- Second quarter reported net sales increased 1.3 percent
year-over-year to $1.67 billion, and internal sales increased 0.6
percent.
- Delivered second quarter GAAP earnings of $0.30 per diluted
share and adjusted earnings1 of $0.47 per diluted share; both GAAP
and adjusted earnings1 were negatively impacted by the
cybersecurity attack on Change Healthcare compared to the prior
year.
- Returned $96.2 million to shareholders in the form of cash
dividends and share repurchases through the first six months of
fiscal 2025.
- Revises fiscal 2025 GAAP earnings guidance range to $1.83 to
$1.93 per diluted share and adjusted earnings1 guidance range to
$2.25 to $2.35 per diluted share.
- Company announces evaluation of strategic alternatives to
maximize shareholder value.
Patterson Companies, Inc. (Nasdaq: PDCO) today reported
operating results for its fiscal 2025 second quarter ended October
26, 2024.
"Our second quarter results were mixed, given the challenging
end market environment,” said Don Zurbay, President and CEO of
Patterson Companies. “To support sustainable, long-term growth, we
took dedicated cost management actions to optimize our operations,
made targeted investments in complementary businesses and invested
in enhancing our higher margin products and services. As we
continue to execute on our strategy, we remain confident in the
opportunities within our end markets and our ability to meet the
evolving needs of our dental and animal health customers and to
drive improved performance.”
Second Quarter Fiscal 2025 Results
Consolidated net sales were $1.67 billion (see attached Sales
Summary for further details), an increase of 1.3 percent compared
to the same period last year. Internal sales, which are adjusted
for the effects of currency translation, the net impact of an
interest rate swap and contributions from recent acquisitions,
increased 0.6 percent over the prior year period.
Reported net income attributable to Patterson Companies, Inc.
for the second quarter of fiscal 2025 was $26.8 million, or $0.30
per diluted share, compared to $40.0 million, or $0.42 per diluted
share, in the second quarter of fiscal 2024. Adjusted net income1
attributable to Patterson Companies, Inc., which excludes deal
amortization, integration and business restructuring expenses, an
inventory pre-payment write-off and a gain on the sale of an
investment, totaled $41.8 million for the second quarter of fiscal
2025, or $0.47 per diluted share, compared to $47.3 million, or
$0.50 per diluted share, in the second quarter of fiscal 2024. The
year-over-year decrease in reported and adjusted net income
attributable to Patterson Companies, Inc. in the second quarter of
fiscal 2025 is related to lower sales of dental equipment and the
continued negative impact of the widely reported cybersecurity
attack on vendor Change Healthcare, within the value-added services
category of the dental segment.
Patterson Dental
Reported net sales in the Dental segment for the second quarter
of fiscal 2025 were $611.7 million. Internal sales decreased 2.3
percent compared to the fiscal 2024 second quarter. Internal sales
of consumables increased 0.7 percent year-over-year. The
deflationary impact of certain infection control products had a
negligible impact on internal sales of dental consumables in the
second quarter of fiscal 2025. Compared to the prior year period,
internal sales of equipment decreased 7.5 percent. Internal sales
of value-added services decreased 2.7 percent compared to the prior
year period, primarily due to the negative impact of the
cybersecurity attack on Change Healthcare.
Patterson Animal Health
Reported net sales in the Animal Health segment for the second
quarter of fiscal 2025 were $1.05 billion. Internal sales increased
1.9 percent compared to the fiscal 2024 second quarter. Compared to
the prior year period, internal sales of consumables increased 1.6
percent, equipment increased 1.4 percent and value-added services
increased 17.1 percent.
Balance Sheet and Capital Allocation
During the first six months of fiscal 2025, Patterson Companies
used $458.7 million of cash from operating activities and collected
deferred purchase price receivables of $497.0 million, generating
$38.4 million in cash, compared to generating $4.2 million during
the first six months of fiscal 2024. Free cash flow1 (see
definition below and attached free cash flow table) during the
first six months of fiscal 2025 improved by $41.5 million compared
to the first six months of fiscal 2024.
In the second quarter of fiscal 2025, Patterson Companies
declared a quarterly cash dividend of $0.26 per share, returning
$22.9 million to shareholders. During the first six months of
fiscal 2025, Patterson Companies returned $96.2 million to
shareholders in the form of cash dividends and share
repurchases.
