Patterson Companies, Inc. (Nasdaq: PDCO) today reported consolidated net sales of $1.55 billion (see attached Sales Summary for further details) in its fiscal second quarter ended October 24, 2020, an increase of 9.5 percent compared to the same period last year. Internal sales, which are adjusted for the effects of currency translation, increased 9.0 percent.
Reported net income attributable to Patterson Companies, Inc. for the second quarter of fiscal 2021 was $54.1 million, or $0.56 per diluted share, compared to a net loss attributable to Patterson Companies, Inc., of $33.1 million, or a loss of $0.35 per diluted share, in the second quarter of fiscal 2020. Adjusted net income1 attributable to Patterson Companies, Inc., which excludes deal amortization, integration and business restructuring expenses, legal reserve costs, accelerated debt-related costs and an investment gain, totaled $61.1 million for the second quarter of fiscal 2021, or $0.63 per diluted share, compared to $36.6 million in the same quarter of fiscal 2020, or $0.39 per diluted share. The 62 percent year-over-year increase in the period is primarily attributed to strong sales execution, improved mix, and the benefit of continued expense discipline during the fiscal 2021 second quarter.
“Patterson’s strong revenue growth and adjusted earnings in the second quarter reflect the resilience of our customers and the focus and dedication of our team as we continue to successfully execute our strategy,” said Mark Walchirk, President and CEO of Patterson Companies. “Despite the disruption of the COVID-19 pandemic, focused investments in our people, technology and services have enabled us to deepen our partnerships with our customers and continue the sales momentum we are building across our Dental and Animal Health businesses.
“I am incredibly proud of the entire Patterson team and our ongoing efforts to protect employee health and safety while ensuring business continuity and support for our customers. I am confident in our ability to drive long-term value by capitalizing on opportunities as business conditions continue to improve in our end markets, while remaining prepared to address challenges related to the pandemic as the situation evolves.”
Patterson Dental
Reported net sales in our Dental segment for the second quarter of fiscal 2021, which represented approximately 41 percent of total company sales, were $631.7 million compared to $564.6 million in the second quarter of last year. Internal sales increased 12.1 percent compared to the fiscal 2020 second quarter.
Patterson Animal Health
Reported net sales in our Animal Health segment for the second quarter of fiscal 2021, which comprised approximately 59 percent of the company’s total sales, were $914.2 million compared to $848.2 million in the second quarter of last year. Internal sales for the segment increased 6.9 percent from the fiscal 2020 second quarter.
Balance Sheet and Capital Allocation
During the first six months of fiscal 2021, Patterson Companies used $423.0 million of cash from operating activities and collected deferred purchase price receivables of $408.9 million, resulting in a use of cash of $14.1 million, compared to generating $197.6 million in the first six months of fiscal 2020. Free cash flow1 (see definition below and attached free cash flow table) generated during the first six months of fiscal 2021 is down $203.3 million compared to the first six months of fiscal 2020, primarily due to an increased level of working capital in the period.
During the second quarter of fiscal 2021, Patterson Companies declared a quarterly cash dividend of $0.26 per share. On a year-to-date basis, Patterson has returned $25.0 million in cash dividends to shareholders.
Year-to-Date Results
Consolidated reported net sales for the first six months of fiscal 2021 totaled $2.80 billion, a 1.9 percent year-over-year increase. Internal sales have increased 1.8 percent compared to the first six months of fiscal 2020. Reported net income attributable to Patterson Companies, Inc. was $78.5 million, or $0.82 per diluted share, compared to a net loss attributable to Patterson Companies, Inc. of $3.1 million, or a net loss of $0.03 per diluted share in last year's period. Adjusted net income1 attributable to Patterson Companies, Inc., which excludes deal amortization, integration and business restructuring expenses, legal reserve costs, accelerated debt-related costs and an investment gain, totaled $92.6 million, or $0.96 per diluted share, compared to adjusted net income attributable to Patterson Companies, Inc. of $62.0 million, or $0.65 per diluted share, in the year-ago period.
