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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Patterson Companies Inc | NASDAQ:PDCO | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.03 | -0.12% | 25.82 | 25.82 | 25.83 | 26.05 | 25.36 | 25.95 | 498,216 | 19:19:08 |
Patterson Companies, Inc. (Nasdaq: PDCO) today reported operating results for its fiscal 2024 second quarter ended October 28, 2023.
“Our team executed well against softer than anticipated demand within our end markets,” said Don Zurbay, President and CEO of Patterson Companies. “Steady patient traffic supported strong performance in our broad and resilient dental consumables portfolio that was offset by lower sales in certain high-tech dental equipment categories. Our Animal Health segment benefitted from the depth of our offering and omnichannel presence across a wide range of animal species. We delivered healthy sales growth in our production animal business while our companion animal business was impacted by moderating veterinary clinic visits.
“The macro environment challenges we faced during the second quarter do not change our core objectives or continued conviction in making strategic investments in our distribution capabilities, software offerings, and value-added services. While we have adjusted our fiscal 2024 guidance to reflect our current expectations for the near term, we remain confident in the enduring strength and resiliency of the Dental and Animal Health end markets. We continue to believe that our talented team and comprehensive value proposition make Patterson well positioned to drive enhanced growth, profitability and value creation over the long term.”
Second Quarter Fiscal 2024 Results Consolidated net sales were $1.65 billion (see attached Sales Summary for further details), an increase of 1.6 percent compared to the same period last year. Internal sales, which are adjusted for the effects of currency translation, contributions from recent acquisitions and the net impact of an interest rate swap, increased 1.0 percent over the prior year period.
Reported net income attributable to Patterson Companies, Inc. for the second quarter of fiscal 2024 was $40.0 million, or $0.42 per diluted share, compared to $54.1 million, or $0.55 per diluted share, in the second quarter of fiscal 2023. Adjusted net income1 attributable to Patterson Companies, Inc., which excludes deal amortization, totaled $47.3 million for the second quarter of fiscal 2024, or $0.50 per diluted share, compared to $61.2 million, or $0.63 per diluted share, in the second quarter of fiscal 2023. The year-over-year decrease in reported and adjusted net income attributable to Patterson Companies, Inc. in the second quarter of fiscal 2024 was primarily due to lower sales of dental technology equipment and increased operating expenses compared to the prior year period.
Patterson Dental Reported net sales in the Dental segment for the second quarter of fiscal 2024 were $626.4 million. Internal sales decreased 0.2 percent compared to the fiscal 2023 second quarter. Internal sales of consumables increased 2.9 percent year-over-year. Excluding the deflationary impact of certain infection control products, internal sales of consumables increased 4.7 percent year-over-year. Compared to the prior year period, internal sales of equipment decreased 6.3 percent and internal sales of value-added services increased 3.1 percent.
Patterson Animal Health Reported net sales in the Animal Health segment for the second quarter of fiscal 2024 were $1.02 billion. Internal sales growth of 0.2 percent year-over-year was driven by growth in the production animal business, which more than offset reduced sales in the companion animal business. Within the Animal Health segment, internal sales of consumables decreased 0.6 percent, equipment increased 0.9 percent and value-added services increased 67.9 percent.
Balance Sheet and Capital Allocation During the first six months of fiscal 2024, Patterson Companies used $485.3 million of cash from operating activities and collected deferred purchase price receivables of $489.5 million, generating $4.2 million in cash, compared to using $30.5 million in the prior year period. Free cash flow1 (see definition below and attached free cash flow table) during the first six months of fiscal 2024 improved by $28.0 million compared to the first six months of fiscal 2023 due to a decreased level of working capital during the first six months of fiscal 2024.
In the second quarter of fiscal 2024, Patterson declared a quarterly cash dividend of $0.26 per share and returned $24.9 million in cash dividends to shareholders. Also, under an existing share repurchase authorization, the company repurchased approximately $61.0 million of shares during the second quarter of fiscal 2024. Through the first six months of fiscal 2024, Patterson Companies returned $140.8 million to shareholders in the form of cash dividends and share repurchases. At of the end of the second quarter of fiscal 2024, Patterson had approximately $319 million of share repurchase authority remaining on its current share repurchase authorization.
