Patterson Companies Inc (PDCO)

ST. PAUL, Minn.--(BUSINESS WIRE)--
Patterson Companies, Inc. (Nasdaq: PDCO) today reported consolidated
sales of $814,951,000 for the second quarter of fiscal 2010 ended
October 24, an increase of 7% from $759,461,000 in the year-earlier
quarter. Acquisitions transacted over the past 12 months accounted for a
substantial portion of the second quarter sales growth, while the impact
of foreign currency adjustments was minimal. Net income of $49,343,000
or $.41 per diluted share rose 5% from $46,903,000 or $0.40 per diluted
share in the second quarter of fiscal 2009.

Sales of Patterson Dental Supply, Patterson????s largest business, were
$537,167,000 in the second quarter, virtually unchanged from
$536,837,000 in the year-earlier period.

• 
  Sales of consumable dental supplies and printed office products were
  down 2% from last year????s second quarter.
  


• 
  Sales of dental equipment and software increased 3% from the
  year-earlier level. Within this product category, sales of CEREC????
  dental restorative systems rose 45%, which offset a 7% decline in
  sales of basic equipment, including chairs, units and lights.
  


• 
  Sales of other services and products, consisting primarily of
  technical service parts and labor, software support services and
  artificial teeth, rose 4% from last year????s second quarter.
  

Sales of the Webster Veterinary unit increased 30% in the second quarter
of fiscal 2010 to $160,654,000. Internal growth accounted for 8% of this
increase, while the October 2008 acquisition of Columbus Serum Company
accounted for the balance. Sales of Patterson Medical, Patterson????s
rehabilitation supply and equipment unit, increased 18% to $117,130,000.
Internal sales were up 5%, with acquisitions accounting for the balance:
Mobilis Healthcare Group in April 2009 and Empi Therapy Solutions, a
unit of DJO Incorporated, in June 2009.

James W. Wiltz, president and chief executive officer, commented: ????We
are generally pleased with Patterson????s second quarter performance as our
businesses held up relatively well despite the ongoing impact of the
recession. Within our Patterson Dental unit, the market for consumable
supplies has been affected by high unemployment levels, but our sales of
these products have remained generally stable during the first half of
fiscal 2010. At the same time, we believe the weak economy has been
causing many dental practitioners to focus their investment dollars on
equipment with rapid and high rates of return. This consideration helps
explain the strong growth of CEREC dental restorative products thus far
in fiscal 2010 and why sales of basic equipment have tended to lag.
CEREC sales also are benefiting from the steadily growing market
acceptance of this new-technology equipment. The unequalled performance
of CEREC has made it the industry leader by a considerable margin in the
category of CAD/CAM dental equipment. We also believe CEREC is the most
viable choice for dentists purchasing this type of equipment.?????

He continued: ????Sales of our Webster unit were consistent with forecasted
levels in the second quarter from the standpoint of both
internally-generated growth and the impact of the Columbus Serum
acquisition. Webster????s large consumable supply business benefited from
higher volumes of veterinary care for companion-pets during this period.
However, equipment sales remained soft as many veterinary practices
remained cautious about purchasing equipment. Webster is continuing to
remove costs from the Columbus Serum acquisition, and this process will
be largely completed in the third quarter.?????

Wiltz added: ????Patterson Medical????s performance exceeded our expectations
in the second quarter. We believe this unit gained market share in this
period and that the overall rehabilitation market started firming during
the quarter. The assimilation of the acquisitions is proceeding on
schedule, and equally encouraging, more business from these acquired
units has been retained than we initially planned.?????

Patterson????s second quarter earnings also benefited from cost control
measures that have been implemented in recent periods, including the
company-wide salary reductions enacted in this year????s first quarter. In
addition, Patterson is continuing to generate substantial operating cash
flows, which are ample for supporting the various growth initiatives
currently underway.

Patterson is maintaining its earnings guidance of $1.70 to $1.80 per
diluted share for full-year fiscal 2010.

As previously reported, Mr. Wiltz will retire as president and chief
executive officer of Patterson Companies at the end of the current
fiscal year on April 24, 2010. The Board of Directors named Scott P.
Anderson, currently president of the Patterson Dental Supply subsidiary,
as Mr. Wiltz????s successor.

In a related move, Paul A. Guggenheim, currently southwest region
manager of Patterson Dental, will become president of Patterson Dental
at the end of fiscal 2010. Mr. Guggenheim joined Patterson in 2000
following Patterson Dental????s acquisition of Guggenheim Brothers Dental
Supply. He has worked in the dental industry for over 25 years and is
former chairman of the American Dental Trade Association (now the Dental
Trade Alliance.) He also is past president of the Dental Dealers of
America and former chairman of the American Dental Cooperative.

About Patterson Companies, Inc.

Patterson Companies, Inc. is a value-added distributor serving the
dental, companion-pet veterinarian and rehabilitation supply markets.

Dental Market

As Patterson????s largest business, Patterson Dental provides a virtually
complete range of consumable dental products, equipment and software,
turnkey digital solutions and value-added services to dentists and
dental laboratories throughout North America.

Veterinary Market

Webster Veterinary is the nation????s second largest distributor of
consumable veterinary supplies, equipment and software, diagnostic
products, vaccines and pharmaceuticals to companion-pet veterinary
clinics.

Rehabilitation Market

Patterson Medical is the world????s leading distributor of rehabilitation
supplies and non-wheelchair assistive patient products to the physical
and occupational therapy markets. The unit????s global customer base
includes hospitals, long-term care facilities, clinics and dealers.

This release contains forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are information of a non-historical nature and are subject to
risks and uncertainties that are beyond the Company????s ability to
control. The Company cautions shareholders and prospective investors
that the following factors, among others, may cause actual results to
differ materially from those indicated by the forward-looking
statements: competition within the dental, veterinary, and
rehabilitative and assistive living supply industries; changes in the
economics of dentistry, including reduced growth in expenditures by
private dental insurance plans, the effects of economic conditions and
the effects of healthcare reform, which may affect future per capita
expenditures for dental services and the ability and willingness of
dentists to invest in high-technology products; the effects of
healthcare related legislation and regulation which may affect
expenditures or reimbursements for rehabilitative and assistive
products; changes in the economics of the veterinary supply market,
including reduced growth in per capita expenditures for veterinary
services and reduced growth in the number of households owning pets; the
ability of the Company to maintain satisfactory relationships with its
sales force; unexpected loss of key senior management personnel;
unforeseen operating risks; risks associated with the dependence on
manufacturers of the Company????s products; and the ability of the Company
to successfully integrate the recent acquisitions into its existing
business. Forward-looking statements are qualified in their entirety by
the cautionary language set forth in the Company's filings with the
Securities and Exchange Commission.

Second Quarter Conference Call and Replay

Patterson????s second quarter earnings conference call will start at 10:00
a.m. Eastern today. Investors can listen to a live webcast of the
conference call at www.pattersoncompanies.com.
Listeners should go to this website at least 15 minutes prior to the
call to download and install any necessary audio software. The
conference call will be archived on Patterson????s web site. A replay of
the second quarter conference call can be heard through November 26,
2009 at 1-303-590-3030 with the 4182657 Conference ID.