UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
August 23, 2012
Date of report
PATTERSON COMPANIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Minnesota | 0-20572 | 41-0886515 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
1031 Mendota Heights Road
St. Paul, Minnesota 55120
(Address of Principal Executive Offices, including Zip Code)
(651) 686-1600
(Registrants Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
On August 23, 2012 Patterson Companies, Inc. issued a press release announcing its financial results for the first quarter of fiscal year 2013 ended July 28, 2012. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(d) EXHIBITS
99.1 | Press release of Patterson Companies, Inc., dated August 23, 2012. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PATTERSON COMPANIES, INC. | ||||||
Date: August 23, 2012 | By: | /s/ R. Stephen Armstrong | ||||
R. Stephen Armstrong | ||||||
Executive Vice President, Treasurer and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
EXHIBIT INDEX
Exhibit Number |
Description | |
99.1 | Press release of Patterson Companies, Inc., dated August 23, 2012. |
Exhibit 99.1
Patterson Companies Reports On-Plan First Quarter Operating Results
St. Paul, MNAugust 23, 2012Patterson Companies, Inc. (Nasdaq: PDCO) today reported operating results for the first quarter of fiscal 2013 ended July 28.
| Consolidated sales increased 5% to $889,225,000 from $847,422,000 in the year-earlier period. |
| Net income of $47,538,000 or $0.45 per diluted share, compared to $48,610,000 or $0.42 per diluted share in the first quarter of fiscal 2012. Net income in this years first quarter was affected by the absorption of $3.2 million of incremental interest expense related to Pattersons debt issuance in the third quarter of fiscal 2012. |
Sales of Patterson Dental, Pattersons largest business, increased 6% from the year-earlier period to $567,392,000 in this years first quarter.
| Sales of consumable dental supplies and printed office products increased 1% in the first quarter, excluding the 0.6% negative impact related to Canadian currency exchange rates. |
| Sales of dental equipment and software rose more than 19% from the year-earlier level, driven by double-digit sales increases of both CEREC® dental restorative systems and basic equipment. |
| Sales of other services and products, consisting primarily of technical service, parts and labor, software support services and artificial teeth, increased 3% from last years first quarter. |
Internally generated sales of the Webster Veterinary unit increased more than 10% in the first quarter. A change in a distribution agreement for nutritional products late in last years fourth quarter reduced Websters first quarter sales growth by approximately six percentage points, while the August 2011 acquisition of American Veterinary Supply Corporation added 2.5 percentage points of sales growth. Reflecting these factors, Websters first quarter sales increased nearly 6.5% to $191,090,000. Sales of Patterson Medical, the rehabilitation supply and equipment unit, declined 3% to $130,743,000, due primarily to weakness in its equipment business. The impact of negative foreign exchange rates largely offset the nearly 2% sales contribution from Patterson Medicals April 2012 acquisition of Surgical Synergies Pty Ltd., a distributor of physiotherapy, rehabilitation and mobility products serving the Australian and New Zealand markets.
Scott P. Anderson, president and chief executive officer, commented: We are generally pleased with Pattersons on-plan first quarter results despite persistently soft economic conditions both in North America and our foreign markets. Within Patterson Dental, sales of consumable supplies were below forecasted levels, and we are intensifying our focus on this key component of our sales mix. However, the exceptionally strong sales growth of CEREC products and low double-digit sales growth of basic equipment more than compensated for the below-plan consumables sales. Our robust CEREC sales were generated in part by strong demand from new users, reflecting the ongoing trend toward the digitization of dentistry. We believe sales will receive an additional boost from the recent introduction by Sirona Dental Systems, Inc. (NYSE: SIRO) of a revolutionary powder-free intraoral camera that will make CEREC significantly easier to use. This camera, which will be available on new CEREC systems, will start selling in the second quarter as production ramps up. In addition, Patterson and Sirona, the undisputed leader in digital dental technology that also manufactures Schick® digital sensors, recently expanded our exclusive North American marketing agreement to cover Sironas complete product line, including digital panoramic and cone beam x-rays. This move further strengthens Patterson Dentals position as the leading distributor of dental technology and other equipment.
