PATTERSON COMPANIES, INC. (PDCO) SEC Filing 10-Q Quarterly report for the period ending Saturday, October 27, 2018

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Exhibit 99

 

PATTERSON COMPANIES | 1031 Mendota Heights Road | Saint Paul, MN 55120    NEWS RELEASE

PATTERSON COMPANIES REPORTS FISCAL 2019 SECOND-QUARTER RESULTS

 

   

Second-quarter reported net sales totaled $1.4 billion, up 1.4 percent.

 

   

Second-quarter GAAP earnings of $0.31 per diluted share.

 

   

Second-quarter adjusted earnings1 of $0.39 per diluted share.

 

   

Company generates $200.2 million of cash flow from operating activities in first six months of fiscal 2019.

 

   

Company reaffirms fiscal 2019 GAAP earnings range of $0.84 to $0.94 per diluted share and adjusted earnings1 range of $1.40 to $1.50 per diluted share.

St. Paul, Minn. — December 6, 2018 — Patterson Companies, Inc. (Nasdaq: PDCO) today reported consolidated net sales of approximately $1.4 billion (see attached Sales Summary for further details) in its fiscal second quarter ended October 27, 2018, an increase of 1.4 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, increased 1.8 percent.

Reported net income attributable to Patterson Companies, Inc. for the second quarter of fiscal year 2019 was $28.9 million, or $0.31 per diluted share, compared to net income attributable to Patterson Companies, Inc. of $40.2 million, or $0.43 per diluted share, in last year’s fiscal second quarter. Adjusted net income1 attributable to Patterson Companies, Inc., which excludes deal amortization costs and integration and business restructuring costs, totaled $36.3 million for the second quarter of fiscal 2019, or $0.39 per diluted share, compared to $47.6 million in the same quarter last year, or $0.51 per diluted share. The reported net income and the adjusted net income attributable to Patterson Companies, Inc. were both impacted by the decrease in operating margins within the Dental segment.

“Our second quarter results met our expectations and we continue to make progress on our focused initiatives to improve performance and build a stronger Patterson,” said Mark Walchirk, president and CEO of Patterson Companies. “While we still have much work ahead, our team has delivered two consecutive quarters of year-over-year revenue growth, operating margin improvement from the fiscal first quarter and continued strong cash flow generation. As a result, we are reaffirming our fiscal 2019 guidance.”

Patterson Animal Health

Reported net sales in our Animal Health segment for the second quarter of fiscal 2019, which comprised approximately 61 percent of the company’s total sales, were $855.4 million compared to $823.6 million in the same quarter last year. Internal sales for the segment increased 4.5 percent from the fiscal 2018 second quarter.

Patterson Dental

Reported net sales in our Dental segment for the second quarter of fiscal 2019, which represented approximately 39 percent of total company sales, were $542.5 million compared to $553.6 million in the same quarter last year. Internal sales declined 1.8 percent compared to the fiscal 2018 second quarter.

Balance Sheet and Capital Allocation

For the first six months of fiscal 2019, Patterson Companies generated $200.2 million of cash from operating activities and collected deferred purchase price receivables of $165.6 million for a total of $365.8 million, compared to a total of $101.7 million in the same period last year. During the first six months of fiscal 2019, debt has been reduced by $196.3 million and cash has grown by $102.5 million.

In the second quarter of fiscal 2019, Patterson Companies paid $24.7 million in cash dividends to shareholders. On a year-to-date basis, Patterson has returned $50.0 million in cash dividends to shareholders.

Year-to-Date Results

Consolidated net sales for the first six months of fiscal 2019 totaled $2.7 billion, a 1.9 percent year-over-year increase. Reported net income attributable to Patterson Companies, Inc. was $24.4 million, or $0.26 per diluted share, compared to $71.1 million, or $0.76 per diluted share in last year’s period. In July 2018, Patterson Companies booked a pre-tax reserve of $28.3 million for the anticipated settlement of purported class action antitrust litigation.

