Patterson Companies Reports Fiscal 2017 Second-Quarter Operating Results

  • Reported net sales totaled $1.4 billion, up 2.1 percent. Sales grew
    4.1 percent in constant currency.
  • GAAP earnings from continuing operations increased 12 percent to
    $0.48 per diluted share.
  • Adjusted earnings from continuing operations1
    were flat at $0.56 per diluted share.
  • Company elects not to extend the exclusive portion of its Sirona
    relationship after September 2017, but intends to remain a strategic
    partner and continue offering the full Sirona product line thereafter.
  • Company revises Fiscal 2017 outlook and expects non-GAAP earnings
    to be in the range of $2.25 to $2.35 per diluted share.

ST. PAUL, Minn.–(BUSINESS WIRE)–Patterson Companies, Inc. (Nasdaq: PDCO) today reported consolidated net
sales of $1.4 billion (see attached Sales Summary for further details)
in its fiscal second quarter ended October 29, 2016, up 2.1 percent over
the same period last year. Adjusting for the effects of currency
translation, sales increased 4.1 percent.

Reported net income from continuing operations was $45.8 million, or
$0.48 per diluted share, compared to $42.6 million, or $0.43 per diluted
share, in last year’s fiscal second quarter. Adjusted net income from
continuing operations1, which excludes certain non-recurring
and deal amortization costs, totaled $53.5 million for the second
quarter of fiscal 2017, down 3.2 percent from $55.3 million in the same
quarter last year. Adjusted earnings per diluted share from continuing
operations1 totaled $0.56 in the 2017 second quarter,
unchanged year-over-year.

“Patterson Companies competes in two markets with attractive long-term
fundamentals. The Dental business is positioned to benefit from
favorable demographic trends, including an aging population. In Animal
Health, the worldwide demand for protein will intensify; and consumers
are increasing both their pet ownership and the dollars they spend on
their pets. These are compelling trends. However, our markets are
evolving, and we are adapting our strategies to take full advantage of
new opportunities to deliver even greater value to our customers,” said
Scott Anderson, chairman, president and chief executive officer.

Anderson continued, “During the second quarter, we continued to move
Patterson’s growth agenda forward and, despite relatively stable yet
challenging dental and animal health environments, we continued to make
the necessary decisions to unlock growth potential for the long term. In
our Dental segment, we expanded on our strategy to broaden our approach
to the market, which resulted in a new relationship with Heartland
Dental, the largest dental support organization in the U.S. In our
Animal Health segment, our focus on sales execution is driving expansion
and market-share gains.”

Patterson Dental
Reported net sales in our Dental segment,
which represents approximately 43 percent of total company sales, were
$601.6 million, flat with prior year. Sales were unchanged on a constant
currency basis from the 2016 second fiscal quarter. On that same basis,
year-over-year sales by category were as follows:

  • Consumable dental supplies decreased 2.5 percent
  • Equipment sales improved 4.2 percent, led by double-digit increases in
    core equipment and digital x-ray products
  • Other services and products, primarily composed of technical service,
    parts and labor, software support services and office supplies, rose
    0.2 percent

Anderson said, “We are pleased with our dental equipment sales during
the period, especially considering the difficult year-over-year
comparable. Dental markets, overall, remained soft but relatively stable
in the second quarter. After the end of the second quarter, Patterson
Companies elected not to extend exclusivity with Sirona for its entire
portfolio beyond September 2017. This decision is consistent with our
strategy of serving the evolving needs of all our customers and will
allow us to better serve the full range of practice models in the
future. Importantly, it will also potentially enable more product
innovation and bring more options to our customers by opening up our
superior technology support infrastructure to more manufacturers, who
view our expertise and support as a meaningful competitive advantage. We
expect this move, along with our sales realignment activities taken
earlier in fiscal 2017, to better position Patterson Dental to serve the
evolving dental market.”

Anderson continued, “In no way does this decision change our commitment
to our long-standing partnership with Sirona. Together, for the past 20
years, we have built the market for chair-side restoration technology in
North America. We are very proud of our achievements together and intend
to preserve our unwavering commitment to this important relationship. We
look forward to helping Dentsply Sirona drive further innovation in the
dental marketplace.”

