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8-K - 8-K - PATTERSON COMPANIES, INC.d934497d8k.htm

Exhibit 99

 

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

PATTERSON COMPANIES REPORTS FISCAL 2020

FOURTH-QUARTER AND YEAR-END OPERATING RESULTS

St. Paul, Minn. — June 24, 2020 — Patterson Companies, Inc. (Nasdaq: PDCO) today reported operating results for its fiscal year 2020 and fourth quarter ended April 25, 2020.

“The strategies we executed during fiscal 2020 produced accelerating performance through the first 11 months, enabling us to exceed our goals for the year despite the impact of COVID-19, resulting in full fiscal 2020 adjusted earnings growth of 10.7 percent,” said Mark Walchirk, President and CEO of Patterson Companies. “Our strong business momentum from the first three quarters of fiscal 2020 continued to build during the first two months of our fiscal fourth quarter, helping to deliver fourth quarter adjusted earnings growth of 16.2 percent compared to the same period last year.

“Beginning in late-March, COVID-19 considerably disrupted our end markets, impacting our performance for the balance of the year and into the first quarter. Patterson took immediate actions in response to COVID-19 to protect employee health and safety, ensure business continuity for our customers and help to reduce the spread of the virus in our communities. We also acted quickly in response to this disruption by taking additional actions, including aggressive cost savings measures, suspending all non-essential capital expenditures and additional measures to preserve our liquidity.

“The challenges related to COVID-19 are continuing into fiscal 2021, but we are confident in the long-term fundamentals of our end markets and the essential role we serve with our customers. I am especially proud of the way our Patterson team has responded during this crisis, maintaining their focus on our customers and reinforcing our value proposition to the businesses we serve. Our successful efforts to strengthen Patterson throughout fiscal 2020, demonstrated by our accelerating performance and earnings growth, have positioned us well to navigate this near-term disruption and emerge as a stronger Patterson.”

Fourth-Quarter Fiscal 2020 Results

Patterson’s performance in the first two months of the fourth quarter was offset by disruption caused by COVID-19 across the Company’s end markets starting in late-March and April, considerably impacting overall fourth quarter results.

Consolidated net sales were approximately $1.29 billion (see attached Sales Summary for further details) in the fiscal fourth quarter ended April 25, 2020, a decrease of 10.5 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, decreased 10.0 percent. Internal sales for the first two months of the fiscal fourth quarter, ended on March 21, around when COVID-19 began to impact performance, increased 5.1 percent compared to the same period last year.

Reported net loss attributable to Patterson Companies, Inc. for the fourth quarter of fiscal 2020 totaled $608.6 million, or $6.44 per diluted share, compared to net income attributable to Patterson Companies, Inc. of $28.0 million, or $0.30 per diluted share, in the fourth quarter of fiscal 2019. The year-over-year decrease in the period is primarily due to a pre-tax $675.1 million goodwill impairment charge related to our Animal Health segment.

Fourth-quarter adjusted net income1 attributable to Patterson Companies, Inc., which excludes deal amortization, integration and business restructuring expenses, an investment loss and goodwill impairment, totaled $41.1 million for the fourth quarter of fiscal 2020, or $0.43 per diluted share, compared to $35.0 million in the same quarter of fiscal 2019, or $0.37 per diluted share. This represents a 16.2 percent improvement over the prior

 

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

 

year period. The year-over-year increase in the period is attributable to the strong sales momentum at the beginning of the fourth quarter and immediate expense reductions in response to COVID-19.

Patterson Dental

Reported net sales in our Dental segment for the fourth quarter of fiscal 2020, which represented approximately 32 percent of total company sales, were $409.6 million compared to $563.5 million in the fourth quarter of last year. Internal sales decreased 27.2 percent compared to the fiscal 2019 fourth quarter. Internal sales for the first two months of the fiscal fourth quarter, ended on March 21, increased 7.8 percent compared to the same period last year.

Patterson Animal Health

Reported net sales in our Animal Health segment for the fourth quarter of fiscal 2020, which comprised approximately 66 percent of the Company’s total sales, were $853.2 million compared to $866.4 million in the fourth quarter of last year. Internal sales decreased 0.8 percent compared to the fiscal 2019 fourth quarter. Internal sales for the first two months of the fiscal fourth quarter, ended on March 21, increased 3.7 percent compared to the same period last year.