Year-to-Date Results Consolidated reported net sales for the first six months of fiscal 2024 totaled $3.23 billion, a 2.5 percent year-over-year increase. Internal sales for the first six months of fiscal 2024, which are adjusted for the effects of currency translation, contributions from recent acquisitions and the net impact of an interest rate swap, increased 1.6 percent year-over-year. Through the first six months of fiscal 2024, Dental segment internal sales increased 0.9 percent, including a 3.7 percent increase in consumables, a 6.0 percent decline in equipment and a 4.4 percent increase in value-added services. Through the first six months of fiscal 2024, Animal Health segment internal sales increased 2.0 percent, including 1.4 percent growth in consumables, a 1.3 percent decline in equipment and a 70.1 percent increase in value-added services.
Reported net income attributable to Patterson Companies, Inc. was $71.2 million, or $0.74 per diluted share, compared to $78.7 million, or $0.81 per diluted share in last year's period. Adjusted net income1 attributable to Patterson Companies, Inc., which excludes deal amortization, totaled $85.8 million, or $0.90 per diluted share, compared to $92.9 million, or $0.95 per diluted share, in the year-ago period.
Fiscal 2024 Guidance Patterson Companies today revised its fiscal 2024 earnings guidance, which is provided on both a GAAP and non-GAAP adjusted1 basis:
Our guidance reflects the strength of our business and competitive positioning, as well as our expectations for the North American and international end markets in which we operate, which we expect to be affected by the ongoing challenges of inflationary trends and higher interest rates as well as additional slow-down in the broader economy. Beyond macroeconomic and geopolitical uncertainty, our guidance further assumes that there are no material adverse developments associated with wide-spread public health concerns.
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 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 and an interest rate swap along with any related tax effects of these items.
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.
In addition, the term “internal sales” used in this release represents net sales adjusted for the effects of currency translation, contributions from recent acquisitions and the net impact of an interest rate swap. 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, an interest rate swap and recent acquisitions provides useful supplementary information to investors in light of fluctuations in these variables that are independent of our period-over-period performance.
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 and Replay Patterson Companies’ fiscal 2024 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. A replay of the fiscal 2024 second quarter conference call can be heard for one week at 1-800-770-2030 and by providing the Conference ID 71954 when prompted.
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: wide-spread public health concerns as we experienced, and may continue to experience, with the COVID-19 pandemic; 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; adverse changes in supplier rebates or other purchasing incentives; risks of selling private label products, including the risk of adversely affecting our relationships with suppliers; 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 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; 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 from the formation or expansion of GPOs, provider networks and buying groups that may place us at a competitive disadvantage; 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 28, 2023
October 29, 2022
October 28, 2023
October 29, 2022
Net sales
$
1,652,772
$
1,626,204
$
3,229,517
$
3,149,469
Gross profit
339,026
328,089
658,081
640,222
Operating expenses
282,123
267,994
562,956
545,283
Operating income
56,903
60,095
95,125
94,939
Other income (expense):
Other income, net
7,096
18,203
18,997
19,983
Interest expense
(10,642
)
(7,544
)
(20,154
)
(13,107
)
Income before taxes
53,357
70,754
93,968
101,815
Income tax expense
13,502
17,105
22,983
23,906
Net income
39,855
53,649
70,985
77,909
Net loss attributable to noncontrolling interests
(103
)
(424
)
(207
)
(754
)
Net income attributable to Patterson Companies, Inc.