Non-cash Impairment Charge
In the
first quarter of fiscal 2006, Patterson extended its exclusive North
American distribution relationship with Sirona Dental Systems for
Sirona’s CEREC 3D dental restorative system. At that time, Patterson
paid a $100 million distribution fee to extend the existing exclusive
relationship for at least a 10-year period beginning in 2007. In 2012,
the relationship was amended to include the full Sirona product
portfolio in the U.S. market and to provide for the potential for the
exclusivity relationship to extend beyond 2017. This distribution fee
has been accounted for as an intangible asset that has been amortized
since October 2007.

Based on Patterson’s decision not to extend sales exclusivity for the
full Sirona portfolio of products, Patterson Companies expects to record
a pre-tax non-cash impairment charge of approximately $36 million, or
approximately $22 million after taxes or $0.23 per diluted share in the
fiscal 2017 third quarter, related to the distribution fee associated
with the CEREC product component of this arrangement. While this
non-cash accounting charge will not affect Patterson’s liquidity, cash
flows or compliance with its debt covenants, the company expects this
decision to negatively affect near-term operations. This impact is
reflected in the company’s updated fiscal 2017 earnings guidance.

Patterson Animal Health
Reported net sales for Patterson
Animal Health, which comprises approximately 57 percent of the company’s
total sales, were $807.1 million, up 4.2 percent over last year and up
7.8 percent in constant currency. Companion animal sales rose 10.8
percent in constant currency. Production animal sales increased 4.9
percent, reflecting strong sales in swine and beef species.

Anderson continued, “Revenue growth and sales execution have been key
priorities for us, and we are pleased with the significant sales
expansion and share gains in our animal health business during the
second quarter. However, we face a more challenging environment with
branded pharmaceutical manufacturers that are impacting the profit
contribution from this sales momentum, and we are implementing programs
immediately to respond to these challenges. We have a long history of
working with innovative product manufacturers and using our market
leadership and scale to create mutually beneficial relationships. We are
a partner of choice and are focusing on our strengths to create value
and drive performance.”

Discontinued Operations
On August 28, 2015, Patterson
Companies completed the sale of Patterson Medical to Madison Dearborn
Partners for approximately $717 million. As a result of the sale,
Patterson Medical is classified and reported as discontinued operations
for all periods presented.

Share Repurchases and Dividends
In the fiscal 2017 second
quarter, Patterson repurchased approximately 0.5 million shares of its
outstanding common stock, with a value of $25.0 million, leaving
approximately 15 million shares for repurchase under the current
authorization, which expires in March 2018. The company also paid $23.5
million in cash dividends to shareholders in the second quarter of
fiscal 2017.

Year-to-Date Results1
Consolidated sales
for the first six months of fiscal 2017 totaled $2.8 billion, an 8.6
percent year-over-year increase. Reported net income from continuing
operations was $84.7 million, or $0.88 per diluted share, compared to
$62.9 million, or $0.63 per diluted share in last year’s period.
Adjusted net income from continuing operations1, which
excludes certain non-recurring and deal amortization costs and tax costs
related to tax repatriation, totaled $102.3 million, or $1.06 per
diluted share, compared to adjusted net income from continuing
operations of $102.2 million, or $1.03 per diluted share, in the
year-ago period. Sales in the prior year six-month period included an
extra sales week and approximately six fewer weeks of contribution from
Animal Health International, Inc.

Business Outlook
Anderson concluded, “We believe that we are
making the right strategic moves to build sustainable growth platforms
in our two fundamentally strong and changing markets. In light of both
external market factors and our strategic decisions, we have re-examined
our financial outlook for the year. When we entered fiscal 2017, our
guidance was predicated on end markets similar to those experienced in
fiscal 2016. But we, along with others in our industry, have seen
softness in the U.S. dental market and challenges with branded
pharmaceutical companies in our animal health business. Just as
important as these external factors, we made important strategic
decisions in the first half of fiscal 2017 to realign our Dental sales
force to enhance our effectiveness and, more recently, to enable
leveraging of our sales, service and technical support infrastructure
across a wide range of products and customers in the future. While these
strategic decisions will impact our near-term performance, we believe
they are integral to evolving the customer-centric approach for which we
are known and to realize our growth ambitions.”