Full-Year Fiscal 2020 Results

Patterson’s fiscal 2020 results reflect the sales, profitability and cash flow improvements the Company achieved throughout the first 11 months of its fiscal year, which enabled Patterson to deliver year-over-year adjusted earnings growth despite the end market disruption caused by COVID-19 starting in late-March and April.

Consolidated reported net sales for fiscal 2020 totaled $5.49 billion, a 1.5 percent year-over-year decrease. Internal sales decreased 0.9 percent compared to fiscal 2019. Internal sales for the first 11 months of the fiscal year, ended on March 21, increased 2.7 percent compared to the same period last year. Reported net loss attributable to Patterson Companies, Inc. was $588.4 million, or $6.25 per diluted share, compared to reported net income attributable to Patterson Companies, Inc. of $83.6 million, or $0.89 per diluted share in fiscal 2019. The year-over-year decline was primarily attributable to a pre-tax $675.1 million goodwill impairment charge related to our Animal Health segment.

Adjusted net income1 attributable to Patterson Companies, Inc., which excludes deal amortization, integration and business restructuring expenses, certain legal expenses, accelerated debt-related costs, discrete tax matters, investment (gain) loss and goodwill impairment, totaled $147.6 million, or $1.55 per diluted share, compared to $130.9 million, or $1.40 per diluted share, in the year-ago period. This represents a 10.7 percent improvement over the prior year. The year-over-year increase is primarily attributable to improved performance in the Dental segment across consumables, equipment and value-added services.

Balance Sheet and Capital Allocation

During the full year of fiscal 2020 Patterson Companies used $243.5 million of cash from operating activities and collected deferred purchase price receivables of $540.9 million, netting $297.4 million in cash, compared to a total of $450.5 million during the full year of fiscal 2019. The previous year period contained a trade accounts receivable facility amount of $171.0 million and the current period contained a trade accounts receivable facility amount of $29.0 million. Free cash flow1 (see definition below and attached free cash flow table) generated during fiscal 2020 is $7.8 million higher than the fiscal 2019 period primarily due to a decrease in working capital.

In the fourth quarter of fiscal 2020, Patterson Companies paid $24.9 million in cash dividends to shareholders. For the full fiscal year, Patterson has returned $100.4 million in cash dividends to shareholders.

 

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

 

Fiscal 2021 Guidance

Given the ongoing disruption of North American and international market conditions and the inability to accurately predict the economic effects of COVID-19 and related government actions, Patterson is not issuing fiscal 2021 earnings guidance at this time.

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 operating (loss) income, (loss) income before taxes, income tax (benefit) expense, net (loss) income attributable to Patterson Companies, Inc. and diluted (loss) earnings per share attributable to Patterson Companies, Inc., for the impact of deal amortization, integration and business restructuring expenses, certain legal expenses, accelerated debt-related costs, discrete tax matters, investment (gain) loss and goodwill impairment, along with the related tax effects of these items.

The term “free cash flow” used in this release is defined as net cash (used in) provided by operating activities less capital expenditures less the one-time benefit from the initiation of our trade account receivables facilities plus collection of deferred purchase price receivables.

In addition, the term “internal sales” used in this release represents net sales adjusted to exclude foreign currency impact and changes in product selling relationships. 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.

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

Fourth-Quarter Conference Call and Replay

Patterson Companies’ fiscal 2020 fourth-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 the Patterson Companies website. A replay of the fiscal 2020 fourth-quarter conference call can be heard for one week at 800-585-8367 and by providing the Conference ID 7898036 when prompted.

About Patterson Companies, Inc.

Patterson Companies, Inc. (Nasdaq: PDCO) 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.

 

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

 

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: the effects of the highly competitive dental and animal health supply markets in which we compete; the COVID-19 pandemic and measures taken in response thereto; general economic conditions, including political and economic uncertainty; risks from disruption to our information systems; our ability to comply with restrictive covenants in our amended credit agreement; our dependence on relationships with sales representatives, service technicians and customers; our ability to realize the long-term strategic benefits of our acquisition of Animal Health International; potential disruption of distribution capabilities, including service issues with third-party shippers; our ability to provide our sales force and customers with the latest technology; our dependence on suppliers for the manufacture and supply of the products we sell; material changes in our purchasing relationship with suppliers; the risk that private label sales could adversely affect our relationships with suppliers; our dependence on positive perceptions of Patterson’s reputation; risks inherent in acquiring other businesses; the risk that our acquired technology or developed technology might not be successful in maintaining or gaining customers; litigation risks, including new or unanticipated litigation developments and new or unanticipated regulatory investigations; changes in consumer preferences; regulatory restrictions; the cyclicality of the livestock market; the outbreak of an infectious disease within the production animal or companion animal population; pressure from animal rights groups; adverse changes in supplier rebates; fluctuations in quarterly financial results; volatility in the price of our stock; risks from the expansion of customer purchasing power; increases in over-the-counter sales of companion animal products; the risks inherent in international operations, including currency fluctuations; the effects of health care reform; failure to comply with regulatory requirements and data privacy laws; cyberattacks or other privacy or data security breaches; the risk of the products we sell becoming obsolete or containing undetected errors; volatility in the financial markets; our dependence on our senior management; our dependence on leadership development and succession planning; disruptions from our enterprise resource planning system; risks associated with shareholder activism; the risk of being required to record impairment charges; the risk of audit by tax authorities; risks associated with interest rate fluctuations; and the risk that our governing documents and Minnesota law may discourage takeovers and business combinations. 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.