$
39,958
$
54,073
$
71,192
$
78,663
Earnings per share attributable to Patterson Companies, Inc.:
Basic
$
0.42
$
0.56
$
0.75
$
0.81
Diluted
$
0.42
$
0.55
$
0.74
$
0.81
Weighted average shares:
Basic
94,710
96,913
95,127
96,771
Diluted
95,156
97,552
95,722
97,708
Dividends declared per common share
$
0.26
$
0.26
$
0.52
$
0.52
PATTERSON COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 28, 2023
April 29, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
113,886
$
159,669
Receivables, net
490,428
477,384
Inventory
858,028
795,072
Prepaid expenses and other current assets
328,334
351,011
Total current assets
1,790,676
1,783,136
Property and equipment, net
218,977
212,283
Operating lease right-of-use assets, net
101,532
92,956
Goodwill and identifiable intangibles, net
368,351
388,293
Investments
162,531
160,022
Long-term receivables, net and other
247,623
242,456
Total assets
$
2,889,690
$
2,879,146
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
688,687
$
724,993
Other accrued liabilities
223,723
250,949
Operating lease liabilities
30,132
28,390
Current maturities of long-term debt
36,000
36,000
Borrowings on revolving credit
170,000
45,000
Total current liabilities
1,148,542
1,085,332
Long-term debt
449,974
451,231
Non-current operating lease liabilities
74,393
67,376
Other non-current liabilities
161,692
156,672
Total liabilities
1,834,601
1,760,611
Stockholders' equity
1,055,089
1,118,535
Total liabilities and stockholders' equity
$
2,889,690
$
2,879,146
PATTERSON COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
October 28, 2023
October 29, 2022
Operating activities:
Net income
$
70,985
$
77,909
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization
42,836
41,090
Non-cash employee compensation
11,650
8,393
Non-cash losses (gains) and other, net
3,166
5,085
Change in assets and liabilities:
Receivables
(487,186
)
(508,811
)
Inventory
(67,416
)
(100,596
)
Accounts payable
(30,911
)
41,557
Accrued liabilities
(24,908
)
(47,519
)
Other changes from operating activities, net
(3,492
)
(37,269
)
Net cash used in operating activities
(485,276
)
(520,161
)
Investing activities:
Additions to property and equipment and software
(33,467
)
(26,779
)
Collection of deferred purchase price receivables
489,452
489,639
Payments related to acquisitions, net of cash acquired
(1,108
)
—
Payments related to investments
—
(15,000
)
Net cash provided by investing activities
454,877
447,860
Financing activities:
Dividends paid
(50,331
)
(50,732
)
Repurchases of common stock
(90,491
)
(15,000
)
Payments on long-term debt
(1,500
)
—
Draw on revolving credit
125,000
145,000
Other financing activities
4,141
(1,766
)
Net cash provided by (used in) financing activities
(13,181
)
77,502
Effect of exchange rate changes on cash
(2,203
)
(6,935
)
Net change in cash and cash equivalents
(45,783
)
(1,734
)
Cash and cash equivalents at beginning of period
159,669
142,014
Cash and cash equivalents at end of period
$
113,886
$
140,280
PATTERSON COMPANIES, INC.
SALES SUMMARY
(Dollars in thousands)
(Unaudited)
October 28, 2023
October 29, 2022
Total Sales Growth
Foreign Exchange Impact
Net Interest Rate Swap
Acquisition Impact
Internal Sales Growth
Three Months Ended
Consolidated net sales
Consumable
$
1,319,363
$
1,301,256
1.4
%
0.9
%
—
%
0.2
%
0.3
%
Equipment
230,293
243,896
(5.6
)
(0.2
)
—
—
(5.4
)
Value-added services and other
103,116
81,052
27.2
0.7
(12.7
)
6.5
32.7
Total
$
1,652,772
$
1,626,204
1.6
%
0.7
%
(0.6
)%
0.5
%
1.0
%
Dental
Consumable
$
346,492
$
337,489
2.7
%
(0.2
)%
—
%
—
%
2.9
%
Equipment
200,127
214,006
(6.5
)
(0.2
)
—
—
(6.3
)
Value-added services and other
79,762
77,428
3.0
(0.1
)
—
—
3.1
Total
$
626,381
$
628,923
(0.4
)%
(0.2
)%
—
%
—
%
(0.2
)%
Animal Health
Consumable
$
972,871
$
963,767
0.9
%
1.2
%
—
%
0.3
%
(0.6
)%
Equipment
30,166
29,890
0.9
—
—
—
0.9
Value-added services and other
21,585
9,339
131.1
6.5
—
56.7
67.9
Total
$
1,024,622
$
1,002,996
2.2
%
1.2
%
—
%
0.8
%
0.2
%
Corporate
Value-added services and other
$
1,769
$
(5,715
)
(131.0
)%
—
%
180.0
%
—
%
(311.0
)%
Total
$
1,769
$
(5,715
)
(131.0
)%
—
%
180.0
%
—
%
(311.0
)%
PATTERSON COMPANIES, INC.
