Patterson Companies, Inc. (PDCO) SEC Filing 10-Q Quarterly report for the period ending Saturday, January 26, 2019

Exhibit 99

PATTERSON COMPANIES REPORTS FISCAL 2019 THIRD-QUARTER RESULTS

St. Paul, Minn. — February 28, 2019 — Patterson Companies, Inc. (Nasdaq: PDCO) today reported consolidated net sales of approximately $1.4 billion (see attached Sales Summary for further details) in its fiscal third quarter ended January 26, 2019, an increase of 1.6 percent compared to the same period last year. Internal sales, which are adjusted for the effects of currency translation and changes in product selling relationships, increased 2.5 percent.

Reported net income attributable to Patterson Companies, Inc. for the third quarter of fiscal year 2019 was $31.2 million, or $0.33 per diluted share, compared to $109.0 million, or $1.18 per diluted share, in last year’s fiscal third quarter. The prior year period included the recognition of a provisional tax benefit of $77.3 million, reflecting the revaluation of tax-deferred assets and liabilities, net of a one-time transition tax on unremitted foreign earnings as a result of the Tax Cuts and Jobs Act (“2017 Tax Act”) enacted during the prior year period. Adjusted net income¹ attributable to Patterson Companies, Inc., which excludes deal amortization costs, integration and business restructuring costs and discrete tax matters, totaled $35.6 million for the third quarter of fiscal 2019, or $0.38 per diluted share, compared to $39.6 million in the same quarter last year, or $0.43 per diluted share.

“We are pleased with our performance during the third quarter. We delivered the third consecutive quarter of year-over-year revenue growth as well as continued, sequential operating margin improvement,” said Mark Walchirk, President and CEO of Patterson Companies. “We continued to execute against our strategic priorities, which resulted in Dental segment revenue growth and solid performance in our Animal Health segment. Our progress throughout fiscal 2019 provides us with confidence that we are taking the right steps to build a stronger Patterson that is well positioned to deliver long-term value.”

Patterson Animal Health

Reported net sales in our Animal Health segment for the third quarter of fiscal 2019, which comprised approximately 58 percent of the company’s total sales, were $807.5 million compared to $794.9 million in the same quarter last year. Internal sales for the segment increased 2.8 percent from the fiscal 2018 third quarter.

Patterson Dental

Reported net sales in our Dental segment for the third quarter of fiscal 2019, which represented approximately 42 percent of total company sales, were $579.7 million compared to $577.9 million in the same quarter last year. Internal sales increased 0.9 percent compared to the fiscal 2018 third quarter.

Balance Sheet and Capital Allocation

For the first nine months of fiscal 2019, Patterson Companies generated $76.3 million of cash from operating activities and collected deferred purchase price receivables of $308.6 million for a total of $384.9 million, compared to a total of $77.1 million in the same period last year. During the first nine months of fiscal 2019, debt has been reduced by $231.0 million and cash has grown by $54.4 million.

In the third quarter of fiscal 2019, Patterson Companies paid $24.8 million in cash dividends to shareholders. On a year-to-date basis, Patterson has returned $74.7 million in cash dividends to shareholders.

Year-to-Date Results

Consolidated net sales for the first nine months of fiscal 2019 totaled $4.1 billion, a 1.8 percent year-over-year increase. Reported net income attributable to Patterson Companies, Inc. was $55.6 million, or $0.60 per diluted share, compared to $180.0 million, or $1.93 per diluted share in last year’s period. The prior year period included the recognition of a provisional tax benefit of $77.3 million, reflecting the revaluation of tax-deferred assets and liabilities, net of a one-time transition tax on unremitted foreign earnings as a result of the 2017 Tax Act. In July 2018, Patterson Companies booked a pre-tax reserve of $28.3 million for the anticipated settlement of purported class action antitrust litigation.