Fiscal 2021 Guidance
Due to the continued uncertainty surrounding the COVID-19 pandemic and its impact on business operations, Patterson is not providing fiscal 2021 financial 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 income (loss), income (loss) before taxes, income tax expense, net income (loss), net income (loss) attributable to Patterson Companies, Inc. and diluted earnings (loss) per share attributable to Patterson Companies, Inc., for the impact of deal amortization, integration and business restructuring expenses, legal reserve costs, accelerated debt-related costs and an investment gain, 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 operating activities less capital expenditures plus collection of deferred purchase price receivables.
In addition, the term “internal sales” used in this release represents net sales adjusted to exclude the impact of foreign currency. 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 second-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.
Second-Quarter Conference Call and Replay
Patterson Companies’ fiscal 2021 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 the Patterson Companies website. A replay of the fiscal 2021 second-quarter conference call can be heard for one week at 800-585-8367 and by providing the Conference ID 1517668 when prompted.
About Patterson Companies Inc.
Patterson Companies Inc. (Nasdaq: PDCO) connects dental and animal health customers in North America and the U.K. to the latest products, technologies, services and innovative business solutions that enable operational and professional success. Our comprehensive portfolio, distribution network and supply chain is equaled only by our dedicated, knowledgeable people who deliver unrivalled expertise and unmatched customer service and support.
Learn more: pattersoncompanies.com
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.
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.
| PATTERSON COMPANIES, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| October 24, 2020 | October 26, 2019 | October 24, 2020 | October 26, 2020 | |||||||||||||
| Net sales | $ | 1,553,168 | $ | 1,418,744 | $ | 2,799,005 | $ | 2,747,395 | ||||||||
| Gross profit | 320,368 | 301,494 | 574,184 | 591,548 | ||||||||||||
| Operating expenses | 246,662 | 319,640 | 462,606 | 593,020 | ||||||||||||
| Operating income (loss) | 73,706 | (18,146 | ) | 111,578 | (1,472 | ) | ||||||||||
| Other income (expense): | ||||||||||||||||
| Other income, net | 3,223 | 269 | 5,257 | 32,186 | ||||||||||||
| Interest expense | (6,381 | ) | (9,046 | ) | (13,072 | ) | (17,736 | ) | ||||||||
| Income (loss) before taxes | 70,548 | (26,923 | ) | 103,763 | 12,978 | |||||||||||
| Income tax expense | 16,722 | 6,426 | 25,735 | 16,520 | ||||||||||||
| Net income (loss) | 53,826 | (33,349 | ) | 78,028 | (3,542 | ) | ||||||||||
| Net loss attributable to noncontrolling interests | (234 | ) | (220 | ) | (439 | ) | (455 | ) | ||||||||
| Net income (loss) attributable to Patterson Companies, Inc. | $ | 54,060 | $ | (33,129 | ) | $ | 78,467 | $ | (3,087 | ) | ||||||
| Earnings (loss) per share attributable to Patterson Companies, Inc.: | ||||||||||||||||