SALES SUMMARY
(Dollars in thousands)
(Unaudited)
October 28, 2023
October 29, 2022
Total Sales Growth
Foreign Exchange Impact
Net Interest Rate Swap
Acquisition Impact
Internal Sales Growth
Six Months Ended
Consolidated net sales
Consumable
$
2,635,088
$
2,563,025
2.8
%
0.6
%
—
%
0.2
%
2.0
%
Equipment
394,264
417,831
(5.6
)
(0.2
)
—
—
(5.4
)
Value-added services and other
200,165
168,613
18.7
0.4
(0.9
)
6.2
13.0
Total
$
3,229,517
$
3,149,469
2.5
%
0.4
%
—
%
0.5
%
1.6
%
Dental
Consumable
$
698,539
$
675,329
3.4
%
(0.3
)%
—
%
—
%
3.7
%
Equipment
337,676
360,516
(6.3
)
(0.3
)
—
—
(6.0
)
Value-added services and other
157,466
150,995
4.3
(0.1
)
—
—
4.4
Total
$
1,193,681
$
1,186,840
0.6
%
(0.3
)%
—
%
—
%
0.9
%
Animal Health
Consumable
$
1,936,549
$
1,887,696
2.6
%
0.9
%
—
%
0.3
%
1.4
%
Equipment
56,588
57,315
(1.3
)
—
—
—
(1.3
)
Value-added services and other
42,475
18,355
131.4
4.6
—
56.7
70.1
Total
$
2,035,612
$
1,963,366
3.7
%
0.9
%
—
%
0.8
%
2.0
%
Corporate
Value-added services and other
$
224
$
(737
)
(130.4
)%
—
%
212.3
%
—
%
(342.7
)%
Total
$
224
$
(737
)
(130.4
)%
—
%
212.3
%
—
%
(342.7
)%
PATTERSON COMPANIES, INC.
SALES SUMMARY
(Dollars in thousands)
(Unaudited)
July 29, 2023
July 30, 2022
Total Sales Growth
Foreign Exchange Impact
Net Interest Rate Swap
Acquisition Impact
Internal Sales Growth
Three Months Ended
Consolidated net sales
Consumable
$
1,315,725
$
1,261,769
4.3
%
0.3
%
—
%
0.2
%
3.8
%
Equipment
163,971
173,935
(5.7
)
(0.3
)
—
—
(5.4
)
Value-added services and other
97,049
87,561
10.8
0.1
10.0
5.8
(5.1
)
Total
$
1,576,745
$
1,523,265
3.5
%
0.2
%
0.6
%
0.5
%
2.2
%
Dental
Consumable
$
352,047
$
337,840
4.2
%
(0.4
)%
—
%
—
%
4.6
%
Equipment
137,549
146,510
(6.1
)
(0.4
)
—
—
(5.7
)
Value-added services and other
77,704
73,567
5.6
(0.2
)
—
—
5.8
Total
$
567,300
$
557,917
1.7
%
(0.4
)%
—
%
—
%
2.1
%
Animal Health
Consumable
$
963,678
$
923,929
4.3
%
0.5
%
—
%
0.3
%
3.5
%
Equipment
26,422
27,425
(3.7
)
—
—
—
(3.7
)
Value-added services and other
20,890
9,016
131.7
2.7
—
56.7
72.3
Total
$
1,010,990
$
960,370
5.3
%
0.5
%
—
%
0.8
%
4.0
%
Corporate
Value-added services and other
$
(1,545
)
$
4,978
(131.0
)%
—
%
175.2
%
—
%
(306.2
)%
Total
$
(1,545
)
$
4,978
(131.0
)%
—
%
175.2
%
—
%
(306.2
)%
PATTERSON COMPANIES, INC.
OPERATING INCOME BY SEGMENT
(In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
October 28, 2023
October 29, 2022
October 28, 2023
October 29, 2022
Operating income (loss)
Dental
$
55,277
$
60,950
$
93,947
$
97,845
Animal Health
26,346
28,316
56,039
50,175
Corporate
(24,720
)
(29,171
)
(54,861
)
(53,081
)
Total
$
56,903
$
60,095
$
95,125
$
94,939
PATTERSON COMPANIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(Dollars in thousands, except per share amounts)
(Unaudited)
For the three months ended October 28, 2023
GAAP
Deal amortization
Interest rate swap
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
%
For the three months ended October 29, 2022
GAAP
Deal amortization
Interest rate swap
Non-GAAP
Net sales
$
1,626,204
$
—
$
13,072
$
1,639,276
Gross profit
328,089
—
13,072
341,161
Operating expenses
267,994
(9,327
)
—
258,667
Operating income
60,095
9,327
13,072
82,494
Other income (expense), net
10,659
—
(13,072
)
(2,413
)
Income before taxes
70,754
9,327
—
80,081
Income tax expense
17,105
2,237
—
19,342
Net income
53,649
7,090
—
60,739
Net loss attributable to noncontrolling interests
(424
)
—
—
(424
)
Net income attributable to Patterson Companies, Inc.