Year-to-Date Results
Consolidated reported net sales for the first six months of
fiscal 2024 totaled $3.22 billion, a 0.4 percent year-over-year
decrease. Internal sales for the first six months of fiscal 2025,
which are adjusted for the effects of currency translation and the
net impact of an interest rate swap, decreased 1.1 percent
year-over-year. Through the first six months of fiscal 2025, Dental
segment internal sales decreased 2.6 percent, including a 0.7
percent decrease in consumables, a 5.4 percent decline in equipment
and a 4.6 percent decrease in value-added services. Through the
first six months of fiscal 2025, Animal Health segment internal
sales decreased 0.4 percent, including 0.7 percent decrease in
consumables, a 1.0 percent decline in equipment and a 12.8 percent
increase in value-added services.
Reported net income attributable to Patterson Companies, Inc.
was $40.5 million, or $0.46 per diluted share, compared to $71.2
million, or $0.74 per diluted share in last year's period. Adjusted
net income1 attributable to Patterson Companies, Inc., which
excludes deal amortization, integration and business restructuring
expenses, an inventory pre-payment write-off and a gain on the sale
of an investment totaled $62.9 million, or $0.71 per diluted share,
compared to $85.8 million, or $0.90 per diluted share, in the
year-ago period.
Fiscal 2025 Guidance
Patterson Companies today revised its fiscal 2025 earnings
guidance, which is provided on both a GAAP and non-GAAP adjusted1
basis:
- GAAP earnings are expected to be in the range of $1.83 to $1.93
per diluted share.
- Non-GAAP adjusted earnings1 are expected to be in the
range of $2.25 to $2.35 per diluted share.
- Our non-GAAP adjusted earnings1 guidance excludes the
after-tax impact of: - Deal amortization expenses of approximately
$29.9 million ($0.34 per diluted share). - Integration and business
restructuring expenses of $7.6 million ($0.09 per diluted share). -
Inventory pre-payment write-off of $2.8 million ($0.03 per diluted
share). - Investment gain of $2.9 million ($0.03 per diluted
share).
Our guidance reflects the strength of our business and
competitive positioning as well as completed and previously
announced acquisitions. It does not include the impact of unplanned
share repurchases, potential future acquisitions or similar
transactions, impairments, restructuring and integration expenses
not previously publicly disclosed, or amortization expense of
acquired intangible assets. Our guidance assumes North American and
international end market conditions consistent with current market
conditions.
Strategic Review
Today the Company also announced that it is evaluating potential
strategic alternatives to maximize shareholder value. Such
alternatives may include, but are not limited to, a sale, merger,
strategic business combination or other transaction. There can be
no assurances that such evaluation will result in a transaction or
that any transaction, if pursued, will be successfully completed.
Patterson Companies does not intend to disclose further
developments unless and until it is determined that further
disclosure is appropriate.
1Non-GAAP Financial Measures
The term “internal sales” used in this release represents net
sales adjusted for the effects of currency translation, the net
impact of an interest rate swap and contributions from recent
acquisitions. 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 and an interest rate swap provides
useful supplementary information to investors in light of
fluctuations in these variables that are independent of our
period-over-period performance.
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.
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,
integration and business restructuring expenses, an interest rate
swap, an inventory pre-payment write-off, and a gain on the sale of
an investment along with any related tax effects of these
items.
- Deal amortization represents non-cash intangible amortization
expense, primarily related to the acquisition of Animal Health
International.
- Integration and business restructuring expenses represent
restructuring charges to better align our organization to current
market opportunities. Restructuring activities resulted in pre-tax
asset impairment charges of $6.9 million to write down assets
related to certain software offerings and pre-tax severance charges
of $3.3 million.
- 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. 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.
- Inventory pre-payment write-off represents the write-off of the
remaining balance of a transaction initiated during the COVID-19
pandemic. The inventory prepayment was made in a period of supply
chain disruptions and increased demand for PPE and does not
represent our normal process for purchasing inventory. The
remaining balance of the prepayment was determined to be
uncollectible in the second quarter of fiscal 2025.
- Gain on investment relates to the sale of our investment in
VetSource.
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 Webcast and Audio
Replay
Patterson Companies’ fiscal 2025 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.
An audio replay of the fiscal 2025 second quarter conference
call will be available for one week. To access the audio replay,
please pre-register at
https://registrations.events/direct/Q4I672812531 to receive a
unique access code to listen to the audio playback.