 

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

 

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.

 

INVESTOR CONTACT:    John M. Wright, Investor Relations
COMPANY:    Patterson Companies Inc.
TEL:    651.686.1364
EMAIL:    john.wright@pattersoncompanies.com
MEDIA CONTACT:    Patterson Corporate Communications
COMPANY:    Patterson Companies Inc.
TEL:    651.905.3349
EMAIL:    corporate.communications@pattersoncompanies.com
WEB:    pattersoncompanies.com
SOURCE:    Patterson Companies Inc.

# # #

 

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

 

PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended     Twelve Months Ended  
     April 25,
2020
    April 27,
2019
    April 25,
2020
    April 27,
2019
 

Net sales

   $ 1,286,461   $ 1,436,706   $ 5,490,011   $ 5,574,523

Gross profit

     294,032     312,527     1,197,410     1,190,775

Operating expenses

     233,440     265,904     1,094,474     1,053,059

Goodwill impairment

     675,055     —         675,055     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income

     (614,463     46,623     (572,119     137,716

Other (expense) income:

        

Other (expense) income, net

     (10,994     (443     23,499     8,178

Interest expense

     (7,467     (9,817     (41,787     (39,666
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before taxes

     (632,924     36,363     (590,407     106,228

Income tax (benefit) expense

     (24,127     8,678     (1,040     23,352
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

     (608,797     27,685     (589,367     82,876

Net loss attributable to noncontrolling interests

     (211     (305     (921     (752
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to Patterson Companies, Inc.

   $ (608,586   $ 27,990   $ (588,446   $ 83,628
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) earnings per share attributable to Patterson Companies, Inc.:

        

Basic

   $ (6.44   $ 0.30   $ (6.25   $ 0.90
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (6.44   $ 0.30   $ (6.25   $ 0.89
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares:

        

Basic

     94,462     92,990     94,154     92,755

Diluted

     94,462     93,899     94,154     93,484

Dividends declared per common share

   $ 0.26   $ 0.26   $ 1.04   $ 1.04

 

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

 

PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

     April 25,
2020
     April 27,
2019
 

ASSETS

     

Current assets:

     

Cash and cash equivalents

   $ 77,944    $ 95,646

Receivables, net

     416,523      582,094

Inventory

     812,194      761,018

Prepaid expenses and other current assets

     236,104      165,605
  

 

 

    

 

 

 

Total current assets

     1,542,765      1,604,363

Property and equipment, net

     303,725      305,790

Operating lease right-of-use assets, net

     79,021      —    

Goodwill and identifiable intangibles, net

     452,229      1,167,379

Long-term receivables, net and other

     337,610      191,737
  

 

 

    

 

 

 

Total assets

   $ 2,715,350    $ 3,269,269
  

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current liabilities:

     

Accounts payable

   $ 862,093    $ 648,418

Other accrued liabilities

     182,099      203,319

Operating lease liabilities

     30,706      —    

Current maturities of long-term debt

     —          23,975
  

 

 

    

 

 

 

Total current liabilities

     1,074,898      875,712

Long-term debt

     587,766      725,341

Non-current operating lease liabilities

     49,854      —    

Other non-current liabilities

     166,388      187,709
  

 

 

    

 

 

 

Total liabilities

     1,878,906      1,788,762

Stockholders’ equity

     836,444      1,480,507
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 2,715,350    $ 3,269,269
  

 

 

    

 

 

 

 

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

 

PATTERSON COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

     Twelve Months Ended  
     April 25,
2020
    April 27,
2019
 

Operating activities:

    

Net (loss) income

   $ (589,367   $ 82,876

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

    