Fiscal 2017 Guidance
For the first time, Patterson today
introduced fiscal 2017 GAAP earnings guidance. It also revised fiscal
2017 non-GAAP adjusted earnings guidance to reflect the company’s
current business environment and strategies. For comparison purposes, it
should be noted that Patterson previously disclosed 2017 non-GAAP
adjusted earnings guidance in its prior earnings releases.

  • GAAP earnings are expected to be in the range of $1.65 to $1.75 per
    diluted share for fiscal 2017.
  • Non-GAAP adjusted earnings for fiscal 2017 are now expected to be in
    the range of $2.25 to $2.35 per diluted share.
  • Our non-GAAP adjusted earnings guidance excludes the after-tax impact
    of:

    • Deal amortization expense of approximately $27 million ($0.28 per
      diluted share)
    • Non-cash impairment charges of approximately $22 million ($0.23
      per diluted share)
    • Integration and business restructuring expenses of approximately
      $6 million ($0.06 per diluted share)
    • Transaction-related costs of approximately $3 million ($0.03 per
      diluted share)

    Our guidance is for current continuing operations as well as completed
    or previously announced acquisitions and does not include the impact of
    potential future acquisitions or similar transactions, if any, or
    impairments and material restructurings beyond those previously publicly
    disclosed. Our guidance assumes North American and international market
    conditions similar to those experienced in the first half of fiscal 2017
    and includes the previously disclosed pretax $25 million step-up in
    operating expense associated with the enterprise resource planning
    system implementation.

    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 earnings from continuing operations, net income from
    continuing operations, and earnings per diluted share from continuing
    operations, for the impact of transaction related costs, deal
    amortization, integration and business restructuring expenses,
    accelerated debt issuance costs and tax impact of cash repatriation.

    Management believes that these non-GAAP measures may provide a helpful
    representation of the company’s current quarter 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.

    In addition, the term constant currency used in this release represents
    net sales adjusted to exclude foreign currency impacts. 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 changes
    in constant currency provides useful supplementary information to
    investors in light of significant fluctuations in currency rates.

    Second-Quarter Conference Call and Replay
    Patterson’s
    second-quarter earnings conference call will start at 10 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 Patterson’s website. A replay of
    the second-quarter conference call can be heard for one week at
    888-203-1112 and by providing the Conference ID 6130925 when prompted.

    About Patterson Companies, Inc.
    Patterson Companies, Inc. is
    a value-added distributor serving the dental and animal health markets.

    Dental Market
    Patterson’s Dental
    segment 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.

    Animal Health Market
    Patterson’s
    Animal Health segment is a leading distributor of products, services and
    technologies to both the production and companion animal health markets
    in North America and the U.K.

    This press release contains certain 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 Patterson’s
    ability to control. Forward-looking statements generally can be
    identified by words such as “believes,” “expects,” “anticipates,”
    “foresees,” “forecasts,” “estimates” or other words or phrases of
    similar import. It is uncertain whether any of the events anticipated by
    the forward-looking statements will transpire or occur, or if any of
    them do, what impact they will have on the results of operations and
    financial condition of Patterson or the price of Patterson stock. These
    forward-looking statements involve certain risks and uncertainties that
    could cause actual results to differ materially from those indicated in
    such forward-looking statements, including but not limited to the other
    risks and important factors contained and identified in Patterson’s
    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. Any forward-looking statement in this press
    release speaks only as of the date on which it is made. Except to the
    extent required under the federal securities laws, Patterson does not
    intend to update or revise the forward-looking statements.

     
    PATTERSON COMPANIES, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
    (In thousands, except per share amounts)
    (Unaudited)
                   
    Three Months Ended Six Months Ended
    October 29, October 31, October 29, October 31,
    2016 2015 2016 2015
     
    Net sales $ 1,418,241 $ 1,389,210 $ 2,750,677 $ 2,532,080
     
    Gross profit 318,960 330,899 636,138 619,143
     
    Operating expenses   239,157     247,436     490,919     473,503  
     
    Operating income from continuing operations 79,803 83,463 145,219 145,640
     
    Other income and expense:
    Other income, net 1,622 954 3,986 1,624
    Interest expense   (10,097 )   (17,154 )   (20,259 )   (29,297 )
     