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: 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; risks of selling private label products,
including the risk of adversely affecting our relationships with
suppliers; adverse changes in supplier rebates or other purchasing
incentives; 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 inherent in our growing use of AI
systems to automate processes and analyze data; adverse impacts of
wide-spread public health concerns as we experienced with the
COVID-19 pandemic and may experience in the future; 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; risks from the formation or expansion of GPOs, provider
networks and buying groups that may place us at a competitive
disadvantage; 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 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 26, 2024
October 28, 2023
October 26, 2024
October 28, 2023
Net sales
$
1,674,375
$
1,652,772
$
3,216,117
$
3,229,517
Gross profit
328,092
339,026
640,701
658,081
Operating expenses
290,456
282,123
573,696
562,956
Operating income
37,636
56,903
67,005
95,125
Other income (expense):
Other income, net
9,705
7,096
11,419
18,997
Interest expense
(11,798
)
(10,642
)
(25,021
)
(20,154
)
Income before taxes
35,543
53,357
53,403
93,968
Income tax expense
8,847
13,502
13,068
22,983
Net income
26,696
39,855
40,335
70,985
Net loss attributable to noncontrolling
interests
(73
)
(103
)
(149
)
(207
)
Net income attributable to Patterson
Companies, Inc.
$
26,769
$
39,958
$
40,484
$
71,192
Earnings per share attributable to
Patterson Companies, Inc.:
Basic
$
0.30
$
0.42
$
0.46
$
0.75
Diluted
$
0.30
$
0.42
$
0.46
$
0.74
Weighted average shares:
Basic
88,158
94,710
88,142
95,127
Diluted
88,663
95,156
88,724
95,722
Dividends declared per common share
$
0.26
$
0.26
$
0.52
$
0.52
PATTERSON COMPANIES,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
October 26, 2024
April 27, 2024
ASSETS
Current assets:
Cash and cash equivalents
$
157,935
$
114,462
Receivables, net
532,038
547,287
Inventory, net
823,689
782,898
Prepaid expenses and other current
assets
328,355
334,116
Total current assets
1,842,017
1,778,763
Property and equipment, net
225,354
229,081
Operating lease right-of-use assets,
net
124,881
122,295
Goodwill and identifiable intangibles,
net
341,242
349,589
Investments
85,962
166,320
Long-term receivables, net and other
226,146
250,684
Total assets
$
2,845,602
$
2,896,732
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
731,259
$
745,375
Other accrued liabilities
220,312
245,610
Operating lease liabilities
33,865
32,815
Current maturities of long-term debt
125,000
122,750
Borrowings on revolving credit
234,000
186,000
Total current liabilities
1,344,436
1,332,550
Long-term debt
325,396
328,911
Non-current operating lease
liabilities
94,294
92,464
Other non-current liabilities
118,027
141,075
Total liabilities
1,882,153
1,895,000
Stockholders' equity
963,449
1,001,732
Total liabilities and stockholders'
equity
$
2,845,602
$
2,896,732
PATTERSON COMPANIES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
October 26, 2024
October 28, 2023
Operating activities:
Net income
$
40,335
$
70,985
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization
45,640
42,836
Stock-based compensation
12,432
11,650
Non-cash (gains) losses and other, net
(9,369
)
3,166
Change in assets and liabilities:
Receivables
(455,290
)
(487,186
)
Inventory
(36,665
)
(67,416
)
Accounts payable
(20,864
)
(30,911
)
Accrued liabilities
(28,918
)
(24,908
)
Other changes from operating activities,
net
(5,976
)
(3,492
)
Net cash used in operating activities
(458,675
)
(485,276
)
Investing activities:
Additions to property and equipment and
software
(26,195
)
(33,467
)
Collection of deferred purchase price
receivables
497,029
489,452
Payments related to acquisitions, net of
cash acquired
(7,897
)
(1,108
)
Sale of investment
86,408
—
Net cash provided by investing
activities
549,345
454,877
Financing activities:
Dividends paid
(46,219
)
(50,331
)
Repurchases of common stock
(50,000
)
(90,491
)
Payments on long-term debt
(1,500
)
(1,500
)
Draw on revolving credit
48,000
125,000
Other financing activities
850
4,141
Net cash used in financing activities
(48,869
)
(13,181
)
Effect of exchange rate changes on
cash
1,672
(2,203
)
Net change in cash and cash
equivalents
43,473
(45,783
)
Cash and cash equivalents at beginning of
period
114,462
159,669
Cash and cash equivalents at end of
period
$
157,935
$
113,886
PATTERSON COMPANIES,
INC.