Adjusted net income1 attributable to Patterson Companies, Inc., which excludes deal amortization costs, integration and business restructuring costs and legal reserve costs, totaled $60.3 million, or $0.65 per diluted share, compared to adjusted net income of $89.0 million, or $0.95 per diluted share, in the year-ago period.

 

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The following information was filed by PATTERSON COMPANIES, INC. on Thursday, December 6, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Click a sentiment analysis snippet below from PATTERSON COMPANIES, INC.'s Management Discussions to find these positive and negative remarks within their 10-Q Quarterly report:
  • 18484721_27
    Financial - Cash Flow
    The collection of the DPP receivable is recognized as an increase to net cash provided by investing activities within the condensed consolidated statements of cash flows, with a corresponding reduction to net cash provided by operating activities within the condensed consolidated statements of cash flows.
  • 18484721_37
    Revenue - Product
    In addition, lower net sales in our Corporate segment related to customer financing contracts reduced the gross profit margin rate.
  • 18484721_5
    Revenue - Product
    Such risks and uncertainties include, without limitation, the cautionary language set forth herein; operations disruptions attributable to our enterprise resource planning system implementation; our ability to attract or retain qualified sales representatives and service technicians who relate directly with our customers; the reduction, modification, cancellation or delay of purchases of innovative, high-margin equipment; material changes in our purchasing relationships with suppliers; changes in general market and economic conditions; and the other risks and important factors contained and identified in Patterson?s previous filings with the Securities and Exchange Commission, such as its Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K, any of which could cause actual results to differ materially from the forward-looking statements.
  • 18484721_35
    Revenue - Product
    Positive end market fundamentals contributed to the current quarter sales growth.
  • 18484721_51
    Revenue - Product
    Positive end market fundamentals contributed to the current period sales growth.
  • 18484721_30
    Revenue - Product
    Current quarter sales of consumables decreased 2.4%, sales of dental equipment and software decreased 1.1% to $167.7 million, and sales of other dental services and products decreased 2.6%.
  • 18484721_53
    Revenue - Product
    The decrease was primarily due to lower net sales and a lower gross profit margin rate in the current period, in addition to greater operating expenses.
  • 18484721_39
    Revenue - Product
    The decrease was primarily due to lower net sales and a lower gross profit margin rate in the current quarter, in addition to greater operating expenses.
  • 18484721_61
    Financial - Cash Flow
    Net cash flows for the six months ended October 27, 2018 were positive primarily due to the collection of $165.6 million of deferred purchase price receivables.
  • 18484721_41
    Financial - Expense
    The decrease was primarily due to greater operating expenses incurred during the three months ended October 27, 2018.
  • 18484721_32
    Revenue - Product
    Animal Health segment sales for the three months ended October 27, 2018 were $855.4 million, an increase of 3.9% from $823.6 million for the three months ended October 28, 2017.
  • 18484721_48
    Revenue - Product
    Animal Health segment sales for the six months ended October 27, 2018 were $1,680.6 million, a 5.1% increase from $1,599.7 million for the six months ended October 28, 2017.
  • 18484721_49
    Revenue - Geography
    Foreign exchange rate changes had a favorable impact of 0.1% on current period sales.
  • 18484721_36
    Financial - Earnings
    21 21 and Animal Health segment also contributed to the decline in the gross profit margin rate.
  • 18484721_59
    Other - Other
    The net cash provided by operating activities during the six months ended October 27, 2018 was primarily driven by a reduction in working capital and the impact of the Receivables Securitization Program.

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  • Form Type: Quarterly
  • Number of times amended: 0
  • Accession Number: 0000891024-18-000012
  • Submitted to the SEC: Thursday, December 6, 2018 2:55:05 PM EST
  • Accepted by the SEC: Thursday, December 6, 2018
  • Period ending: October 2018
  • Industry: Wholesale Medical Dental And Hospital Equipment And Supplies