    Income from continuing operations before taxes 71,328 67,263 128,946 117,967
     
    Income tax expense   25,572     24,700     44,284     55,093  
     
    Net income from continuing operations 45,756 42,563 84,662 62,874
    Net income (loss) from discontinued operations       (7,142 )       2,250  
    Net income $ 45,756   $ 35,421   $ 84,662   $ 65,124  
     
    Basic earnings (loss) per share:
    Continuing operations $ 0.48 $ 0.43 $ 0.89 $ 0.64
    Discontinued operations       (0.07 )       0.02  
    Net basic earnings (loss) per share $ 0.48   $ 0.36   $ 0.89   $ 0.66  
     
    Diluted earnings (loss) per share:
    Continuing operations $ 0.48 $ 0.43 $ 0.88 $ 0.63
    Discontinued operations       (0.07 )       0.02  
    Net diluted earnings (loss) per share $ 0.48   $ 0.36   $ 0.88   $ 0.65  
     
    Shares:
    Basic 95,290 98,525 95,510 98,981
    Diluted 95,904 99,185 96,138 99,674
     
    Dividends declared per common share $ 0.24 $ 0.22 $ 0.48 $ 0.44
     
     
    PATTERSON COMPANIES, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
           
    October 29, April 30,
    2016 2016
    (Unaudited)
    ASSETS
    Current assets:
    Cash and cash equivalents $ 110,387 $ 137,453
    Receivables 822,734 796,693
    Inventory 795,454 722,140
    Prepaid expenses and other current assets   104,257   91,255
    Total current assets 1,832,832 1,747,541
    Property and equipment, net 303,342 293,315
    Goodwill and other intangible assets 1,292,396 1,325,889
    Long-term receivables, net and other   161,798   154,059
    Total assets $ 3,590,368 $ 3,520,804
     
    LIABILITIES AND STOCKHOLDERS’ EQUITY
    Current liabilities:
    Accounts payable $ 545,366 $ 566,253
    Other accrued liabilities 217,678 226,582
    Current maturities of long-term debt 20,625 16,500
    Borrowings on revolving credit   163,000   20,000
    Total current liabilities 946,669 829,335
    Long-term debt 1,010,211 1,022,155
    Other non-current liabilities   227,436   227,568
    Total liabilities 2,184,316 2,079,058
    Stockholders’ equity   1,406,052   1,441,746
    Total liabilities and stockholders’ equity $ 3,590,368 $ 3,520,804
     
     
     
    PATTERSON COMPANIES, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
    (Unaudited)
           
    Six Months Ended
    October 29, October 31,
    2016 2015
     
    Operating activities:
    Net income $ 84,662 $ 65,124
    Net income from discontinued operations       2,250  
    Net income from continuing operations 84,662 62,874

    Adjustments to reconcile net income from continuing operations to
    net cash used in operating activities:

    Depreciation and amortization 42,007 38,400
    Non-cash employee compensation 14,693 13,541
    Change in assets and liabilities, net of acquired   (196,668 )   (128,782 )
    Net cash used in operating activities – continuing operations (55,306 ) (13,967 )
    Net cash used in operating activities – discontinued operations       (38,985 )
    Net cash used in operating activities (55,306 ) (52,952 )
     
    Investing activities:
    Additions to property and equipment, net of disposals (29,377 ) (40,978 )
    Acquisitions and equity investments (1,105,229 )
    Proceeds from sale of securities 48,744
    Other investing activities   23,115      
    Net cash used in investing activities – continuing operations (6,262 )

     

    (1,097,463 )
    Net cash provided by investing activities – discontinued operations    

     

      715,430  
    Net cash used in investing activities (6,262 )

     

    (382,033 )
     
    Financing activities:
    Dividends paid (47,655 ) (45,356 )
    Repurchases of common stock (50,000 ) (160,579 )
    Proceeds from issuance of long-term debt, net 988,400
    Retirement of long-term debt (8,250 ) (674,125 )
    Draw on revolver 143,000 80,000
    Other financing activities   974     2,894  
    Net cash provided by financing activities 38,069 191,234
     
    Effect of exchange rate changes on cash   (3,567 )   (8,058 )
    Net change in cash and cash equivalents $ (27,066 ) $ (251,809 )
     