SALES SUMMARY
(Dollars in thousands)
(Unaudited)
October 26, 2024
October 28, 2023
Total Sales
Growth
Foreign Exchange
Impact
Net Interest Rate Swap
Acquisition Impact
Internal Sales
Growth
Three Months
Ended
Consolidated net sales
Consumable
$
1,347,208
$
1,319,363
2.1
%
0.6
%
—
%
—
%
1.5
%
Equipment
215,735
230,293
(6.3
)
—
—
—
(6.3
)
Value-added services and other
111,432
103,116
8.1
0.4
3.5
—
4.2
Total
$
1,674,375
$
1,652,772
1.3
%
0.5
%
0.2
%
—
%
0.6
%
Dental
Consumable
$
348,908
$
346,492
0.7
%
—
%
—
%
—
%
0.7
%
Equipment
185,153
200,127
(7.5
)
—
—
—
(7.5
)
Value-added services and other
77,621
79,762
(2.7
)
—
—
—
(2.7
)
Total
$
611,682
$
626,381
(2.3
)%
—
%
—
%
—
%
(2.3
)%
Animal Health
Consumable
$
998,300
$
972,871
2.6
%
0.9
%
—
%
0.1
%
1.6
%
Equipment
30,582
30,166
1.4
—
—
—
1.4
Value-added services and other
25,706
21,585
19.1
1.9
—
0.1
17.1
Total
$
1,054,588
$
1,024,622
2.9
%
0.9
%
—
%
0.1
%
1.9
%
Corporate
Value-added services and other
$
8,105
$
1,769
n/m
—
%
n/m
—
%
62.0
%
Total
$
8,105
$
1,769
n/m
—
%
n/m
—
%
62.0
%
PATTERSON COMPANIES,
INC.
SALES SUMMARY
(Dollars in thousands)
(Unaudited)
October 26, 2024
October 28, 2023
Total Sales
Growth
Foreign Exchange
Impact
Net Interest Rate Swap
Acquisition Impact
Internal Sales
Growth
Six Months
Ended
Consolidated net sales
Consumable
$
2,625,621
$
2,635,088
(0.4
)%
0.3
%
—
%
—
%
(0.7
)%
Equipment
375,021
394,264
(4.9
)
(0.1
)
—
—
(4.8
)
Value-added services and other
215,475
200,165
7.6
0.2
7.0
—
0.4
Total
$
3,216,117
$
3,229,517
(0.4
)%
0.2
%
0.5
%
—
%
(1.1
)%
Dental
Consumable
$
693,025
$
698,539
(0.8
)%
(0.1
)%
—
%
—
%
(0.7
)%
Equipment
319,011
337,676
(5.5
)
(0.1
)
—
—
(5.4
)
Value-added services and other
150,003
157,466
(4.7
)
(0.1
)
—
—
(4.6
)
Total
$
1,162,039
$
1,193,681
(2.7
)%
(0.1
)%
—
%
—
%
(2.6
)%
Animal Health
Consumable
$
1,932,596
$
1,936,549
(0.2
)%
0.5
%
—
%
—
%
(0.7
)%
Equipment
56,010
56,588
(1.0
)
—
—
—
(1.0
)
Value-added services and other
48,395
42,475
13.9
1.1
—
—
12.8
Total
$
2,037,001
$
2,035,612
0.1
%
0.5
%
—
%
—
%
(0.4
)%
Corporate
Value-added services and other
$
17,077
$
224
n/m
—
%
n/m
—
%
28.8
%
Total
$
17,077
$
224
n/m
—
%
n/m
—
%
28.8
%
PATTERSON COMPANIES,
INC.