| Basic | $ | 0.57 | $ | (0.35 | ) | $ | 0.82 | $ | (0.03 | ) | ||||||
| Diluted | $ | 0.56 | $ | (0.35 | ) | $ | 0.82 | $ | (0.03 | ) | ||||||
| Weighted average shares: | ||||||||||||||||
| Basic | 95,518 | 94,093 | 95,341 | 93,944 | ||||||||||||
| Diluted | 96,415 | 94,093 | 96,105 | 93,944 | ||||||||||||
| Dividends declared per common share | $ | 0.26 | $ | 0.26 | $ | 0.52 | $ | 0.52 | ||||||||
| PATTERSON COMPANIES, INC. | ||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (In thousands) | ||||||
| (Unaudited) | ||||||
| October 24, 2020 | April 25, 2020 | |||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 139,481 | $ | 77,944 | ||
| Receivables, net | 491,687 | 416,523 | ||||
| Inventory | 761,941 | 812,194 | ||||
| Prepaid expenses and other current assets | 263,149 | 236,104 | ||||
| Total current assets | 1,656,258 | 1,542,765 | ||||
| Property and equipment, net | 298,460 | 303,725 | ||||
| Operating lease right-of-use assets, net | 81,171 | 79,021 | ||||
| Goodwill and identifiable intangibles, net | 435,682 | 452,229 | ||||
| Long-term receivables, net and other | 317,453 | 337,610 | ||||
| Total assets | $ | 2,789,024 | $ | 2,715,350 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 690,755 | $ | 862,093 | ||
| Other accrued liabilities | 239,317 | 182,099 | ||||
| Operating lease liabilities | 31,814 | 30,706 | ||||
| Borrowings on revolving credit | 111,000 | - | ||||
| Total current liabilities | 1,072,886 | 1,074,898 | ||||
| Long-term debt | 588,329 | 587,766 | ||||
| Non-current operating lease liabilities | 53,796 | 49,854 | ||||
| Other non-current liabilities | 181,286 | 166,388 | ||||
| Total liabilities | 1,896,297 | 1,878,906 | ||||
| Stockholders' equity | 892,727 | 836,444 | ||||
| Total liabilities and stockholders' equity | $ | 2,789,024 | $ | 2,715,350 | ||
| PATTERSON COMPANIES, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
Six Months Ended | ||||||||
October 24,
| October 26,
| |||||||
| Operating activities: | ||||||||
| Net income (loss) | $ | 78,028 | $ | (3,542 | ) | |||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 38,881 | 41,275 | ||||||
| Investment gain | - | (34,334 | ) | |||||
| Non-cash employee compensation | 16,660 | 19,302 | ||||||
| Non-cash losses (gains) and other, net | 5,976 | - | ||||||
| Change in assets and liabilities: | ||||||||
| Receivables | (505,535 | ) | (209,100 | ) | ||||
| Inventory | 58,238 | (27,238 | ) | |||||
| Accounts payable | (179,276 | ) | 118,301 | |||||
| Accrued liabilities | 24,555 | 102,301 | ||||||
| Long term receivables | 687 | (4,292 | ) | |||||
| Other changes from operating activities, net | 38,782 | (17,326 | ) | |||||
| Net cash used in operating activities | (423,004 | ) | (14,653 | ) | ||||
| Investing activities: | ||||||||
| Additions to property and equipment | (14,370 | ) | (22,851 | ) | ||||
| Collection of deferred purchase price receivables | 408,907 | 212,307 | ||||||
| Other investing activities | 396 | - | ||||||
| Net cash provided by investing activities | 394,933 | 189,456 | ||||||
| Financing activities: | ||||||||
| Dividends paid | (25,009 | ) | (50,504 | ) | ||||
| Payments on long-term debt | - | (87,090 | ) | |||||
| Draw on revolving credit | 111,000 | - | ||||||