     
    PATTERSON COMPANIES, INC.
    SALES SUMMARY
    (Dollars in thousands)
    (Unaudited)
                     
    Total Foreign Animal Health
    October 29, October 31, Sales Exchange International Internal
    2016 2015

      Growth  

    Impact Impact

      Growth  

    Three Months Ended

     
    Consolidated net sales
    Consumable $ 1,112,232 $ 1,087,489 2.3 % (2.5 ) % % 4.8 %
    Equipment and software 217,194 207,809 4.5 4.5
    Other   88,815   93,912 (5.4 ) (0.9 )   (4.5 )
    Total $ 1,418,241 $ 1,389,210 2.1   % (2.0 ) %   % 4.1   %
     
    Dental
    Consumable $ 324,237 $ 332,436 (2.5 ) % % % (2.5 ) %
    Equipment and software 205,062 196,767 4.2 4.2
    Other   72,254   72,119 0.2       0.2  
    Total $ 601,553 $ 601,322   %   %   %   %
     
    Animal Health
    Consumable $ 787,995 $ 755,053 4.4 % (3.6 ) % % 8.0 %
    Equipment and software 12,132 11,042 9.9 (0.3 ) 10.2
    Other   7,019   8,358 (16.0 ) (9.9 )   (6.1 )
    Total $ 807,146 $ 774,453 4.2   % (3.6 ) %   % 7.8   %
     
    Corporate
    Other $ 9,542 $ 13,435 (29.0 ) %   %   % (29.0 ) %
    Total $ 9,542 $ 13,435 (29.0 ) %   %   % (29.0 ) %
     
     

    Six Months Ended

     
    Consolidated net sales
    Consumable $ 2,188,453 $ 1,982,796 10.4 % (2.3 ) % 9.8 % 2.9 %
    Equipment and software 378,140 361,292 4.7 (0.2 ) 4.9
    Other   184,084   187,992 (2.1 ) (0.8 ) (0.1 ) (1.2 )
    Total $ 2,750,677 $ 2,532,080 8.6   % (1.9 ) % 7.7   % 2.8   %
     
    Dental
    Consumable $ 657,185 $ 690,488 (4.8 ) % (0.2 ) % % (4.6 ) %
    Equipment and software 355,944 340,437 4.6 (0.2 ) 4.8
    Other   143,439   145,514 (1.4 ) (0.1 )   (1.3 )
    Total $ 1,156,568 $ 1,176,439 (1.7 ) % (0.2 ) %   % (1.5 ) %
     
    Animal Health
    Consumable $ 1,531,268 $ 1,292,308 18.5 % (3.4 ) % 15.0 % 6.9 %
    Equipment and software 22,196 20,855 6.4 (0.2 ) 6.6
    Other   16,313   18,587 (12.2 ) (7.0 ) (0.9 ) (4.3 )
    Total $ 1,569,777 $ 1,331,750 17.9   % (3.4 ) % 14.6   % 6.7   %
     
    Corporate
    Other $ 24,332 $ 23,891 1.8   %   %   % 1.8   %
    Total $ 24,332 $ 23,891 1.8   %   %   % 1.8   %
     
     
    PATTERSON COMPANIES, INC.
    OPERATING INCOME BY SEGMENT
    (In thousands)
    (Unaudited)
                   
    Three Months Ended Six Months Ended
    October 29, October 31, October 29, October 31,
    2016 2015 2016 2015
     
    Operating income (loss)
    Dental $ 77,043 $ 74,094 $ 137,338 $ 141,346
    Animal Health 21,854 25,177 36,683 38,149
    Corporate   (19,094 )   (15,808 )   (28,802 )   (33,855 )
    Total $ 79,803   $ 83,463   $ 145,219   $ 145,640  
     
     
    PATTERSON COMPANIES, INC.
    RECONCILIATION OF GAAP TO NON-GAAP MEASURES
    (Dollars in thousands, except per share amounts)
    (Unaudited)
                               
