(Source: Business Wire)
Patterson Companies, Inc. (Nasdaq: PDCO) today reported consolidated sales of $779,884,000 for the fourth quarter of fiscal 2009 ended April 25, virtually unchanged from $778,388,000 in the year-earlier quarter. The positive impact of acquisitions was largely offset by weaker than forecasted sales brought on by the recession and the effect of a stronger U.S. dollar on foreign operations. Net income of $53,961,000 or $0.46 per diluted share was down from $63,209,000 or $0.51 per diluted share in the fourth quarter of 2008.
The weak economy affected each of Patterson's three businesses in the fourth quarter, particularly in the area of equipment sales. This impact was particularly evident on sales of basic dental equipment, although dental practitioners continued investing at solidly higher levels in new technology products, including CEREC® dental restorative products and digital radiography systems. Patterson's fourth quarter earnings also were affected by a shift in its sales mix due to the October 2008 acquisition of Columbus Serum Company by the Webster Veterinary unit. As a result, veterinary products, which have a lower operating margin than revenues generated by Patterson's other businesses, accounted for a higher proportion of consolidated revenues.
Full-year fiscal 2009 consolidated sales totaled $3,094,227,000, up 3% from $2,998,729,000 in fiscal 2008. Net income for the year came to $199,635,000 or $1.69 per diluted share, compared to $224,858,000 or $1.69 per diluted share in fiscal 2008.
Sales of Patterson Dental Supply, Patterson's largest business, were $533,547,000 in the fourth quarter, down 5% from $562,112,000 in the year-earlier period.
Sales of consumable dental supplies and printed office products were down 2% from last year's fourth quarter or 3% after the impact of foreign currency, net of acquisitions.
Sales of dental equipment and software declined 10% from the year-earlier level.
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 fourth quarter.
Sales of the Webster Veterinary unit increased 33% in the fourth quarter of fiscal 2009 to $158,514,000, due primarily to the Columbus Serum acquisition. Sales of Patterson Medical, Patterson's rehabilitation supply and equipment unit, declined 9% to $87,823,000, due principally to the strengthening of the U.S. dollar and the impact of the economy on sales of rehabilitation equipment.
James W. Wiltz, president and chief executive officer, commented: "Our fourth quarter operating results were below our expectations as we experienced reduced customer demand for the capital equipment offerings at each of our three businesses. In addition, sales of consumable dental supplies continued to be affected by the economy-related trend of patients deferring higher-level and discretionary services. Partly offsetting the lower sales of basic dental equipment was the strong sales growth of new technology products, with sales of CEREC systems up 7% and sales of digital X-ray systems up 25%. We believe the recession is causing many dental practitioners to limit their investments to equipment with rapid rates of return. New technology products, in comparison to such basic dental equipment as chairs and lights, meet this return on investment requirement. We also believe CEREC sales are benefiting from the January 2009 introduction of a new digital imaging acquisition unit that provides significantly greater ease of use and precision, in addition to scaleable pricing. We believe these advancements have placed the CEREC system at the forefront of CAD/CAM dental technology."
He added: "We are operating in an extremely challenging environment, but Patterson's future remains secure. The long-term fundamentals of the dental, veterinary and rehabilitation markets are strongly favorable. We are continuing to generate sizeable cash flows from our operations, providing us with ample resources for supporting our various growth initiatives. And, each of our businesses holds a strong competitive position in its served market. Given all of these factors, we are optimistic about Patterson's long-term prospects."
Wiltz continued: "We believe that weakness in the general economy will continue to affect our performance for at least several more quarters. Reflecting this belief, we are forecasting earnings of $1.70 to $1.80 per diluted share for fiscal 2010."
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.