Depreciation and amortization

     82,182     82,773

Investment gain

     (34,334     —    

Goodwill impairment

     675,055     —    

Non-cash employee compensation

     37,354     33,425

Deferred consideration in securitized receivables

     (540,944     (402,367

Change in assets and liabilities, net of acquired

     126,510     251,451
  

 

 

   

 

 

 

Net cash (used in) provided by operating activities

     (243,544     48,158

Investing activities:

    

Additions to property and equipment

     (41,809     (60,734

Collection of deferred purchase price receivables

     540,944     402,367

Other investing activities

     —         (906
  

 

 

   

 

 

 

Net cash provided by investing activities

     499,135     340,727

Financing activities:

    

Dividends paid

     (100,442     (99,468

Proceeds from issuance of long-term debt, net

     296,700     —    

Payments on long-term debt

     (460,840     (249,542

Payments on revolving credit

     —         (16,000

Other financing activities

     (6,647     9,764
  

 

 

   

 

 

 

Net cash used in financing activities

     (271,229     (355,246

Effect of exchange rate changes on cash

     (2,064     (977
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (17,702     32,662

Cash and cash equivalents at beginning of period

     95,646     62,984
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 77,944   $ 95,646
  

 

 

   

 

 

 

 

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

 

PATTERSON COMPANIES, INC.

SALES SUMMARY

(Dollars in thousands)

(Unaudited)

 

     April 25,
2020
     April 27,
2019
     Total
Sales
Growth
    Foreign
Exchange
Impact
    Other (a)     Internal
Sales
Growth
 

Three Months Ended

              

Consolidated net sales

              

Consumable

   $ 1,062,259    $ 1,154,802      (8.0 )%      (0.5 )%      —       (7.5 )% 

Equipment and software

     124,535      190,536      (34.6     (0.1     —         (34.5

Value-added services and other

     99,667      91,368      9.1       (0.2     —         9.3  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 1,286,461    $ 1,436,706      (10.5 )%      (0.5 )%      —       (10.0 )% 
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Dental

              

Consumable

   $ 230,543    $ 312,061      (26.1 )%      (0.1 )%      —       (26.0 )% 

Equipment and software

     110,798      174,572      (36.5     (0.1     —         (36.4

Value-added services and other

     68,253      76,844      (11.2     (0.1     —         (11.1
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 409,594    $ 563,477      (27.3 )%      (0.1 )%      —       (27.2 )% 
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Animal Health

              

Consumable

   $ 831,716    $ 842,741      (1.3 )%      (0.7 )%      —       (0.6 )% 

Equipment and software

     13,737      15,964      (14.0     —         —         (14.0

Value-added services and other

     7,788      7,706      1.1       (1.2     —         2.3  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 853,241    $ 866,411      (1.5 )%      (0.7 )%      —       (0.8 )% 
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Corporate

              

Value-added services and other

   $ 23,626    $ 6,818      246.5     —       —       246.5
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 23,626    $ 6,818      246.5     —       —       246.5
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Sales of certain products previously recognized on a gross basis were recognized on a net basis during the three and twelve months ended April 25, 2020.

 

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

 

PATTERSON COMPANIES, INC.

SALES SUMMARY

(Dollars in thousands)

(Unaudited)

 

     April 25,
2020
     April 27,
2019
     Total
Sales
Growth
    Foreign
Exchange
Impact
    Other (a)     Internal
Sales
Growth
 

Twelve Months Ended

              

Consolidated net sales

              

Consumable

   $ 4,378,018    $ 4,482,016      (2.3 )%      (0.5 )%      (0.2 )%      (1.6 )% 

Equipment and software

     736,702      753,805      (2.3     (0.1     —         (2.2

Value-added services and other

     375,291      338,702      10.8       (0.2     —         11.0  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 5,490,011    $ 5,574,523      (1.5 )%      (0.4 )%      (0.2 )%      (0.9 )% 
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Dental

              

Consumable

   $ 1,136,083    $ 1,214,814      (6.5 )%      (0.1 )%      —       (6.4 )% 

Equipment and software

     677,548      694,864      (2.5     (0.1     —         (2.4

Value-added services and other

     288,291      282,112      2.2       (0.1     —         2.3  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 2,101,922    $ 2,191,790      (4.1 )%      (0.1 )%      —       (4.0 )% 
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Animal Health

              

Consumable

   $ 3,241,935    $ 3,267,202      (0.8 )%      (0.6 )%      (0.3 )%      0.1

Equipment and software

     59,154      58,941      0.4       —         —         0.4  

Value-added services and other

     35,164      28,385      23.9       (1.2     —         25.1  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 3,336,253    $ 3,354,528      (0.5 )%      (0.6 )%      (0.3 )%      0.4
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Corporate

              

Value-added services and other

   $ 51,836    $ 28,205      83.8     —       —       83.8
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 51,836    $ 28,205      83.8     —       —       83.8
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Sales of certain products previously recognized on a gross basis were recognized on a net basis during the three and twelve months ended April 25, 2020.

