Patterson Companies, Inc. (Nasdaq: PDCO) today reported that consolidated sales totaled $1.1 billion in its fiscal second quarter ended October 25, 2014, an increase of 10.5 percent from $998.8 million in the year-earlier period. Organic sales were up more than 7 percent, after excluding the incremental impact of the National Veterinary Services Limited (NVS) acquisition and the Medical unit restructuring, which both occurred in the prior fiscal year. Net income increased to $53.8 million, from adjusted net income of $48.7 million in the year-ago period. Fiscal 2015 second quarter earnings per diluted share was $0.54, up 12.5 percent from adjusted earnings per diluted share of $0.48, in the year-ago period.

Fiscal 2014 second quarter adjusted earnings of $0.48 per diluted share excluded approximately $0.07 per share of costs related to last year’s Medical unit restructuring. Fiscal 2015 second quarter results included three additional weeks of contribution from the NVS acquisition. The acquisition, which closed on August 16, 2013, will not affect year-over-year comparisons going forward.

“Patterson Companies produced double-digit sales growth in the fiscal second quarter and we are pleased with the performance across all three of our businesses,” said Scott Anderson, chairman and chief executive officer. “During the quarter, we saw the scale and leverage of the company’s business model provide the platform for us to focus on our customers and exceed their expectations.”

Patterson Dental
Sales for Patterson Dental, Patterson’s largest business that accounts for 55 percent of total sales, increased 7.5 percent on a constant currency basis from the year-earlier period to $601.7 million in the second quarter of fiscal 2015. By category, also on a constant currency basis versus the year-ago quarter, sales of:

• Consumable dental supplies totaled $336.2 million, up 3.1 percent from the prior year;
• Dental equipment and software rose 16.2 percent from the year-earlier level, with strong contributions from both basic equipment and technology sales, led by new users of CEREC CAD/CAM systems; and
• Other services and products, consisting primarily of technical service, parts and labor, software support services and artificial teeth, increased 6.8 percent.

Commented Anderson, “Solid growth in sales of consumables was augmented by double-digit gains in basic equipment and technology sales. Patterson Dental is known for providing customers with industry-leading technology that is supported by an unparalleled suite of value-added services. This model continues to be validated in the market as we executed well in equipment sales throughout North America.”

Patterson Veterinary
Second quarter fiscal 2015 sales for Patterson Veterinary increased 22.2 percent from the prior year period to $376.5 million. U.S. sales were up 6.4 percent from the prior year, to $202.5 million. For U.S. veterinary sales, versus the year-ago second quarter:

• Consumable sales rose to $190.9 million, up 7.4 percent;
• Equipment sales declined to $8.2 million, from $9.4 million;
• Sales of other services and products, consisting primarily of technical service, parts and labor, and software support services, were $3.4 million, up 4.3 percent to prior year.

Anderson continued, “Patterson Veterinary, which now constitutes just over one-third of our total sales, reported growth in both the United States and the United Kingdom in the fiscal second quarter. NVS, our U.K.-based veterinary business, has been a great acquisition and gained additional market share in that region. We are confident that we will continue to take advantage of the growth opportunities that result from our expanded geographic footprint.”

Patterson Medical
Sales for Patterson Medical, the rehabilitation supply and equipment business, increased nearly 2 percent, to $125.1 million, after excluding the impact of the fiscal 2014 planned divestiture of certain non-core assets. Consolidated sales of Patterson Medical currently represent approximately 11 percent of total company sales.

Anderson said, “We were encouraged to see sales growth for the ongoing operations of Patterson Medical in the fiscal second quarter, reversing the trends of the past several quarters. Our renewed focus and strategic execution is having the desired effect on this segment, which delivered improved performance in the period. We expect our strong portfolio of value-added products to capture future growth opportunities in the rehabilitation market.”

Share Repurchases and Dividends
Year to date, Patterson repurchased approximately 1.2 million shares of its outstanding common stock, with a value of $47.5 million, leaving approximately 21 million shares for repurchase under the current authorization. In the fiscal 2015 second quarter, approximately 90,000 shares, with a value of $3.6 million, were repurchased. The company also paid $20.2 million in cash dividends to shareholders in the quarter and $40.2 million in the first half of fiscal 2015.

Year to Date Results
Consolidated sales for the first six months of fiscal 2015 totaled $2.2 billion, an increase of more than 15 percent from $1.9 billion in the year-earlier period. Net income was $104.1 million, or $1.04 per diluted share, compared to adjusted net income of $94.6 million, or $0.93 per diluted share, in the year-ago period; results from the first half of fiscal 2014 exclude $0.07 per share of costs for the Patterson Medical restructuring.

Business Outlook
Commented Anderson, “We are maintaining our earnings guidance range for fiscal 2015 of $2.20-$2.30 per diluted share and remain focused on execution; first, by capitalizing on the growth opportunities available through the investments we are making and, second, through our strategies to further enhance our product and service offerings. In summary, we are well-positioned as we enter the second half of the year when we experience our heaviest sales volumes.”

The following non-GAAP table is provided to adjust reported net income for the impact of the costs associated with restructuring the medical segment. Management believes that the adjusted income amounts provide a helpful representation of the current quarter performance of the Company.

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 web site. A replay of the second quarter conference call can be heard for one week at 888-203-1112 and by providing the Conference ID 3519682, when prompted.

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
Patterson Veterinary is a leading distributor in the U.S. and U.K. of consumable veterinary supplies, equipment and software, diagnostic products, vaccines and pharmaceuticals predominantly 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. Any statements made in this press release about the Company’s future financial conditions, results of operations, expectations, plans, or prospects, including the information under the heading “Business Outlook”, constitute forward-looking statements. Forward-looking statements also include those preceded or followed by the words "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," “projects,” “should,” "targets" and/or similar expressions. These forward-looking statements are based on the Company’s current estimates and assumptions and, as such, involve uncertainty and risk. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those contemplated by the forward-looking statements because of a number of factors, including the factors described in Item 1A of the Company’s most recent Annual Report on Form 10-K, which factors are incorporated herein by reference. Any forward-looking statement in this release speaks only as of the date in which it is made. Except to the extent required under the federal securities laws, the Company does not intend to update or revise the forward-looking statements.