fourth quarter sales growth benefited from strong demand for new combination products in the flea/tick and heartworm category, which helped fuel a 12% increase in sales of consumable supplies. In addition, Webster posted continued strong sales of veterinary equipment and software, which rose 41% from last year's fourth quarter. Webster's equipment business has been growing at solid rates in recent quarters, and we intend to continue investing in this relatively new portion of Webster's operation."

Patterson issued financial guidance of $1.90 to $2.00 per diluted share for fiscal 2012. This guidance includes the impact of non-cash expense related to its Employee Stock Ownership Plan, which will affect earnings by an estimated $0.12 per share beginning in fiscal 2012. In addition, fiscal 2012 will be a 52-week sales year, compared to the 53 weeks in fiscal 2011 due to Patterson's 52/53-week fiscal year convention.