 

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

 

PATTERSON COMPANIES, INC.

OPERATING (LOSS) INCOME BY SEGMENT

(In thousands)

(Unaudited)

 

     Three Months Ended     Twelve Months Ended  
     April 25,
2020
    April 27,
2019
    April 25,
2020
    April 27,
2019
 

Operating (loss) income

        

Dental

   $ 32,846   $ 50,649   $ 168,304   $ 179,236

Animal Health

     (645,979     25,376     (594,743     81,472

Corporate

     (1,330     (29,402     (145,680     (122,992
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ (614,463   $ 46,623   $ (572,119   $ 137,716
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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

 

PATTERSON COMPANIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(Dollars in thousands, except per share amounts)

(Unaudited)

 

For the three months

ended April 25, 2020

  GAAP     Deal
amortization
    Integration
and

business
restructuring
expenses
    Legal
expenses
    Accelerated
debt-related
costs
    Discrete
tax
matters
    Investment
(gain) loss
    Goodwill
impairment
    Non-GAAP  

Operating (loss) income

  $ (614,463   $ 9,252   $ 2,000   $ —       $ —       $ —       $ —       $ 675,055   $ 71,844

Other expense, net

    (18,461     —         —         —         —         —         623     —         (17,838
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before taxes

    (632,924     9,252     2,000     —         —         —         623     675,055     54,006

Income tax (benefit) expense

    (24,127     2,201     500     —         —         —         156     34,428     13,158
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

    (608,797     7,051     1,500     —         —         —         467     640,627     40,848

Net loss attributable to noncontrolling interests

    (211     —         —         —         —         —         —         —         (211
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to Patterson Companies, Inc.

  $ (608,586   $ 7,051   $ 1,500   $ —       $ —       $ —       $ 467   $ 640,627   $ 41,059
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares*

    94,462                     95,394

Diluted (loss) earnings per share attributable to Patterson Companies, Inc.**

  $ (6.44   $ 0.07   $ 0.02   $ —       $ —       $ —       $ —       $ 6.72   $ 0.43
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income as a % of sales

    (47.8 )%                    5.6

Effective tax rate

    3.8                   24.4

For the three months

ended April 27, 2019

  GAAP     Deal
amortization
    Integration
and

business
restructuring
expenses
    Legal
expenses
    Accelerated
debt-related
costs
    Discrete
tax
matters
    Investment
(gain) loss
    Goodwill
impairment
    Non-GAAP  

Operating (loss) income

  $ 46,623     $ 9,238   $ —       $ —       $ —       $ —       $ —       $ —       $ 55,861

Other expense, net

    (10,260     —         —         —         —         —         —         —         (10,260
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before taxes

    36,363       9,238     —         —         —         —         —         —         45,601

Income tax (benefit) expense

    8,678       2,198     —         —         —         —         —         —         10,876
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

    27,685       7,040     —         —         —         —         —         —         34,725

Net loss attributable to noncontrolling interests

    (305     —         —         —         —         —         —         —         (305
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to Patterson Companies, Inc.

  $ 27,990     $ 7,040   $ —       $ —       $ —       $ —       $ —       $ —       $ 35,030
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares*

    93,899                     93,899

Diluted (loss) earnings per share attributable to Patterson Companies, Inc.**

  $ 0.30     $ 0.07   $ —       $ —       $ —       $ —       $ —       $ —       $ 0.37
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income as a % of sales

    3.2                   3.9

Effective tax rate

    23.9                   23.9

 

*

When we present GAAP or non-GAAP net loss attributable to Patterson Companies, Inc., incremental shares related to dilutive securities are not included in the diluted EPS calculation because they would have an anti-dilutive impact on EPS. When we present GAAP or non-GAAP net income attributable to Patterson Companies, Inc., incremental shares related to dilutive securities are included in the diluted EPS calculation.

**

May not sum due to rounding and difference in weighted average shares used to calculate diluted (loss) earnings per share.