OPERATING INCOME BY
SEGMENT
(In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
October 26, 2024
October 28, 2023
October 26, 2024
October 28, 2023
Operating income (loss)
Dental
$
33,660
$
55,277
$
60,718
$
93,947
Animal Health
29,621
26,346
54,988
56,039
Corporate
(25,645
)
(24,720
)
(48,701
)
(54,861
)
Total
$
37,636
$
56,903
$
67,005
$
95,125
PATTERSON COMPANIES,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
(Dollars in thousands, except
per share amounts)
(Unaudited)
For the three months ended October 26,
2024
GAAP
Deal amortization
Integration and business
restructuring expenses
Interest rate swap
Inventory pre- payment
write-off
Gain on investment
Non-GAAP
Net sales
$
1,674,375
$
—
$
—
$
(724
)
$
—
$
—
$
1,673,651
Gross profit
328,092
—
6,947
(724
)
—
—
334,315
Operating expenses
290,456
(9,729
)
(3,262
)
—
(3,797
)
—
273,668
Operating income
37,636
9,729
10,209
(724
)
3,797
—
60,647
Other income (expense), net
(2,093
)
—
—
724
—
(3,803
)
(5,172
)
Income before taxes
35,543
9,729
10,209
—
3,797
(3,803
)
55,475
Income tax expense
8,847
2,304
2,571
—
949
(951
)
13,720
Net income
26,696
7,425
7,638
—
2,848
(2,852
)
41,755
Net loss attributable to noncontrolling
interests
(73
)
—
—
—
—
—
(73
)
Net income attributable to Patterson
Companies, Inc.
$
26,769
$
7,425
$
7,638
$
—
$
2,848
$
(2,852
)
$
41,828
Diluted earnings per share attributable to
Patterson Companies, Inc.*
$
0.30
$
0.08
$
0.09
$
—
$
0.03
$
(0.03
)
$
0.47
Gross margin
19.6
%
20.0
%
Operating margin
2.2
%
3.6
%
Effective tax rate
24.9
%
24.7
%
For the three months ended October 28,
2023
GAAP
Deal amortization
Integration and business
restructuring expenses
Interest rate swap
Inventory pre- payment
write-off
Gain on investment
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
%
* 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 26,
2024
GAAP
Deal amortization
Integration and business
restructuring expenses
Interest rate swap
Inventory pre- payment
write-off
Gain on investment
Non-GAAP
Net sales
$
3,216,117
$
—
$
—
$
(4,479
)
$
—
$
—
$
3,211,638
Gross profit
640,701
—
6,947
(4,479
)
—
—
643,169
Operating expenses
573,696
(19,368
)
(3,262
)
—
(3,797
)
—
547,269
Operating income
67,005
19,368
10,209
(4,479
)
3,797
—
95,900
Other income (expense), net
(13,602
)
—
—
4,479
—
(3,803
)
(12,926
)
Income before taxes
53,403
19,368
10,209
—
3,797
(3,803
)
82,974
Income tax expense
13,068
4,609
2,571
—
949
(951
)
20,246
Net income
40,335
14,759
7,638
—
2,848
(2,852
)
62,728
Net loss attributable to noncontrolling
interests
(149
)
—
—
—
—
—
(149
)
Net income attributable to Patterson
Companies, Inc.
$
40,484
$
14,759
$
7,638
$
—
$
2,848
$
(2,852
)
$
62,877
Diluted earnings per share attributable to
Patterson Companies, Inc.*
$
0.46
$
0.17
$
0.09
$
—
$
0.03
$
(0.03
)
$
0.71
Gross margin
19.9
%
20.0
%
Operating margin
2.1
%
3.0
%
Effective tax rate
24.5
%
24.4
%
For the six months ended October 28,
2023
GAAP
Deal amortization
Integration and business
restructuring expenses
Interest rate swap
Inventory pre- payment
write-off
Gain on investment
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
%
* May not sum due to rounding
PATTERSON COMPANIES,
INC.
FREE CASH FLOW
(In thousands)
(Unaudited)
Six Months Ended
October 26, 2024
October 28, 2023
Net cash used in operating activities
$
(458,675
)
$
(485,276
)
Additions to property and equipment and
software
(26,195
)
(33,467
)
Collection of deferred purchase price
receivables
497,029
489,452
Free cash flow
$
12,159
$
(29,291
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241205773591/en/
INVESTOR: John M. Wright, Investor Relations TEL:
651.686.1364 EMAIL:
investor.relations@pattersoncompanies.com
MEDIA: Patterson Corporate Communications TEL:
651.905.3349 EMAIL:
corporate.communications@pattersoncompanies.com
WEB: pattersoncompanies.com
Patterson Companies (NASDAQ:PDCO)
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