On June 18, 2024, Patterson Companies Inc (PDCO, Financial) released its 8-K filing reporting the operating results for its fiscal 2024 fourth quarter and year ended April 27, 2024. Patterson Companies Inc is a leading dental distributor and wholesaler of consumable products and equipment operating through two business segments, Patterson Dental, and Patterson Animal Health. The company's segment includes Dental, Animal Health, and Corporate, with the majority of its revenue derived from the Animal Health segment and primarily from the United States.
Fourth Quarter Fiscal 2024 Results
Consolidated net sales for the fourth quarter were $1.72 billion, a slight increase of 0.1% compared to the same period last year. However, internal sales, adjusted for currency translation and the net impact of an interest rate swap, decreased by 0.5% year-over-year. Reported net income attributable to Patterson Companies Inc for the fourth quarter was $67.0 million, or $0.74 per diluted share, down from $75.0 million, or $0.77 per diluted share, in the fourth quarter of fiscal 2023. Adjusted net income, excluding deal amortization, was $74.4 million, or $0.82 per diluted share, compared to $82.4 million, or $0.84 per diluted share, in the prior year period.
Segment Performance
Patterson Dental: Reported net sales in the Dental segment for the fourth quarter were $657.8 million. Internal sales decreased by 3.8% compared to the fiscal 2023 fourth quarter. Internal sales of consumables increased by 3.7% year-over-year, while internal sales of equipment and value-added services decreased by 11.9% and 11.0%, respectively. The decline in value-added services was primarily due to the negative impact of a cybersecurity attack on vendor partner, Change Healthcare.
Patterson Animal Health: Reported net sales in the Animal Health segment for the fourth quarter were $1.06 billion. Internal sales grew by 2.5% year-over-year, driven by sales growth in the production animal business. Internal sales of consumables grew by 2.5%, equipment decreased by 4.0%, and value-added services increased by 15.0% compared to the prior year period.
Full Year Fiscal 2024 Results
For the full fiscal year 2024, consolidated reported net sales totaled $6.57 billion, a 1.5% increase year-over-year. Internal sales increased by 0.8% year-over-year. The Dental segment's internal sales were flat, with a 4.4% increase in consumables, a 6.9% decline in equipment, and a 0.8% decrease in value-added services. The Animal Health segment's internal sales increased by 1.3%, with 0.8% growth in consumables, a 3.3% decline in equipment, and a 42.6% increase in value-added services.
Reported net income attributable to Patterson Companies Inc for fiscal 2024 was $185.9 million, or $1.98 per diluted share, compared to $207.6 million, or $2.12 per diluted share, in fiscal 2023. Adjusted net income, excluding deal amortization, was $215.3 million, or $2.30 per diluted share, compared to $236.4 million, or $2.42 per diluted share, in the prior year.
Balance Sheet and Capital Allocation
During fiscal 2024, Patterson Companies generated $238.9 million in cash from operating activities, compared to $244.1 million in fiscal 2023. Free cash flow declined by $8.6 million due to operational performance and increased capital spending. The company declared a quarterly cash dividend of $0.26 per share and repurchased approximately 0.5 million shares during the fourth quarter. Patterson returned $327.9 million to shareholders in the form of cash dividends and share repurchases during fiscal 2024.
Analysis and Outlook
Patterson Companies Inc faced a challenging market environment in fiscal 2024, impacting its performance. The decline in equipment sales and the cybersecurity attack on Change Healthcare negatively affected the company's financial results. However, the growth in consumables and value-added services in the Animal Health segment highlights the company's resilience and strong value proposition.
Looking ahead, Patterson Companies remains focused on its strategic objectives to drive enhanced growth and profitability. The company's fiscal 2025 guidance reflects confidence in its business strength and competitive positioning, despite the current market conditions.
Explore the complete 8-K earnings release (here) from Patterson Companies Inc for further details.
