ST. PAUL, Minn., Feb. 17 /PRNewswire/ -- Improvements in core operations
and acquired businesses led to strong earnings growth for Patterson Dental
Company (Nasdaq: PDCO) in the third quarter and nine months ended January 24,
1998, the company reported today.
    Net income increased 20 percent to $10.8 million in the third quarter from
$9 million a year earlier, while sales grew 7 percent to $195.5 million from
$182 million.  Earnings per share rose 5 cents to 33 cents from 28 cents.
    For the first nine months of fiscal 1998, net income increased 25 percent
to $29.2 million from $23.4 million, yielding a per-share comparison of
88 cents in the current year, up 16 cents from 72 cents in the prior year.
Sales increased 13 percent to $567.2 million from $500.3 million.  Patterson's
acquisition of Colwell during the second quarter of the prior year and
EagleSoft in the first quarter of the current year contributed significantly
to this year's sales growth.  Excluding Colwell and Eaglesoft's impact, sales
rose 9 percent for the nine-month period.
    Results for the prior year periods have been restated to include
operations of Canadian Dental Supply, acquired in August, 1997 and accounted
for as a pooling of interests.  In addition, per share results reflect the
3 for 2 stock split in the form of a 50% stock dividend declared January 12,
1998, and payable February 17, 1998.  The stock split brings shares
outstanding to approximately 33 million.
    "We are on track with our goal to increase earnings approximately
20 percent for fiscal 1998, which ends in April," according to Peter
Frechette, chairman and chief executive officer.  "Sales of consumables and
equipment continue to be strong and we are integrating our newly acquired
operations effectively.  EagleSoft, a practice management software company we
acquired in July, 1997, is now fully integrated and has exceeded our
expectations.  We are proceeding with the integration of Canadian Dental
Supply, although we have not yet gained all the efficiencies we eventually
hope to obtain in Canada."
    At January 24, Patterson's balance sheet was strong.  Cash and cash
equivalents increased to $34.7 million, reflecting cash generated from
operations, while total debt of $3.9 million represented less than 2 percent
of total capitalization.

    THIRD QUARTER GROWTH
    Reviewing the third quarter, Frechette noted that U.S. dental sales
increased 11% due largely to growth of the sales force, increased penetration
of existing accounts and the success of such major high-tech products as the
Cerec 2, Triangle Sterilization Unit and KCP devices.  Sale of business forms
and stationery through Colwell Systems was down 12% because of discontinued
sales to Deluxe Corporation and consolidation in the medical market.  Canadian
sales were down 4% in Canadian dollars, on a restated basis, due to the ice
storm in Montreal and integration related issues in western Canada.
    Operating profit increased 18 percent to $17.1 million as a result of
stronger U.S. profitability and a strong contribution from EagleSoft.

    NINE MONTH GAINS
    For the first nine months, Colwell contributed $20.8 million, or
31 percent of the consolidated sales increase.  Excluding the impact of
Colwell, consumable products sales rose 9 percent, reflecting expansion of the
sales force, and increased penetration of existing accounts.  Equipment sales
rose 10 percent, driven largely by high-tech products.
    Operating profit increased 27 percent to $46.1 million as a result of
stronger sales and margin improvement at Colwell, EagleSoft and U.S. dental
operations.  Operating margins remained weak in Canada, which recorded a loss
for the first three quarters.

    SUBSEQUENT DEVELOPMENTS
    Following the close of the third quarter, the company also announced the
acquisition of Hill Dental Company, Inc. of Birmingham, Ala., a distributor
with 1997 revenues of approximately $29 million.  Hill's operations are
focused in the South and Southeast, including a strong market presence in
Georgia, Florida, Alabama, Mississippi, Tennessee, Louisiana and Texas.
    Patterson Dental Company is one of the largest distributors of dental
products in North America.  The company supplies more than 75,000 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 more than 850 direct sales representatives and equipment
specialists in the United States and Canada, and ships approximately
97 percent of its consumable goods within 24 hours of receipt of order.
    This news release contains certain forward-looking statements as defined
in the Private Securities Litigation Reform Act of 1995, which may be
identified by the use of certain forward-looking terminology such as "may,"
"will," "expect," "anticipate," "estimate," "goal," or "continue," or
comparable terminology that involves risks and uncertainties, which may cause
the company's actual results in the future to differ materially from expected
results.  These risks 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; the successful integration of Canada Dental Supply Ltd.;
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 25,
1997, 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)

                                 Quarter ended           Nine months ended
                           January 24,   January 25,  January 24,  January 25,
                              1998          1997         1998         1997
                                         (Restated)                (Restated)

    Net sales               $195,540      $181,996    $567,163     $500,308
    Gross profit              73,336        66,137     209,950      178,797
    Operating income          17,094        14,487      46,116       36,230
    Other income and
      expense, net               370            80         826          997
    Income taxes               6,666         5,550      17,741       13,800
    Net income               $10,798        $9,017     $29,201      $23,427
    Earnings per common
      share -- basic and
      diluted                  $0.33         $0.28       $0.88        $0.72
    Weighted average common and
      common equivalent shares
      outstanding             33,210        32,739      33,104       32,651
    Gross margin percent        37.5%         36.4%       37.0%        35.7%
    Operating expenses as
      a % of sales              28.8%         28.4%       28.9%        28.5%
    Operating income as
      a % of sales               8.7%          8.0%        8.1%         7.2%
    Effective tax rate          38.2%         38.1%       37.8%        37.1%
    Net income as
      a % of sales               5.5%          5.0%        5.1%         4.7%

    Restated to reflect results of Canadian Dental Supply Limited which was
accounted for as a pooling of interests and to give effect to the 3 for 2
stock split in the form of a 50% stock dividend declared January 12, 1998.

                           PATTERSON DENTAL COMPANY
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                            (Dollars in thousands)

                                        January 24,        April 26,
                                           1998              1997
                                        (Unaudited)        (Restated)
    ASSETS
    Current assets:
      Cash and cash equivalents          $34,706            $9,095
      Accounts and notes
        receivable, net                   90,518            95,132
      Inventory                           71,968            65,486
      Prepaid expenses and deferred taxes  2,579             4,105
        Total current assets             199,771           173,818

    Property and equipment, net           36,072            35,563
    Intangibles                           42,182            43,813
    Long-term receivables, net and other   2,298             2,117
        Total assets                    $280,323          $255,311

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                   $47,422           $48,472
      Other accrued liabilities           25,557            23,226
      Current maturities of long-term
        debt and bank indebtedness         1,102             5,227
        Total current liabilities         74,081            76,925

    Long-term debt                         2,843             5,565
    Deferred taxes                         1,362             1,362
        Total liabilities                 78,286            83,852

    Deferred credits                       7,133             7,797

    Stockholders' equity                 194,904           163,662

    TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY                            $280,323          $255,311

    Restated to reflect results of Canadian Dental Supply Limited which was
accounted for as a pooling of interests.

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