    For the three months ended October 29, 2016 GAAP

    Transaction-
    related costs

    Deal
    amortization

    Integration
    and business
    restructuring
    expenses

    Accelerated
    debt issuance
    costs

    Tax impact of
    cash
    repatriation

    Non-GAAP
    Operating income from continuing operations $ 79,803 $ 896 $ 10,247 $ 804 $ $ $ 91,750
    Other expense, net   (8,475 )               (8,475 )
    Income from continuing operations before taxes 71,328 896 10,247 804 83,275
    Income tax expense   25,572     338   3,537   304         29,751  
    Net income from continuing operations $ 45,756   $ 558 $ 6,710 $ 500 $ $   $ 53,524  
     
    Diluted EPS from continuing operations* $ 0.48   $ 0.01 $ 0.07 $ 0.01 $ $   $ 0.56  
     
    Consolidated operating income as a % of sales 5.6 % 6.5 %
    Effective tax rate 35.9 % 35.7 %
     
    For the three months ended October 31, 2015 GAAP

    Transaction-
    related costs

    Deal
    amortization

    Integration
    and business
    restructuring
    expenses

    Accelerated
    debt issuance
    costs

    Tax impact of
    cash
    repatriation

    Non-GAAP
    Operating income from continuing operations $ 83,463 $ 723 $ 10,862 $ 2,183 $ $ $ 97,231
    Other expense, net   (16,200 )         5,153       (11,047 )
    Income from continuing operations before taxes 67,263 723 10,862 2,183 5,153 86,184
    Income tax expense   24,700     46   3,888   825   1,948   (500 )   30,907  
    Net income from continuing operations $ 42,563   $ 677 $ 6,974 $ 1,358 $ 3,205 $ 500   $ 55,277  
     
    Diluted EPS from continuing operations* $ 0.43   $ 0.01 $ 0.07 $ 0.01 $ 0.03 $ 0.01   $ 0.56  
     
    Consolidated operating income as a % of sales 6.0 % 7.0 %
    Effective tax rate 36.7 % 35.9 %
     
    For the six months ended October 29, 2016 GAAP

    Transaction-
    related costs

    Deal
    amortization

    Integration
    and business
    restructuring
    expenses

    Accelerated
    debt issuance
    costs

    Tax impact of
    cash
    repatriation

    Non-GAAP
    Operating income from continuing operations $ 145,219 $ 1,243 $ 20,261 $ 5,679 $ $ $ 172,402
    Other expense, net   (16,273 )               (16,273 )
    Income from continuing operations before taxes 128,946 1,243 20,261 5,679 156,129
    Income tax expense   44,284     469   6,914   2,147         53,814  
    Net income from continuing operations $ 84,662   $ 774 $ 13,347 $ 3,532 $ $   $ 102,315  
     
    Diluted EPS from continuing operations* $ 0.88   $ 0.01 $ 0.14 $ 0.04 $ $   $ 1.06  
     
    Consolidated operating income as a % of sales 5.3 % 6.3 %
    Effective tax rate 34.3 % 34.5 %
     
    For the six months ended October 31, 2015 GAAP

    Transaction-
    elated costs

    Deal
    amortization

    Integration
    and business
    restructuring
    expenses

    Accelerated
    debt issuance
    costs

    Tax impact of
    cash
    repatriation

    Non-GAAP
    Operating income from continuing operations $ 145,640 $ 13,088 $ 17,896 $ 3,583 $ $ $ 180,207
    Other expense, net   (27,673 )         5,153       (22,520 )
    Income from continuing operations before taxes 117,967 13,088 17,896 3,583 5,153 157,687
    Income tax expense   55,093     3,109   6,310   1,354   1,948   (12,300 )   55,514  
    Net income from continuing operations $ 62,874   $ 9,979 $ 11,586 $ 2,229 $ 3,205 $ 12,300   $ 102,173  
     
    Diluted EPS from continuing operations* $ 0.63   $ 0.10 $ 0.12 $ 0.02 $ 0.03 $ 0.12   $ 1.03  
     
    Consolidated operating income as a % of sales 5.8 % 7.1 %
    Effective tax rate 46.7 % 35.2 %
     
    * May not sum due to rounding
     

    Contacts

    Patterson Companies, Inc.
    Ann B. Gugino, 651-686-1600
    Executive
    Vice President & CFO
    or
    John M. Wright, 651-686-1364
    Vice
    President, Investor Relations

    Read full story here

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