$
54,073
$
7,090
$
—
$
61,163
Diluted earnings per share attributable to Patterson Companies, Inc.*
$
0.55
$
0.07
$
—
$
0.63
Gross margin
20.2
%
20.8
%
Operating margin
3.7
%
5.0
%
Effective tax rate
24.2
%
24.2
%
* 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 28, 2023
GAAP
Deal amortization
Interest rate swap
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
%
For the six months ended October 29, 2022
GAAP
Deal amortization
Interest rate swap
Non-GAAP
Net sales
$
3,149,469
$
—
$
11,124
$
3,160,593
Gross profit
640,222
—
11,124
651,346
Operating expenses
545,283
(18,678
)
—
526,605
Operating income
94,939
18,678
11,124
124,741
Other income (expense), net
6,876
—
(11,124
)
(4,248
)
Income before taxes
101,815
18,678
—
120,493
Income tax expense
23,906
4,474
—
28,380
Net income
77,909
14,204
—
92,113
Net loss attributable to noncontrolling interests
(754
)
—
—
(754
)
Net income attributable to Patterson Companies, Inc.
$
78,663
$
14,204
$
—
$
92,867
Diluted earnings per share attributable to Patterson Companies, Inc.*
$
0.81
$
0.15
$
—
$
0.95
Gross margin
20.3
%
20.6
%
Operating margin
3.0
%
3.9
%
Effective tax rate
23.5
%
23.6
%
* 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 three months ended July 29, 2023
GAAP
Deal amortization
Interest rate swap
Non-GAAP
Net sales
$
1,576,745
$
—
$
6,775
$
1,583,520
Gross profit
319,055
—
6,775
325,830
Operating expenses
280,833
(9,626
)
—
271,207
Operating income
38,222
9,626
6,775
54,623
Other income (expense), net
2,389
—
(6,775
)
(4,386
)
Income before taxes
40,611
9,626
—
50,237
Income tax expense
9,481
2,304
—
11,785
Net income
31,130
7,322
—
38,452
Net loss attributable to noncontrolling interests
(104
)
—
—
(104
)
Net income attributable to Patterson Companies, Inc.
$
31,234
$
7,322
$
—
$
38,556
Diluted earnings per share attributable to Patterson Companies, Inc.*
$
0.32
$
0.08
$
—
$
0.40
Gross margin
20.2
%
20.6
%
Operating margin
2.4
%
3.4
%
Effective tax rate
23.3
%
23.5
%
For the three months ended July 30, 2022
GAAP
Deal amortization
Interest rate swap
Non-GAAP
Net sales
$
1,523,265
$
—
$
(1,948
)
$
1,521,317
Gross profit
312,133
—
(1,948
)
310,185
Operating expenses
277,289
(9,351
)
—
267,938
Operating income
34,844
9,351
(1,948
)
42,247
Other income (expense), net
(3,783
)
—
1,948
(1,835
)
Income before taxes
31,061
9,351
—
40,412
Income tax expense
6,801
2,237
—
9,038
Net income
24,260
7,114
—
31,374
Net loss attributable to noncontrolling interests
(330
)
—
—
(330
)
Net income attributable to Patterson Companies, Inc.
$
24,590
$
7,114
$
—
$
31,704
Diluted earnings per share attributable to Patterson Companies, Inc.*
$
0.25
$
0.07
$
—
$
0.32
Gross margin
20.5
%
20.4
%
Operating margin
2.3
%
2.8
%
Effective tax rate
21.9
%
22.4
%
* May not sum due to rounding
PATTERSON COMPANIES, INC.
FREE CASH FLOW
(In thousands)
(Unaudited)
Six Months Ended
October 28, 2023
October 29, 2022
Net cash used in operating activities
$
(485,276
)
$
(520,161
)
Additions to property and equipment and software
(33,467
)
(26,779
)
Collection of deferred purchase price receivables
489,452
489,639
Free cash flow
$
(29,291
)
$
(57,301
)
View source version on businesswire.com: https://www.businesswire.com/news/home/20231129971564/en/
INVESTORS: John M. Wright, Investor Relations Patterson Companies Inc. 651.686.1364 investor.relations@pattersoncompanies.com
MEDIA: Patterson Corporate Communications Patterson Companies Inc. 651.905.3349 corporate.communications@pattersoncompanies.com
pattersoncompanies.com
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