| Other financing activities | 631 | (4,067 | ) | |||||
| Net cash provided by (used in) financing activities | 86,622 | (141,661 | ) | |||||
| Effect of exchange rate changes on cash | 2,986 | 787 | ||||||
| Net change in cash and cash equivalents | 61,537 | 33,929 | ||||||
| Cash and cash equivalents at beginning of period | 77,944 | 95,646 | ||||||
| Cash and cash equivalents at end of period | $ | 139,481 | $ | 129,575 | ||||
| PATTERSON COMPANIES, INC. | |||||||||||||||
| SALES SUMMARY | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| October 24, 2020 | October 26, 20191 | Total Sales Growth | Foreign Exchange Impact | Internal Sales Growth | |||||||||||
| Three Months Ended | |||||||||||||||
| Consolidated net sales | |||||||||||||||
| Consumable | $ | 1,241,586 | $ | 1,127,481 | 10.1 | % | 0.6 | % | 9.5 | % | |||||
| Equipment and software | 220,181 | 205,790 | 7.0 | (0.1 | ) | 7.1 | |||||||||
| Value-added services and other | 91,401 | 85,473 | 6.9 | 0.1 | 6.8 | ||||||||||
| Total | $ | 1,553,168 | $ | 1,418,744 | 9.5 | % | 0.5 | % | 9.0 | % | |||||
| Dental | |||||||||||||||
| Consumable | $ | 357,849 | $ | 304,565 | 17.5 | % | (0.2 | )% | 17.7 | % | |||||
| Equipment and software | 198,135 | 188,192 | 5.3 | (0.1 | ) | 5.4 | |||||||||
| Value-added services and other | 75,764 | 71,846 | 5.5 | (0.1 | ) | 5.6 | |||||||||
| Total | $ | 631,748 | $ | 564,603 | 11.9 | % | (0.2 | )% | 12.1 | % | |||||
| Animal Health | |||||||||||||||
| Consumable | $ | 883,737 | $ | 822,916 | 7.4 | % | 0.9 | % | 6.5 | % | |||||
| Equipment and software | 22,046 | 17,598 | 25.3 | - | 25.3 | ||||||||||
| Value-added services and other | 8,394 | 7,674 | 9.4 | 2.2 | 7.2 | ||||||||||
| Total | $ | 914,177 | $ | 848,188 | 7.8 | % | 0.9 | % | 6.9 | % | |||||
| Corporate | |||||||||||||||
| Value-added services and other | $ | 7,243 | $ | 5,953 | 21.7 | % | - | % | 21.7 | % | |||||
| Total | $ | 7,243 | $ | 5,953 | 21.7 | % | - | % | 21.7 | % | |||||
| Six Months Ended | |||||||||||||||
| Consolidated net sales | |||||||||||||||
| Consumable | $ | 2,286,567 | $ | 2,222,665 | 2.9 | % | 0.2 | % | 2.7 | % | |||||
| Equipment and software | 349,558 | 348,323 | 0.4 | (0.1 | ) | 0.5 | |||||||||
| Value-added services and other | 162,880 | 176,407 | (7.7 | ) | - | (7.7 | ) | ||||||||
| Total | $ | 2,799,005 | $ | 2,747,395 | 1.9 | % | 0.1 | % | 1.8 | % | |||||
| Dental | |||||||||||||||
| Consumable | $ | 614,452 | $ | 608,039 | 1.1 | % | (0.1 | )% | 1.2 | % | |||||
| Equipment and software | 311,098 | 313,876 | (0.9 | ) | (0.1 | ) | (0.8 | ) | |||||||
| Value-added services and other | 136,493 | 143,824 | (5.1 | ) | (0.1 | ) | (5.0 | ) | |||||||
| Total | $ | 1,062,043 | $ | 1,065,739 | (0.3 | )% | (0.1 | )% | (0.2 | )% | |||||
| Animal Health | |||||||||||||||
| Consumable | $ | 1,672,115 | $ | 1,614,626 | 3.6 | % | 0.2 | % | 3.4 | % | |||||
| Equipment and software | 38,460 | 34,447 | 11.6 | - | 11.6 | ||||||||||
| Value-added services and other | 15,755 | 16,654 | (5.4 | ) | 0.7 | (6.1 | ) | ||||||||
| Total | $ | 1,726,330 | $ | 1,665,727 | 3.6 | % | 0.2 | % | 3.4 | % | |||||
| Corporate | |||||||||||||||
| Value-added services and other | $ | 10,632 | $ | 15,929 | (33.3 | )% | - | % | (33.3 | )% | |||||
