ST. PAUL, Minn., Aug. 20 /PRNewswire/ -- Patterson Dental Company
(Nasdaq: PDCO) today reported that the strength of U.S. operations, driven by
a larger customer and sales representative base, propelled sales and net
income for the first quarter ended July 25, 1998, to record levels.
"The consistent execution of our established strategies continues to
result in record operating performance," said Peter L. Frechette, president
and chief executive officer. "Our U.S. business is benefiting from the
contributions of two noteworthy acquisitions. EagleSoft, our new practice
management software line that electronically links patient accounts to dental
records, was acquired in the last month of the first quarter of fiscal 1998.
This acquisition allows us to expand sales to existing customers by offering
increased value through a new product capability. Hill Dental, acquired late
in fiscal 1998, strengthens our market position in the South Central states,
adding to both our customer base and sales representative network."
According to Frechette, the favorable results were also attributable to an
increase of 16.4 percent in sales of equipment, raising equipment sales to 25
percent of sales from 24 percent in the year ago quarter.
For the fiscal 1999 first quarter, net income rose 23 percent to $10.2
million, or $0.31 per share, from $8.3 million, or $0.25 per share, last year.
The company's basic and diluted earnings per share are the same. Net sales
for the three months increased 11 percent to $200.1 million from $180.0
million in the year-ago quarter. Gross margin advanced slightly to 36.8
percent from 36.6 percent last year. Operating expense as a percent of sales
decreased due to improved operating leverage, leading to an increase in
operating income of 22 percent and an expansion in operating margin of 70
basis points for the latest three months.
Patterson continues to report a strong financial position. The company's
cash and cash equivalents were $38.1 million at July 25, 1998. Stockholders'
equity advanced 5 percent in the first quarter to $220.0 million from $210.3
million at April 25, 1998. Debt remains a modest 3 percent of capitalization,
and the current ratio was a healthy 2.6 to 1.
Patterson Dental Company is one of the largest distributors of dental
products in North America. The company supplies more than 82,500 products to
dentists, dental laboratories, institutions, physicians and other heath care
providers. These products include x-ray film, impression and restorative
materials, hand instruments, sterilization products, front office forms and
stationery as well as capital equipment. Patterson markets its products and
services through nearly 900 sales representatives and equipment specialists in
the United States and Canada.
This press release contains forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
involve risks and uncertainties which are beyond the company's ability to
control and in many cases the company cannot predict what factors may cause
actual results to differ materially from those indicated by the forward
looking statements. These factors may include, among others: competition
within the dental supply industry; changes in the economics of dentistry,
including reduced growth in expenditures by private dental insurance plans and
the effects of healthcare reform, which may affect future per capita
expenditures for dental services and the ability of dentists to invest in or
obtain reimbursement for the use of high-technology products; the ability of
the company to maintain satisfactory relationships with its sales force; the
effects of economic conditions; unforeseen operating risks; risks associated
with the dependence on manufacturers of the company's products; and the
availability of capital to finance planned growth. These risks are qualified
in their entirety by cautionary language set forth in the company's Form 10-K
report filed July 16, 1998, and other documents filed with Securities and
Exchange Commission.
PATTERSON DENTAL COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except for earnings per share)
(Unaudited)
First Quarter
July 25, July 26,
1998 1997
(Restated)
Net sales $200,073 $179,988
Gross profit 73,591 65,866
Operating income 16,243 13,333
Other income, net 420 205
Income taxes 6,434 5,198
Net income $10,229 $8,340
Earnings per share
basic and diluted $0.31 $0.25
Weighted average and dilutive
potential shares outstanding 33,387 32,928
Gross margin 36.8% 36.6%
Operating expenses as a % of sales 28.7% 29.2%
Operating income as a % of sales 8.1% 7.4%
Effective tax rate 38.6% 38.4%
Return on net sales 5.1% 4.6%
Restated to reflect results of Canadian Dental Supply Limited which was
accounted for as a pooling of interests.
PATTERSON DENTAL COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
July 25, April 25,
1998 1998
ASSETS
Current assets:
Cash and cash equivalents $38,143 $35,619
Accounts and notes receivables, net 97,336 106,252
Inventory 97,146 81,810
Prepaid expenses and deferred taxes 3,919 3,980
Total current assets 236,544 227,661
Property and equipment, net 35,609 37,998
Intangibles and other 49,847 50,714
Total assets $322,000 $316,373
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $57,373 $60,652
Other accrued liabilities 29,634 29,287
Current maturities of long-term debt
and bank indebtedness 3,599 4,466
Total current liabilities 90,606 94,405
Long-term debt 2,665 2,736
Deferred taxes 2,017 2,017
Total liabilities 95,288 99,158
Deferred credits 6,691 6,912
Stockholders' equity 220,021 210,303
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $322,000 $316,373
SOURCE Patterson Dental Company
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CONTACT:
Ronald Ezerski, Executive Vice President &
CFO of Patterson Dental, 612-686-1600; Leslie Hunziker, General
Information, or Kathy Brunson, Analyst Inquiries, 312-266-7800,
both of The Financial Relations Board
NOTE TO EDITORS: For further information on Patterson Dental free
of charge via fax, dial 1-800-PRO-INFO and enter the number 207
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