Webster, whose solid first quarter sales growth was generated by robust demand for consumable supplies, is currently implementing a range of strategies aimed at further strengthening its full-service platform, he continued. The expansion and training of its field sales force are aimed at boosting sales of both consumables and equipment. To further spur its equipment business, Webster plans to achieve full national coverage for technical support by the end of fiscal 2013. In addition, Webster is continuing to strengthen its growing range of technology solutions for veterinarians and their clients. Reflecting these and other initiatives, Webster is strengthening its competitive position to capitalize upon favorable pet ownership and consumer spending trends, and we intend to continue investing in this growing business.
Anderson added: First quarter sales of Patterson Medicals industry-leading range of consumable supplies were largely consistent with forecasted levels. Despite U.S. healthcare regulatory uncertainties and the weak economic environment both here and abroad, we believe Patterson Medical, as the only single source of supply in the rehabilitation market, is strongly positioned to take maximum advantage of worldwide demographic trends that will have a favorable long-term affect on the rehabilitation market.
Patterson repurchased approximately 1.1 million common shares during the first quarter under its 25 million-share buyback authorization that expires in 2016. Approximately 10 million shares remain available for repurchase under this authorization.
Patterson remains on track toward achieving its previously issued financial guidance of $2.10 to $2.16 per diluted share in fiscal 2013.
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 Pattersons 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 a leading distributor of consumable veterinary supplies, equipment and software, diagnostic products, vaccines and pharmaceuticals to companion-pet veterinary clinics.
Rehabilitation Market
Patterson Medical is the worlds leading distributor of rehabilitation supplies and non-wheelchair assistive patient products to the physical and occupational therapy markets. The units 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 Companys 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 Companys 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 Companys filings with the Securities and Exchange Commission.
For additional information contact:
R. Stephen Armstrong | Richard G. Cinquina | |
Executive Vice President & CFO | Equity Market Partners | |
651/686-1600 |
904/415-1415 |
First Quarter Conference Call and Replay
Pattersons first 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. The conference call will be archived on Pattersons web site. A replay of the first quarter conference call can be heard for one month at 1-303-590-3030 and providing the conference ID: 4559525.
PATTERSON COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share amounts)
(Unaudited)
Three Months Ended | ||||||||
July 28, 2012 |
July 30, 2011 |
|||||||
Net sales |
$ | 889,225 | $ | 847,422 | ||||
Gross profit |
285,700 | 278,276 | ||||||
Operating expenses |
203,108 | 196,283 | ||||||
|
|
|
|
|||||
Operating income |
82,592 | 81,993 | ||||||
Other expense, net |
(8,891 | ) | (5,135 | ) | ||||
|
|
|
|
|||||
Income before taxes |
73,701 | 76,858 | ||||||
Income taxes |
26,163 | 28,248 | ||||||
|
|
|
|
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Net income |
$ | 47,538 | $ | 48,610 | ||||
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Earnings per share: |
||||||||
Basic |
$ | 0.45 | $ | 0.42 | ||||
Diluted |
$ | 0.45 | $ | 0.42 | ||||
Shares: |
||||||||
Basic |
105,035 | 115,576 | ||||||
Diluted |
105,783 | 116,285 | ||||||
Dividends declared per common share |
$ | 0.14 | $ | 0.12 | ||||
Gross margin |
32.1 | % | 32.8 | % | ||||
Operating expenses as a % of net sales |
22.8 | % | 23.2 | % | ||||
Operating income as a % of net sales |
9.3 | % | 9.7 | % | ||||
Effective tax rate |
35.5 | % | 36.8 | % |
PATTERSON COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
July 28, 2012 |
April 28, 2012 |
|||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 580,753 | $ | 573,781 | ||||
Receivables, net |
413,690 | 464,869 | ||||||
Inventory |
318,128 | 319,952 | ||||||
Prepaid expenses and other current assets |
49,039 | 44,911 | ||||||
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|
|
|
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Total current assets |
1,361,610 | 1,403,513 | ||||||
Property and equipment, net |
193,495 | 195,465 | ||||||
Goodwill and other intangible assets |
1,019,165 | 1,022,809 | ||||||
Investments and other |
126,202 | 117,581 | ||||||
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|
|
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Total Assets |
$ | 2,700,472 | $ | 2,739,368 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 202,253 | $ | 207,915 | ||||
Other accrued liabilities |
174,101 | 196,733 | ||||||
Current maturities of long-term debt |
125,000 | 125,000 | ||||||
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|
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Total current liabilities |
501,354 | 529,648 | ||||||
Long-term debt |
725,000 | 725,000 | ||||||
Other non-current liabilities |
108,376 | 109,518 | ||||||
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|
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Total liabilities |
1,334,730 | 1,364,166 | ||||||
Stockholders equity |
1,365,742 | 1,375,202 | ||||||
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Total Liabilities and Stockholders Equity |
$ | 2,700,472 | $ | 2,739,368 | ||||
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PATTERSON COMPANIES, INC.