| Total | $ | 10,632 | $ | 15,929 | (33.3 | )% | - | % | (33.3 | )% | |||||
1 Certain sales were reclassified between categories to conform to the current period presentation.
| PATTERSON COMPANIES, INC. | ||||||||||||||||
| OPERATING INCOME BY SEGMENT | ||||||||||||||||
| (In thousands) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| October 24, 2020 | October 26, 2019 | October 24, 2020 | October 26, 2019 | |||||||||||||
| Operating income (loss) | ||||||||||||||||
| Dental | $ | 72,957 | $ | 52,632 | $ | 110,726 | $ | 86,636 | ||||||||
| Animal Health | 17,591 | 18,174 | 34,990 | 37,798 | ||||||||||||
| Corporate | (16,842 | ) | (88,952 | ) | (34,138 | ) | (125,906 | ) | ||||||||
| Total | $ | 73,706 | $ | (18,146 | ) | $ | 111,578 | $ | (1,472 | ) | ||||||
| PATTERSON COMPANIES, INC. | |||||||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP MEASURES | |||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| For the three months ended October 24, 2020 | GAAP | Deal amortization | Integration and business restructuring expenses | Legal reserve costs | Accelerated debt-related costs | Investment gain | Non-GAAP | ||||||||||||||||
| Operating income (loss) | $ | 73,706 | $ | 9,250 | $ | - | $ | - | $ | - | $ | - | $ | 82,956 | |||||||||
| Other income (expense), net | (3,158 | ) | - | - | - | - | - | (3,158 | ) | ||||||||||||||
| Income (loss) before taxes | 70,548 | 9,250 | - | - | - | - | 79,798 | ||||||||||||||||
| Income tax expense (benefit) | 16,722 | 2,199 | - | - | - | - | 18,921 | ||||||||||||||||
| Net income (loss) | 53,826 | 7,051 | - | - | - | - | 60,877 | ||||||||||||||||
| Net loss attributable to noncontrolling interests | (234 | ) | - | - | - | - | - | (234 | ) | ||||||||||||||
| Net income (loss) attributable to Patterson Companies, Inc. | $ | 54,060 | $ | 7,051 | $ | - | $ | - | $ | - | $ | - | $ | 61,111 | |||||||||
| Diluted earnings (loss) per share attributable to Patterson Companies, Inc.* | $ | 0.56 | $ | 0.07 | $ | - | $ | - | $ | - | $ | - | $ | 0.63 | |||||||||
| Operating income (loss) as a % of sales | 4.7 | % | 5.3 | % | |||||||||||||||||||
| Effective tax rate | 23.7 | % | 23.7 | % | |||||||||||||||||||
| For the three months ended October 26, 2019 | GAAP | Deal amortization | Integration and business restructuring expenses | Legal reserve costs† | Accelerated debt-related costs | Investment gain | Non-GAAP | ||||||||||||||||
| Operating income (loss) | $ | (18,146 | ) | $ | 9,238 | $ | 3,792 | $ | 61,300 | $ | - | $ | - | $ | 56,184 | ||||||||
| Other income (expense), net | (8,777 | ) | - | - | - | 959 | - | (7,818 | ) | ||||||||||||||
| Income (loss) before taxes | (26,923 | ) | 9,238 | 3,792 | 61,300 | 959 | - | 48,366 | |||||||||||||||
| Income tax expense (benefit) | 6,426 | 2,200 | 948 | 2,125 | 240 | - | 11,939 | ||||||||||||||||
| Net income (loss) | (33,349 | ) | 7,038 | 2,844 | 59,175 | 719 | - | 36,427 | |||||||||||||||
| Net loss attributable to noncontrolling interests | (220 | ) | - | - | - | - | - | (220 | ) | ||||||||||||||
| Net income (loss) attributable to Patterson Companies, Inc. | $ | (33,129 | ) | $ | 7,038 | $ | 2,844 | $ | 59,175 | $ | 719 | $ | - | $ | 36,647 | ||||||||
| Diluted earnings (loss) per share attributable to Patterson Companies, Inc.* | $ | (0.35 | ) | $ | 0.07 | $ | 0.03 | $ | 0.62 | $ | 0.01 | $ | - | $ | 0.39 | ||||||||
| Operating income (loss) as a % of sales | (1.3 | )% | 4.0 | % | |||||||||||||||||||
| Effective tax rate | (23.9 | )% | 24.7 | % | |||||||||||||||||||
| † Includes costs and expenses incurred in the second quarter of fiscal 2020 of $58,300 related to the then-probable settlement of litigation with the U.S. Attorney's Office for the Western District of Virginia and $3,000 related to other legal proceedings. | ||||||||||||||