 

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

 

PATTERSON COMPANIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(Dollars in thousands, except per share amounts)

(Unaudited)

 

For the twelve months

ended April 25, 2020

  GAAP     Deal
amortization
    Integration
and business
restructuring
expenses
    Legal
expenses‡
    Accelerated
debt-related
costs
    Discrete
tax
matters
    Investment
(gain) loss
    Goodwill
impairment
    Non-GAAP  

Operating (loss) income

  $ (572,119   $ 37,010   $ 15,461   $ 81,254   $ —       $ —       $ —       $ 675,055   $ 236,661

Other expense, net

    (18,288     —         —         —         9,943     —         (33,711     —         (42,056
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before taxes

    (590,407     37,010     15,461     81,254     9,943     —         (33,711     675,055     194,605

Income tax (benefit) expense

    (1,040     8,802     3,870     7,113     2,486     —         (7,728     34,428     47,931
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

    (589,367     28,208     11,591     74,141     7,457     —         (25,983     640,627     146,674

Net loss attributable to noncontrolling interests

    (921     —         —         —         —         —         —         —         (921
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to Patterson Companies, Inc.

  $ (588,446   $ 28,208   $ 11,591   $ 74,141   $ 7,457   $ —       $ (25,983   $ 640,627   $ 147,595
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares*

    94,154                     95,059

Diluted (loss) earnings per share attributable to Patterson Companies, Inc.**

  $ (6.25   $ 0.30   $ 0.12   $ 0.78   $ 0.08   $ —       $ (0.27   $ 6.74   $ 1.55
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income as a % of sales

    (10.4 )%                    4.3

Effective tax rate

    0.2                   24.6

For the twelve months

ended April 27, 2019

  GAAP     Deal
amortization
    Integration
and business
restructuring
expenses
    Legal
expenses
    Accelerated
debt-related
costs
    Discrete
tax
matters
    Investment
(gain) loss
    Goodwill
impairment
    Non-GAAP  

Operating (loss) income

  $ 137,716     $ 38,193   $ —       $ 28,263   $ —       $ —       $ —       $ —       $ 204,172

Other expense, net

    (31,488     —         —         —         —         —         —         —         (31,488
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before taxes

    106,228       38,193     —         28,263     —         —         —         —         172,684

Income tax (benefit) expense

    23,352       8,992     —         7,523     —         2,686     —         —         42,553
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

    82,876       29,201     —         20,740     —         (2,686     —         —         130,131

Net loss attributable to noncontrolling interests

    (752     —         —         —         —         —         —         —         (752
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income attributable to Patterson Companies, Inc.

  $ 83,628     $ 29,201   $ —       $ 20,740   $ —       $ (2,686   $ —       $ —       $ 130,883
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares*

    93,484                     93,484

Diluted (loss) earnings per share attributable to Patterson Companies, Inc.**

  $ 0.89     $ 0.31   $ —       $ 0.22   $ —       $ (0.03   $ —       $ —       $ 1.40
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating (loss) income as a % of sales

    2.5                   3.7

Effective tax rate

    22.0                   24.6

 

Includes costs and expenses incurred in the first quarter of fiscal 2020 of $17,666 related to the settlement of litigation with SourceOne Dental, Inc., costs and expenses incurred in the second quarter of fiscal 2020 of $58,300 related to the probable settlement of litigation with the U.S. Attorney’s Office for the Western District of Virginia and $5,288 related to other settlements.

*

When we present GAAP or non-GAAP net loss attributable to Patterson Companies, Inc., incremental shares related to dilutive securities are not included in the diluted EPS calculation because they would have an anti-dilutive impact on EPS. When we present GAAP or non-GAAP net income attributable to Patterson Companies, Inc., incremental shares related to dilutive securities are included in the diluted EPS calculation.

**

May not sum due to rounding and difference in weighted average shares used to calculate diluted (loss) earnings per share.

 

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

 

PATTERSON COMPANIES, INC.

FREE CASH FLOW

(In thousands)

(Unaudited)

 

     Twelve Months Ended  
     April 25,
2020
    April 27,
2019
 

Net cash (used in) provided by operating activities

   $ (243,544   $ 48,158

Additions to property and equipment

     (41,809     (60,734

Collection of deferred purchase price receivables

     540,944     402,367

Impact of trade account receivables facility

     (29,000     (171,000
  

 

 

   

 

 

 

Free cash flow

   $ 226,591   $ 218,791
  

 

 

   

 

 

 

 

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