Patterson Companies (PDCO) investor relations material

Executive summary

• Q3 FY2025 net sales were $1.57B, down 2.7% year-over-year, with net income of $31.3M, down from $47.7M.

• The company is being acquired by Patient Square Capital for $31.35 per share in cash, a $4.1B deal expected to close in April 2025.

• Dental segment sales declined 6.4%, while Animal Health segment sales increased 0.5%.

• Gross margin and operating income declined, impacted by margin pressure, increased LIFO expense, and legal/medical costs.

• No dividend was declared in the quarter due to merger agreement restrictions.

Financial highlights

• Q3 FY2025 net sales: $1.57B (down 2.7%); nine months: $4.79B (down 1.2%).

• Q3 net income: $31.3M ($0.35/share) vs. $47.7M ($0.52/share) prior year; adjusted net income: $38.7M ($0.43/share).

• Nine-month net income: $71.7M ($0.81/share) vs. $118.9M ($1.26/share); adjusted: $101.6M ($1.14/share).

• Gross profit margin for Q3: 20.4% GAAP (down 130 bps); operating margin: 2.9% GAAP, 3.6% adjusted.

• Cash flow from operations for nine months: $(735.1)M, mainly due to receivables securitization and working capital changes.

Outlook and guidance

• Merger with Patient Square Capital expected to close in April 2025, after which the company will become private.

• No further dividends or share repurchases anticipated during the merger process.

• No updated forward-looking earnings guidance or earnings call due to pending acquisition.

• Annual pre-tax savings from restructuring estimated at $16M, with $10M expected in FY2025.