| * May not sum due to rounding |
PATTERSON COMPANIES, INC. | ||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP MEASURES | ||||||||||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
| For the six months ended October 24, 2020 | GAAP | Deal amortization | Integration and business restructuring expenses | Legal reserve costs | Accelerated debt-related costs | Investment gain | Non-GAAP | |||||||||||||||||
| Operating income (loss) | $ | 111,578 | $ | 18,503 | $ | - | $ | - | $ | - | $ | - | $ | 130,081 | ||||||||||
| Other income (expense), net | (7,815 | ) | - | - | - | - | - | (7,815 | ) | |||||||||||||||
| Income (loss) before taxes | 103,763 | 18,503 | - | - | - | - | 122,266 | |||||||||||||||||
| Income tax expense (benefit) | 25,735 | 4,400 | - | - | - | - | 30,135 | |||||||||||||||||
| Net income (loss) | 78,028 | 14,103 | - | - | - | - | 92,131 | |||||||||||||||||
| Net loss attributable to noncontrolling interests | (439 | ) | - | - | - | - | - | (439 | ) | |||||||||||||||
| Net income (loss) attributable to Patterson Companies, Inc. | $ | 78,467 | $ | 14,103 | $ | - | $ | - | $ | - | $ | - | $ | 92,570 | ||||||||||
| Diluted earnings (loss) per share attributable to Patterson Companies, Inc.* | $ | 0.82 | $ | 0.15 | $ | - | $ | - | $ | - | $ | - | $ | 0.96 | ||||||||||
| Operating income (loss) as a % of sales | 4.0 | % | 4.6 | % | ||||||||||||||||||||
| Effective tax rate | 24.8 | % | 24.6 | % | ||||||||||||||||||||
| For the six months ended October 26, 2019 | GAAP | Deal amortization | Integration and business restructuring expenses | Legal reserve costs‡ | Accelerated debt-related costs | Investment gain | Non-GAAP | |||||||||||||||||
| Operating income (loss) | $ | (1,472 | ) | $ | 18,491 | $ | 5,747 | $ | 78,966 | $ | - | $ | - | $ | 101,732 | |||||||||
| Other income (expense), net | 14,450 | - | - | - | 959 | (34,334 | ) | (18,925 | ) | |||||||||||||||
| Income (loss) before taxes | 12,978 | 18,491 | 5,747 | 78,966 | 959 | (34,334 | ) | 82,807 | ||||||||||||||||
| Income tax expense (benefit) | 16,520 | 4,401 | 1,442 | 6,541 | 240 | (7,884 | ) | 21,260 | ||||||||||||||||
| Net income (loss) | (3,542 | ) | 14,090 | 4,305 | 72,425 | 719 | (26,450 | ) | 61,547 | |||||||||||||||
| Net loss attributable to noncontrolling interests | (455 | ) | - | - | - | - | - | (455 | ) | |||||||||||||||
| Net income (loss) attributable to Patterson Companies, Inc. | $ | (3,087 | ) | $ | 14,090 | $ | 4,305 | $ | 72,425 | $ | 719 | $ | (26,450 | ) | $ | 62,002 | ||||||||
| Diluted earnings (loss) per share attributable to Patterson Companies, Inc.* | $ | (0.03 | ) | $ | 0.15 | $ | 0.05 | $ | 0.76 | $ | 0.01 | $ | (0.28 | ) | $ | 0.65 | ||||||||
| Operating income (loss) as a % of sales | (0.1 | )% | 3.7 | % | ||||||||||||||||||||
| Effective tax rate | 127.3 | % | 25.7 | % | ||||||||||||||||||||
| ‡ 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 then-probable settlement of litigation with the U.S. Attorney's Office for the Western District of Virginia and $3,000 related to other legal proceedings. | ||||||||||||||
| * May not sum due to rounding |
| PATTERSON COMPANIES, INC. | ||||||||
| FREE CASH FLOW | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Six Months Ended | ||||||||
| October 24, 2020 | October 26, 2019 | |||||||
| Net cash used in operating activities | $ | (423,004 | ) | $ | (14,653 | ) | ||
| Additions to property and equipment | (14,370 | ) | (22,851 | ) | ||||
| Collection of deferred purchase price receivables | 408,907 | 212,307 | ||||||
| Free cash flow | $ | (28,467 | ) | $ | 174,803 | |||
View source version on businesswire.com: https://www.businesswire.com/news/home/20201202005346/en/
Contacts:
COMPANY: Patterson Companies Inc.
TEL: 651.686.1364
EMAIL: john.wright@pattersoncompanies.com
