Patterson Companies, Inc. (Nasdaq: PDCO) today reported consolidated sales of $814,951,000 for the second quarter of fiscal 2010 ended October 24, an increase of 7% from $759,461,000 in the year-earlier quarter. Acquisitions transacted over the past 12 months accounted for a substantial portion of the second quarter sales growth, while the impact of foreign currency adjustments was minimal. Net income of $49,343,000 or $.41 per diluted share rose 5% from $46,903,000 or $0.40 per diluted share in the second quarter of fiscal 2009.
Sales of Patterson Dental Supply, Patterson’s largest business, were $537,167,000 in the second quarter, virtually unchanged from $536,837,000 in the year-earlier period.
- Sales of consumable dental supplies and printed office products were down 2% from last year’s second quarter.
- Sales of dental equipment and software increased 3% from the year-earlier level. Within this product category, sales of CEREC® dental restorative systems rose 45%, which offset a 7% decline in sales of basic equipment, including chairs, units and lights.
- Sales of other services and products, consisting primarily of technical service parts and labor, software support services and artificial teeth, rose 4% from last year’s second quarter.
Sales of the Webster Veterinary unit increased 30% in the second quarter of fiscal 2010 to $160,654,000. Internal growth accounted for 8% of this increase, while the October 2008 acquisition of Columbus Serum Company accounted for the balance. Sales of Patterson Medical, Patterson’s rehabilitation supply and equipment unit, increased 18% to $117,130,000. Internal sales were up 5%, with acquisitions accounting for the balance: Mobilis Healthcare Group in April 2009 and Empi Therapy Solutions, a unit of DJO Incorporated, in June 2009.
James W. Wiltz, president and chief executive officer, commented: “We are generally pleased with Patterson’s second quarter performance as our businesses held up relatively well despite the ongoing impact of the recession. Within our Patterson Dental unit, the market for consumable supplies has been affected by high unemployment levels, but our sales of these products have remained generally stable during the first half of fiscal 2010. At the same time, we believe the weak economy has been causing many dental practitioners to focus their investment dollars on equipment with rapid and high rates of return. This consideration helps explain the strong growth of CEREC dental restorative products thus far in fiscal 2010 and why sales of basic equipment have tended to lag. CEREC sales also are benefiting from the steadily growing market acceptance of this new-technology equipment. The unequalled performance of CEREC has made it the industry leader by a considerable margin in the category of CAD/CAM dental equipment. We also believe CEREC is the most viable choice for dentists purchasing this type of equipment.”
He continued: “Sales of our Webster unit were consistent with forecasted levels in the second quarter from the standpoint of both internally-generated growth and the impact of the Columbus Serum acquisition. Webster’s large consumable supply business benefited from higher volumes of veterinary care for companion-pets during this period. However, equipment sales remained soft as many veterinary practices remained cautious about purchasing equipment. Webster is continuing to remove costs from the Columbus Serum acquisition, and this process will be largely completed in the third quarter.”