SUPPLEMENTARY FINANCIAL DATA
(Dollars in thousands)
(Unaudited)
Three Months Ended | ||||||||
July 28, | July 30, | |||||||
2012 | 2011 | |||||||
Consolidated Net Sales |
||||||||
Consumable and printed products |
$ | 587,558 | $ | 574,962 | ||||
Equipment and software |
227,042 | 199,651 | ||||||
Other |
74,625 | 72,809 | ||||||
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|
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Total |
$ | 889,225 | $ | 847,422 | ||||
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Dental Supply |
||||||||
Consumable and printed products |
$ | 310,156 | $ | 308,869 | ||||
Equipment and software |
191,939 | 161,027 | ||||||
Other |
65,297 | 63,471 | ||||||
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Total |
$ | 567,392 | $ | 533,367 | ||||
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Rehabilitation Supply |
||||||||
Consumable and printed products |
$ | 96,027 | $ | 96,716 | ||||
Equipment and software |
27,889 | 31,057 | ||||||
Other |
6,827 | 6,679 | ||||||
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Total |
$ | 130,743 | $ | 134,452 | ||||
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Veterinary Supply |
||||||||
Consumable and printed products |
$ | 181,375 | $ | 169,377 | ||||
Equipment and software |
7,214 | 7,567 | ||||||
Other |
2,501 | 2,659 | ||||||
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Total |
$ | 191,090 | $ | 179,603 | ||||
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Other (Expense) Income, net |
||||||||
Interest income |
$ | 1,499 | $ | 1,829 | ||||
Interest expense |
(9,568 | ) | (6,353 | ) | ||||
Other |
(822 | ) | (611 | ) | ||||
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|
|
|||||
$ | (8,891 | ) | $ | (5,135 | ) | |||
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PATTERSON COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Three Months Ended | ||||||||
July 28, 2012 |
July 30, 2011 |
|||||||
Operating activities: |
||||||||
Net income |
$ | 47,538 | $ | 48,610 | ||||
Depreciation & amortization |
11,485 | 9,082 | ||||||
Stock-based compensation |
3,738 | 3,180 | ||||||
ESOP compensation |
5,700 | 5,700 | ||||||
Change in assets and liabilities, net of acquired |
(8,703 | ) | 144 | |||||
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Net cash provided by operating activities |
59,758 | 66,716 | ||||||
Investing activities: |
||||||||
Additions to property and equipment, net of disposals |
(3,206 | ) | (10,247 | ) | ||||
Acquisitions and equity investments |
| | ||||||
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Net cash used in investing activities |
(3,206 | ) | (10,247 | ) | ||||
Financing activities: |
||||||||
Dividends paid |
(14,817 | ) | (13,801 | ) | ||||
Share repurchases |
(34,472 | ) | (59,913 | ) | ||||
Other financing activities |
4,116 | 4,199 | ||||||
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Net cash used in financing activities |
(45,173 | ) | (69,515 | ) | ||||
Effect of exchange rate changes on cash |
(4,407 | ) | (1,843 | ) | ||||
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Net increase (decrease) in cash and cash equivalents |
$ | 6,972 | $ | (14,889 | ) | |||
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